Weekend Update #036
Welcome to Blue Room's Weekend Update. Each week, we're sharing what companies we're researching and the what, the who and the how that we think makes the companies interesting and unique. This roundup is brought to you weekly by a group of interns, creative minds, artists and investors who believe that through best in class investing along with the democratization of financial education we can do great things together. Enjoy, Explore and Share.
CONSUMER PRICE INCREASE
On Tuesday we learned consumer prices had the largest month-over-month increase since 2008, registering a 0.9% increase as well as an un-adjusted 12-month ended June increase of 5.4%, the largest 12-month increase since the 5.4% increase for the period ending August 2008. As supply chain shortages touch almost every part of the economy, businesses have no other recourse than to increase prices to address elevated demand. Fed Chairman Jerome Powell maintained a dovish stance toward monetary policy, arguing inflation will prove to be transitory. A slew of banks reported earnings, including Bank of America, BlackRock, Citi and Wells Fargo, kicking off earnings season. Moderna will be replacing Alexion Pharmaceuticals in the S&P 500 index, and stocks remained mixed overall as investors keep their eyes on the growing COVID-19 infection rates due to the Delta variant.
The 91st Major League Baseball All-Star Game was set to be played in Los Angeles on July 14, 2020. The “Midsummer Classic” is usually played in the middle of July and is meant to mark the halfway point of the MLB season. It is a baseball game played between the National and American League teams made up of ”all-stars” selected by fans, as well as by managers and players. They tend to be MLB’s best players, and for one Tuesday evening, they play against each other to prove which is the better league. It used to be that the winning league would earn home-field advantage for the World Series, but that practice ended after 2016, and now the event is held just for fun (and bragging rights and bonuses for the players, of course). Additionally, part of the revenues generated during the festivities are donated to charities.
The week of Bastille Day, or as the French call it, “le 14 juillet”, is the perfect week to reflect on my experience here in Paris, France.
What began as a study abroad romance in Venice, Italy in 2019 has led me to living 6 months over the last year in Paris with my French girlfriend. Not only had I never learned to speak French before, I also lacked a historical and cultural roadmap of Europe and the world. Now that I’ve built a deeper understanding of the French language, history, and culture, the insights I’ve gained have left a lasting impression on my world perspective.
***
— DO NOT MISS —
THESE
BULLPEN EXCERPTS
***
= DAVID KOGAN =
Semiconductor Overview
Thursday
July 15, 2021
9:30 AM
BLUE ROOM
Investment Team Bullpen
__________ __________
***
= LOGAN CHANG =
Income Statement Overview
Wednesday
July 14, 2021
9:30 AM
__________ __________
BLUE ROOM
Investment Team Bullpen
__________ __________
After spending my freshman year in New York City, I headed back home to Denver for the summer. This past week I got to visit my friend and live in the Upper East Side while attending an in-person summer class. Since moving to New York, I have always been hyper-alert of my surroundings. I rarely go out into the city without a group of friends because of safety concerns. Traveling with my friend Sarah as just two girls, this weekend gave me a new perspective into the inequalities in the city that have been magnified post-pandemic.
A
R
T
Friday
July 2, 2021
10:10 AM
BLUE ROOM Art
with Eduardo Sarabia
Guadalajara
MEXICO
A walk around the studio
WITH MINYOUNG SOHN
At this point it feels cliché to be retrospective about the beginning of COVID, but I’m going to do it anyway. There is no doubt that the initial spread of the virus was frightening, uncertain and chaotic. However, the ensuing lockdown was perfectly boring: several weeks of no friends, no activities—just family. Make no mistake: I love my family, truly, but after a few weeks confined to baking, puzzle solving and knitting, I was beginning to feel more like a retiree than a college student.
It’s every tennis player's dream to grace the famed lawns of Wimbledon’s All England Club in their white outfits and lift the sport’s most prestigious trophy, yet very few ever will. As Novak Djokovic and Matteo Berrettini’s dramatic first set tiebreak unfolded, an American teenager turned his Wimbledon dream into an incredible reality. Samir Banerjee, a 17-year-old from New Jersey, is now a junior Wimbledon champion. As tennis fans and the media begin to swoon over the birth of a new tennis sensation, I see my friend finally realizing his potential.
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DRY STORAGE
===
— OUR RYE —
coffee, molasses, and miso paste
++ CHEF-LED FLOUR ++
Regenerative practices for the win.
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Thursday
July 15, 2021
12 PM Mountain
BLUE ROOM
MEETING NUMBER 57
__________
Dear Blue Room:
Welcome to Thursday Meeting Number 57.
__________
Meeting Agenda
I. Blue Room Company and Operational Updates
II. Research Team / Coverage / Intern Program Updates
III. Madelon / Maison / Liminal Space Project Update
IV. Id Est Hospitality / Dry Storage Update
V. Twin Peaks / Supply Chain Update
VI. Blue Room Art Update
VII. Any Other Business
WHAT
MOVIE
would you show
ALIENS
to learn about our
planet?”
