Stocks - r/Stocks Daily Discussion & Options Trading Thursday - Nov 04, 2021 |
- r/Stocks Daily Discussion & Options Trading Thursday - Nov 04, 2021
- Tesla sells 1% of cars globally, yet is priced more than the companies combined that sell the other 99%
- NVIDIA is going to break $300 today, currently it is worth 745B, it will be the next 1T club member
- Cathie Wood’s Ark Dumps 3.9 Million Zillow Shares - a day after buying 288,813
- nVidia and Tesla combined are now worth more than Google
- Peloton shares fall 21% as company posts wider-than-expected loss and slashes full-year outlook
- Cloudflare crushes earnings
- Deere Says It’s Done Bargaining After Striking Workers Reject Second Contract Offer
- One question how the hell is NKLA not at 0?
- PTON going lower?
- This market is insane. Why is the stock going up?
- Name a company that is amazing but has terrible management
- Intel - Good buying opportunity following new chips?
- RIVN IPO on November 10
- Gaining Visibility on Paysafe (PSFE) Parts 8-10
- The NBA Announces Expanded Betting and Daily Fantasy Agreement With DraftKings
- Airbnb crushes earnings
- Sale of $Z by ARK funds accounted for 5% of trade volume Wednesday.
- Pinterest beats on earnings and revenue even as monthly user number drops
- Qualcomm (QCOM) EPS beats by 0.29$, beats on revenue, guides Q1 above estimates
- GPRO: The turnaround is real
- It’s good that the FED starts the taper
- Bill.com crushes earnings, reporting YoY Total Revenue increase of 152%
- $NVAX may be the new $MRNA
- Company gifted me 84 shares of stock - Help
| r/Stocks Daily Discussion & Options Trading Thursday - Nov 04, 2021 Posted: 04 Nov 2021 02:30 AM PDT 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]  |
| Posted: 04 Nov 2021 05:45 AM PDT The valuation on Tesla is now beyond the absurd. Whilst European EV sales explode to presently 19% of all car sales this year, Tesla does not even make the top five EV sellers by company at a lowly 7%. (VW 25%; Stellantis 13%; Daimler 10%; BMW 10%; Hyundia-Kia 9%). Tesla, unlike in the US, is simply being outsold by the vast array of alternative BEV models on sale particularly. VW group alone offers the e-up, ID3 and ID4 (ID5 not yet on sale); Audi e-tron, e-tron Sportback e-tron GT and RS e-tron GT; Cupra Born; and Skoda Enyaq In China Tesla has been pushed into 3rd place this year by BYD which has seen EV sales grow from 53K Q1; 98K.Q2; 183K Q3. Tesla meanwhile has seen China quarterly sales for 2021 flattish at 69K, 62K and 75K. China will likely sell 3 million EV's this year, half the worlds volume and Tesla sales are flat for the year. Tesla might sell a lowly 9%. Tesla dominates the US markets of course, where few EV models are on sale. EV sales might be 3% of automotive sales. Whilst investors will assert these stats do not.matter and Tesla's valuation is all about tech, batteries and robo-taxis, it still does not sell any car related tech beyond its own cars. Take up of FSD is a lowly 11%. It still buys it's battery cells. By its own statements it has a level 2/3 driver assist whilst companies like Waymo are already starting to offer level 4/5 robo-taxis in cities like San Fran (a free trial program has commenced). With Tesla slipping badly in the two biggest and mature EV markets globally, it's EV mkt share has fallen from near 18% highs in 2019 to 14.7% YTD in 2021. With Europe and China likely to see 20% EV sales, the Tesla domination of global car mkts story is looking utterly flawed, yet its market capitalisation is now than the entire companies combined that sell 99% of cars and are adding EV's faster. Tesla is frankly trading at utterly ludicrous levels given the clear reality of global EV market growth. (These figures all verifiable with CleanTechnica and InsideEVs) [link] [comments]  |
| NVIDIA is going to break $300 today, currently it is worth 745B, it will be the next 1T club member Posted: 04 Nov 2021 09:29 AM PDT Nvidia has been on fire since Meta announce it will invest over 10B into the META field, and Nvidia AI chips will be in high demand. The stock is trading a bit stretched but most people are still holding it for long term and let it run. It is the best semi right now and future as there are a lot of potential for Nvidia to grow. update: It reached $300! [link] [comments]  |
| Cathie Wood’s Ark Dumps 3.9 Million Zillow Shares - a day after buying 288,813 Posted: 04 Nov 2021 06:19 AM PDT (Bloomberg) -- Cathie Wood's exchange-traded funds sold 3.9 million shares in Zillow Group Inc. on Wednesday as the stock's rout deepened -- a day after buying 288,813 of the securities. The stake offloaded was about $255 million, assuming Wednesday's closing price. That's about 10 times the value of the shares purchased on Tuesday, when Seattle-based Zillow pulled the plug on its tech-powered home-flipping operation. Zillow's stock has suffered as investors question its strategic goal of shifting from a company known for real estate listings to one that gets a bigger piece of the lucrative business around property transactions. Ark's daily trading updates provided figures for the portfolio changes without specifying buying and selling prices. They only show active decisions by the management team and don't include creation or redemption activity caused by investor flows. For that reason, the firm's exact trading activity may vary. Following their sales on Wednesday, Zillow makes up less than 1% of each of the ARK Innovation ETF, ARK Next Generation Internet ETF and ARK Fintech Innovation ETF. Tuesday's update showed the flagship ARK Innovation ETF buying 288,813 shares. Wood is well known for buying the dip in her high-conviction bets. She and her firm frequently emphasize they have at least a five-year investment horizon, and acknowledge that the disruptive companies they target are often volatile. https://www.bnnbloomberg.ca/cathie-wood-s-ark-dumps-3-9-million-zillow-shares-1.1676719 [link] [comments]  |
