There’s no trading in the stock market today because of Good Friday, but there’s been a lot of little stories that have happened this week that I wanted to discuss. The biggest news this week was definitely President Biden’s announcement of his infrastructure plan. I went into detail about his proposal in my last blog “Investing in President Biden’s Infrastructure Plan“. If this plan is put into action, there will be great opportunities to invest in multiple different industries.
Other big news this week was the when the massive cargo ship Ever Given was finally freed from blocking the Suez Canal. The Ever Given had become lodged sideways, blocking the Suez Canal for nearly a week and stopping all international shipping in the area. The debacle started on March 23 and after seven days of dredging and using tugboats, it was finally dislodged on March 29. This blockage caused at least 400 boats to be rerouted and hundreds more were stuck waiting to be able to pass through the canal. Due to the amount of products and materials that were stuck at sea, this blockage cost an estimated $9 billion each day in delayed global trade. The situation is under investigation by the Suez Canal Authority.
The brokerage app Robinhood was in the news again this week but it wasn’t about GameStop or its highly anticipated upcoming IPO. Robinhood is being sued by rapper Ice Cube for trademark infringement. Ice Cube filed a federal lawsuit on Wednesday, March 31, accusing Robinhood of damaging his reputation by using his image to promote its products without his consent. Ice Cube claims the trading platform is retaliating against him for his association with Jeff Kwatinetz, his business partner and his civil rights attorney who was involved in a separate lawsuit against Robinhood over the GameStop controversy. Ice Cube is asking the court for an injunction requiring Robinhood to stop using his likeness and also for unspecified monetary damages.
There were some big IPOs that dropped this week including the online learning platform Coursera (COUR) and the newest addition to the ARK Invest ETF lineup, the ARK Space Exploration & Innovation ETF, or ARKX. Both of these IPOs have had a pretty good first week and they are trading higher than their IPO price. ARKX is managed by famed investor and CEO & CIO of ARK Invest, Cathie Wood. ARKX has received mixed reviews and some criticism over the ETF containing some names like Netflix and Amazon that don’t really have anything to do with space exploration.
It was definitely an interesting week on Wall Street. I will continue to update you with all the latest news and information from around the investment world. Make sure to follow this blog and my other social media platforms. Have a great weekend!
Obviously, Tesla (TSLA) isn’t a new company so I’m sure many of you have already had money invested in the company. But I’ve noticed over the past 5 months Tesla’s stock price seemed overvalued. Starting 11/16/2020, their stock price gained a massive $100 per share jumping up from $400 to $500 over the course of just THREE DAYS from 11/16-11/19. Tesla’s stock price’s started skyrocketing and started shooting to the moon. The price peaked around $890 per share during this past January and has been on the decline since then.
Today, 3/26/2021, Telsa’s stock price has dipped down to around $610 per share. The last time we saw it’s price go this low was when it dipped three weeks ago around 3/8/2020, where it quickly shot back up in price averaging $700 per share since then. I personally think this stock was out of control over the past few months with volatility, but I believe the price has corrected. Over the past week, the price has gone from $670 and dipped down to $610 today.
I think it’s currently in a dip and that could make this a good time to invest. There has also been a lot of government talk about transitioning to electric vehicles (EVs) and increasing infrastructure for charging stations. This could mean a huge increase in sales because of fleet purchases. But I think the potential government incentives for building the infrastructure for more charging stations could be HUGE.
In other recent Tesla news, Elon Musk has talked about a large expansion at the Shanghai factory and has said the Chinese market will be Tesla’s “biggest market” in the long term. Also, PepsiCo has preordered and expects to be the first recipients of 15 brand new Tesla semitrucks this year at their Modesto, CA Frito-Lay manufacturing facility. In other Tesla semitruck news, it might not be legal on roads in Australia due to a law there where vehicles cannot be wider than 250 centimeters but it measures 3.8 centimeters wider than that, Tesla is lobbying for this rule to be amended.
I personally think all this recent news along with the current dip in it’s stock price makes Tesla a very tempting investment opportunity. I am no expert and this is not financial advice on how to invest your own money, but I personally bought some Tesla today. Leave me a comment with your thoughts regarding Tesla.
Now that you have your stimulus money, what should you do with it? My advice is to invest as much as you can. But how do you start? Apps like Robinhood, Webull, and Stash have made investing ultra easy and user friendly.
