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    Stocks - r/Stocks Daily Discussion & Fundamentals Friday Oct 01, 2021

    October 01, 2021

    Stocks - r/Stocks Daily Discussion & Fundamentals Friday Oct 01, 2021

    r/Stocks Daily Discussion & Fundamentals Friday Oct 01, 2021

    Posted: 01 Oct 2021 02:30 AM PDT

    This is the daily discussion, so anything stocks related is fine, but the theme for today is on fundamentals, but if fundamentals aren't your thing then just ignore the theme and/or post your arguments against fundamentals here and not in the current post.

    Some helpful day to day links, including news:

    Most fundamentals are updated every 3 months due to the fact that corporations release earnings reports every quarter, so traders are always speculating at what those earnings will say, and investors may change the size of their holdings based on those reports. Expect a lot of volatility around earnings, but it usually doesn't matter if you're holding long term, but keep in mind the importance of earnings reports because a trend of declining earnings or a decline in some other fundamental will drive the stock down over the long term as well.

    See the following word cloud and click through for the wiki:

    Market Cap - Shares Outstanding - Volume - Dividend - EPS - P/E Ratio - EPS Q/Q - PEG - Sales Q/Q - Return on Assets (ROA) - Return on Equity (ROE) - BETA - SMA - quarterly earnings

    If you have a basic question, for example "what is EBITDA," then google "investopedia EBITDA" and click the Investopedia article on it; do this for everything until you have a more in depth question or just want to share what you learned.

    Useful links:

    See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday.

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    Redditors Are Right About the Unfairness of the Market

    Posted: 01 Oct 2021 07:09 AM PDT

    https://www.bloomberg.com/opinion/articles/2021-10-01/ordinary-investors-don-t-get-a-fair-shot-when-the-powerful-flout-the-rules

    A rallying cry of the day traders that hang out in Reddit Inc.'s stock market forums is that only by joining forces can they prosper in an environment inherently hostile to small investors. Recent events suggest their suspicion that the decks are stacked against them is justified – which is a terrible look for capitalism.

    Daniel Taylor, a professor at the Wharton School, has amassed evidence of widespread insider trading by company executives, Bloomberg Businessweek reported this week. An investigation by the Wall Street Journal found that more than 130 U.S. federal judges failed to recuse themselves from 685 court cases involving companies in which they or their families had investments. And at the Federal Reserve, two policymakers have resigned amid a probe into their personal trading activity.

    Wharton professor Taylor's research has shown that corporate insiders consistently dumped holdings before official legal probes hurt their company's shares, Businessweek reported. They also increased their buying and selling in the gaps between audit reports being produced for company boards and being made publicly available, and exploited rules governing scheduled trading schedules for profit.

    His analysis suggests the existing regulations governing insider trading are inadequate. It also implies that the Securities and Exchange Commission is asleep at the wheel: The watchdog instigated only 33 insider trading cases last year and just 32 in 2019, the fewest in more than two decades, according to Businessweek.

    Since 1974, federal law has explicitly prohibited U.S. judges from overseeing cases in which they or their immediate family have a "legal or equitable interest, however small," the Journal reported earlier this week. But the newspaper found that in two-thirds of the cases in which judiciary members had a stake, the rulings would have benefited their finances.

    At the U.S. central bank, Boston Fed President Eric Rosengren and Dallas Fed chief Robert Kaplan both resigned within hours of each other on Monday. Both had revealed questionable investing activity in their annual financial disclosures. And while they said the trades were within the central bank's rules, both are being scrutinized further. "We're looking carefully at the trading that was done to make sure that it's in compliance with our rules and with the law," Fed Chairman Jerome Powell told the Senate Banking Committee.

    In light of those embarrassing events in the U.S., you'd hope that every central bank in the world is currently getting busy reviewing the protocols governing what policy makers are allowed to do with their personal portfolios while in office. You'd also hope that every central banker in the world is examining their investment activities and tappity-tapping a resignation letter if their pursuit of personal profit is at odds with the probity of their position.

    Capitalism is still tarnished by the aftershocks of the global financial crisis, when the risks taken by private capital had to be bailed out by public funds. And the growing prevalence of the fastest-growing companies staying off public markets and funding their expansion instead with private capital keeps them out of the portfolios of retail buyers, further stoking suspicion that the covenant between capitalism and society is asymmetrical and biased against individual investors.

    When corporate executives, judges and policy makers line their own pockets by either bending or breaking rules designed to avoid even the appearance of impropriety, they do a disservice to society as a whole. "Most Americans today believe the stock market is rigged, and they're right," Wharton's Taylor told Businessweek.

    Sure, public officials have the same right to set aside income for their retirement or to pay school fees or even to buy sport cars or boats. But they can achieve those goals by putting their money into blind trusts or index funds or other financial products that don't involve them selecting specific individual stocks of companies. Leave day trading to the day traders.

    submitted by /u/_hiddenscout
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    So how much did you lose in September?