| nVidia and Tesla combined are now worth more than Google Posted: 04 Nov 2021 07:28 AM PDT This is not some doomer post shitting on your gains. All of you who have been buying these stocks, great job, these have been tremendous gains and I hope you get to keep your winnings. But it's time to be real about these companies and the SPY in general. For Tesla+Nvidia, their combined quarterly revenue isn't even a third of Google's and their quarterly profit isn't even 25% of Google's. Yet they're at the same valuation. And I'd argue Google is also very, very richly valued. nVidia's P/E is 100. One day the music will stop. For those wondering, look at what happened to Intel and Cisco in 2000. Twenty years later, their revenues have more than tripled and their profits have increased even more, all while buying back millions of shares. Yet still they haven't reached their 2000 share price. Large institutions won't be the ones holding the bag, please be careful. You may be holding these bags for years to come. Good luck. [link] [comments]  |
| Peloton shares fall 21% as company posts wider-than-expected loss and slashes full-year outlook Posted: 04 Nov 2021 01:12 PM PDT Peloton on Thursday reported weakening sales growth and a wider-than-expected loss in its fiscal first quarter, prompting the company to slash its outlook for the full year amid softened demand for its exercise equipment and ongoing supply chain challenges. Loss per share: $1.25 vs. $1.07 expected Revenue: $805.2 million vs. $810.7 million expected "We anticipated fiscal 2022 would be a very challenging year to forecast, given unusual year-ago comparisons, demand uncertainty amidst re-opening economies, and widely-reported supply chain constraints and commodity cost pressures," Chief Executive Officer John Foley said in a letter to shareholders. Peloton posts wider-than-expected loss, slashes full-year outlook amid softening sales https://www.cnbc.com/2021/11/04/peloton-pton-to-report-fiscal-q1-2022-earnings-.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard [link] [comments]  |
| Posted: 04 Nov 2021 01:38 PM PDT Third Quarter Fiscal 2021 Financial Highlights Revenue: Total revenue of $172.3 million, representing an increase of 51% year-over-year. Gross Profit: GAAP gross profit was $134.8 million, or 78.2% gross margin, compared to $87.2 million, or 76.3%, in the third quarter of 2020. Non-GAAP gross profit was $136.6 million, or 79.2% gross margin, compared to $88.2 million, or 77.3%, in the third quarter of 2020. Operating Income (Loss): GAAP loss from operations was $26.5 million, or 15.4% of total revenue, compared to $21.3 million, or 18.6% of total revenue, in the third quarter of 2020. Non-GAAP income from operations was $2.2 million, or 1.3% of total revenue, compared to a loss from operations of $4.5 million, or 4.0% of total revenue, in the third quarter of 2020. Net Income (Loss): GAAP net loss was $107.3 million, compared to $26.5 million in the third quarter of 2020. GAAP net loss per basic and diluted share was $0.34, compared to $0.09 in the third quarter of 2020. Non-GAAP net income was $1.4 million, compared to non-GAAP net loss of $5.8 million in the third quarter of 2020. Non-GAAP net income per diluted share was $0.00, compared to non-GAAP net loss per share of $0.02 in the third quarter of 2020. [link] [comments]  |
| Deere Says It’s Done Bargaining After Striking Workers Reject Second Contract Offer Posted: 03 Nov 2021 06:13 PM PDT Deere DE -3.45% & Co. won't raise its offer to striking workers after a second vote to ratify a new contract failed Tuesday, a company executive said. Marc Howze, the chief administrative officer for the farm and construction equipment manufacturer, said the company made its best and final offer in a six-year proposed contract that members of the United Auto Workers union voted down by a margin of 55% to 45%. "There's not more bargaining to be done," Mr. Howze said in an interview Wednesday. "We've done all we can do. We don't have a better offer to provide. This is it." Deere will continue operating its U.S. plants with nonunion employees, Mr. Howze said, and it is considering sourcing replacement parts and machinery from its overseas plants. Union leaders and negotiators for the striking Deere workers are discussing their next steps, a UAW spokesman said. The union had no specific response to Mr. Howze's assertion that Deere won't negotiate on a third offer with bigger raises. The strike at Deere, the largest U.S. farm equipment manufacturer by sales, is set to head into its third week at a time when tractor and combine sales have been booming, and farmers are planning purchases for the coming crop year. Some farmers worry that an extended strike at the Moline, Ill.