A huge reason these apps are so popular is the fact that they offer commission-free online stock trading. In the past, financial services companies such as Fidelity, Merrill, and Charles Schwab charged fees for buying or selling stocks. These apps have changed that and enabled users to buy and sell stocks with no trading fees. Some of the apps like Stash charge a $1 monthly fee but that is nothing compared to commissions and fees that companies used to charge. Webull is nice because they are a free platform plus they offer free stocks just for depositing money on the platform.
Each of the online brokers has their own unique benefits along with their different user interfaces. Stash is a good beginners investing app because it has very basic information and graphs. Stash and Robinhood are nice options because you can purchase partial shares, so in case you don’t have $2,000 for one share of Google or $57,000 to buy one bitcoin, you can purchase partial shares with whatever dollar amount you choose. Webull is my personal favorite platform because it displays the most useful information along with news articles about the companies you’re researching. Webull also has a social media aspect where there’s a comment section so you and fellow investors can interact. I really like how Webull gives you more trading options than the other platforms, such as inputting the price your willing to buy or sell at.
To get started, simply search online for the brokerage platform you want to use or download the app from your app store. Next you fill out basic information like your name, email, etc., and then you need to connect your bank account to the platform. Doing this is how you deposit money onto the platform and cash out back into your bank account. You can then deposit however much money you want to invest onto the platform, and then you’re ready to start investing!
Before you start buying stocks, make sure you research the companies you want to invest in. Do you like the newer online brokerages or traditional financial services companies? Leave me a comment and let me know your favorite way to invest.
British American Tobacco (BTI) has become a big player in the cannabis industry with a 20% acquisition of Canadian company OrganiGram (OGI). This deal cost British American Tobacco $220 million Canadian dollars, or about $176.6 million American, to purchase 58 million shares of OrganiGram. British American Tobacco is one of the largest tobacco companies, with a portfolio of brands including: Camel, Newport, Kool, Lucky Strike, and Pall Mall. BTI also produces Vuse vaporizers as well as a number of smokeless tobacco brands.
Experts say this deal is less about the Canadian market and more about laying the groundwork to capitalize on the growing global marketplace for cannabinoid-based products and delivery systems. This partnership is a strategic collaboration with a focus on research and product development. News of this partnership have caused both BTI and OGI stock prices to surge in the past couple days.
Other news causing some buzz in the cannabis industry came Thursday morning when Mexico’s Chamber of Deputies passed landmark legislation to legalize recreational sales in the country. The Mexican Senate is expected to back the bill in the coming days. Mexican President Andres Manuel Lopez Obrador’s party strongly backs the proposal and he is expected to sign the bill after the Senate passes it. Legalizing cannabis in Mexico would make it the largest country to do so, with it’s population of almost 130 million people.
Mexico would dwarf the Canadian (pop. 37.6 million) and Uruguay (3.4 million) markets, and put the U.S. sandwiched in between two fully legalized countries. This will put added pressure on the U.S. to federally legalize cannabis. Like I mentioned in my previous blog regarding cannabis, 15 U.S. states and 3 U.S. territories including Washington D.C. have already legalized adult recreational use, now our neighboring countries to the North and South are legal.
The big question is when will the U.S. end it’s federal prohibition on cannabis and allow the flood gates of tax revenue to open. Large corporations are waiting on the sidelines ready to take action. I personally think this industry is a great investment opportunity because it is so new with so much room to grow, I equate this to investing in the internet back in the 90s. What are your thoughts? Leave me a comment and let me know what you think about the cannabis industry as an investment opportunity.
First, off you might ask yourself what exactly is an IPO? IPO stands for initial public offering and it is when a private company first starts letting the public buy and sell shares of the company on the stock market. An initial price along with number of shares is established in an underwriting process that puts a valuation on the company. The IPO process involves companies meeting requirements set by the exchanges and the Securities and Exchange Commission (SEC). An IPO is often a great time to buy into a company before the stock prices surge. So, what are some good recent IPOs to keep an eye on?
The dating app Bumble (BMBL) issued their IPO a month ago in February and it has already caused a lot of buzz. On February 11th, before it dropped its IPO, it’s shares were priced at $43 apiece, above its target range of $37 to $39. It immediately began selling almost 77% above that for a price of $76. Bumble’s stock price has fluctuated over the past month of trading and it is currently trading around $69.76 per share. Overall, I think there is a lot of demand in this market and a lot of room for growth. Their CEO has talked about plans to monetize their friendship side of the app, Bumble BFF, next year in 2022.