    Posted: 01 Oct 2021 07:12 AM PDT

    I swear I don't need sex anymore I have been getting screwed daily by the stock market. I lost 3500, a 5% of my portfolio (I'm still holding strong though).

    How about you guys? Misery does love company so I would love hearing how much you lost last month alone.

    If you happened to win, share it too, I'm sincerely happy for you!

    submitted by /u/girloverflowers
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    Just sold half of my holdings in TSLA.

    Posted: 01 Oct 2021 12:43 PM PDT

     After months of weighing options I decided this was the best move for my family. I've been in TSLA since 2015 when I decided to invest as a single mother, and never sold even when times were hard. TSLA ended up being a huge blessing for me and my son over the years! I made it through work being closed down for 9 months last year and half of this year, and never sold. So, this step took alot for me, on a personal level. Because of my job being effected half of this year, my income was no where close to what it would have normally been... I decided that selling half would give me some peace of mind with the economic climate where it is. I also knew that with my income being as low as it was this year, that this was possibly the last opportunity to avoid selling in a higher tax bracket. Of course, I had this mental struggle between selling and it then going higher. But I've decided to just not let myself think on those terms. I now feel a security in knowing that if it rises, I still have half my holdings and will enjoy watching my position climb again. And if it goes down, I will have the option to buy the dip. I was surprised at how stubborn my pride was when deciding whether to reduce position or not! This ride has been wild over the years. I'm happy to still be on it! But happy I was able to exercise making a tough decision that I knew was the wisest, for me.
    submitted by /u/siennasolo
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    Here is a Market Recap for today Friday, October 1, 2021

    Posted: 01 Oct 2021 01:55 PM PDT

    PsychoMarket Recap - Friday, October 1, 2021

    Happy spooky season Psychos! Stocks advanced today, reversing hard in the morning to the upside, though all three major indexes closed out the week negative once again. The S&P 500 (SPY) closed 1.19% higher but finished the week -1.86% down. The Nasdaq (QQQ) continued its streak of underperformance, pressured by rising Treasury yields, closing the day 0.51% higher but finished the week -2.71%, one of the worst weeks all year. The Dow Jones (DIA) closed the day 1.45% higher, driven by strength in financial and energy stocks, but closed the week 1.37% down. The Russell 2000 (IWM), which tracks the performance of small-caps, closed the day 1.68% higher but the week -0.38% down.

    Market participants continue to closely monitor developments coming out of Washington DC, with Congress managing to avoid a government shutdown by passing a last-minute bill yesterday night. Right before the midnight deadline, President Biden signed into law a short-term appropriations bill that will keep the government running through at least December 3, successfully avoiding a government shutdown. The Senate and House approved the funding legislation earlier Thursday. The Senate passed it in a 65-35 vote as all 50 Democrats backed it and 15 Republicans joined them. The House passed the bill by a 254-175 margin. Every Democratic representative and 34 Republicans supported it.

    https://www.cnbc.com/2021/09/30/government-shutdown-congress-moves-to-pass-funding-bill.html

    Focus will now shift towards debates surrounding the bipartisan infrastructure bill and raising the debt ceiling before mid-October, which is the estimated timeline when the debt ceiling will be hit. Earlier today, President Biden went to the capital to try and salvage plans for the infrastructure bill after House Speaker Nancy Pelosi was forced to delay the vote she scheduled today. This is due to disagreements in the party between moderates and more progressive members, particularly with Democratic Senators Joe Manchin and Kyrsten Sinema, who oppose the size of the infrastructure bill. https://www.reuters.com/world/us/democrats-struggle-reach-deal-congress-bidens-agenda-2021-10-01/

    A historic U.S. debt default could occur around Oct. 18, Treasury Secretary Janet Yellen has estimated, if Congress fails to give the government additional borrowing authority beyond the current statutory limit of $28.4 trillion. The House approved a bill late on Wednesday suspending the debt limit through December 2022. The Senate could vote on it "as early as next week," Senate Majority Leader Chuck Schumer said, but Republicans are expected to block it again as they have twice before. This is an evolving situation. In my humble opinion, I think the Republicans are playing political games with the debt ceiling and will pass it last minute, similar to the spending bill to avoid the government shutdown.

    Put simply, a default by the US would be an economic and political disaster that must be avoided. I cannot fathom the government willingly plunging the US into an unprecedented financial crisis for political reasons, though one can never guess the future. According to a report by Moody's Analytics, one of the three big along with Standard & Poor's and Fitch Group, approximately 6 million jobs would be lost and the unemployment would spike dramatically, US GDP would decline, and there would be an irrevocable stain on the faith and strength of US financial markets. "Internationally, the United States will have for the first time undermined the full faith and credit of its own currency -- a blow to our standing in the world and a boon for our adversaries such as China who are arguing to the world that the US is on the decline"

    The report goes on to say, "Global financial markets and the economy would be upended, and even if resolved quickly, Americans would pay for this default for generations, as global investors would rightly believe that the federal government's finances have been politicized and that a time may come when they would not be paid what they are owed when owed it. To compensate for this risk, they will demand higher interest rates on the Treasury bonds they purchase. That will exacerbate our daunting long-term fiscal challenges and be a lasting corrosive on the economy, significantly diminishing it."