-based manufacturer could deepen shortages of new equipment and drive up prices for already-scarce used equipment, with factory production currently constrained due to a lack of semiconductor chips and other components. The contract rejected Tuesday would have given more than 10,000 striking Deere employees an immediate 10% increase in pay, plus an $8,500 bonus for each worker and additional 5% pay raises in 2023 and 2025. That proposal followed a previous contract offer rejected by Deere workers Oct. 10. Deere shares settled 3.5% lower Wednesday, with U.S. stock indexes generally moving higher. Employees said Deere should have provided bigger raises and benefit expansions, given a surge in the company's farm and construction equipment sales, and the pay increases other employers have offered this year to recruit workers. Deere workers went on strike Oct. 14, the first walkout at the company since 1986. Mr. Howze said the company negotiators were willing to consider employees' demand for better raises and benefits after the first contract offer failed by a wide margin. But he said the company won't go any higher than the second offer, which he said would cost Deere an additional $3.5 billion over the life of the contract. "There's no benefit to be gained by staying out," Mr. Howze said, referring to strikers holding out for a better deal by prolonging the walkout. "We want to get people back to work." Mr. Howze said Deere executives were encouraged by the level of support for the second offer after 90% of the voters reportedly turned down the first deal. He declined to elaborate on how Deere is maintaining operations with nonunion employees, but said some U.S. employees are working around the clock at some sites. Employees of Deere have said they felt empowered to push for better terms from due to the current strength in the company's business, versus negotiations in past years when equipment sales were slower, or general economic conditions weaker. For the full fiscal year, Deere has projected about $5.8 billion in income, compared with $2.8 billion in 2020 and $3.3 billion in 2019. Rising demand for agricultural commodities and poor weather in North and South America have tightened crop supplies over the past year, and driven a rebound in the farm economy. www.w sj.com/articles/deere-says-its-done-bargaining-after-striking-workers-reject-second-contract-offer-11635976220 [link] [comments]  |
| One question how the hell is NKLA not at 0? Posted: 04 Nov 2021 08:08 AM PDT They blatantly committed fraud and have no working prototype, it's so far behind in the EV race that it didn't even leave the starting line I'm genuinely curious on what idiot is actually buying NKLA and for what reason. [link] [comments]  |
| Posted: 04 Nov 2021 12:47 PM PDT Pelton earnings are after market close today. Their last earnings were rough to say the least. I'm bearish on this company as I view them as just a fad that popped during covid. Their services are expensive, their products and monthly memberships are expensive. It's reaching that point where people are using them less and less, I'm seeing more and more of their products and machines for sale on Ebay, Facebook, Offerup, and Craigslist. Planet Fitness did great today with earnings / memberhsip sign ups. People are getting back out there, and a gym offers far more than PTON can, for a much for affordable price. I bought November 19 puts. Let's see what happens. [link] [comments]  |
| This market is insane. Why is the stock going up? Posted: 04 Nov 2021 07:10 AM PDT Just looking at the S&P index, I'm seeing P/E for the top 10 companies (Microsoft, Apple, Amazon, Tesla, Alphabet, NVIDIA) showing 37.3x, 27.0x, 66.2x, 393.9x, 28.2x, 23.7x, 95.0x, etc. How is this sustainable? I would assume the supply chain shortage is affecting the output from each of these companies? The only thing I can think of is the Fed announcement of keeping rates the same. Have we lost our minds? [link] [comments]  |
| Name a company that is amazing but has terrible management Posted: 03 Nov 2021 08:40 PM PDT I want to know what you think is an amazing company but has terrible management that is preventing them to have sustainable/consistent growth? I can think of one company of top of my head and that's Activision Blizzard. They have some amazing IP's like StarCraft and Warcraft but the with recent events they are gonna struggle for a bit and their CEO is okay. What about you guys, what do you think is an amazing company that has terrible management. [link] [comments]  |
| Intel - Good buying opportunity following new chips? Posted: 04 Nov 2021 09:25 AM PDT 12th gen i9 and i5 performance reviews have dropped and look very promising, especially the i5-12600K giving the 5th Gen Ryzen chips a run for its money at a similar price point. Unless AMD has another generational performance leap in store, seems like a good Intel buying opportunity? [link] [comments]  |
| Posted: 04 Nov 2021 07:18 AM PDT Rivian is set to have a high profile IPO. Their S1-A prospectus released on Nov 1 is available here: https://sec.report/Document/0001193125-21-315537/ THE IPO FUNDAMENTALS Some key elements to pull out of here:
This gives RIVN a market cap of $55Bn with the goal of raising $8Bn in funding during this IPO. THE COMPANY FINANCIALS Right now, RIVN has zero revenue. Consider them like QuantumScape. They're set to release product soon, but they have no commercialized product currently. In 2020, they racked up total operational net losses of $1Bn. In 2021, they're on track for net losses of $2Bn. These are all costs associated with what they term as "Research and development" and "Selling, general, and administrative". Their goal is to operate in the truck market initially, focusing on consumer truck/SUV vehicles and then delivery fleet vehicles (EDV). This is similar to what WKHS/RIDE were trying to accomplish. The S1 has RIVN projecting Amazon buying 100,000 EDVs from them, and growing the preorders of their R1T and R1S consumer models. THE PRODUCT RIVN is focusing on the SUV/Truck market, and this makes sense for America as trucks and SUVs consistently outsell all other vehicles on the road. Based on reviews, the R1T is ranked at 4th place comparing against other EVs by Car and Driver: https://www.caranddriver.com/rivian/r1t The R1T looks like a truck, and is designed very much to provide the culturally American truck experience. With the Cybertruck delayed into 2022, RIVN may have the first mover advantage, but again its hard to compare to TSLA who is just a runaway behemoth and cult brand at this point. Car and Driver's review glow about Rivian's offroad and rugged capabilities. It really seems to live up to the hype. Though there are worries about battery efficacy compared to the ModelX. The R1T is priced $30k cheaper than the ModelX. Amazon invested $700M into Rivian to develop EDVs that plan to go on the road by 2022: https://electrek.co/guides/rivian/ Ford was invested for $500M, but pulled out after COVID hit. THE LEADERSHIP In 2019, Forbes did a piece on the CEO of Rivian: https://www.forbes.com/wheels/news/meet-r-j-scaringe-founder-of-rivian-automotive-and-teslas-worst-nightmare/ RJ Scaringe is a MechEng PhD from MIT, who founded Rivian in 2009 as Mainstream Motors. The deep story is that RJ Scaringe worked on cars growing up in Florida and also liked outdoors and hiking. So he put the two together to create this company: https://electrek.co/guides/rivian/ Unlike Trevor Milton (where Rivian drives a lot of comparison to NKLA), Scaringe has a background in tech. Milton dropped out of university to go pursue sales and marketing. He sold alarms and used cars before founding NKLA. While leadership trust in NKLA was suspect, I think Scaringe has more credibility and accountability. I speak about leadership because in this high risk, volatile and speculative companies like RIVN (they haven't delivered any real products yet, its an emerging market, etc), trust in leadership is as important as the performance of the company. It's hard to differentiate TSLA from Musk. CONCLUSION Is RIVN worth $62? I think there will be some serious short term volatility. Its hard to value a company at $60Bn when they haven't even delivered any real products at scale yet. And TSLA gigafactory manufacturing strategy creates a sunk cost moat to scale production to compete. But its hard to go against American cultural trends where trucks rule supreme. If you do buy RIVN at $62, expect to hold for at least 3 years for their fleet operations to come into focus. Also, create a strategy to handle huge downside swings based on bad news around supply chains and TSLA competition. I think RIVN is a gut play, and there could be short term volatility since it has a nosebleed valuation for its current deliverables. [link] [comments]  |
| Gaining Visibility on Paysafe (PSFE) Parts 8-10 Posted: 04 Nov 2021 06:19 AM PDT Here are the final Parts 8-10, of an article addressing the main bear arguments on Paysafe. Parts 1-7 covered Paysafe's outlook on growth, debt, and profit, along with insider ownership and competition. I recommend starting with the introduction in Part 1 (Growth), and following the links from there if still interested. 8. ManagementAs part of Paysafe's preparations for the next phase of growth, the company has undergone a complete management overhaul. Along with replacing nearly all the Board of Directors, in the last two years, they've hired a new CEO, new CFO, new CTO, new CIO, new CRO and new CISO. They've hired PayPal's Chief Risk Officer and have also filled key division CEO positions with Facebook's Head of Payments and Amazon Intl's Head of Payments. This does not sound like an operation with a passive outlook. Still, many are rightfully frustrated that management has done little publicly to support the share price since going public. Despite a steady supply of positive news, the CEO has not once meaningfully engaged the media to highlight Paysafe's value story. It may be that management is deliberately downplaying its messaging while shares move from short-term trader's hands to those of value-seeking funds in order to better secure long-term share value. Or, they are simply focused on producing the numbers. Regardless, what management may lack in public storytelling, it makes up for in execution. In the short time since they went public, they have announced 3 new acquisitions and over 25 expanded partnerships with the likes of Visa, Coinbase, Fubo Gaming, FOXbet, Golden Nugget, Bankable, Wix, Repay, WynnBet, Betfred USA, OwnersBox, Dutch neobank bunq, IntelliPay, Glory Ltd, Parx Interactive, TripGift, SweePay, SimplePayMe, Smart Property Systems, Ambassador Cruise Line, Shelby Financial, ResponseCRM, ZEN, Montana Lottery, PlayUP, SuperBook Sports and Bitrise. In that same period, they've also:
Also during this time, they announced the appointments of:
All that done while reporting a profitable quarter, beating on revenue and EPS consensus, reporting 41% total payment volume (TPV) growth, refinancing all debt for significant cost savings, after putting deals in place throughout North America to lead in any new iGaming market as soon as it opens (as just happened with their 100% positioning in Canada's newly opened sports betting market). As Bill Foley said, "we're seeding the future growth right now… The day a state opens up, we are there ready from a regulatory perspective, from a risk perspective, and from a product perspective…It's our job to be there first and to make sure we dominate." They have not slept on this promise even as they quietly lay the groundwork to do the same thing in South America. Lastly, major shareholder and Paysafe Chairman of the Board, Bill Foley has repeatedly proven himself to be a trusted and highly effective deal maker with a remarkably consistent track record in growing shareholder value. Bloomberg describes Foley as someone who prides himself on operating experience, who has a known talent for corporate maneuvering and brings with him a full team of seasoned financial managers. The types of acquisitions described in Part 1 are central to Paysafe's "value creation playbook" which is exactly how Foley, grew FIS 36x from a market cap of $2.5 billion to over $90 billion. From the beginning of the deal to bring Paysafe public, Foley said, "those characteristics of FIS are right in line with what we plan on doing with Paysafe... FIS has very similar characteristics to Paysafe – an attractive platform with a defensible market position. Upside from acquisition integration, platform consolidation and cross-selling. We will cross-sell, cross-sell, and cross-sell." In this context, it's worth underscoring Foley's undeniably history of simultaneously growing multiple companies. Over just the last six years, Foley successfully grew Ceridian 3.3x, Dun & Bradstreet 5.6x, and Black Knight 8.7x. He's also known for growing Fidelity National Financial from $3 Million market cap to $10.8 Billion (3,600x). In all cases, he has significantly expanded their margins between 500 to 1800 bps. Foley said, "My whole history and career has been around acquiring companies and fixing companies." Though he's not Paysafe's front man, his fingerprints are evident and IR has recently assured that " Bill is highly engaged with the company." Personally, I don't doubt it. 9. Lockup ExpirationSome bears still point to PSFE overhang from lockups but all share lockups expired months ago, except for founder shares which constitute about 4% of outstanding shares (20F p. 135). That lockup is expected to expire in December. Personally, lockup expiry of such a small percentage of shares is not deterring me from continuing to build a position before Paysafe starts reporting better numbers. This is especially true when those shares are controlled by Chairman Foley, who is central to Paysafe's value creation playbook. Between Foley's consistent track record, the proxy statement below and Blackstone's stance on future growth, all signs indicate a long-term hold. Upon approving the deal to bring Paysafe public, the founders identified "base returns for a four year hold period" of "2.9x to 3.8x" from $10. From their proxy statement (SEC filing-DEFM14A): "The Business Combination could provide base returns for a four year hold period assuming exit multiples between 20-25x next twelve month EBITDA, reflecting a range of internal rate of return of 30.9% to 39.2% and a multiple on invested capital of 2.9x to 3.8x, in each case, based on the FTAC initial public offering price of $10.00 per share, while recognizing that the achievement of such returns could not be assured, and that the Business Combination has similar characteristics to other transactions involving Mr. Foley in the financial technologies industry, including an attractive platform with a defensible market position and multiple attractive acquisition opportunities to strengthen market position further, each of which made PGHL an attractive investment for FTAC." 10. ValuationPaysafe is building an integrated architecture that is worth more than the sum of its parts. By leveraging an asset-light cloud-based model to efficiently scale up in new high growth markets globally, Paysafe is a perfect example of the low capex Fintech profile that generally warrants high valuation multiples. Now trading around 4x a conservative F2022 revenue with nearly every institutional owner's cost basis 20-40% higher than the current price, it would appear PSFE is severely undervalued. Perhaps because Paysafe didn't go public via the traditional IPO method it is being lumped in with highly speculative pre-revenue