The online gaming platform Roblox (RBLX) issued their IPO this past Wednesday, 3/10/21, with a suggested price point of $45. Wednesday, on its first day of trading, Roblox stock prices went up more than 54%, closing at $69.50. The stock climbed another 6.3% on Thursday, closing at $73.90. The Roblox IPO is a little different because it is a direct listing or direct public offering, meaning no new shares of the company were created. Instead only existing, outstanding shares are sold, which means the shares aren’t diluted by creating additional shares for the public.
Another IPO I’m keeping my eye on is Coupang (CPNG), which has been called the Amazon of South Korea. It just had it’s IPO release today, 3/11/21, with a suggested price of $35. When trading began this morning it opened with shares selling at $63.50, but the excitement calmed throughout the day and the price closed at $49.25. But in after hours trading it’s been on the rise and is priced around $52.35. There is definitely a lot of potential in this company, especially being an early investor.
IPOs can be great opportunities to buy in early, but as always the price could also drop. What do you think about Bumble (BMBL), Roblox (RBLX), and Coupang (CPNG)? Leave me a comment and let me know if you think these are good investments or a waste of money.
It’s been a rough week and an even rougher month for a lot of companies on the stock market. Like I discussed in my previous blog, “Are We About to Have a New Crash in the Stock Market?“, fears about rising interest rates and inflation have caused a lot of volatility on the stock exchange. These fears have been further complicated with rising interest rates in the bonds market and 10-year yields topping 1.54%. This is the highest level since the Covid-19 pandemic began.
Once again, Federal Reserve Chairman Jerome Powell addressed these concerns. At the Wall Street Journal Jobs Summit, he acknowledged that he expects the economic reopening to cause some temporary inflation but that it would not be enough to make the central bank raise interest rates. While Mr. Powell continues to try and ease investors minds, investors are having a “crisis of confidence” with Powell and the Federal Reserve. Investors fear that the Fed is misjudging the speed at which the economy is moving and they are underestimating the level of inflation and the impact that it will cause.
These uncertainties in the financial world have caused a lot of volatility on the stock exchange, with the tech sector being the hardest hit. For example, Tesla stock prices went from highs around $875 just a month or two ago to dropping below $600 as of recently. Apple’s stock price went from a high of $144 about a month ago down to around $120 today, which in another example of the tech sector’s drop. Many argue that the tech sector experienced excessive rapid growth over the past 4 months and this is the market correcting itself. What are your thoughts? Leave me a comment on whether you think this is the start of a market crash, especially in the tech sector OR is this just a great opportunity to buy the dip?
Just a few years ago, you would have never found these two words in the same sentence let alone be the topic of conversation amongst investors, but a lot has changed ever since Colorado and Washington went rogue and legalized cannabis at the end of 2012. Since then, the total number of states that have legalized the plant for adult recreational use has jumped up to 15 states plus three territories including Washington D.C. This week the governor of Virginia is expected to sign the bill to legalize adult recreational use in his state and will make it the 16th state to do so. Twelve other states currently have recreational legalization measure on the table also. Beyond that, it is legal in 36 US states for medical purposes.
Our neighbor to the north, Canada, legalized cannabis in 2018 and many in the US think that the federal government is currently not far behind them, especially considering the number of states that have already legalized it. With the legalization of cannabis, the opportunities for companies to grow in this industry has exploded. Another major milestone happened in 2018, the cannabis company Cronos Group became the first in the industry to receive SEC approval and be traded on the US stock exchange. Since then, many new companies have emerged onto the market and this is proving to be a highly competitive industry.
News that is fueling this fire is that last month, the Senate Majority Leader Chuck Schumer pledged that he, Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) would release a draft bill to end federal marijuana prohibition “in the early part of this year.” More recently, this past Friday Senate Majority Leader Chuck Schumer sent out a fundraising email to supporters where he discussed Democrat’s agenda for change this year, where he reiterated the fact, “It’s time to decriminalize marijuana nationally.” All this talk of federal legalization has the industry waiting in anticipation. Although companies are already being traded on the stock market, full federal legalization would not only open the flood gates of potential customers but it would also give everyone the green light to go 100% in building operations across the country.
Some of the companies leading the way in the new legal cannabis market are Canopy Growth, Tilray, and Aurora Cannabis. These are three of the biggest names in the industry but like I mentioned earlier, this is a blossoming industry with a lot of competition vying for space. Leave me a comment on what are your thoughts on investing in cannabis? Is it a good idea to invest now or wait until full legalization? Will it be too late to invest then?