    Here is a link to the full report, I encourage you to read it

    https://www.moodysanalytics.com/-/media/article/2021/playing-a-dangerous-game-with-the-debt-limit.pdf

    This is huge! Merck (MRK) said it developed an oral drug that reduces the risk of hospitalizations and deaths by around 50% for patients with mild or moderate cases of coronavirus and has filed for emergency use authorization with the FDA. Might be start time to look again at travel and restaurant stocks, a pill/oral drug would go a huge way to make people more comfortable and help make up for the gap created by vaccine hesitancy. https://www.cnbc.com/2021/10/01/merck-to-seek-emergency-authorization-for-oral-covid-19-treatment.html

    "The future belongs to those who believe in the beauty of their dreams." -Eleanor Roosevelt

    submitted by /u/psychotrader00
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    All film and TV production is likely to freeze this month and the markets are ignoring it.

    Posted: 01 Oct 2021 10:43 AM PDT

    TL;DR: IATSE, the union representing most below-the-line film workers, has started voting on a strike authorization and—as someone who works in the industry—I'm certain it's going to pass. In all likelihood, we'll see all US-based TV and film shoots come to a screeching halt in October. My thesis is that this will likely result in a short-term decline in NFLX, DIS, T and CMCSA as they're the four largest parties in the AMPTP (trade organization for producers).

    What IATSE is striking for, according to Variety:

    The industry has long expected workers to put in 14-hour days during production, if not longer. The shift to streaming and the explosion of demand has only sped up the pace. Before, workers might have expected weeks of downtime between shows. Now they can jump from one show to the next. Workers complain of exhaustion, and of being too tired to drive home safely.

    The union is seeking a 10-hour minimum "turnaround" — the time between production days — for all workers on all types of productions. The union negotiators argue that workers need a minimum of eight hours at home, plus an hour each way to commute to set. Some classifications have that already, but others have only eight- or nine-hour turnarounds.

    The unions are also seeking a minimum 54-hour turnaround on weekends. That would put an end to the dreaded "Fraturday" — a late-Friday shift that ends on Saturday morning. They also want to dramatically increase meal penalties, which are the payments that productions are obligated to provide if workers do not get a meal break. For many workers, a production will have to pay $8.50 for the first half-hour without a meal, $11 for the second half-hour, and then $13.50 for each half-hour after that. Those payments can work out to hundreds of extra dollars a week — though at the cost of having to eat standing up or skipping meals entirely. Unions have suggested increasing those payments as much as threefold, as a way of forcing studios to actually take the meal break, rather than just budgeting in the penalties.

    What will shut down?

    Almost everything. There are three contracts in play — the Basic Agreement, the Area Standards Agreement and the Videotape Agreement. The Basic Agreement applies to the 13 "West Coast" IATSE locals, which represent about 47,000 workers. Three of those locals are nationwide: the International Cinematographers Guild, Local 600, the Motion Picture Editors Guild and the Art Directors Guild. The Area Standards Agreement covers another 15,000 to 20,000 workers at 23 locals around the country, including production hubs such as Georgia, Louisiana and New Mexico. Those workers are also voting on a strike authorization. The Videotape Agreement covers certain TV shows, like talk shows, reality shows, game shows, or "Dancing With the Stars." The Basic Agreement and the Area Standards Agreement expired on Sept. 10, and the Videotape Agreement expires on Thursday night. All together, those contracts cover the vast majority of film and TV production across the country, and if a strike is called, all work covered under those contracts would cease.

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    Is it theoretically possible for everyone in the market to profit?

    Posted: 01 Oct 2021 08:36 AM PDT

    Let's say you buy some shares over here, and they buy shares over here and I sell shares over here and then you buy more and then he sells some, you know like a regular market.

    They say when someone profits , someone else loses. But I don't believe that's true. I don't believe the stock market is a zero sum game.

    If everyone bought and sold at the right time is it possible for everyone to profit if they coordinated?

    submitted by /u/Careful_Mirror6886
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    Coinbase Hacked, Funds From Least 6,000 Customers Wiped Out

    Posted: 01 Oct 2021 12:24 PM PDT

    Coinbase customers affected recieved this email this morning:

    Unfortunately, between March and May 20, 2021, you were a victim of a third-party campaign to gain unauthorized access to the accounts of Coinbase customers and move customer funds off the Coinbase platform. At least 6,000 Coinbase customers had funds removed from their accounts, including you.

