Pinterest shares leap by 25%

Pinterest shares leap by 25%

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%”

Everything is relative when it comes to investment

Everything is relative when it comes to investment

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.

Price-earnings ratio

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”

Amazon calls time on domestic marketplace business in China

Amazon calls time on domestic marketplace business in China

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”

Boeing air crash report prompts more concerns

Boeing air crash report prompts more concerns

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”

Donald Trump and Chinese trade

Donald Trump forces Chinese President to the negotiating table

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”

Do all brands have a shelf life?

Boeing air crash report prompts more concerns

Over the last few months we have seen a significant reduction in the brand value of Tesla and Apple according to stock markets. This prompts the question; do all brands have a shelf life?

Leading consumers by the hand

Companies such as Tesla and Apple, these are just two examples, have been extremely successful in leading consumers by the hand. The ability to build up anticipation prior to the launch of a new product, to remove pricing from the thought process and encourage customers to effectively “buy blind” is a gift. Apple especially has been very successful in managing not only news flow but also consumer interest and anticipation. Continue reading “Do all brands have a shelf life?”

Apple finally responding to market concerns

Apple finally responding to market concerns

The fact we are looking at nine positive days for Apple shares out of the past 10 trading days is a miracle in itself. This is a share which collapsed from well over $200 down to $140 and now stands at $195. Indeed, the recent increase in the share price has pushed it well above recent trendlines indicating there could still be more to come. So, why is Apple back in favour?

Drip feeding news

Over the last few days Apple has begun to drip feed new products and new ideas into the marketplace. Indeed this coming Monday the company is hosting a high-profile event at which many believe Apple will announce a streaming video service. This has been rumoured for some time but finally it looks as though it is here! Continue reading “Apple finally responding to market concerns”

Are Apple and Tesla a match made in heaven?

Are Apple and Tesla a match made in heaven?

Over the last few days there has been much speculation regarding the future of Tesla with the shares now below $300. There was also been mention of a potential offer from Apple, no indication whatsoever from the company, amid a growing view that Apple and Tesla could well be a match made in heaven. So, why is there so much attention on Apple and Tesla?

Elon Musk

Love him or hate, Elon Musk is a man who gets things done goes against the establishment and is not scared to go out on a limb. While his techniques and his strategy are often called into question, references recent battle with the SEC, he does sail close to the wind but very rarely does his boat capsize. As a consequence, there is some comment from analysts suggesting that Elon Musk would have made a far better replacement for Steve Jobs at Apple. Does this make sense? Continue reading “Are Apple and Tesla a match made in heaven?”

What can Tesla do to appease the markets?

Should Tesla go private and come back to market in the future?

Tesla shares have fallen from well over $400 to below $300 over the last few months. It is fair to say that this has been an extremely rocky ride for the electric car manufacturer. The founder Elon Musk has been relegated to behind-the-scenes (although he is often wheeled out to announce bad news) after his controversial social media communications. However, Tesla has significantly reduced costs going forward, which is exactly what the market wanted, but the shares are being hammered.

Short-term pain, long-term gain

In the back of the minds of many investors is the concern that Tesla will need to tap the market for additional funding in the short to medium term. Despite the company suggesting just a few weeks ago that it had turned the corner and would be profitable on a quarter by quarter basis going forward, this comment has been diluted a little. The company has reduced the workforce, announced plans to close many showrooms and will be reducing the price of the Model 3 to $35,000. So, why are investors still concerned about the company’s future? Continue reading “What can Tesla do to appease the markets?”

Donald comes up trumps in Chinese trade talks

Donald comes up trumps in Chinese trade talks

Love him or hate him, there is no doubt that Donald Trump has a knack of delivering what many people believed was undeliverable. While he stands on the verge of a historic summit with North Korea, which could denuclearise the Korean peninsula, there has also been great progress in Chinese trade talks. In his now all-too-familiar social media communication style, Donald Trump has been posting extremely positive notes from ongoing trade negotiations. So, what is going on behind-the-scenes?

Trade tariffs

At 12:01 AM on Saturday, 23 February 2019 plans to ramp up tariffs on Chinese goods worth $200 billion were cancelled. The threat of increasing tariffs from 10% to 25% was taken off the table amid rumours of a breakthrough in Chinese/US trade talks. This is a perfect example of how behind closed doors politics can be very different to the mudslinging condescending headline grabbing comments in the public arena. Continue reading “Donald comes up trumps in Chinese trade talks”