Stocks - r/Stocks Daily Discussion & Options Trading Thursday - Nov 18, 2021 |
- r/Stocks Daily Discussion & Options Trading Thursday - Nov 18, 2021
- Alibaba misses expectations as earnings plunge 38% in the September quarter
- Amazon is going up steadily after the last earning report and it is currently up 3% today
- Why is Intel INTC getting beat down like this?
- Here is a Market Recap for today Thursday, November 18, 2021
- AMD vs NVIDIA vs NFLX
- DD: $SONY is more than the sum of its parts and outpferforming 90% of US blue chips.
- Remember, the stock is not the company and the company is not the stock!
- Senate Amendment 4722: five subsidized microchip companies can bring 150,000 jobs back to America from overseas for +$53 billion in 2022
- SROs, Complexity and Market Structure
- How does this subreddit view ETFs?
- Pelosi: House vote on Biden's social-spending bill could occur as soon as today
- PayPal ‘now risks getting disrupted’ by competitors, analyst says in downgrade
- Naked / Cenntro Merger … an undervalued EV?
- Is TDOC trading at almost its book value? What is "Additional Paid in Capital"?
- Activision Blizzard $ATVI
- $BRZE has gone public, why I think it’s a great move
- Can stocks hedge against inflation?
- Facebook (META)
- UiPath vs c3.ai
- Sectors/industry to focus on during inflation
- Taking a position in Rivian via puts
- Should I trigger a short term capital gain to offset a short term capital loss?
- Travel industry
| r/Stocks Daily Discussion & Options Trading Thursday - Nov 18, 2021 Posted: 18 Nov 2021 02:30 AM PST This is the daily discussion, so anything stocks related is fine, but the theme for today is on stock options, but if options aren't your thing then just ignore the theme and/or post your arguments against options here and not in the current post. Some helpful day to day links, including news:
Required info to start understanding options:
See the following word cloud and click through for the wiki: If you have a basic question, for example "what is delta," then google "investopedia delta" 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. See our past daily discussions here. Also links for: Technicals Tuesday, Options Trading Thursday, and Fundamentals Friday. [link] [comments] |
| Alibaba misses expectations as earnings plunge 38% in the September quarter Posted: 18 Nov 2021 03:46 AM PST Alibaba missed revenue and earnings expectations for the September quarter, as slowing economic growth in China and the country's crackdown on its technology companies weighed on results. Here's how Alibaba did in its fiscal second-quarter, versus Refinitiv consensus estimates: Revenue: 200.69 billion yuan ($31.4 billion) vs. 204.93 billion yuan estimated, a 29% year-on-year rise. Alibaba has been a victim of China's crackdown on its domestic technology industry which has seen a slew of new regulation brought in from antitrust to data protection. While China's tech giants have grown largely unencumbered over the past few years, Beijing has looked to clean up some of the behaviors of its corporates. Alibaba was fined $2.8 billion in April as part of an anti-monopoly probe. Meanwhile, China's economy slowed down in the third quarter of the year. Expectations were low coming into the fiscal second-quarter earnings report as a result, with analysts expecting it to be one of the most challenging quarters ever for the Chinese e-commerce giant. The company is coming off the back of Singles Day, a huge shopping event in China where e-commerce platforms push heavy discounts and rack up billions of dollars of sales. Alibaba raked in gross merchandise volume during the 11-day period totaling 540.3 billion yuan ($84.54 billion). Any revenue Alibaba gets from this event will not be reflected in the September quarter. Link: https://www.cnbc.com/2021/11/18/alibaba-earnings-fiscal-q2-revenue-misses-earnings-plunge.html [link] [comments] |
| Amazon is going up steadily after the last earning report and it is currently up 3% today Posted: 18 Nov 2021 08:40 AM PST For the past month amazon has been going up steadily. Many retailers reported amazing quarterly reports and guidance, and Amazon should be the one to benefit as the upcoming holidays there will be robust spending from consumers. Amazon should be able to absorbs the inflation from material and labor costs easily as AWS still growing very fast and provided profit margin. Investors should be keep holding the stocks. [link] [comments] |
| Why is Intel INTC getting beat down like this? Posted: 18 Nov 2021 09:00 AM PST They have excellent fundamentals and 21B in revenue, hot sector and with sympathies (NVDA, AMD) at all time highs why is this making new lows every day? One would argue that competitors are doing better but every other chip company is doing better. What is going on? [link] [comments] |
| Here is a Market Recap for today Thursday, November 18, 2021 Posted: 18 Nov 2021 01:48 PM PST PsychoMarket Recap - Thursday, November 18, 2021 Stocks traded mixed on Thursday, with Nasdaq (QQQ) massively outperforming on the day, driving by strength in mega-caps like Apple (AAPL), NVIDIA (NVDA) and Amazon (AMZN) while the Dow Jones (DIA) fell for the second straight day. Market participants continue to digest the tail-end of a better-than-expected corporate earnings season amid a backdrop of rising inflation. Key Numbers For Today