    In order to access your Coinbase account, these third parties first needed prior knowledge of the email address, password, and phone number associated with your Coinbase account, as well as access to your personal email inbox. While we are not able to determine conclusively how these third parties gained access to this information, this type of campaign typically involves phishing attacks or other social engineering techniques to trick a victim into unknowingly disclosing login credentials to a bad actor. We have not found any evidence that these third parties obtained this information from Coinbase itself.

    Even with the information described above, additional authentication is required in order to access your Coinbase account. However, in this incident, for customers who use SMS texts for two-factor authentication, the third party took advantage of a flaw in Coinbase's SMS Account Recovery process in order to receive an SMS two-factor authentication token and gain access to your account.

    Once in your account, the third party was able to transfer your funds to crypto wallets unassociated with Coinbase.

    From a shareholder perspective, I think this is very egregious that this was happening around the time of the IPO, but they didn't disclose this until just now. This news was withheld and kept under wraps for months, and could be related to the heavy selling we've seen from company executives since the IPO back in April.

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    Here's Your Daily Market Brief For October 1st

    Posted: 01 Oct 2021 05:55 AM PDT

    Top News

    • S&P 500 Futures are +.26%; Dow Futures are +.32%; NASDAQ Futures are +.12%
    • US stock futures move slightly higher after starting the day off red. Investors are concerned about the debt ceiling and the delayed $1T bipartisan infrastructure bill. Last night, Speaker Pelosi called off a planned infrastructure vote in the US House after they couldn't agree on a spending proposal. Note: The US House will plan to try again shortly but the big concerns about the bill remain to be the size and scope
    • August US consumer spending data (CPI) rose higher than expected. CPI jumped .8% vs .6% expected. Earlier this week, Fed's Jerome Powell said inflationary pressures could last longer than expected due to supply chain bottlenecks
    • The Chinese government is cracking down on the energy shortage concern in China. Chinese officials ordered the top state-owned energy companies to secure supplies for winter at all costs. Note: This global power shortage will raise prices for power around the world as the cold season starts
    • The debt ceiling is starting to be more in focus - Treasury Secretary Yellen reiterated that a US default would be "catastrophic" for the country. In addition, a report from the Institute of International Finance indicated that US debt is losing favor as safe haven in the world. Investors are now demanding higher yields for debt due in October and November. Note: Demanding higher yields generally means investors want to be compensated for the higher risks involved

    Price Target Updates

    • JP Morgan lowered the price target on Spirit Airlines, Inc. SAVE from $43 to $34
    • Raymond James cut Alibaba Group Holding Limited BABA price target from $300 to $240
    • Telsey Advisory Group cut Bed Bath & Beyond Inc. BBBY price target from $28 to $20
    • Needham raised DoorDash, Inc. DASH price target from $230 to $240
    • JP Morgan lifted the price target for Southwest Airlines Co. LUV from $64 to $70

    In Other News

    • Palantir could lose a $111M contract it has with Immigrations and Customs Enforcement (ICE). A government document shows that ICE is working to replace Palantir's FALCON system with a custom analytics tool by RAVEn
    • Merck and Ridgeback Biotherapeutics are expected to ask for emergency authorization for their oral antiviral treatment for COVID after they saw good results in trials
    • Zoom and Five9 will call off their $14.7B mergers after Five9 didn't receive the required number of votes from their stockholders. Note: Five9 stockholders did not think they were being fairly compensated due to the decline in ZM's share price recently
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    Bear case for DIS

    Posted: 01 Oct 2021 06:29 AM PDT

    What's your take on the recent DIS drop. Shang-Chi was a huge success, law case on black widow is also resolved, parks are opening back up for the next wave of travel around thanksgiving and Christmas. What's the bear case? Is DIS a no brainer buy now?

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    $AMZN - Amazon is Building The Greatest Moat Through Its Logistics Network

    Posted: 01 Oct 2021 10:09 AM PDT

    Amazon Investment Thesis - Logistics moat

    • Shipping supply issues have impacted businesses globally, and increased shipping costs hurt operating margins for all retailers.
    • Carrier companies are the biggest winner due to supply chain constraints, but there is one retailer that has an advantage despite rising shipping costs.
    • Amazon, due to it's shipping network (doubled in size in the last 2 years), will be able to absorb these costs because they dominate the "Last Mile Delivery" which other retailers can't control.

    Shipping – Bottlenecks In the Supply Chain

    Container rates and availability are usually built into annual contracts between shippers and the carriers, and these deals normally have strict requirements, such as only nonstop service between ports or a minimum of two sailings a week.

    But little by little over the past 18 months the daily rates quoted by carriers and freight agents have soared.[1]

    Side note: Earlier this year I wrote about $GSL and how they could take advantage of shipping turmoil. Since sharing the idea, GSL's stock price has increased close to 200%. Original writeup

    Transportation costs—typically a fraction of a finished product's price—are emerging as another supply-chain hurdle, overwhelming some companies already paying more for raw materials and labor.

