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    Saturday, July 31, 2021

    Stock Market - 3 GOP Congressmen face ethics complaints for failing to disclose $22 million in stock trades

    Stock Market - 3 GOP Congressmen face ethics complaints for failing to disclose $22 million in stock trades


    3 GOP Congressmen face ethics complaints for failing to disclose $22 million in stock trades

    Posted: 31 Jul 2021 10:25 AM PDT

    Nice ��

    Posted: 31 Jul 2021 05:56 AM PDT

    What will happen to my GE calls options with the stock reverse split??? Good or bad??

    Posted: 31 Jul 2021 04:12 AM PDT

    Carbon credit streaming is going to explode

    Posted: 31 Jul 2021 10:56 AM PDT

    Date 7/30/2021 Speculator midagedinvestor86 Contributors

    Strategy Bullish / Stock (20% of portfolio, will likely go higher) Ticker $OFSTF Entry Price $1.40 Price when I exited TBD

    Hello! I'm a stock speculator and investor that is very bullish on carbon credits and companies in the space. This is my thesis on what I see as the best company in the space: Carbon Streaming Corporation.

    I'm not a financial advisor and you need to make your own decisions about what you do with your own money, I am just telling you why I am so bullish.

    Thesis

    Carbon credits are a relatively new commodity that few people have even heard of yet. The market is growing at a rapid pace and is estimated by at least one leading natural resource investor (more on him later) to be larger than the oil market by the year 2050, maybe even as early as 2040. That is not a typo, the growth in carbon credits is expected to make carbon credits the largest commodity market in the world in 30 years time. This is from a base of only about 1.5 billion this year total and only $320 million this year in the voluntary carbon market specifically.

    (https://www.cnbc.com/2021/07/08/carbon-credits-institute-of-international-finance-sees-huge-potential.html)

    https://www.carbonstreaming.com/_resources/presentations/corporate-presentation.pdf?v=0.4

    Why will this market grow so much in the next few decades? Because going green is good business! Regardless of whether you believe in man made global warming, this is one of the greatest money making opportunities of a generation and it would be foolish to not recognize and capitalize on it.

    The ESG (Environmental, Sustainability, Governance) trend is unstoppable and requires that businesses around the world change their practices to make the world a better place. One of the biggest ways of doing this is to lower their carbon emissions. While many countries around the world are creating cap and trade schemes, there is also a rapidly growing "voluntary" carbon market. Some companies such as large oil producers are in a business that will always generate massive amounts of CO2 emissions however they can "offset" this by producing or alternatively purchasing carbon credits. Why would they do that? Because they want to lower their cost of capital and make their shares attractive to the rapidly growing pools of capital that are mandated to only invest in ESG friendly companies. By lowering their carbon emissions by purchasing carbon credits or building projects that generate carbon credits the company is then able to issue "green bonds", which have a lower cost to the company than regular bond issuances: https://katusaresearch.com/carbonomics/

    The green bond market is massive and growing all the time. These are bonds of companies that meet certain ESG specifications. Global ESG debt issuance just surpassed 3 trillion dollars in total this month. (Source: https://katusaresearch.com/carbonomics/) And that will not stop growing. It took 12 years for the first trillion in ESG bonds to be issued, the second trillion took one year, the third took only six months!

    The cost of capital is critical for large scale capital intensive businesses like hydrocarbon production firms such as Exxon or Chevron or large industrial metal producers like Rio Tinto or Freeport. By lowering their cost of capital these businesses create huge cost savings for their operations and by going green these companies open their shares up to be bought by far more institutional investors who, because of many factors, are often now required to only buy shares in businesses that have a good ESG scorecard. While it costs money in legal fees, compliance officers etc. to make a company ESG friendly, the savings a company experiences from a lowered cost of capital more than makes up for it.

    Oil giant Shell unjust lost a court ruling in the Netherlands that will now require them to cut their greenhouse gas emissions by 45% by 2030: https://www.reuters.com/business/legal/big-oil-may-get-more-climate-lawsuits-after-shell-ruling-lawyers-activists-2021-05-28/

    To put this in perspective, this will require Shell to buy and/or create 100 million carbon credits per year for the next decade. Is Shell just a one off? No! 24 hours after the Shell court ruling, the board of directors of Exxon was disrupted and two board seats were won in an acrimonious proxy fight by an unknown climate fund called Engine No.1.