After a monster run-up last month, the choppiness in the market can be attributed to mixed economic reports coming out recently. While US retail sales came in better-than-expected, a great sign that consumer demand is staying robust, the recent report on inflation showed the fastest pace of growth in roughly 30 years. Earlier in the week, Walmart (WMT) and Target (TGT), two of the largest retailers in the US, reported earnings. While the report was better than expected, executives from both companies raised concerns over rising prices, rising labor costs, and supply-chain disruptions affecting the bottom line. The possible staying power of inflation remains the central focus for market participants, as a potential damper to consumer spending, which accounts for roughly 70% of US GDP and as a catalyst for the Federal Reserve to raise interest rates sooner than originally expected. Despite starting to taper the pace of quantitative easing, the Fed has remained very accommodative and says an interest rate hike could take place sometime near the middle of next year. It would be really bad for markets if the timeline is accelerated. Adding another wrench in the plans, President Biden is expected to announce his nominee to be the Chair of the Fed. So far, the two main candidates are incumbent Jerome Powell and current Fed Governor Lael Brainard. The Labor Department's Weekly Unemployment Report came in slightly higher than expected but still eked out a new pandemic-era low. Here are the numbers:
Highlights
"Whether you think you can or you think you can't, you're right." -Henry Ford [link] [comments] |
| Posted: 18 Nov 2021 06:53 AM PST Hi there, I got some bonus 20k recently and thinking abt dumping that into one of the above tickers, based on current PE, factoring some pull back and future potential which stock would you recommend the most. Or shall wait a bit for some pullback. [link] [comments] |
| DD: $SONY is more than the sum of its parts and outpferforming 90% of US blue chips. Posted: 18 Nov 2021 04:29 AM PST I bought a couple stocks in my play account when I started investing (mid 2 end 2019): SONY, MSFT, NFLX. But ended up buying a SPY Tech ETF. When I looked back I saw that SONY at times actually outpferforms Microsoft and that for close to 10 years. Granted they were beaten to the ground prior in 2010 but how their last CEO turned that business around in pretty much all areas is a masterwork. When I did more research I found out that an important factor to their success was their CFO at that time, who has become their current new CEO in just 2 years. At first I was mostly interested in their Playtation devision because I see how far ahead they are in storytelling and grahpics compared to other AAA developers and publishers. But now I actually like each divison they are in: Television/Pictures: they dont have a big streaming service but they produce like 2 or 3 of Netflix biggest hits (The Crown, Bridgerton, Cobra Kai, Better call Saul) and they did Breaking Bad. I feel their television arm is morphing more and more into another HBO quality wise. I expect Netflix, Apple, Amazon and Disney to lit. fight for this content in future and Sony television can easy profit. And well Spiderman: Now way Home is a Sony movie afterall and breaking records for that franchise. Music: Sony Music is the 2nd largest Music label in the world and they are not stopping growing. Again they dont own a streaming service, but they make equal good money by licensing and with the closer becoming fan interaction of artists and their fans --maybe in VR-- (where Sony is also big into btw.) I can see them going a more direct way to present live conerts etc. skipping Spotify, Youtube etc. They already partnered up with one of the big 3 kpop labels to get as one of the first big music labels exposure to that lucrative market, so they are in the Zeitgeist. Electronics/Sensing/Imaging: I see mostly growth in Sensing and imaging technology for the EV market(cars and other vehicles). Electronics I dont think is too hot at the moment but I see their TVs and Smartphone being in the premium segment now where margin is better. Its already worth it to have that direct 2 consumer relationship imo and they can build up from here with VR and AR devices. Gaming: With Tencent is Sony the best and fastest growing Gaming company imo. They are quite heavily advancing with their Playstation Studios portfolio aquiring left and right and increasing their existing studio size. I am not into the metaverse talk, but when Playtation would want to one Im sure they could. They talk how they want more exposure to 1st party big multiplayer titles, whereas last generation they mostly concentrated their efforts to deliver big quality singe player games. Mulitplayer brings more profit, so thats bullish. They are also devloping Playstation VR2 for release in 2022, which would for example let you play also any non VR game with rudimentary VR support. With all the metaverse (bullshit)talk I can see that reveal create kinda a buzz. They also own Sony Bank, one of the biggest japanese digital banks. But thats about their current divisions. In the coming years, they plan to enter semi business in corporation with TSMC and build up a new core business pillar for them as they call it: Anime. They now own the biggest box office anime hit in history with Demon Salyer. That IP is so big, it generated 8 BILLION USD in revenue (https://animesweet.com/anime/demon-slayer-the-series-unstoppable-success-topped-8-billion/). Granted, across different companies and with Merch, (mobile/console)games etc. but when they can create one such anime hit, they have the chance for another. Netflix for example produces --while quality anime content-- but not one of that caliber of Demon Salyer. With Sony having much closer ties to many japanese anime studios I can see them creating the defacto streaming service and having a chance for that next One Piece killer. Merch is brining in the money, not the movies itself. They already own Funimation and Crunchyroll and are currently working on combining them... YTD performance: 36% Market Cap: 154B Past 5 years: 304% [link] [comments] |
