In days gone by public relations (PR) would often be a simple nod and a wink to let influential investors know what was happening. The situation today is very different with literally millions of pounds spent on PR to keep private investors and institutional investors up-to-date with events. While we asked the question “is PR now an integral part of stock market life” the simple answer is yes!
The tail wagging the dog
Looking at the likes of Tesla, Weight Watchers, Facebook, Snapchat and Apple to a certain extent, far too much time seems to be spent on PR. These are companies which have experienced significant volatility in their share prices with the likes of Tesla, Weight Watchers and Snapchat under serious pressure. Investors are looking for short-term returns, which is switching the focus of directors towards “keeping investors happy”. Surely their time should be spent on long-term planning and returns? Continue reading “Is PR now an integral part of stock market life?”
Donald Trump has announced plans to introduce Chinese trade tariffs worth around $200 billion in a major development. There has been much talk of ongoing Chinese/US trade talks which were initially instigated by Donald Trump some time ago. Many believe that talks were progressing as planned but last week’s announcement by Donald Trump through the markets into turmoil. After announcing plans for $200 billion worth of tariffs on Chinese goods he also suggested more could follow.
Trump blames China
While the details of the ongoing trade talks have been kept very private, Donald Trump has suggested in public for the first time that China “broke the deal”. The Chinese authorities have refuted these allegations and threatened their own round of US trade tariffs in retaliation. However, are things really as bad in the actual talks? Continue reading “Donald Trump introduces more Chinese trade tariffs”
The much awaited float of ride hailing pioneer Uber is nearly upon us although it seems as though the IPO price will be set towards the lower end of the $44 up to $50 range. If the rumours are confirmed, the IPO will be priced at $45 and value the company at around $82 billion. This is a huge IPO and one which many experts believe will test the market. However, how does the future look for Uber?
Uber has never made a profit
In this day and age it is no surprise to learn that Uber has never made a profit although revenues are growing and losses have been reduced. Revenues for 2018 came in at $11.3 billion which was up 43% increase from 2017. At the same time, the company reported a loss for 2018 of $1.8 billion although this is a slight improvement on the $2.2 billion loss in 2017. Since inception the company has raised more than $24 billion to cover development and ongoing losses. Continue reading “Uber IPO set at $45 a share”
The Tesla share price currently stands at $241 and is just off a near recent low. Contrast this to August last year when the shares were flying high and in excess of $380 with rumours of a bid by Elon Musk in the region of $420. Where did it all go wrong? Should a company such as Tesla go private and come back to the market further down the development stage?
Selling the story
Whether investors like you do not, Tesla has radicalised the electric car market and even if it turns out not to be the major winner it has changed the trend. This is a company which came from nothing, was discounted by the government and ridiculed by traditional car manufacturers. Fast forward, Tesla has disrupted the market to say the least and encouraged the switching of investment away from petrol/diesel vehicles towards more environmentally friendly cars. Continue reading “Should Tesla go private and come back to market in the future?”
This week’s impressive debut by Pinterest has cast a very interesting light across the social media/technology sector. While we await with anticipation the reaction of investors when markets open again next week, Pinterest is a different animal to the likes of Facebook and Twitter. However, if you look back at the debut of Snapchat and the initial rise of more than 50% from the IPO price, look at the shares today. Having been initially priced at $17 a share they very quickly hit $29 then fell to a low of $4.99 and are currently priced at $11.67. So what does this show?
Technology/social media companies are volatile
The whole concept behind technology and in many cases social media companies is the prospects for the future. Many investors are prepared to write-off the short term, together with an array of losses, as a means of gearing up for the long term boost in profits. We have seen this with many companies, the likes of Amazon was loss-making for many years due to significant investment in systems, software and hardware. Then suddenly, the majority of the ground work had been done and the company very swiftly moved into profit. Continue reading “Technology shares and hedging your bets”
We live in a world where social media is everywhere, allowing people to share their lives and their thoughts with others. While the likes of Facebook and Twitter have come under significant criticism of late, the same cannot be said of the latest Silicon Valley “unicorn” in the shape of Pinterest. The company was floated on the US stock market early this week and the shares immediately leapt by 25%. So, is the Pinterest story different from Facebook and Twitter? Will the company avoid the latest raft of criticism hitting the social media sector?