    Then the shareholders of Chevron voted, and changes will happen there too.

    It is inevitable that other large oil companies and large resource miners get with the program.

    Carbon credit prices in the voluntary market are likely to rise considerably over the next few years. As legendary Canadian resource investor Marin Katusa puts it:

    "All of this is building up a pressure chamber of demand in the Voluntary Carbon Market that has not yet reached a tipping point.

    When it does, there's a lot of upside to be had.

    Because It's the perfect setup for a long squeeze in the Voluntary Carbon Market:

    Rising emissions from a growing population. Tightening government mandates on carbon emissions. Increasing consumer demand for environmental responsible. More transparency in emissions reporting. Corporate buy-in at every level, even from non-emitting companies. All together, this is going to result in a desperate scramble for high-quality carbon offsets, of which there are few.

    If you thought the rise in the price of lumber was crazy in early 2021…

    Just wait until you see the VCM market in five years."

    (https://katusaresearch.com/the-adoption-rate-of-this-obscure-commodity-will-be-the-fastest-of-all-commodities/)

    If you want to read more a really good primer on Carbon Credits read this: https://www.forbes.com/sites/erikkobayashisolomon/2020/03/13/want-to-understand-carbon-credits-read-this/?sh=4032228671aa

    Company Overview

    Carbon Streaming Corporation ("CSC") just went public in Canada under the ticker symbol NETZ (for "Net Zero") and trades in the US on the over the counter exchange under the ticker symbol OFSTF.

    The business model CSC is going to employ is in my opinion brilliant. They are going to finance carbon credit generation projects all over the world in exchange for streams of carbon credits. Let me explain. Back in the 1980's and 1990's companies like Franco Nevada, Wheaton Precious Metals, and Royal Gold pioneered a new business model within the gold industry. Instead of spending money exploring for gold deposits and putting them into production by building mines, they provided investment capital to mining companies in exchange for royalties on the mine's gold production. For example, the royalty company would invest say 150 million dollars into a miner and in exchange they would receive 2% of all the revenue generated by the mine over the entire life of the mine. By doing this the royalty company got exposure to the price of the underlying commodity but took drastically less risk by avoiding having to build and operate the mine themselves. Later this business model added the concept of "streams". A "stream" or "streaming deal" is one where again the royalty company like Franco Nevada puts up serious money to help another firm build their mine, and in exchange they get the option, for example, of purchasing say 20% of all the gold produced by the mine for an artificially low price of $400 per ounce. This deal would be called a "gold stream".

    This business model has worked remarkably well in the precious metals space with Franco Nevada returning much more over the long term than gold itself, the Nasdaq, and GDX, the markets leading gold stock ETF: https://www.franco-nevada.com/about-us/Overview/default.aspx

    These royalty stocks trade at drastically higher multiples than golder miners themselves and currently the three biggest precious metal royalty companies, Franco Nevada, Wheaton, and Royal Gold trade at price to sales ratios of 28, 18, and 14 respectively: www.Finviz.com

    Enter Carbon Streaming Corporation. This company is going to employ the Franco Nevada royalty model to Carbon Credits. The company just raised over $100 million USD in a financing bringing the total cash in their treasury to $141 million USD with no debt. With about 200 million shares outstanding undiluted this amounts to about $0.70 per share in cash. The stock currently trades at about $1.40 per share meaning that when you "net out" the cash, the market is giving Carbon Steaming an Enterprise Value of $140 million. In my opinion this is cheap given the size of the opportunity, the quality of management, and the first mover advantage the company will enjoy for the next 6-12 months.

    The CEO of Carbon Streaming is Mr. Justin Cochrane, former investment banker and executive vice president of Sandstorm Gold (NYSE: SAND) , a very successful gold royalty company that has grown from a tiny micro cap to a large player in the space that may one day be considered amongst the giants like Franco Nevada. He has personally been involved with hundreds of millions of dollars of royalty transactions in the precious metals space. He put up millions of dollars of his own money in this latest financing round which is critically important when considering investing in smaller companies in my opinion. The management team as a whole bought 10 million worth of the latest financing.