SHOUT OUT TO ALEX CHANG for his answer in the weekly global meeting.
Erring on the side of caution, these aliens might have potentially malintent for the human race, I would actually show them a bunch of super heroes movies to make them think we are capable of doing these things and then that might discourage them…
Hello! My name is Elizabeth Wong and I’m from Mequon, Wisconsin. At Dartmouth College, I’m a rising sophomore studying Economics and Government. These two subjects have given me a holistic perspective and allowed me to dive more deeply into the everyday happenings of our world. My favorite classes have been Economics 22: Macroeconomics and Government 4: Politics of the World because of their real-life applications. Outside of the classroom, I’m involved in the Dartmouth Center for Social Impact, Fusion Dance Company, and Women in Business. In my free time, I enjoy baking (currently working my way through bread recipes), long hikes, and reading. As of right now, I’m halfway through The Amazing Adventures of Kavalier & Clay by Michael Chabon, which I highly recommend!
I’ve loved working at Blue Room so far and have really enjoyed getting to know the fellow interns in my class! I was really drawn to Blue Room because of the company’s focus on social impact and giving back to the community. Their work in supporting artists, restaurants, and minority-owned small businesses is truly a testament to its unique Togetherism ethos and the team’s desire to create change.
Currently, I’m covering 10x Genomics, a biotechnology company in the single-cell sequencing market. In doing so, I’ve been able to combine my interests in both finance and biomedical research and dive into the nuances of genomics and transcriptomics. I’m really excited to be able to learn more about financial modeling and am so thankful for the team’s support in walking me through the more technical aspects. It’s been so enlightening to sit-in on these meetings and learn more about the business world as a whole. I am really grateful for the opportunity to be interning at Blue Room and cannot wait for these next few weeks!
P L E A S E E N J O Y T H E
—WEEKLY—
company updates
from the BR intern team.
Caroline Burnham
Ticker: ALLO
Name: Allogene Therapeutics
Number of Shares Outstanding: 1.17B
Market Capitalization: $343.91B
Stock Price History:
July 1, 2021 $26.55
July 2, 2021 $26.28
July 6, 2021 $24.91
July 7, 2021 $24.09
July 8, 2021 $23.59
July 9, 2021 $24.10
July 12, 2021 $23.67
July 13, 2021 $23.02
July 14, 2021 $22.04
July 15, 2021 $22.35
July 16, 2021 $22.65
Allogene Therapeutics Executive Summary
Allogene Therapeutics is a biotechnology company focused on developing allogeneic CAR T cells for the treatment of cancer. They are currently in the clinical stage of testing product candidates within their pipeline. On July 14, Allogene appeared in a panel at William Blair’s Biotech Conference along with other cell therapy companies. This panel highlighted the future of cell therapy in the cancer treatment landscape. Notably, the panelists discussed many aspects of allogeneic CAR T cell therapy. According to the panelists, Allo CAR T cell therapy compares favorably with other autologous therapies, which are FDA approved and are currently considered the gold standard of cell therapy. Additionally, there is a huge market for oncology drugs: $1.2 trillion. The panelists further discussed Allogene Therapeutics’ pipeline and how its inherent off-the-shelf and early manufacturing could provide an advantage as cell therapy advances in the next decade. Because Allogene Therapeutics products would come from healthy donor T cells, they would be cost-efficient, easily accessible, and available for potential out-patient treatment. This means that Allogene has fewer issues with speed and manufacturing, but issues arise specifically when dealing with the body’s rejection of donor T cells. In the next decade, the panelists predict that allogeneic and autologous T cell therapies will coexist and support different diseases, with autologous therapies looking more promising against solid tumors and allogeneic therapies looking more promising against leukemias and lymphomas. However, the panelists still predict that in CAR T cell therapies will develop significantly in the next decade.
Jackson Blaufeld
Ticker: QCOM
Name: Qualcomm, Inc.
Number of Shares Outstanding: 1.13 B
Market Capitalization: 159.307 B
Stock Price History:
July 2, 2021: $142.58
July 6, 2021: $141.19
July 7, 2021: $139.97
July 8, 2021: $138.29
July 9, 2021: $139.44
July 12, 2021: $142.47
July 13, 2021: $141.18
July 14, 2021: $143.75
July 15, 2021: $141.46
July 16, 2021: $139.71
Qualcomm, Inc. Executive Summary
Qualcomm, Inc. is a global leader in the semiconductor industry, headquartered in San Diego, California. Qualcomm specializes in the development and commercialization of technologies for the wireless industry. This group of engineers, scientists and business strategists are focused on inventing breakthrough technologies that transform how the world connects, computes and communicates. Qualcomm’s products are used in mobile devices and have been a key factor in the growth of smartphones.
