I might pump, but I don’t dump
Global Internet Outage, Mercedes Turns Electric-Only, Car-Flipping
Hi all,
On Thursday, a large share of the internet dropped offline. The outage hit some of the most popular sites, apps and services including Airbnb, Amazon, AT&T, British Airways, Capital One, Costco, Delta Air Lines, Fidelity, Go Daddy, Steam, the PlayStation Network, Vanguard and UPS.
The outage was caused by a bug at Akamai (AKAM), one of the largest content delivery network (CDN) providers, next to Cloudflare (NET) and Fastly (FSLY).
Thankfully, the bug was fixed and the system was back up a few hours later so that the world could continue spinning.
Next week, I will be out for a short summer break and digital detox. You will hear from me again in the first week of August!
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NEWS
| OPPORTUNITIES | OTHER
Elon Musk, Jack Dorsey (CEO Twitter and Square), and Cathie Wood (CEO and CIO at ARK Invest) came together this week for “The B Word” conference. The 3 billionaires reinforced their bullish outlooks around Bitcoin, giving it a boost after it lately dipped below $30k.
“I might pump, but I don’t dump.” - Elon
A big topic of the call was the non-eco-friendliness of cryptocurrencies as many of them consume a huge amount of energy. Becoming “eco-friendly” doesn’t mean making major underlying changes to Bitcoin, but rather changing the energy sources which are powering the mining centers. You can re-watch the call here.
Cloud Factor’s Take: I do not see how Bitcoin could lead to world piece and crypto currencies have been too volatile for me in 2021 so I will stay away for now. The only crypto I own is OMI - which is def going to the MOON ;)
Weekly Inflation Update: The ECB met this week to review its monetary policy. After the meeting, it said it would keep buying bonds and maintain its deeply negative interest rates in order to increase inflation, which has been much lower than in the US. The Fed will meet during the next few days and decide on a potential slow down down of its bond-buying program.
Cloud Factor’s Take: Delta is spreading rapidly and in the past, the ECB and the FED seemed determined to solve Corona by throwing money at the problem. Buybacks and inflation seem unlikely to slow down. Here’s what to invest in during inflation.
Zoom (ZM) is acquiring the cloud-based call center platform Five9 (FIVN) for $15 billion, a 13% premium to the previous market price. This is Zoom's first $-billion acquisition and signals a move beyond video chat. More here.
Zoom also announced that it will integrate third-party apps into its video conferences. After the launch, 50 productivity apps will be available for tasks like meeting planning (Asana), polling (Dot Collector), taking notes (ZoomNotes) or whiteboarding.
Beyond work, the company is also planning to offer apps for online games to play live with with friends and family via video. More here.
Cloud Factor’s Take: The acquisition makes sense for Zoom to expand into adjacent markets. ZM itself seems fairly priced and I already hold a high-conviction position in a cloud-communication company (PEXIP), so I won’t double down in the space.
Mercedes Benz announced a $47 billion plan to become an electric-only automaker by 2030. This means the company will need a lot of batteries, so Mercedes plans to set up eight (!) battery factories; 1 in the US, 4 in Europe and 3 in China. More here.
At the same time, however, Coal prices have increased to a record high and are up 165% in one year. Coal is dirty and not well liked, but it is still the second-biggest source of energy. The rebound in electricity demand combined with some supply chain disruptions has fired up the price. More here.
Cloud Factor’s Take: Coal is bad. Supply chain disruptions are temporary. I own one commodity stock, which is electric-vehicle related: First Quantum Minerals (FM), based on some of the reasons explained here.
Tencent (TCEHY) is buying British video game developer Sumo Group (SUMO) for $1.3 billion. Sumo shares were up 40% on the news. More here.
YouTube announced its latest feature, Super Thanks, which lets viewers tip creators between $2 and $50 for their uploads. More here.
Quarterly Performance Updates
Netflix (NFLX) Q2-21
Revenue: $7.3 billion, as expected
EPS: $2.97, vs. $3.16 expected
Global paid net subscriber additions: 1.5 million vs 1.2 million expected
Market reaction: Down slightly with -0.2% in after hours
Snapchat (SNAP) Q2-21
Revenue: $982 million, vs. $846 expected
EPS: $0.10m vs. ($0.01) expected
Global daily active users: 293 million vs. 290.3 million expected
Average revenue per user: $3.35 vs. $2.92 expected
Market reaction: Shares jumped 16% higher before the bell on Friday
Twitter (TWTR) Q2-21
Twitter’s revenue grew 74% year over year, the strongest growth since 2014, after introducing a range of new major features and the launch of its first subscription service.
Revenue: $1.2 billion vs. $1.1 billion expected
EPS: $0.2, vs. $0.07 expected
Monetizable daily active users: 206 million vs. 206.2 million expected
Market reaction: Shares jumped 5% pre-market
Busy Week Ahead. Earnings Announcements:
Monday: Hasbro, Lockheed Martin, Tesla
Tuesday: UPS, 3M, General Electric, Alphabet, Microsoft, Visa, Apple
Wednesday: Pfizer, McDonald's, Bristol-Myers Squibb, Boeing, Qualcomm, Ford, Facebook, PayPal, Yum China, Samsung Electronics
Thursday: Airbus, Merck, Comcast, Altria, Yum Brands, Mastercard, Amazon, Gilead Sciences, T-Mobile
Friday: Caterpillar, Chevron, Exxon Mobil, Procter & Gamble, Colgate-Palmolive
NEWS |
OPPORTUNITIES
| OTHER
Valuations Map
Active Investments
Bill.com (BILL) - Target price: $100. Analysis
Pexip (PEXIP) - Target price: $15. Analysis
Docebo (DCBO) - Target price: $70. Analysis
The stock is nearing my price target. Also the company will soon announce its Q2 performance. Based on the Q2 information I will update the price target and decide whether to realize gains or continue to hold.
ECOMI (OMI) - Target price: MOON. Analysis
NEWS | OPPORTUNITIES |
OTHER
🤫 How TikTok's algorithm figures out your deepest desires [video].
🚗 Heard of house-flipping? Check out car-flipping
💭 Mind reading, literally. Decoding thought words.
🎈 Bubbles, bubbles everywhere
🃏 Dealt. Trailer
🚲 Peloton video game
🥩 How to stop food costs from eating up your budget
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I am long DCBO, PEXIP, OMI and short BILL.
I am not a registered investment, legal or tax advisor or a broker / dealer. All investment / financial opinions expressed by me are from personal research and experience and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.