    The fabric and crafts retailer Jo-Ann Stores LLC said it has spent 10 times more than its historical cost in some cases to move products from one point to another. [2]

    But it's not just shipping containers. Everywhere across the supply chain is getting squeezed as truck drivers are in short supply and gasoline is more expensive than many expected. This is a cost you can't control if you are a retailer, you are absorbing these costs form the delivery service,

    And it's not going to be over soon. A lot of retailers and distributors foresee these problems lasting well into 2023. This bodes very well for Amazon, as I will discuss below.

    Amazon's Explosive Shipping Network Growth

    Let's look at what Amazon can control. Mainly their north American distribution network and facilities. Amazon's Distribution Network has doubled over the last 2 years [3].

    We can also see massive growth in the additions of delivery stations. Amazon now has 250 delivery stations, accounting for 13.9% of it's physical footprint, which are the last step (last mile) in the e-commerce distribution chain. [3]

    Delivery Stations: Parcel delivery stations are medium-sized cross-docking facilities mostly to sort parcels bound for specific local delivery routes. Since deliveries are primarily within an urban setting, parcels are usually loaded into delivery vans or other specialized urban delivery vehicles (electric vans and even cargo bicycles)

    Why Delivery Stations Are Important

    In the past, Amazon was beholden to USPS, UPS, and FedEx for the last mile delivery, but these are not dedicated to Amazon. In the past, when demand surged, Amazon would experience shipping delays. This impacts their reputation since customers don't benefit from Prime – same day delivery.

    Having these delivery stations means that Amazon can bypass USPS, FedEx, and UPS and perform the vital last mile delivery. It is one of the aspects of their operating margin they can control and ensures the optimal Amazon experience.

    Why Amazon Wins

    An increase in shipping costs will squeeze operating margins in the coming quarters, but more importantly, it squeezes competitors. Because the competitors can't control other aspects of the supply chain (last mile delivery) they won't be able to handle the spike in shipping costs.

    To put it bluntly, Amazon is building one of the greatest moats in history through its logistics network.

    Who knows, maybe they will acquire a shipping company?

    Sources:

    [1] Bloomberg

    [2] https://www.wsj.com/articles/rising-shipping-costs-are-companies-latest-inflation-riddle-11631784602?mod=latest_headlines

    [3] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7419283/

    [4] https://utradea.com/positions/AMZN--Amazon-is-Building-The-Greatest-Moat-Through-Its-Logistics-Network

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    Target is way oversold

    Posted: 01 Oct 2021 08:02 AM PDT

    This is a company which is a great retailer, great financials, fast growing businesses in e-commerce, and even has successfully launched private label brands. Yet it's down 10% in a matter of weeks.

    Time to buy folks!

    submitted by /u/plainbread11
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    What stock market tips/ advice do you hate hearing?

    Posted: 01 Oct 2021 01:52 PM PDT

    For me it's "you can't lose if you don't sell" as if companies can't go bankrupt. Or stocks can't stay low forever. All it does is trick new investors into thinking there's some law that says all stock must go back to their all time high. How is bag holding a stock for 10 years instead of moving the remainder over to an index not losing?

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    $LICY- Koch Brothers making big investment

    Posted: 01 Oct 2021 03:40 AM PDT

    Li-cycle ($LICY) is leading the young but growing industry of lithium ion battery recycling. While everyone has been dumping investment money into the EV market over the past 18months, this niche derivative industry has largely been overlooked…. till now…

    Ford recently announced a $50m investment into private battery recycler Redwood and two days ago, news dropped that Koch Strategic Platforms is making a $100m investment in $LICY.

    https://www.businesswire.com/news/home/20210929005563/en/Li-Cycle-Announces-100-Million-Investment-from-Koch-Strategic-Platforms

    The terms of the deal are important to note:

    "Under the terms of the investment, KSP will purchase a convertible note in the aggregate principal amount of $100 million (the "Note"). The Note will have an initial conversion price of approximately $13.43 per Li-Cycle common share"

    This should set a floor share value somewhere around $13.50, which makes sense considering all of the recent analyst initiations ranging from $13-15. These analyst initiations were done PRIOR to the Koch Brothers deal so watch out for revised numbers and new initiations in the next few days/weeks. I predict that the new price targets will be around the $20mark now.

    Whats possibly more important about the Koch Strategic Platforms arrangement is the following:

    *"In addition to the new capital, the Company along with several Koch Industries subsidiaries are exploring opportunities to accelerate Li-Cycle's global growth strategies. This includes potentially working with Koch Engineered Solutions ("KES") which provides engineering, procurement, and construction services, as well as the Optimized Process Designs group ("OPD"), a capability of KES, which provides detailed engineering packages, single point procurement for all equipment and materials, fabrication, and construction services. Li-Cycle and KES are exploring commercial opportunities to support the global deployment of incremental Spoke facilities and to enhance execution and operational readiness for the Company's Rochester Hub1.