ventures. But Paysafe is anything but that. Or maybe the current low price is simply a reflection of broadly disseminated misleading information like the articles on debt quoted in Part 2 or like the several articles falsely claiming Paysafe went public at a 3x higher valuation above its 2017 take private price. Some articles claim this by mistaking British pounds for US dollars while a Yahoo Finance article claimed a "300% higher" valuation with bad math and a false comparison between enterprise value (inclusive of debt) and a misquoted 2017 market cap price of "$3.7 billion", exclusive of debt. Inclusive of debt (enterprise value), Paysafe was taken private for $4.7 billion, according to Reuters. To make its bear case, that article misquotes the relevant 2017 take private value by a full billion dollars. Initially, I wondered why just about every bearish article relied on faulty or misleading information to make its valuation case, or why so many platforms misreported PSFE's financial data, like YF's overstating a Q1 EPS miss as -0.23 EPS instead of -0.05 (fixed months later); or why does a Credit Suisse analyst offer new price targets 4 times in 5 months with the first change just two days after initiating coverage and the last change, to neutral, just two weeks before Q3ER. Instead of waiting a few days for new data highly relevant to his thesis, the analyst cites, as if Q2 were a new revelation, months old information most of which was available before he first initiated coverage. (Coincidentally, he issued this two minutes before pre-market, precisely when PSFE was on the verge of breaking above the confluence of its 9-month downtrend resistance line and the 50DMA). Negligence or intentional price manipulation, take your pick. Skeptics may cringe at this idea but this is really nothing new. It's not like the market is unaware of analyst conflicts of interest or that Credit Suisse has shown itself to be an upstanding market participant (think lawsuit for misleading investors on Archegos, $5.3B fine for mortgage backed securities,$2.5B fine after pleading guilty for aiding in tax fraud, and the recent $547M fine after admitting to regulatory breaches, secret loans, lying to authorities and spying on employees). On the other hand, this could be CS trying to clean up its act by playing it safe or an analyst trying to preserve his reputation by keeping price targets closer to market. If so, this may have the flip-side benefit of future incremental upgrades. Obviously, this is all conjecture, which really doesn't matter in the long run. True price discovery will take form as share rotation plays out and Paysafe's value story becomes clear. Until then, here are a few reference points: Looking at Paysafe's eCash segment as a separate company: The eCash segment is a high margin business with over 12 million active users, $5 billion in volume, $405 million in TTM revenue and $157 million EBITDA. For H1/21, they just reported 49.4% YoY revenue growth and 81.6% YoY EBITDA growth. Not many Fintech companies can claim that. Adyen is a Fintech with a similar growth profile, (46% YoY revenue growth and 27% YoY EBITDA growth). Applying Adyen's 19x EV/rev ratio to Paysafe's eCash business alone, would give it a $7.6 billion enterprise value. That's close to the current valuation of the entirety of Paysafe, yet this one segment represents less than a third of total revenue. Using Adyen's EV/EBITDA ratio of 149x would value Paysafe's eCash segment at $23.3 billion. Even when applying the company's entire debt to that one segment, the share price for just the eCash business alone would still be $26.62. Again, that represents less than a third of Paysafe's total business. Brick & Mortar Payment Processing Paysafe is a value play right now but bears focus on growth. Paysafe has an established history of 27-30% CAGR but because recent growth was temporarily stifled by China de-risking exits and Covid-related closures, some equally hard-hit brick & mortar payment processing partners, like Visa and Mastercard, offer an interesting comparison. For 2020, Visa reported negative YoY revenue growth (-8.7%) and negative EBITDA growth (-10.2%). Similarly, Mastercard reported negative YoY revenue growth (-9.4%) and negative EBITDA growth (-14.20%). Their forward growth is projected to be 7.7% and 10% respectively. In all forward growth metrics, including EBITDA and EPS, they do worse than Paysafe, yet they both trade at an EV/Rev multiple of roughly 24X. This would put PSFE at $41.80. Digital Wallet vs. Digital Wallet Many compare the #1 digital wallet, PayPal, to the #2 digital wallet, Paysafe, so, hopefully without striking a nerve, here's a deeper look into that comparison: As noted earlier, Paysafe's stock was recently clobbered down 30% (to 3.2x P/S) on soft Q3 guidance even though they reaffirmed full year guidance and beat consensus on revenue and EPS. By comparison, PayPal missed Q3 guidance for both revenue and EPS. PayPal was also reported to be falling short on their 2021 full year guidance AND they missed on Q2 revenue consensus while also reporting a -23%YoY decline on EPS. PYPL only went down 10% (from a lofty 15x P/S) as news outlets characterized PayPal's troubles as a "buying opportunity." Some will