What is Pinterest?
The best way to describe Pinterest is a digital scrapbook which allows users to pin pictures, recipes, images and much more onto their account page. They are then able to share these images with friends, family and other interested parties and so the network widens. At this moment in time the company boasts 250 million active users a month and in official documentation it is stated that the company reaches “8 out of 10 moms” in the USA. So, will Pinterest be any different from other social media companies? Will the shares perform better than recent “unicorns” such as Lyft? Continue reading “Pinterest shares leap by 25%”
It is easy to look at figures or comments in isolation and come to a conclusion. If a company announced a “100% increase in profits” you can’t really argue with that? However, what if competitors had announced a “150% increase in profits”? Do you see what we mean? Everything is relative when looking at investments.
Those who follow the stock market will be well aware that the price-earnings ratio of different sectors can vary enormously. Technology sectors tend to have a higher price-earnings ratio because of the potential for significant growth. Utilities, including water, electric and gas tend have a relatively low price-earnings ratio with the limited growth rates. However, very often this is supplemented by a healthy dividend yield because many of these utility businesses are effectively cash cows. Continue reading “Everything is relative when it comes to investment”
Anonymous sources are suggesting that Amazon has decided to close its domestic marketplace business in China by mid-July. It is believed that fulfilment centres in China will be wound down over the next 90 days as it would appear the market is far too competitive for Amazon to make a difference. The e-commerce sector in China is dominated by Alibaba and JD.com who between them account for 81.9% of the Chinese e-commerce sector.
Knowing when to call it a day
While the headlines would seem to suggest that Amazon is backing out of the Chinese market, this is not necessarily the case. Shoppers in China will still be able to acquire goods from the US, UK, Denmark and Japan via the Amazon global store. They will not be able to acquire third-party goods via the Chinese store which many had expected to be a significant area of growth for Amazon. Indeed, if we look back to 2011 the company paid $75 million for local Chinese online shopping website Joyo.com and then rebranded the business as Amazon China. Continue reading “Amazon calls time on domestic marketplace business in China”
Prior to the announcement of a second crash involving the new Boeing 737 Max jet the Boeing share price was just over $440. In the aftermath of the second fatal crash, with circumstances said to replicate a separate crash last October, the shares initially fell to $420 and then down to $360. While we still await publication of the Ethiopia crash report and the Indonesia crash report, in many ways the movement of Boeing shares reflects general market reactions.
Damage to Boeing reputation
While the Boeing share price has since bounced to around $390 there are still concerns regarding the similarities between the two crashes. The loss of life has been headline news across the world amidst concerned about the airplane’s anti-stall system and various sensors. Interestingly, the CEO of Boeing has been in the press today with a heartfelt apology for the loss of life which he seems to be blaming on sensor issues. It is unusual to see a company effectively taking responsibility at such an early stage prior to official regulatory reports being released. Continue reading “Boeing air crash report prompts more concerns”
It is fair to say that investors and observers of the economic and political scenes have seen nothing like Donald Trump in their lifetime. This is a man who has made it in business, lost everything, rose again from the ashes and repeated this on numerous occasions. He now finds himself as the president of the most influential country in the world and he is certainly making headlines. However, are concerns over Chinese trade warranted or simply short-termism at its worst?
The deal will be done
He does not use traditional negotiating methods, he is quite prepared to walk away from the table but Donald Trump knows that the US needs a trade deal with China. He has made his position clear, the playing field will be reset and the US will never find itself with such deep trade deficits ever again. Well, that may be a little strong but you get the message, the tide has turned and the US is not prepared to fund other countries going forward. Continue reading “Donald Trump and Chinese trade”