    The shareholder roster for the company is also very impressive and includes legendary Canadian resource entrepreneurs/investors Marin Katusa and Ross Beatty. Mr. Katusa recently took down almost 10% of the over $100 million dollar financing and is considered by many to be the "Young Warren Buffett" of resource investing up here in Canada. He tends to be very reserved and conservative in his valuation models and very selective about his stock picks and entry prices. He is the company's largest shareholder. In his words: "The amount of capital that has and will continue to be deployed into the Carbonomics Sector is mind boggling—it's in the hundreds of billions and will reach the trillions….Carbon Streaming Corp is the first company to get involved in the financing and production of carbon credits at a large scale. The company is priced attractively for speculators, given the early-stage venture risk….I do believe that by 2030, the carbon market can be larger than copper and gold markets, and by 2040 could be $2 trillion larger than the oil market. Let that sink in for a moment. The opportunity here is so compelling and we have a chance to get a core position in one of the leaders in this industry before it gets listed on a Big League exchange."

    The company currently owns two Carbon Credit Streams, the Marvivo Blue Carbon Project and the Bonobo Peace Forest Project. Management has stated both of these projects have Internal Rates of Return (IRR) greater than 15% which is unheard of at this point in the precious metals sector given all of the new companies and competitors have entered the space over the last 10 years. I will not go into the details here but Blue Carbon Credits are superior to regular Carbon credits and will trade at a substantial premium in terms of price. Basically blue carbon credits are created by the growth and conservation of carbon-absorbing plants, such as mangrove forests and their associated marine habitat. A blue carbon project will have its carbon credits trade at a premium because of the enormous second-order benefits on such things as, for example, corals, algae, and marine biodiversity that have been so deleteriously affected by over-fishing and farming.

    I expect management to start to deploy their war chest of cash immediately to build their portfolio of high quality carbon credit streams to position itself as the Franco Nevada of the Carbon Credit space. These deals should be positive catalysts for the stock moving forward. Management has stated they are aiming to exit 2023 at a revenue run rate of $200 million USD per year. And that is only using CURRENT PRICING for carbon credits, which actually are expected to move much higher in price over the next few years. Putting a 10-20x pierce to sales multiple on that would peg CSC with a market cap in the billions in a little over 2 years. But with all the "hot money" capital that will seek to enter this space over the next two years I would not be surprised if the market cap gets much higher than that. The reason for this is simple. Other than the exchange traded fund KRBN there are still very few ways for investors to get "pure play" exposure to carbon credits. CSC is going to be the first publicly listed company that provides investors with a way to invest in an equity 100% focused on carbon credits. Given the massive amount of capital looking to get in on this emerging hot investment trend and the tiny amount of options available to those investors, there will likely be massive buying pressure on the stock. Think of a fire hose worth of water trying to get pushed through the eye of a needle!

    While the stock currently trades on the OTC market in the US, management has made it clear that they will seek to uplist the stock to the Nasdaq or the NYSE before the end of 2021. While this seems a bit optimistic to me in terms of timing I fully expect the company to uplist at least by the end of first quarter 2022.

    Risks

    While the stock has a sizable market cap already the shares are very illiquid and if a market crash were to occur before the stock becomes more well known it may be tough to get out of a sizable position quickly without trashing the stock price even more.

    Competition-Carbon Streaming has first mover advantage in the space but I expect numerous "me too" companies to pop up in the next 6-12 months with the same business model and this will create competition for the carbon streams that may drive down the Internal Rates of Returns on streams as companies try to outbid each other for the various deals to be had.

    Trump gets back in in 2024 however I think this would merely create an initial shock lower in the stock and it would soon recover given that their assets will likely be located all over the world.