| Remember, the stock is not the company and the company is not the stock! Posted: 18 Nov 2021 10:26 AM PST Before I start, letting you know I have no short positions on any company whatsoever. As someone greatly explained it to me, The problem is that with shorts you are not betting that the stocks is undervalued, you are betting that people will realize within a short span of time that it is overvalued which is more risky than the former. Anyways, I been seeing and hearing lately a lot of people looking for long-term investments during 2021. Don't mean to be a bear, but it's important to understand that the stock is not the company and the company is not the stock. There are plenty of companies out there going mainstream with potential for a bright future. EV sector, Renewable sector, Crypto, Fintech & Tech, etc. I agree. I firmly believe renewables, electric vehicles, and internet-based payments are, in fact, the future. EV vehicle sales are growing at exponential paces. Solar panels will be seen more and more in your neighborhoods. ATMs probably won't even exist in 2030. Major cities are pushing for 100% electric buses by 2035. Major car dealerships are expecting to sell only EVs by 2040. Crypto is making a push as well. But what's important is also hopping in the stock at the right price. Now, I'm not advocating for market timing. But hopping into Rivian, whose currently valued at $100B with 0 sales is just insane. Lucid being another one whose valued at $75B with a QUARTER of a MILLION in sales. Don't even get me started on $PLUG. $PLUG is a leader in hydrogen fuel cells for forklifts that reported negative revenue (wtf) and is valued $23B. We all know Tesla is a leader in its sector as well, but the price is outrageous. History has shown prices will always correct based on the company's fundamentals. Too many posts on $TSLA so I won't go into this. It's no doubt we are in a bubble. Lots of "Stock Gurus" on Instagram promoting all these overvalued stocks just because their "future looks bright", and here come all these people commenting talking about how they just invested for the long term. Not saying their future isn't bright, but it's important to know when a stock is reasonably priced as opposed to just hearing a pitch line and going all in if they convince you. I have no ounce of doubt the prices will drop substantially. I'm not worried about missing out on these hyped stocks. And no, I'm not talking about a 30% correction. Check the dot com bubble companies. I'm talking 95% corrections. Several bankruptcies across the globe. The 2000 dot-com market collapse was triggered by technology stocks. Investors' interest in internet related companies increased to a frenzied level following massive growth and adoption of the internet. It was the unprecedented rise in equity valuations of internet-based tech companies during the bull market of the late 1990s The dotcom bubble burst when capital began to dry up. In the years preceding the bubble, record low interest rates, the adoption of the Internet, and interest in technology companies allowed capital to flow freely, especially to startup companies that had no track record of success. I'm not here to spark rage or scare you. It's just the hard truth, lots of inexperienced investors have no idea how crazy the outcome could get. Once the big banks and heads at Wall Street realize its insanely overvalued, the rug pull will come. Let me know if I'm wrong. Curious to hear everyone's thoughts. [link] [comments] |
| Posted: 17 Nov 2021 04:22 PM PST Senate Amendment 4722: five subsidized microchip companies currently receiving $6 billion (deficit spending) can bring 150,000 jobs back to America from overseas for $53 billion to be paid in 2022. In exchange, these companies issue stock warrants worth that amount plus interest. The specific companies receiving the $53 billion of taxpayer subsidies are Intel, Texas Instruments, Micron, Analog Devices, and NVIDIA. edit: The source is CSPAN-2 live from about 3 hours ago. This is from the SENATE not the house. [link] [comments] |
| SROs, Complexity and Market Structure Posted: 18 Nov 2021 10:32 AM PST Last week I actually lost sleep due to frustration and anger at the current self-regulatory structure in markets. While this is kind of silly and a bit absurd (though it did happen!), I think it's worth examining and explaining how the incentives for a self-regulatory, for-profit company lead to extreme complexity and subsidization in US markets. It's easy to say "self-regulatory BAD!" but harder to understand the web of complexity that such perverse structures create. This is a long post. By the end, I hope you understand what the self-regulatory structure is, why it exists, why it creates perverse incentives, and how I think it should be fixed. I'll do my best to explain the context of these archaic structure, why it leads to unnecessary complexity, and reduces competitive forces. Most importantly, throughout the piece think about how such perverse incentives leads to lax enforcement and wrist slaps, and a cozy relationship with the industry being regulated. The financial services industry is the only industry in America (that I am aware of) in which for-profit, publicly traded firms are "self-regulatory." What does "self-regulatory" mean and where did it come from? The structure came about from the member-owned stock exchanges that