Hi all,
hope you’re doing well! We were on a short summer break so this week’s newsletter is a little shorter than usual.
Next week, we will discuss the current situation in the Chinese stock market: Which companies and subsectors is the Chinese government targeting with new and strict regulations and why.
Also, we will soon publish a dedicated piece on how to value public companies and discuss a few fundamental concepts of investing. Stay tuned!
Now let’s dive in.
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NEWS RUNDOWN
| PORTFOLIO | OUTSIDE
Robinhood Debut
HOOD shares started trading this week, priced at $38 per share. At this price, the company was worth around $32 billion. However, it closed the first day of trading down 8% at a PPS of $34.8, which clearly wasn’t what some expected to see.
A few things could be at play why the HOOD fell on its first day of trading:
Robinhood made a large piece of its IPO shares available to its own users at the same price and level of access that big investors were given. It thereby curtailed early retail demand and missed out on upwards price pressure from unserved retail investors. While this is a good idea, it may have had a negative impact on the stock’s early performance.
Robinhood also shared warnings that its trading volumes in Q2 2021 could decline, which may have scared off some bulls.
More here.
US Economy Growth
Boosted by revenge spending and travelling, the US economy was expected to grow by 8.5% YoY in Q2 2021. However, the numbers came up quite a bit short at around 6.5%, showing a slowing momentum of the economic recovery. The positive: Total economic output is finally back above its pre-pandemic level for the first time since Covid. The main reasons for the slowdown were lagging property investments and inventory drawdowns. More here.
Unvaccinated Out
Google said it will mandate vaccines or weekly Covid tests for employees returning to the office. This will be an increasingly important topic for many companies. Link
This week’s notable earnings announcements
Google
Revenue $61.9 billion vs $56.2 billion
EPS $27.26 vs $19.34
Revenues from YouTube increased 83% YoY
Apple
Revenue: $81.4 billion vs $73.3 billion
EPS: $1.30 vs $1.01
Total revenue up 36% YoY, led by the iPhone which increased 50%
Facebook
Revenue: $29.1 billion vs $27.9 billion
EPS: $3.61 vs $3.03
Revenue grew 56% YoY, Ad revenues +51%, Average price per ad +47% YoY
Microsoft
Revenue: $46.2 billion vs $44.2 billion
EPS: $2.17 vs $1.92
Intelligent Cloud segment led growth with $17.38B in revenue, +30% YoY
Amazon
Revenue: $113.1 billion vs $115.2 billion
EPS: $15.12 vs $12.30
Revenues grew 27% YoY, disappointing Wall Street’s expectations
Next week’s notable earnings announcements
NEWS RUNDOWN |
PORTFOLIO
| OUTSIDE
Valuations Map
Active Investments
Bill.com (BILL) - Target price: $100. Analysis
Pexip (PEXIP) - Target price: $15. Analysis
Docebo (DCBO) - Target price: $70. Analysis
ECOMI (OMI) - Target price: MOON. Analysis
NEWS RUNDOWN | PORTFOLIO |
OUTSIDE
🍻🚗 Uber has reduced drunk driving by 6% in the US in 2019, saving ca 214 lives
🚙 American SUVs are now larger than World War II tanks
🤖🏃♂️ This robot is going for a 5k run
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Thanks for reading and see you next Sunday!
Chris