How should price sensitive information be released?

How should price sensitive information be released?

Last week we saw Elon Musk tweeting that he was thinking of taking Tesla private at a price of $420 per share. This was before the company had made any announcement, causing the share price to increase by around 20% to just over $380. The price has since cooled to around $350 with concerns that the “secured funding” mentioned by Elon Musk might not be secured. So, this begs the question, how should price sensitive information be released?

Stock market announcements

The stock market has a very efficient and fast acting announcement service which should be the first port of call for any type of price sensitive information. Even though Tesla has since confirmed it is in talks with Elon Musk surely the company should have been first to release the information into the public domain? Continue reading “How should price sensitive information be released?”

The world of technology stocks moves so quickly

The world of technology stocks moves so quickly

Over the years we have seen some phenomenal technology stocks such as Google, Amazon, Netflix, etc. In the early days, Amazon was written off as a nonentity but today it is valued in the hundreds of billions of dollars and expected to secure more than 50% of online sales in the short to medium term. However, the world of technology moves so quickly and while not all shares will perform as well as those mentioned above, there may well be some interesting short-term plays.

First to market

In business there is a general consensus that it is not always the first to market which will be the most successful. Perhaps one of the prime examples of this theory is MySpace and Facebook. Those who follow the world of social media will be well aware that MySpace changed hands for some phenomenal figures back in the day. It was to all intents and purposes the precursor to Facebook which, despite its recent difficulties, is one of the largest companies in the world. MySpace, well the company has since changed hands for but a fraction of its value at the top of the cycle and is now a nonentity in the world of social media.

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Facebook down by more than $100 billion in one day

Facebook down by more than $100 billion in one day

While Mark Zuckerberg is around $15 billion less wealthy than he was this time last week, he is still comfortably one of the top 10 wealthiest people in the world. So, while Facebook lost more than $100 billion in value in one day, a 20% fall, few tears will be cried for the founder. However, shareholders in Facebook are now being forced to face some very stark realities.

Why did the shares fall?

Companies such as Facebook depend upon user numbers growing as well as the amount of time they spend online. The fact that results this week were still in positive territory has been overshadowed by two main issues. Firstly, user growth numbers are at their slowest rate for more than two years as the company fights competition and attacks on its reputation. Secondly, in order to fight back and try and regain some of its lost reputation the company is spending billions of dollars to improve privacy and track advertising methods.

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Have you got the courage of your own convictions?

Have you got the courage of your own convictions?

Every investor will start off with “imaginary money” to test how the market works and whether they can read the signs of share price movements. The likelihood is that the majority of investors will have made “big money” using this particular approach because they will run their winners and cut their losers. So, have you got the courage of your own convictions when it comes to real money?

Ignoring pressure

When looking to invest using the courage of your own convictions you will to a certain extent need to ignore pressure as much as possible. It would be foolish to suggest that it is easy to ignore any pressure but pressure can impact your thought process and often lead to you making a rash decision. One which can often turn out to be wrong!

Believe in yourself

If you do your own research, follow the experts, read all of the financial papers and keep yourself in tune with the markets, there is no reason why you cannot gain invaluable experience going forward. While it is dangerous to bet against the market, there can be good money to be made by following market trends and the earlier you spot a trend, and the underlying reasons, the greater the potential rewards. Continue reading “Have you got the courage of your own convictions?”

Gauging investor sentiment and new issues

The world of technology stocks moves so quickly

We often hear about new issues being pulled at the last minute because of a change in investor sentiment. Sometimes this is seen as an excuse due to a lack of demand for shares while other times it does seem to be a valid reason. Unless you are involved in the day-to-day gauging of investor sentiment and the requirement for perfect timing for new issues it is difficult to understand the potential downside of mismanaging a new issue.

IPOs/New issues

IPOs/new issues often take the form of a company coming to the market whereby the original shareholders will sell part of their holding to create a liquid market. There are other occasions where original shareholders may retain their shares, or sell part of them, while the company issues new shares as a fundraising exercise. Therefore, it is not difficult to see how a particular change in investor sentiment, whether positive or negative, can have a significant impact upon the pricing of a new issue and the potential level of funds raised. Continue reading “Gauging investor sentiment and new issues”

Donald Trump squeezing China on trade tariffs

Donald Trump squeezing China on trade tariffs

While many believed that Donald Trump’s flexing of his trade tariff muscles was nothing but a token gesture, the recent activation of increased US trade tariffs on $34 billion worth of Chinese goods speaks for itself. Wells Fargo have been looking at the situation in detail and, like so many other experts, they believe that the Chinese economy has a lot more to lose than its US counterpart in the long term.