    G Trends

    You cannot do a Dumb Money High conviction Doc without including G Trend data. My experience with G Trends is limited and there may be better ways to use it for this trade but for now I am just going to show the 5 year charts for "carbon credit" worldwide and then in the USA. As you can see, both seem to be picking up steam in the last year or two:

    Here are the 5 year trends when using the keywords "Low-carbon economy" for worldwide and US searches respectively:

    Here are the 5 year G trends for "Environmental, Social and Corporate Governance" worldwide and from the US respectively

    Conclusion

    The carbon credit market is starting to take off and is poised for massive growth over the next 5, 10 and 20 years. CSC has perfectly positioned itself to take advantage of this trend by employing the proven and golden business model (pun intended) of royalty and streaming financing to this fast emerging intangible commodity space. We have a chance to get in on the ground floor of a company that could easily be worth many billions of dollars at a tiny market cap before it lists on a major exchange. The company has all the cash and management expertise that it needs to execute its business model and create enormous wealth for early shareholders. Good luck and good investing to all!

    submitted by /u/treesrlyfe
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    $GMGI continues to impress quarter after quarter. This online gambling software company has a excellent debt to asset ratio and consistent quarterly growth. This was trading at $14 a share this year and now sitting at around $7. Still pending uplist approval as they continue to grow. Check them out!

    Posted: 31 Jul 2021 02:48 PM PDT

    Stock Index traders last week SPY SPX etc

    Posted: 31 Jul 2021 06:07 AM PDT

    Is it insider trading if I trade based on shitty past actions/character of a company's exec that I personally know?

    Posted: 31 Jul 2021 03:21 PM PDT

    A company recently IPO'ed in the last year. I know an exec whos done some crappy things, nothing illegal but just really misogynistic personal life behavior. More specifically he threw parties that give him a really bad look and I personally think there's a high possibility that people + news start catching on and paying attention to said parties.

    Additionally, I just think that these parties and behavior reflect bad judgement and character that make him incapable of running the company well over the long term.

    If I trade based on this information, is that considered insider trading? The reason I ask is that the parties weren't "public" persay and invite only and you had to chant weird misogynistic culty stuff to enter and I think it could affect the stock if word got out.

    submitted by /u/poached-egg-gang
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    Since many of you were saying that J-Pow won't allow the market to finish Red 3 days in a row, I analyzed the chances of that happening! Here are the results! [data, explanation, and analysis in comments]

    Posted: 31 Jul 2021 10:18 AM PDT

    While nobody was looking

    Posted: 31 Jul 2021 08:41 AM PDT

    The suspension on raising the federal debt ceiling expires this weekend. What will the market do Monday? The Treasury started using special measures Friday to avert default, but those options will run out in September. Congress is now on vacation and not planned to be back 8n Washington until September.

    During less fanatical times, democrats and republicans routinely raised the debt ceiling as the thought of default was seen as mutely self destructive. This time, I am worried that the most extreme in both parties are willing to go to whatever means necessary to force their special interest agendas forward.

    How likely is it that holding the debt ceiling hostage triggers the next market correction? When would that correction start? What can you do to mitigate the damage to your portfolio?

    submitted by /u/curiosity_2020
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    Which app? Is best? Preferably one that has a $0 commission. And can be used from a country besides US.

    Posted: 31 Jul 2021 08:17 PM PDT

    Hedge Funds Get a Wake up Call on the Risks of Investing in China

    Posted: 31 Jul 2021 08:10 PM PDT

    19 year old college student, heavily focused on growth stocks. How’s my portfolio looking?

    Posted: 31 Jul 2021 09:46 AM PDT

    Al trades throws some DD on Clov

    Posted: 31 Jul 2021 06:01 PM PDT

    Experts say invest no more than 10% of your worth in risky stocks. Does that include the value of your house or condo?

    Posted: 31 Jul 2021 08:52 AM PDT

    I tried a search in Google on this and I couldn't really find the answer. Probably didn't look hard enough. So I'm here because someone can probably shed some light on this. I should restate the question for clarity with an example:

    There are some people with a house or condo worth a decent sum like say $500K usd but their cash and stocks are not a lot, let's say $100K for this example. So 10% of both the home and cash/stocks is $60K invested in risky stocks. And if that tanks to near 0 then the person only has about $40K left of the $100k which could be a disaster for paying bills or even keeping the house. So should the recommended 10% investment in risky stocks not include the value of a house in most or at least many cases?

    I notice financial commentators on the net and tv don't mention the value of a home in the 10% figure. Also I realize if the house is already paid off then a reverse mortgage or some other kind of home equity borrowing could help fix problems from losing the entire 10% investment. But that could have its own problems and feel free to discuss borrowing on the home in this issue.

    submitted by /u/The_Roaming_Beetle_5
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    How did I lose this much money under ‘total return’? Also what does the dotted lines mean? This is only a simulation btw

    Posted: 31 Jul 2021 05:25 PM PDT

    Most Anticipated Earnings Releases for the week beginning August 2nd, 2021

    Posted: 30 Jul 2021 09:01 PM PDT

    At noon on Friday, the Treasury will be suspending sales of securities according to a letter Secretary Janet Yellen sent to Congress last week. The debt ceiling will be reinstated on Sunday.