existed prior to 1934. In 1934 these exchanges were brought into partnership with federal regulators in the Exchange Act of 1934. This actually made a lot of sense. There was nobody better positioned to monitor and enforce the rules of a stock exchange (where trading happened in a physical location, on the floor of the exchange) than the exchange itself. There were conflicts-of-interest, of course, but there were also practical considerations of what technology and communication systems looked like in the early 1900s. So what does "self-regulatory" mean? Now of course, I'm no lawyer, so take everything I say with that in mind. Essentially the self-regulatory structure gives the regulation arm of the exchange quasi-governmental powers (it's been explained to me that this structure means the exchange is supposed to act as an extension of the SEC) – and gives the exchange itself immunity from prosecution when carrying out regulatory functions. It basically means that US exchanges set the rules for trading in US markets, and for interacting with their business, are then in charge of enforcing those rules and have no legal liability in the operation of that business. Those rules include things like fee structure, order types, matching priority model, co-location and data feed costs, and many other things. That means each for-profit exchange is setting its own rules, and responsible for enforcing those rules. Each exchange is responsible for monitoring its own market for manipulation (called "market surveillance"). In reality, the responsibility for market surveillance is outsourced to FINRA. FINRA is another SRO – they are not a for-profit exchange, but they are responsible for setting the rules and policing broker/dealers. You may have heard of some of the other SROs – the DTCC, the OCC, the NSCC and others listed here. FINRA, DTCC, OCC and NSCC are not for-profit, of course, but they are deeply conflicted. They operate on the fees generated by their members, who they police and regulate; stock exchanges do too – their best customers are high-speed speculators (aka HFT), who submit 95% of all orders, and are a party to ~90% of all trades. These speculators also pay for expensive, proprietary data feeds, high-speed connections and cross-connects, and other exchange services. SROs are supposed to police these customers, and are charged with ensuring that their best customers follow the rules. Gee Dave, that sounds like a conflict-of-interest! At least it's not for anything important, like the foundation of the US economy, right? It is generally the SROs that have made breaking the rules a cost of doing business (naturally following the lead of the SEC, of course). While they don't have the authority to press criminal charges (again, not a lawyer) they could easily make referrals and work with the DOJ, who does have that authority. Instead, nearly all of Wall St has decided that breaking the rules is nearly always only worth a fine, very rarely an industry ban, and practically never a perp walk and prison. Just like nobody lost their banking license for fraud following the Great Financial Crisis, can you remember a time when a major broker/dealer had their license revoked? Robinhood has been fined well over $100M by FINRA and the SEC for lying to their customers, failing to provide best execution, and underinvesting in compliance, technology and any system for protecting their customers. For some reason, none of this was enough to lose their license to operate. Those guys are laughing all the way to the bank. Fine after fine is charged to every broker on Wall St, paid by the shareholders, and everyone keeps collecting their bonuses. First SRO Problem: Reluctance to exact severe consequences because the fees being collected from the perps are paying for SRO operations and bonuses. However, there's another side to all of this. Let's take a concrete example to start. In 2014, BATS and DirectEdge merged. Together, they represented approximately 20% of trading in the US. Each of them operated 2 copycat exchanges – a maker/taker exchange (BZX and EDGX) and an inverted exchange (BYX and EDGA). In any other industry, such a merger would result in the consolidation of these exchanges so that the resulting company would only operate 2 exchanges. But that didn't happen here. They continued to run 4 exchanges and do to this day. Why would they do that when it costs way more to run 4 exchanges rather than 2? The answer is actually quite simple and obvious – money. To understand why, we have to take a quick step back, and reference another law. The 1975 Amendments to the 1934 Exchange Act established the need (and gave the SEC the authority) to create the Securities Information Processor (SIP). It was groundbreaking at the time. The SIP is the "ticker" – a record of quotes and trades on all national securities exchanges. Ultimately the SEC did NOT create such a system though, it delegated the authority to the exchanges. The exchanges created the NMS Committees, which are responsible for managing the SIP and setting fees. From last year's SEC press release announcing changes to the SIP:
ALRIGHT ENOUGH HISTORY DAVE, WTF IS THE SIP?? Sorry, it's hard to talk about this stuff without getting deep in the weeds. The SIP is generally referred to as the "public data feed" – at the moment (though this is changing), it provides top-of-book quotes across all US exchanges, calculates the NBBO and publishes it, communicates regulatory halts and other information, and publishes all trades both on- and off-exchange. And guess what? You pay for it. That's right – you are paying for the SIP. Nearly every retail broker subscribes to the SIP, and generally speaking when you see the prices that a stock is being quoted at, or trading for, you're seeing SIP data. This public data feed costs $4 per user, per month, for non-professional, display-only users – if you're not a financial professional, and you're only seeing the data with your eyes (rather than programming a trading system that will automatically look at the data), then you are a non-professional, display-only user. What are all of those user fees worth? Something on the order of > $300M per year. That money is collected by the operators of the SIP (NYSE and Nasdaq), and distributed according to a very complicated formula to each of the exchanges. On the whole, it gets divided up based on quoting and trading market share, and means that approximately $100M every year goes to CBOE, NYSE and Nasdaq (with much less going to the smaller exchanges). That's why BATS/DirectEdge (and now CBOE, which acquired them in 2016) was incentivized to continue to operate 4 exchanges, because it meant that more of this public subsidy would go to them. Talk about perverse – it's the exact opposite of what the 1934 Exchange Act was established to do:
It gets even worse (No way Dave! How can it be worse than this??). Each exchange sells private data feeds that are faster and contain more information than the SIP. So the exchanges are incentivized to ensure that the SIP remains slow, and has less data, so they can make more money selling their private feeds. Pretty sweet gig if you can get it, right? Now, I've simplified the issue, of course. It gets even more complex with Reg NMS and order protection, which requires all exchanges to connect and route to one another, and brokers to manage that complexity as well. It means that CBOE gets double the revenue for private market data, and other connectivity fees, all of which ensures that CBOE earnings per share are robust and growing, and which accomplishes the opposite of the intention of the 1934 Act. Second SRO Problem: SRO structure is a classic example of regulation and subsidy creating inefficient and costly complexity. The BATS/DirectEdge example is only one of so many that highlight the unnecessary complexity at the heart of US markets. I've talked many times about the need for regulators to understand complex systems and systems theory, to understand evolving regulatory structures in that context, and to focus on simplifying markets rather than making them more complex. Unnecessary complexity leads to several problems:
Third SRO Problem: Unnecessary complexity makes markets opaque, fragile and leads to a feedback loop of rent seeking and concentration of power. The for-profit motive overrides the SRO's duty to create fair and efficient markets. I mentioned before that SROs have legal immunity. This means many things, but primarily it means that the brokers who are members of the exchange don't have legal recourse when something goes wrong. It is for this reason that retail brokers who don't accept PFOF still route to the off-exchange duopoly of Citadel and Virtu, because they want someone's neck to wring when something goes wrong. The legal immunity that exchanges enjoy is one of the reasons that we have dramatically segmented markets. Fourth SRO Problem: Legal immunity for for-profit, publicly traded companies leads to perverse incentives and terrible outcomes. So what's the result? A huge amount of unnecessary complexity, enforcement becoming a cost of doing business, and ultimately fragile markets with low participant diversity delivering poor outcomes for investors as the for-profit SROs focus on creating churn and volume to increase earnings per share. More complexity means more fragmentation. More fragmentation means more complex order types. More fragmentation and complex order types means more unnecessary trading and churn. More unnecessary trading and churn means more earnings for publicly traded SROs. Rinse and repeat. It ultimately means that we end up with so much complexity that it's impossible to keep track of. Take a look at the results of this 2018 RBC study on exchange fee structure (the picture is awesome, but I can't seem to add pictures to a post in this sub-reddit):
If someone can explain how this fee structure "promotes just and equitable principles of trade," "protects investors and the public interest," and is "not designed to permit unfair discrimination between customers, issuers, brokers or dealers" I'm all ears. Go ahead, give it a try! Now, let's take this convoluted, inefficient structure, add in a regulatory revolving door, corrupt campaign contribution system and corrupt politicians, mix it all together, and out comes the US crony capitalist system. GET OFF THE SOAP BOX DAVE, WHAT DO WE DO? So glad you asked. I've been asked a bunch of times what I think should change about US market structure, what I would do if I was SEC Chair (imagine that), etc. My answer is nearly always the same – reduce complexity. When I say reduce complexity, this post is what I'm talking about: · End the self-regulatory structure. · Build a proper regulator (complete overhaul of the SEC) with experts who are compensated appropriately. · Prioritize handcuffs, not wrist slaps and fines. Make the industry fearful of regulatory and enforcement consequences. · Reduce the number of exchanges, end public subsidy through SIP fees, get rid of every copycat exchange. · Create a burden for off-exchange trading to compensate for the damage that segmenting and diverting flow does to the price discovery mechanism. · Simplify, Simplify, SIMPLIFY! Tldr; Wall St cannot regulate itself. It leads to unnecessary complexity, and lax enforcement and fines instead of perp walks. It's time to overhaul the regulatory structure, send people to jail, and simplify market structure dramatically. [link] [comments] |