Stock markets

It will depend upon which type of media website/newspaper you read as to the impression you’ll receive about this ongoing trade tariff war. However, stock markets do not lie!

Since peaking on 24 January the Shanghai index has fallen by 23% and the Shenzen index by 22%. When you compare this with the US S&P 500, which peaked on 26 January and is now only 4% off its high, this says everything. Wells Fargo believes there is a 10% chance of a full-blown trade war, 10% chance of a quick reconciliation between the US and China and an 80% chance that negotiations will drag on for some time to come but eventually be successful. During this difficult period there are concerns that, despite Friday’s bounce in Chinese stock markets, the Chinese economy could come under pressure and investors will become ever more concerned. Continue reading “Donald Trump squeezing China on trade tariffs”

It’s better to travel than arrive

The world of technology stocks moves so quickly

There is a saying in investment circles “It’s better to travel than arrive” which sounds a little bizarre to say the least. However, if you dig below the surface you begin to understand exactly what it means.

Buy on rumours, sell on facts

Those who follow stock markets will be well aware of “suspicious” share price movements which often occur prior to big announcements. While much has been done to stamp out insider-trading in recent years the fact is it is still rife. There are suspicious share price movements on a daily basis where there is little public information to justify the move. Then, lo and behold, just a few days later a big announcement comes out to justify the movement. Hey presto, the cat is out of the bag! Continue reading “It’s better to travel than arrive”

Are markets concerned about the US/Chinese trade war?

Are markets concerned about the US/Chinese trade war?

As the trade war between the US and China continues to escalate the press seems to be making more of the issue than equity markets. Since hitting a June high of 25,322 the Dow Jones Industrial Average today stands at 24,618 which while a significant drop is not catastrophic. When you also bear in mind the all-time high of 26,616 was hit on 26 January 2018 perhaps the trade issue is not a major problem as yet.

The situation regarding the NASDAQ Composite index is even less concerning with the market falling from a June high of 7806 to 7706. The figure of 7806 is the all-time high for the NASDAQ Composite index which occurred on 11 June 2018. Indications suggest that the performance of companies such as Facebook and Netflix, both recently hitting all-time highs, has helped to support the index. Continue reading “Are markets concerned about the US/Chinese trade war?”

Can Oprah Winfrey repeat Weight Watchers trick with Apple?

The world of technology stocks moves so quickly

Tech giant Apple has announced a deal with Oprah Winfrey to create original programming with an investment of approaching $1 billion expected in this area. What is described as a “multi-year deal” is a major coup for Apple as it looks to challenge the likes of Netflix and Amazon. In a world where content is King there is no doubt that Apple has signed up the Queen of content and a lady who has shown her Midas touch in recent times.

Revolutionising Weight Watchers

Those who follow the stock market will be well aware that back in October 2015 Oprah Winfrey acquired 6.4 million shares in Weight Watchers at a price of $6.79. She took an active role in the company and in March this year she sold 2 million shares at around $60 per share banking a $110 million profit in the process. She still holds 4.4 million shares with the price now approaching $100! Continue reading “Can Oprah Winfrey repeat Weight Watchers trick with Apple?”

The US trade deficit does need addressing!

The US trade deficit

In 2017 the US trade deficit, excluding services, was a staggering $810 billion. Yes, the US imported $810 billion more than it exported. While Donald Trump’s fairly blunt attempt at rebalancing the trade deficit, using tariffs, has attracted significant criticism, does he not have a point?

Why should the US have a trade deficit?

Goods to the tune of $2.895 trillion were imported into the US in 2017 with exports well behind at $2.329 trillion. So, which countries export far more to the US than they import?

China – there is a $375 billion trade deficit between the US and China
Canada – Canadian businesses export $18 billion more of goods to the US than they import
Mexico – the US is $71 billion short on trading equilibrium
Japan – there is a $69 billion trade deficit with Japan
Germany – the US has a $65 billion trade deficit with Germany Continue reading “The US trade deficit does need addressing!”