    Posted: 31 Jul 2021 07:17 AM PDT

    Chinese Education Stocks Selloff (What to do? Buy the Selloff or Close out Completely?) - 7/24/2021

    Posted: 31 Jul 2021 09:46 AM PDT

    Hello investors,

    Yesterday was marked by an intense selloff in the Chinese education stocks. See below.

    📷

    The driver of the steep movements is that the Chinese government is banning for-profit education institutions from raising capital in the US, to "tackle the birthrate issue and offer lower prices for education".

    https://www.cnbc.com/2021/07/23/us-listed-china-education-stocks-plunge-as-beijing-regulators-crack-down.html

    Now, this is completely my opinion and what my plans are so please stick with me for a minute.

    If you've noticed, the tensions between China and the US have been exacerbating since the start of COVID.

    Early this year, the Biden administration has been increasing the budget to fund investigations into the origins of COVID and there has been discussion regarding delisting Chinese ADRs (American Depository Receipts, another name for Chinese foreign stocks) from the US exchanges if they don't submit their audits of their financials in the past 3 years and several other criteria.

    The Chinese government has announced a major crackdown on the e-commerce giants in China, namely BABA and JD, while stopping Ant's IPO.

    US Deputy Secretary of State Wendy Sherman will be traveling to China on this weekend to meet with the Chinese officials including Foreign Minister Wang Yi.

    I have been basically ignoring all of these developments because when it comes to regulatory risks, there are no right answers. And more often than not, they don't have material impact on the companies' businesses in the long run.

    To put it into numbers, I was assigning 5-10% probability that the tensions between US and China will reach the point where the businesses will be permanently damaged, affecting their bottom lines and future prospects, which was a risk I was willing to take and definitely a risk when you are investing in foreign companies, simply due to different rules and regulations.

    Looking back, I may have assigned too low of a risk, especially when the market has been trying to tell us something since February.

    Look at the below charts.

    📷📷📷📷

    If you look at these charts, you'll notice that the selloff on Friday was not out of thin air. The Chinese names have been getting punished since early 2021 for a few months now.

    Generally speaking, when the stock prices move due to concerns about regulations, they usually recover within a few weeks.

    The continued downtrends in the Chinese names can possibly indicate the Chinese government may impose real long-term risks to the companies, because it's always good to assume that Mr. Market is right and work backwards to disapprove her (a quote by Peter Lynch, not verbatim).

    I have positions in PDD and FUTU. And my personal take is that from a previously assumed regulatory risks of 5-10% chance that these regulations can impose material threats to the companies' bottom lines, I have raised the risks to 20-25%, very roughly speaking.

    This means that I'm still willing to play the bet.

    I know the two companies I mentioned are great businesses with lots of potential. PDD specifically has such a growth potential and has proven to show that its business model generates so much cash flow.

    Despite the increase in regulatory risks, they are still great opportunities from my perspective, especially that we now have cheaper entry points and will likely more than offset the higher risks.

    I have a few scenarios in mind on how this will play out, with corresponding probabilities, again my opinion.

    1. Base case (60%): the Chinese officials make no more major moves regarding ADRs and stays quiet for the foreseeable future. ADRs slowly recover over the course of next couple of years due to continued tensions between the US and China. PDD and FUTU's profitabilities continue to increase and the markets eventually price appropriately to their true earnings powers.
    2. Bull case (20%): the Chinese officials come to truce with the US government in the near term regarding several issues and eliminate the risk of ADRs from being delisted. Regulation risks are lowered and pressures on the ADRs are alleviated, bringing them back to par with their American counterparts in terms of trading multiples.
    3. Bear case (20%): the Chinese officials go full blowout against the US and US-listed Chinese companies and ban foreign capital raising for all domestic companies, which means that ADRs will get delisted and companies like PDD won't be able to raise capital overseas, hurting their ability to raise financing and fund future business plans.