In this corner! We have Gabe Plotkin, from Melvin Capital (hedge fund that majorly shorted GameStop stocks), Vlad Tenev, CEO of Robinhood (brokerage app) and Ken Griffin, the CEO of Citadel (hedge fund involved with both companies). In the other corner, we have the House Financial Services Committee, with Congresswoman Maxine Waters and Alexandria Ocasio-Cortez, Congressman Patrick McHenry, Reddit’s CEO Steve Huffman, and Keith Gill, known as Deep F***** Value on Reddit (he’s a longtime advocate of GameStop and one of the original people to encourage others to buy their stock). The congressional hearing was addressing last months unprecedented skyrocketing and plummeting of GameStop stocks within one week.
One side of the argument is that Reddit and user Keith Gill had manipulated the stock price by generating excitement around GameStop stock. The argument is that this excitement led to driving the price to a peak of around $483. Reddit CEO Steve Huffman stated that there was an internal investigation and there was no evidence of unscrupulous activities or any signs of artificially generating excitement about GameStop or any other companies mentioned on WallStreetBets.
On the other side of the argument is the thoughts and accusations that the hedge funds, Melvin Capital and Citadel, worked directly with Robinhood to force down the price of the GameStop stocks. A little backstory, Melvin Capital is the hedge fund that engaged in majorly short-selling the GameStop stock. The hedge fund Citadel came to the rescue for Melvin Capital and made a large cash investment, reportedly around $3 billion, to essentially bail Melvin Capital out of this predicament. The problem with this is that Citadel operates and makes money by executing trades on behalf of Robinhood, along with some other retail brokers. The connection has made many people suspicious and has led to theories that Citadel pulled strings to make money on both sides of the fight.
During the height of the GameStop stock price, Robinhood disabled only the “Buy” button, but not the “Sell” button, which is argued to have caused the price of the stock to crash. This action is at the heart of the argument. Suspicions and theories about why purchases were suspended started flying around the internet, including one where Citadel and Melvin Capital pulled strings at Robinhood to disable the “Buy” button. Robinhood CEO Vlad Tenev claimed that was not the case, and that it was necessary to disable the “Buy” button due to liquidity concerns because the clearinghouses (responsible for making sure money is correctly exchanged between buyers and sellers) demanded billions of dollars in collateral from Robinhood to ensure the trades would be settled. This caused Robinhood to suspend purchases while they scrambled to gather capital for the clearinghouses.
In the end, the hearing showed that the suspicions and theories lacked substance. There was no proof of collusion between the hedge funds and Robinhood but this situation has put a spot light on brokerage apps like Robinhood and their relationships with institutional investors. Leave a comment and let me know if you think this was just business as normal or was there some unethical behavior here that needs to be further addressed.
Bull. Bear. Short-selling. Hedge fund. Why is everyone obsessed with Game Stop?
There has been a lot talk about the stock market in the news lately and sometimes it’s hard to understand what everyone is talking about. I wanted to help clear the air and talk about some of the recent big stories in the news. I am not a professional trader or stock analyst, I am an MBA student who is extremely interested in researching and learning more about investing and the stock market and I want to share all the news and knowledge that I can with you.
The big story with Game Stop first started evolving even before late January, 2021 when the stock prices went crazy. It started when hedge funds, investment companies, decided they want to short sell the Game Stop stocks. A short sale is an investment or trading strategy that speculates on the decline in a stock price. This particular short sale happened when institutional investors (hedge funds) thought that Game Stop’s stock was over-valued and that the price was going to drop in the future. They then borrowed Game Stop stocks from brokers and sold them back into the market at what they believed was an over-valued price, intending to buy it back for cheap in the future.
This is when the Reddit group called wallstreetbets noticed that there were more shorted stocks for Game Stop than actual shares of it in existence. This wallstreetbets community spread the word on the shorted Game Stop stocks and encouraged normal retail investors to buy up all of the available Game Stop stocks, which forces the price higher, knowing that the hedge funds MUST pay back the brokers that initially lent them the stocks. This drove up the stock price from around $20 per share up to $300-$400 per share.
During the height of the stock price some trading apps like Robinhood disabled the ability for users to buy Game Stop stocks but they did allow users to sell shares, which helped drive down the stock price. There is a lot of debate about the reasoning and ethics behind halting trading for Game Stop, so much so that there will be a Congressional hearing with the CEO of Robinhood, CEOs of two of the hedge funds involved, the co-founder of Reddit, and the trader who initially spread the story. I will update you all after the hearing.
In the end, the price of Game Stop stock dropped significantly compared to its height of $400, and today is valued around $40, but it keeps dropping everyday. The story of Game Stop has helped expose some of the inefficiencies in the stock market and shed light on some questionable practices.