    "KSP's investment in Li-Cycle will further fund and accelerate the growth of our lithium-ion battery recycling footprint in North America and globally, as we scale our efficient and proven technology globally to grow in lockstep with our customers and pursue new market opportunities," said Ajay Kochhar, co-founder and Chief Executive Officer of Li-Cycle."*

    Koch's involvement will be like getting one of the sharks as your business partner. The capital investment is great, but unlocking new contacts, opportunities, cost savers, etc. may prove to be even more important.

    The LICY sub still has under 100members and is under used but I've watched it triple in the week. I bet by the end of the year it will be over 1000 members and stock will be flying.

    submitted by /u/E-garr
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    Vicarious Surgical (NYSE: RBOT) - Future Challenger and Disrupter to Intuitive Surgical's Robotic Surgery Monopoly

    Posted: 01 Oct 2021 11:39 AM PDT

    Vicarious Surgical (RBOT) has the potential to be the first real, meaningful competition to Intuitive Surgical's monopoly on robotic surgery with its robotic platform poised for FDA approval in 2023 with commercialization starting at that point. The company expects to hit $1B in revenue by 2027, which on a discounted basis to today assuming a similar EV/sales multiple as ISRG, would value the business today at around $5B, or 300%+ above today's share price. Note the opportunity is highly speculative as the company has no revenue today and the platform has yet to achieve regulatory approval.

    Background: Vicarious was founded in 2014 by two MIT engineers with the vision of creating a much more simple, effective, and nimble single port robotic system for abdominal surgeries. The company is backed by Kholsa Ventures, Bill Gates, and Eric Schmidt's family office, with Auris (acquired by JNJ) former CFO as executive chairman. Beckton Dickenson, one of the largest publicly traded medical device companies, is also an investor in the PIPE. In September 2021, the company completed its combination transaction with D8 holdings, valuing the company at nearly $1B TEV and putting ~$200MM of cash on the balance sheet. The company's system was granted the "Breakthrough Device" designation by the FDA, the only robotic system to receive this, which positions Vicarious for a faster approval process. Breakthrough designations are only granted to devices which make meaningful technological and patient outcome leaps relative to existing technologies and solutions. There are about 8MM shares in the free float and the remaining ~120MM in the hands of longer term institutional and founder owners.

    The company is based in Waltham, MA (just outside of Boston) and currently has 33 job openings posted.

    Market: the robotic surgery market was born primarily through Intuitive Surgical's development of the da Vinci surgical system starting in the early 2000s, which originally was a multi-port/incision robotic system comprising of 3-4 surgical arms and a separate console. The platform grew originally from prostatectomy and hysterectomy procedures into heart, lung and other applications. The goal of robotic surgery was to advance from laproscopic procedures (minimally invasive manual surgery) toward greater precision, lower complications, and better accuracy by giving the surgeon greater control (the human hand can be unstable) and visibility (HD cameras inserted into the body). Other platforms serving other niches have been developed, including MAKO (for knee replacements, bought by Stryker), Mazor (bought by MDT), Stereotaxis (EP / cath procedures), Ascensus, and Procept. ISRG today generates nearly $5B of revenue and growing at a 20%+ rate with EBITDA margins of nearly 40%. ISRG's surgical platforms cost ~$2-3MM each. Given this growth and share gain from traditional surgery, MDT has developed the Hugo system, JNJ has acquired Auris, and Stryker has made inroads as well.

    The Vicarious Solution: The next stage of robotic surgery is to accomplish the same or better results but through smaller and fewer incisions. ISRG developed a single port system utilizing a 25mm incision and MDT's Hugo system is a copy of the ISRG's multi-port system.

    Vicarious fits in by providing technology able to bring the same capabilities but into a single 10-15mm incision, which results in about a third of the size of an incision from any other single port platform. Additionally, the Vicarious system has two robotic arms and a camera that fit through a single incision, and the arms have 9 degrees of dexterity with the ability to reach 360 degrees, while other systems cannot do this.

    Further, Vicarious' system is smaller and cheaper, allowing more existing hospital ORs to adopt the technology without construction or disruption to the surgical suite. More on the technology can be found in various investor presentations by Vicarious and D8 as well as video interviews with Adam Sachs, the founder/CEO.

    In short, the Vicarious system promises to be cheaper, smaller, more nimble, and offer better patient outcomes compared to the competition. The company's investor materials point to a third party market survey showing that the Vicarious system scored in the 95th percentile in terms of customer feedback and receptivity. Mastering single port abdominal and thoracic surgery via robotics has been the holy grail of the robotic surgery market given it reduces complications, post op recovery time, etc, and Vicarious is poised to be the solution delivering better technology with a lower price.