reasonably say that's because PayPal has such strong growth history but, from the time PayPal's numbers were available separately from its parent eBay, 2012-2020, PayPal grew 17.8% CAGR ($5.6b to $21.5b). In that same period, Paysafe has grown 30.5% CAGR ($169m to $1.43b). Paysafe reported 27%CAGR prior to 2020's restructuring and, in just the last year, when excluding Paysafe's 2020 de-risking exits, they reported 23% YoY growth for Q2 which is on par with PayPal's recent report of 19% YoY growth. This comparative history serves only to show that Paysafe has a strong track record that should not be discounted. Paysafe is still priced as if it is a zero growth, pre-revenue speculative venture. Meanwhile, though some have called PayPal a "free cash flow machine," Paysafe already generates proportionately more free cash flow than PayPal (25% FCF margin vs. 20% FCF margin). There's obviously more to this complex story but, for reference, below is PSFE potential share value when applying PYPL's multiples (now 25% off highs) when factoring in all of PSFE's potential acquisition debt and dilution:
Those metrics average to a share price of $27.31 When factoring in a potential 24% growth, 35% EBITDA margin, 75-80% FCF conversion, the potential share value climbs fairly quickly. Sector multiples: Because Paysafe is far more diversified than the average Fintech, a while back I compared it to a wide basket of Fintech peers including PayPal, Square, Nuvei, Repay, Shift4, Adyen, Affirm, BILL, GPN, and Paysign. Collectively, they have a ~12.5% growth rate. Unlike Paysafe, a third of this group reported negative free cash flow and negative EBITDA and half reported negative EBITDA growth. Paysafe also currently has better EPS and a better Debt/EBITDA ratio than over half the group. After removing the top-end outliers in each category that put PSFE above $100 and discounting all by an additional 10%, here's Paysafe's share price with the averaged peer multiples:
Average : $41.84 It's worth pointing out here that, as happened with FIS's tremendous growth history, stock prices tend to temporarily pull back in association with acquisitions. This may explain some of PSFE's recent price action, but certainly not all. Sure, it's easy to read all of the material in Parts 1-10 and say, "the market doesn't care," but I'm confident that'll change when share rotation settles and quarterly ER's gradually shift focus from the past to the future. Stripped of superficial misdirection, bear arguments often devolve down to variations of "look at the chart" and "price is truth." This has been said about many companies in the past as they position themselves for future growth. No, this is not the next Amazon but Bezos had it right when he said, "The stock is not the company. And the company is not the stock. ... And so, while the stock price was going the wrong way, everything inside the company was going the right way." Do with this what you will. These are simply observations. Feel free to correct any errors, point out things I missed or use this material any way you wish. To be perfectly clear, this is not financial advice. I am not a financial advisor nor am I associated in any way with any commercial interests beyond my own. Given how much disinformation has been out there, I thought I'd do my bit to peel back the layers on what I consider to be a reliable long term investment. This concludes our public service announcement. We now return to normal programming. [link] [comments]  |
| The NBA Announces Expanded Betting and Daily Fantasy Agreement With DraftKings Posted: 04 Nov 2021 06:09 AM PDT The National Basketball Association today announced an expanded multiyear relationship with DraftKings to make the sports technology and entertainment company a co-official sports betting partner of the league. This agreement grants DraftKings expansive NBA rights and assets to integrate within its sports betting, daily fantasy sports, iGaming and free-to-play products and promotional offerings. "DraftKings has demonstrated a clear commitment to strategically investing at the intersection of betting and content," said Scott Kaufman-Ross, Senior Vice President, Head of Gaming & New Business Ventures, NBA. "We are excited to be expanding our relationship to include content initiatives like NBABet Stream to engage NBA fans in unique ways." Since teaming up initially in 2019 when DraftKings became an Authorized Gaming Operator (AGO) of the NBA, the two organizations have collaborated to deliver fan-first content and product experiences. With this expanded dynamic, DraftKings will now become the exclusive presenting sponsor of NBABet Stream, the league's betting-focused telecast that is distributed via NBA League Pass and the NBA TV app. During this weekly alternative betting-focused broadcast, DraftKings odds, lines, props and other forms of gaming-centric content will become integrated into the live-game experience, and underscore the company's continued evolution in the media and content spaces [link] [comments]  |