| How does this subreddit view ETFs? Posted: 18 Nov 2021 05:25 AM PST Last night someone posted about investing $500 and wanted to know about some stocks to throw their money into. I said my tried and true answer VTI. I was then followed up by a redditor saying that VTI is an ETF and not a stock and that comment doesn't belong here. I begged the differ that ETFs should be considered a stock since you can say trade it and buy options on them. He also stated that I was breaking the rule of the sub by going off topic by saying to invest in an ETF. His last comment was that if the OP wanted an ETF as an answer he would posted on r/investing. The amount of karma I was getting from the comment and the amount of people basically agreeing with me help solidified by thinking but I wanted to end this once and for are and see what this Reddits views on ETFs. [link] [comments] |
| Pelosi: House vote on Biden's social-spending bill could occur as soon as today Posted: 18 Nov 2021 10:13 AM PST House Speaker Nancy Pelosi on Thursday said her chamber was close to advancing Democrats' social-spending and climate bill, saying a vote "hopefully will take place later this afternoon." House Democrats have been expected to vote this week on the nearly $2 trillion Build Back Better Act that President Joe Biden has been promoting, while Republicans have continued to criticize the measure amid the highest inflation in three decades. A small group of moderate Democrats has demanded a Congressional Budget Office analysis of the bill before moving forward, and Pelosi said during a news conference that she expected "final CBO estimates later this afternoon, hopefully by five o'clock." [link] [comments] |
| PayPal ‘now risks getting disrupted’ by competitors, analyst says in downgrade Posted: 18 Nov 2021 06:12 AM PST PayPal Holdings Inc. has a reputation for disrupting the payments ecosystem, but it "now risks getting disrupted" itself, according to an analyst. Bernstein's Harshita Rawat downgraded the stock to market perform from outperform Wednesday, citing various competitive pressures for the digital payments giant. Shares of PayPal PYPL, -4.36% are off 2.5% in premarket trading. Rawat worries about the "increasing aggregation" of e-commerce activity on large platforms like Amazon.com Inc. AMZN, +0.23% and Shopify Inc. SHOP, -2.24%, which she estimates are together responsible for about 32% of U.S. commerce. "Amazon currently doesn't accept PayPal and just agreed to accept Venmo starting in 2022," she wrote. "Shopify has ambitions of creating its own payments business and has been pushing its merchants aggressively to convert to Shopify payments platform (and also towards the Shop Pay button)." Smaller merchants "are PayPal's bread and butter, and Shopify's meteoric rise and push towards its own payments platform is particularly problematic," Rawat continued. PayPal's transaction economics are better with smaller businesses than with very large ones, she argued. Shopify Inc. represents an "unassailable competitor" when it comes to the small-business demographic, in her view. Rawat is also concerned that PayPal's market-share gains will slow. The company has typically won share at the expense of manual card entry onto a website, but fewer consumers are entering their card information this way, she said, meaning there is less available land to grab there. She estimates that manual card entry now accounts for about 20% of e-commerce checkout, down from roughly 33% four years back. More broadly, she thinks that share gains could slow "by a thousand cuts" thanks to the rise of a number of technologies that separately eat away at opportunities for PayPal. These include the growth of buy-now pay-later (BNPL) services, the ability to auto-fill credit-card information on some web browsers, and the threat of Apple Pay as ever more commerce shifts online. "It is an understatement to say that the payments landscape is rapidly evolving with many powerful trends emerging," Rawat said in her note to clients. "While PayPal is actively investing and evolving, it simply has more turf to defend versus peers in our view." Rawat acknowledged that her thesis could prove incorrect if PayPal delivers upbeat surprises with its efforts to drive more revenue from its Venmo app and its "superapp" redesign that focuses on features beyond just payments. "After years of false starts, we believe Venmo is finally on the cusp of getting monetized," she wrote. While Rawat has "historically been skeptical of aggressive monetization estimates for Venmo," she feels more "constructive" now. "Venmo monetization is now less about following the PayPal playbook and more about following Cash App's journey," she wrote, referencing Square Inc.'s SQ, -2.78% mobile wallet. Shares of PayPal have declined 20% over the past three months as the S&P 500 SPX, -0.26% has risen about 6%. [link] [comments] |