    What's the play?: the company projects $1B in revenue by 2027, which would be about 3 years after FDA approval. Note ISRG is $5B today and likely to continue growing at 15-20% CAGR. Assuming the same valuation multiples as ISRG (20-25 times sales), that would work out to a roughly $20B TEV in 2027, and discounting this back to 2021 would yield a $5B net present value assuming a 25% discount rate. Today's value is roughly $1.5B, so that is 3x today's value. Even if you cut the company's projections by 50%, you get a current value well in excess of today's value.

    That's all well and good but my personal view is this company will never hit $1B in sales. Why? It will be bought before then. ISRG has $4B of total cash and no debt. Medtronic has $11B in cash. JNJ has $25B in cash. Beckton Dickenson has $3B of cash. These and many others have a strategic need to get a dominant platform in robotic surgery and ISRG at a $120B market cap is too expensive for any of them to buy out.

    As soon as (or even before) the Vicarious system gets FDA approval, it will likely be bought out. Adam Sachs believes the business can be a $100B company, and I believe him given the novel nature of the technology and its capabilities.

    I believe the best way to play this is via the warrants which offer asymmetric upside (trade at ~$2, which is right at intrinsic value with the share price at roughly $13.50). The warrants get dollar for dollar upside on the shares through $18 (and proportional above that), so these act like LEAP call options though with capped upside at $18 as the company can redeem them at that point in time. I own nearly 500,000 warrants, and this isn't a quick flip position, as it would take several days to sell out of this. I owned ISRG back at $40-$50/share and sold out too soon - it is now trading at $1000.

    The Big Risks: the obvious one is failure to achieve FDA approval. The others include the majors developing a competing option that's even better than Vicarious, though not likely based on what is known to be in the pipeline now. Separately, there is the potential that the company needs future capital to commercialize beyond the $200MM on the balance sheet, though that should provide 2-3 years of support to get through FDA approval.

    Resources:

    1. Read the company's S-1/prospectus for the detailed DD done by D8 in connection with the merger
    2. DEH Investor Presentation Video Presentation: - findable on google
    3. Interview with Adam Sachs - findable on google
    4. Read investor presentations and analyst reports for ISRG
    submitted by /u/aretardeddungbeetle
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    U.S. inflation rises sharply again in August and stays at 30-year high, PCE shows

    Posted: 01 Oct 2021 06:29 AM PDT

    The cost of goods and services rose sharply again in August and left the rate of U.S. inflation at a 30-year high, with all signs pointing to price pressures snaking into next year. The personal consumption expenditure price index climbed 0,4% in August, the government said Friday. It was the sixth straight big increase. The rate of inflation in the 12 months ended in August edged up to 4.3% from 4.2% — the highest rate since 1991, when George H.W. Bush was president.

    Until very recently, Federal Reserve leaders insisted inflation would start to fall back to toward pre-pandemic levels of 2% or less by the end of this year. Yet in the past week senior central bank leaders acknowledged inflation could remain high well into 2022 because of ongoing shortages of crucial business supplies and and even labor. The central bank wants inflation to average 2% a year in the long run, using the PCE gauge as its starting point.

    Big picture: The highest rate of inflation in decades is squeezing families and businesses and acting as a bit of a drag on the economy. The big question is how long it lasts. Most of the increase in inflation is tied to the full reopening of the economy. A huge burst of pentup demand overwhelmed the ability of businesses to keep up, especially with computer chips and other materials in short supply. Faced with higher costs, businesses have raised prices, too. Thus the surge in inflation. These shortages were expected to ease by now, but instead it looks like it could get even worse. Fed Chairman Jerome Powell said the shortages could last until next summer.

    A separate measure of inflation that strips out volatile food and energy prices rose 0.3% in August. It's known as the core rate and is viewed by the Fed as a more reliable weathervane for inflationary trends. The increase in the core rate over the past 12 months was unchanged at 3.6%, but it was also at a 30-year peak. The PCE index is viewed as a more accurate measure of inflation than the better known consumer price index. It tracks a broader range of goods and gives more weight to substitution — when consumers buy a cheaper product to substitute for a more expensive one.

    Also on Friday, the government said consumer spending rose 0.8% in August. The increase was just half as big if inflation is taken into account.

    https://www.marketwatch.com/story/u-s-inflation-rises-sharply-again-in-august-and-remains-at-30-year-high-pce-shows-11633092039?mod=home-page

    submitted by /u/rugerapatt
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    Best 3-fund Portfolio Strategy

    Posted: 01 Oct 2021 08:35 AM PDT

    Looking for advice. I have $60,000 in an IRA that I'm looking to invest in a 3-fund ETF "set and forget" portfolio with Fidelity.

    I'm 30 and have a high risk tolerance. I'd like to leanFIRE as soon as I can. Currently investing $2k per month into my 401k outside of this portfolio, which is investing in the following:

    • FXAIX (40%)
    • FSMDX (20%)
    • VSIAX (20%)
    • FSPSX (20%)

    I had previously posted my portfolio venting that my money wasn't adequately "working for me." It was highly recommended I consolidate accounts and stocks that were overly difficult to manage and not working to my advantage. Thanks!!

    submitted by /u/KauffItUp
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    $bntx to good to be true?