| Posted: 04 Nov 2021 01:24 PM PDT Profits for the quarter rose 280% year-over-year and the company saw its highest revenue and net income ever. Airbnb said it expects vaccination progress and the recovery of international travel to lead growth in the fourth quarter and new year. Airbnb reported strong third-quarter profit growth and a beat on revenue estimates Thursday, as the company continues its recovery from Covid-19 and travel returns as vaccinations efforts ramp up worldwide. Shares rose more than 3% after hours. https://www.google.com/amp/s/www.cnbc.com/amp/2021/11 /04/airbnb-abnbearnings-q3-2021.html [link] [comments]  |
| Sale of $Z by ARK funds accounted for 5% of trade volume Wednesday. Posted: 03 Nov 2021 07:34 PM PDT ARK drastically reduced their Zillow position today, and highlighted why most small to mid cap funds limit their AUM. ARKK, ARKW, and ARKF sold a total of 3.9 Million shares of $Z. That's a whopping 5% of the 78M shares traded, and almost 2.5% of the stock's total float of 170M. They still have ~6.4M shares left between the three funds, representing 4% of the stock's total float. I think this should raise some alarm bells about ARK's AUM. Their selection of equities is increasingly strained by their fund size. They're having liquidity issues with -what was a week ago- a $25B company. It's hard to find disruptive innovators when it's only feasible to open sizable positions in companies worth $20B and up. Edit: My data came from their daily trade information email, which I can't share. Here's an online ledger of their trades: https://arkinvestdailytrades.com/ticker/Z [link] [comments]  |
| Pinterest beats on earnings and revenue even as monthly user number drops Posted: 04 Nov 2021 01:24 PM PDT Pinterest on Thursday reported better-than-expected earnings and revenue for the third quarter despite a decline in monthly users. Here are the key numbers: Adjusted earnings per share: 28 cents vs. 23 cents expected by Refinitiv Revenue: $633 million vs. $630.9 million expected by Refinitiv Monthly active users: 444 million vs. 460 million expected by StreetAccount Average revenue per user: $1.41 vs. $1.38 forecast by StreetAccount Pinterest beats on earnings and revenue even as monthly user number drops https://www.cnbc.com/2021/11/04/pinterest-pins-earnings-q3-2021.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard [link] [comments]  |
| Qualcomm (QCOM) EPS beats by 0.29$, beats on revenue, guides Q1 above estimates Posted: 04 Nov 2021 01:52 AM PDT Qualcomm (NASDAQ:QCOM): Q4 Non-GAAP EPS of $2.55 beats by $0.29; GAAP EPS of $2.45 beats by $0.51. Revenue of $9.34B (+43.7% Y/Y) beats by $500M. Following the close of trading, Qualcomm (NASDAQ:QCOM) said that for its fiscal first quarter, it believes it will earn between $2.90 and $3.10 a share, excluding one-time items, on revenue in a range of $10 billion to $10.8 billion. Wall Street analysts had earlier forecast Qualcomm to earn $2.59 a share on $9.68 billion in revenue. [link] [comments]  |
| Posted: 04 Nov 2021 02:21 PM PDT Up 10% after earnings today. It seems like they know how to generate cash now. They're also generating revenue through subscription software, which is interesting. Anyone else following this? I think it is a value play right now. [link] [comments]  |
| It’s good that the FED starts the taper Posted: 04 Nov 2021 05:49 AM PDT I believe it's for the greater good that the FED has decided to start the taper. The $120B that we've seen in treasurys and mortgage-backed securities has started to feel unnecessary. Even though what it has done for the stock market, the constant buying of financial securities would have really started to hurt if the purchases would have kept going. We would have seen even bigger inflation than before and things would't have looked "transitory" any longer. Sure, we'll face interest rate hikes after the taper is over which will likely be around July of 2022. There will most likely be one rate hike in 2022, around fall. This will naturally hurt stock valuations because companies cannot expand their businesses as well as before because they need to spend larger amounts of money towards interest rate payments, thus limiting the amount of innovation and R&D they can do. But IMO, this is good. Investing is for the long haul. Having huge amounts of money printed is not sustainable. It might hurt short-term, but ultimately, it's all good. The taper and rate hikes are important if we want long-term success. Once taper is done the company's ability to make money will be the biggest thing to drive the stock market up, not the amount of money FED pumps. Always think long-term. That's investing. That's my two cents. [link] [comments]  |
| Bill.com crushes earnings, reporting YoY Total Revenue increase of 152% Posted: 04 Nov 2021 02:08 PM PDT Financial highlights for the first quarter of fiscal 2022, as reported, including Divvy and Invoice2go, unless otherwise indicated:
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| Posted: 04 Nov 2021 01:27 PM PDT
Shares slide today and then recover after hours. [link] [comments]  |
| Company gifted me 84 shares of stock - Help Posted: 04 Nov 2021 08:03 AM PDT Newbie here. My company gifted me 84 shares of stock and e*trade says it will be fully vested in 265 days. What does this mean? Can I do anything? Does this mean it sits there for 265 days and then I can choose to sell once it's fully vested? [link] [comments]  |
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