| Naked / Cenntro Merger … an undervalued EV? Posted: 18 Nov 2021 11:34 AM PST Hopefully since this is a NASDAQ listed company it is OK to post this here…. I've been thinking about this one and wanted to sleep on it and crunch some numbers to see what a real valuation of this weird sorta deal would be. I had to research both companies to see how this would work. I'm also just going to copy and paste some other persons article where it makes sense…why waste time. Naked Brand is an apparel stock that has been on the edge of Nasdaq delisting for several years. Cenntro Automotive is a privately held electric commercial vehicle maker looking to expand its production to meet soaring demand. The oddly assorted companies are planning a merger that will bring Cenntro public and give it a cash infusion. Couple important things to consider…per Schwab: Shares outstanding are 906M It shows 0% held by institutions but I'm not sure that is correct. Market Cap is 627.3M. "Naked's acquisition of Cenntro is clearly extinguishing Naked as a swimsuit and lingerie company, meaning Naked is acting in a manner very similar to a SP** and launching an effective initial public offering (IPO) for Cenntro through the merger. Naked is bringing $282 million in cash to the deal, after already providing Cenntro with a $30 million loan to help it ramp up its EV production. Naked will spin off FOH Online, the e-commerce branch of Frederick's of Hollywood that it acquired back in 2018 for $18.2 million, as part of the merger process. Curiously, the new Cenntro will continue trading under the Naked ticker on the Nasdaq exchange, according to the press release." I really like this actually. Cenntro gets a lot of cash so no more share dilution right now. I'm not thrilled with the almost 1B shares but compared to other companies it is fine I guess. Naked keeps its FOH business which goes back to being a private company most likely. So far so good… I then spent some time on Cenntro's website and I like the vehicles. I work in one of the largest cities in the US and their vehicles are exactly the type I see running around downtown delivering to restaurants, businesses, etc….This is really more of a rival to Rivian and Ford delivery vans then it is to the luxury market. I love this point since the luxury sedan market is quickly getting too much competition….you want to be in a business that other businesses want to buy from, not retail. Important facts from the website: 3300+ Vehicles Delivered 20 Million+ Miles Traveled 238 Patents Granted 32+ Countries Certified 26+ Countries Shipped 6+ Assembly Plants That's right…..they have 6 assemble plants already. What other EV manufacture has that? Check out their website: https://www.cenntroauto.com I actually really like all their vehicles but check out the ORV and iChassis. The iChassis is an autonomous driving platform that is pretty cool. I have not seen anything like it from the other EV manufactures. The metro can be anything from a small dump truck (perfect for landscapers in parks, golf courses, etc) and the Logistar 400 is basically a UPS style van. I think once you see their vehicle fleet you will be pretty impressed. Current Targets: In 2021, 1,500 vehicles delivered, $25.3 million in revenue. In 2022, 21,500 vehicles delivered, $506 million in revenue. In 2023, 74,800 vehicles delivered, $2.1 billion in revenue. IF they can accomplish this, the stock is trading at about 1.25X next years revenue. Yup…. Final Thoughts: "On April 24, the index sent a noncompliance warning to Naked after its shares traded under $1 for 30 consecutive days. At that point, Nasdaq officials gave Naked the standard 180 days to raise its bid price above $1 for 10 consecutive days to comply or be taken off the index. Naked failed to meet the deadline by the Oct. 26 deadline, but Nasdaq granted a 180-day extension on Oct. 27. The company must now comply by April 25, 2022." Cenntro is not going to take this route to go public if they think there is a high likelihood that the stock will stay under $1. They are betting it gets above $1 and they are going to do whatever they need to do to get it there. For the next six months I expect to see: Constant updates for vehicle sales to pump up the stock price.
Bear Case: Cenntro's targets could be too aggressive and they can't meet them. This doesn't seem likely to me but companies often offer too rosy of a future outlook. People can't get past the Naked brand and don't buy the stock which leads to de-listing. (This is why I'm pretty positive they will request a ticker change with NASDAQ). There are too many shares and bag holders which will cause resistance on the way up. (This didn't stop Lucid and SOFI….they had so many bag holders in the 20s after they dropped down to the teens). They say they have 6+ assembly plants…so far in my research I have only found references to facilities in Jacksonville, Florida and Düsseldorf, Germany. With the shareholder split 70% / 30 % at the close of the transaction, I have no idea how this will effect the stock of naked shareholders. Any experts that can enlighten? Most important comment from CEO of Cenntro in call: "While we confidentially submitted a draft S-1 to go public via an IPO, we came to believe that Naked allowed us to go public faster, providing the working capital to support our substantial backlog. ". And that my friends, is as bullish as it gets. Don't look at this as buying the previous company….you are buying shares of Cenntro. Position: 20k Shares. [link] [comments] |
| Is TDOC trading at almost its book value? What is "Additional Paid in Capital"? Posted: 18 Nov 2021 10:36 AM PST https://finance.yahoo.com/quote/TDOC/balance-sheet?p=TDOC I like looking at Stockholders' Equity in general. And based on that it looks like a very attractive deal because it seems it's trading at its book value. However, what is "Additional Paid in Capital"? I, of course, googled it, and I still don't get it. What is it in TDOC's case? Thank you. [link] [comments] |