    Posted: 01 Oct 2021 07:45 AM PDT

    I'm bad at dd , but a basic over views . This companies revenue and net income have been tripling yoy for 3 years now . P/s of 6 and down 50% from ath.

    Big news out today saying they are starting a cancer vaccine trial.

    Didn't look on deep but someone tell my why I shouldn't by the 15% drop today?

    submitted by /u/Careful_Mirror6886
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    Wife is freaking out about Oct 19 debt ceiling. Should I sell ahead of time?

    Posted: 01 Oct 2021 10:22 AM PDT

    I have a Robinhood account and have earned about $29k on $110k in deposits over the year. However, my wife's coworker has freaked her out about the debt ceiling and how our stocks are "going to get murdered."

    What's the best strategy here? We have the money in there while we wait to buy a new home.

    submitted by /u/ChrisF79
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    ‘This is a profound game changer’: Merck’s antiviral pill cuts risk of COVID-19 hospitalization and death in half, data show

    Posted: 01 Oct 2021 10:20 AM PDT

    Merck cheered investors and healthcare experts alike on Friday with the news that its COVID-19 antiviral cut the risk of hospitalization or death by roughly half in a late-stage trial, and could become a powerful tool in reining in the pandemic. The drug company MRK, 9.27% said molnupiravir, an oral antiviral developed with partner Ridgeback Biotherapeutics, reduced the risk of hospitalization or death in at-risk adult patients with mild to moderate COVID by about 50% in an interim analysis of data from a late-stage trial. The data came from 775 patients out of 1,550 that were enrolled in the trial.

    Merck shares soared 9% in early trades Friday as investors welcomed what would be a much-needed and long-awaited treatment for COVID. While several effective vaccines have been developed against the illness, far fewer treatments have emerged, and those that have require infusions and must be administered in a clinical setting. Molnupiravir is a pill administered orally in capsule form every 12 hours for five days, according to clinicaltrials.gov.

    Through Day 29 in the Phase 3 trial, no patients given molnupiravir died, compared with the eight patients who died on the placebo. The company is now planning to submit an application for emergency-use authorization for the treatment from the Food and Drug Administration and to seek authorizations from other regulatory bodies around the world. Merck plans to produce 10 million courses of treatment by year-end. The U.S. government has already committed to purchasing about 1.7 million courses of the drug, once it receives an EUA. The company said it halted the study early at the recommendation of an independent data-monitoring committee and in consultation with the FDA, because the results were so positive.

    Health experts applauded the news and said it would make a big difference in the fight against the coronavirus-borne illness, which has caused the deaths of almost 5 million people since the start of the outbreak.

    Full story here- https://www.marketwatch.com/story/merck-cheers-health-experts-with-news-antiviral-cut-risk-of-hospitalization-and-death-by-half-in-trial-and-could-become-powerful-tool-in-combating-covid-19-11633099780?mod=home-page

    submitted by /u/mikeyrocksin2021
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    Wash Sale and Substantially Identical Security question

    Posted: 01 Oct 2021 10:43 AM PDT

    I need some help! Newbie question here:

    The substantially identical part always confuses me. Are stocks from the same sector considered substantially identical? Forexample, Ford and Tesla, are they substantially identical when it comes to wash sales?

    Thanks and sorry for the dumb question

    submitted by /u/faisall1
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    Football stocks: do major transfers influence share price?

    Posted: 01 Oct 2021 06:28 AM PDT

    Hi guys,

    For any football(soccer)/sports fans here, I made a quick analysis of whether or not transfers of major players have an impact on the share price, which you can read here:

    https://pyxfootballreport.wordpress.com/2021/09/29/football-the-stock-market/

    Tl;dr the answer is not really

    The article includes a general discussion of why football teams make for relatively unique stocks

    I am excited to see if anyone else has any input on this topic!

    Also please let me know if I have the wrong flair

    submitted by /u/P_Y_X_
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    How to get rid of stocks your parents bought under your name?

    Posted: 01 Oct 2021 10:14 AM PDT

    My biological father created a stock account under my name on an app called Stockpile. He created this account when I was 16. He told me he was doing it but didn't give me a choice.

    I'm now almost 20, and have cut off all connection with him. He refuses to close the account himself. I tried to close it down via customer service with the app, but the weren't able to do anything because I'm not yet 21. I have to take responsibility for these stocks on my taxes, despite me not having access to any of the money. It all goes to my birth father.

    I'm trying to find what options I have to shut it down. I would rather keep it out of court if at all possible, because my father is a manipulator and I'd rather not piss him off, so I'd like to know if there's any other options.

    Thank!

    submitted by /u/izzylynng02
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