    Chinese domestic companies above certain market cap ($100B) will be heavily scrutinized by the government and will be subject to strict measures such as more than 50% ownership by the state or destroying incentives for the management team.

    It's not worth trying to predict what's going to happen but it is certainly worth it to think of various scenarios and assign your own probability for each event and make investment decisions based off on that.

    Based on the above, my chances of winning on this bet is 80% over the next couple of years, which I'm more than willing to take.

    It's not worth overcomplicating this whole situation and only look at what makes sense. PDD is such an important part of Chinese economy now and will the government really do something that will limit its growth? No one can predict their move because they have shown their williness to go beyond expectations but if I had to bet, the answer is probably no.

    At the same time, the downside risk is extreme. I mean look at EDU and TAL's 70% declines.

    So my plan is to increase my exposure to the names I've mentioned a bit while limiting the overall exposure to less than 7%.

    The key is to have a diversified portfolio so that you are able to take on few losers here and few winners there.

    Please check out our YouTube channel for a more detailed explanation!

    Thanks for reading and I hope this was helpful! Please feel free to share your strategies.

    submitted by /u/midasinvestors
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    Udemy vs Coursera! Do not buy Udemy stock before seeing this video!�� (UDEMY Stock Analysis)

    Posted: 31 Jul 2021 10:51 AM PDT

    $GOED strong fundamental play with Q2 earnings coming up

    Posted: 31 Jul 2021 05:45 AM PDT

    LOW PE micro cap investment idea $GOED

    Here is a name that could be worth a little weekend DD. $GOED is an online retailer of appliances and furniture. Through a recent acquisition of appliances connection the company has dramatically increased their revenues and market share. However the acquisition required a very costly equity raise which punished the share price. Moving forward the investment thesis is sound with a potentially favorable risk/reward profile.

    Current shares outstanding: roughly 105M

    Q1 net income of $13M in $123M in revenue.

    Q2 revenue should increase to roughly $145M (company releases monthly sales figures)

    Currently have $40M in cash with $60M in debt for net debt of roughly $20M.

    June was their strongest revenue month on record with $55M ($660M rev run rate). Note the month of June saw the highest order fill rate of 76% however this is still below historical averages. Management expects this to rise into the 80s and possibly near 90% so there is revenue upside at recent order numbers. Also note the 2nd half of the year is historically better for appliance retailers with November and December the best months.

    If the company does $13M profit each quarter like it did in the first that would be $52M. To compute the fully diluted EPS we need to include 92M warrants brining the total O/S just over 200M. This still gives us an EPS of roughly $0.25. The one analyst covering this stock is projecting $0.71 on a basic eps basis which would be around $0.37 diluted. Remember revenues for Q2 will be around 20% than Q1 and the second half of the year is stronger for there is certainly upside from Q1 profit.

    Other upcoming catalysts include rebranding. As part of the merger with appliances connection the company will rebrand from the current name 1847 Goedeker. The company also recently announced its agreement to acquire Florida based Appliances Gallery. The transaction is non dilutive paid for with operating income. So not only are they growing organically but they are able to grow through acquisition without dilution moving forward.

    The May equity offering needing to finance the acquisition of appliances connection dropped the dramatically but management who owned the majority of the company found a way to pull off this acquisition seeing the potential to grow this to a $1B company.

    At $3 per share the upside outweighs the downside using recent profitably metrics. The one analyst price target is $12. If the company can approach that analysts EPS targets on a diluted basis and do $0.35 this year that should drive the share price higher. A 25X current PE would be $8.75 at years end. Of course peers $W and $OSTK trade much higher multiple than 25.

    Q2 earnings and July orders will be short term catalysts. Also look for more analyst coverage. The recent offering left a lot of retail holders. With more coverage should come more institutional investors allowing a stronger shareholder base and higher share price. Current short interest is also 10% down slightly from prior reported amount. Shorts may be covering with less downside at current levels and into earnings.

    One last item to note is warrants have a $2.25 exercise price with 5 year term and no redemption feature. They have good appeal for long term investors.

    Thoughts?

    submitted by /u/Vast_Shape_3557
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    Will Nikola fraud case hurt Coolidge's future?

    Posted: 31 Jul 2021 05:36 AM PDT

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