| Posted: 18 Nov 2021 08:25 AM PST Am I crazy to keep buying the huge dip here? I still believe in the company even though the recent scandals and delays of Diablo 2 and Overwatch has made the stock tank. They should kick the CEO out and move on to keep moral up and hopefully in the short/long run treat their employees better. I have about I own about 90 shares of the stock with an average price of $64.60. What do you all think? [link] [comments] |
| $BRZE has gone public, why I think it’s a great move Posted: 18 Nov 2021 09:52 AM PST Disclosure: I have positions and work with a partnering integration agency. Braze, a customer engagement platform used by over 1,000 customers reaching over 3 billion active users through 1 trillion messages, has gone public. In their S-1, Braze reports experiencing 55% YoY revenue growth. They went public $10 over target and quickly jumped $20 over IPO this morning. The IPO has Braze raising $520 million with a potential for more if options are exercised. As I said in the disclosure, I've used Braze first hand and I couldn't be more excited for this IPO. It's a chance to get in at the ground level with a rapidly growing customer engagement and analytics platform. Clients have told me Braze is hands down the best marketing tool they have ever used. Disclaimer: This is personal opinion. This is not a recommendation to buy or sell any security. This is not a research report or investment advice. Invest at your own risk. Investments may loose value. [link] [comments] |
| Can stocks hedge against inflation? Posted: 18 Nov 2021 09:44 AM PST When I think of inflation, it means the face dollar value of something goes up because the dollar is worth less, needing more to cover the REAL VALUE of the object. Isnt this the same with stocks? Say a company is worth $100 today and set that as the real value, it issues 10 shares at $10. Assume it does not change real value over a year but inflation was 10%. The company is still valued at $100 (of last years dollars) which would imply a face value of the stock at $110 this year, and 1 stock would now cost $11, a 10% increase. People talk about gold like this as a hedge but unlike a relatively established company speculation can drive metal prices crazy. So can stocks hedge against inflation this way or am I way off? [link] [comments] |
| Posted: 18 Nov 2021 02:19 PM PST So seeing almost all other Faang go up this week, for some reason Facebook is going down with other social media stocks such as snap and Twitter. Obviously Facebook has a cloud over it with the "whistleblower" etc which they usually come out the other end. This is the question I am posing though. Facebook partnered with AMD last week to utilize their chips in building the metaverse, they also teamed up with Microsoft to allow for their Facebook horizon workplace to work with Microsoft teams. They also just released the prototype of a haptic glove which will allow for feeling sensations in the metaverse. They also own oculus VR headsets which is the best selling VR headset and super relevant for the metaverse. Is Facebook being lumped in with social media companies providing a great buying opportunity? With faang stocks at ATH fb is 11% down. Is this a great buying opportunity for the long term? It seems to be. [link] [comments] |
| Posted: 18 Nov 2021 01:57 PM PST I'm looking at these two stocks for the past months. And, i want to position to one of those stocks. Both stocks are down for the past month. But c3.ai is the one that going down a lot. While Uipath their chart is just going up and down. Which one do you think is a better buy in terms of the future of the company? [link] [comments] |
| Sectors/industry to focus on during inflation Posted: 18 Nov 2021 01:35 PM PST Hi guys. Pretty much as the title says. [link] [comments] |
| Taking a position in Rivian via puts Posted: 18 Nov 2021 01:25 PM PST I would love to get some Rivian exposure for less than their current price. In order to do this I'm going to sell 10 12/17 $100 puts and hope it reaches that by next month. That will get me in for $100k and pay $8700 in premiums as of the current share price for tying up my capital. The risk is the share price goes sub $100, but with that being so close to the IPO price (on the open market) I feel comfortable with that. I absolutely agree and understand the current market valuation is inaccurate, but with Amazon's ownership and their big starting order for electric vans, I hope to look back many years from now and say nice job buddy. I hate to quote that stupid commercial, but Fortune Favors the Brave (and the stupid alike). [link] [comments] |
| Should I trigger a short term capital gain to offset a short term capital loss? Posted: 18 Nov 2021 09:37 AM PST I posted a question yesterday on the wash-sale rule and was hoping this community can also share their thoughts on the situation below. Earlier this year I sold a stock and realized a short term capital loss for $10K. This is the only sale I made in the year. I also have a short term unrealized capital gain for $30K on a mutual fund. Is it wise to sell $10K of the mutual fund to trigger a short term capital gain and to offset the short term capital loss for $10K? I would then purchase $10K of the same mutual fund the next day and raise my cost basis. I don't plan to make any other trades this year aside from repurchasing the mutual fund. Am I missing anything here or is this a good opportunity to make the most out of the situation? [link] [comments] |
| Posted: 18 Nov 2021 08:17 AM PST Anyone else feeling stuck in the airline / cruise stocks? I'm still bullish in the long term but I'm expecting the CDC to raw dog us again in January. What are your guys thoughts on the travel sector atm? [link] [comments] |
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