This past week, on July 12, Qualcomm appointed Don McGuire as senior vice president and chief marketing officer. McGuire brings more than 25 years of marketing experience, working across the service provider, device OEM, content/applications and semiconductor industries. Mr. McGuire joined Qualcomm in 2016 as vice president of global product marketing and was promoted to senior vice president last year. Mr. McGuire has been responsible for Snapdragon marketing and has redefined Qualcomm’s approach to product marketing. His marketing expertise has led to innovative marketing campaigns and collaborative partnerships that have brought the most cutting-edge products to market, including the latest in 5G technologies.
In other news, Qualcomm announced its quarterly cash dividend of $0.68 per common share on July 14. That amount will be payable on September 23 to stockholders of record on September 2.
Ticker: CRWD
Name: CrowdStrike
Number of Shares Outstanding: 199.24 million
Market Capitalization: $56.295 billion
Stock Price History:
July 2, 2021 252.59
July 6, 2021 264.98
July 7, 2021 267.52
July 8, 2021 263.39
July 9, 2021 264.44
July 12, 2021 261.79
July 13, 2021 261.16
July, 14, 2021 254.23
July. 15, 2021 249.30
July 16, 2021 249.96
CrowdStrike, Inc Executive Summary (7/16/2021)
Specializing in cybersecurity, CrowdStrike Holdings (CRWD) has doubled its revenue year over year since its IPO in 2019. As sophisticated cyber attacks continue to occur, companies are reminded of their need for tighter security. Most recently, the attacks on the Colonial Pipeline and data breaches at Morgan Stanley serve as reminders that no one is safe from hackers. CrowdStrike is a pioneer in the cybersecurity industry. Utilizing emerging technologies such as artificial intelligence, machine learning, and behavioral analysis; CrowdStrike’s platforms are able to proactively analyze data from hundreds of thousands of different users across its cloud database to pinpoint and stop breaches before they occur. Apart from their incredible ability to detect and prevent cybersecurity attacks, CrowdStrike’s platforms are also very configurable and are able to adapt to unique customer needs.
In agreement with industry analysts, CrowdStrike is expected to continue to double its sales growth year over year. Over the last 12 months, CrowdStrike’s stock price is up 138%, and 19% year to date. Considering the demand for high-profile cybersecurity protection, CrowdStrike should continue to experience rapid growth. According to analysts at Zacks, their latest data from CrowdStrike indicates that CRWD has returned about 23.59% since the beginning of the calendar year. These numbers indicate that CrowdStrike is currently outperforming the Internet/Software industry by 2.95%. As CrowdStrike continues to grow and acquire market share in the cybersecurity industry, competition doesn't seem to pose a threat. As reported by Michael Walkley, an analyst at Canaccord Genuity Capital Markets, CrowdStrike has the ability to experience continued growth without threats from competitors. Walkley arrives at this conclusion because at the moment, only five cybersecurity firms make up 60% of the market.
Elizabeth Wong
Ticker: TGX
Name: 10x Genomics, Inc.
Number of Shares Outstanding: 87.27M
Market Capitalization: $20.855B
Stock Price History:
July 1 $189.94
July 2 $190.94
July 6 $192.14
July 7 $185.05
July 8 $188.25
July 9 $190.41
July 12 $185.50
July 13 $181.32
July 14 $169.00
July 15 $170.05
July 16 $171.18
10x Genomics, Inc. Company Update (7/17/21)
10x Genomics is a biotechnology company focused on producing genetic sequencing technology. A leader in the single-cell sequencing industry, its pioneering Chromium and Visium products and technologies have won numerous scientific accolades and helped to further societal understanding of biological structures. Chromium products allow for detailed analysis of hundreds of thousands of cells and biological units. Visium products are centered around spatial transcriptomics, which is genetic sequencing that uses detailed spatial resolution. Visium Spatial products therefore ensure greater understanding of biological units within the context of larger functional systems and processes.
Recently, the company announced its launch of its Chromium X Series, which encompasses its newly developed Chromium X and Chromium iX instruments. Chromium X allows researchers to analyze large, million cell experiments at the cost of two cents per cell, cutting the cost from 12 cents per cell by 83%. The Chromium iX instruments give scientists the ability to process experiments for tens of thousands of cells. This series marks another effort by the company to ensure that single-cell analysis is economically available to a greater audience of users.
10x Genomics has also partnered with Axiom Space for its second upcoming 2022 International Space Station mission. There, lead astronauts Peggy Whitson and John Shoffner will be utilizing TXG’s single-cell technology to conduct life science research in orbit. This project, which is still in its early stages, marks the beginning of biological research at the single cell level in space. The goal is to learn more about the human body in space, microgravity, and on earth.
Aidan Fetterly
Ticker: TTWO
Name: Take-Two Interactive Software, Inc.
Number of Shares Outstanding: 116.17M
Market Capitalization: $20.50B
Stock Price History:
June 25: $173.82
June 28: $178.09
June 29: $178.19
June 30: $177.02
July 1: $178.97
July 2: $177.30
July 6: $174.07
July 7: $173.69
July 8: $170.67
July 9: $170.37
Take Two Executive Summary
Take-Two Interactive Software, Inc. is an interactive entertainment and video game developer headquartered in New York, New York. Comprising five production labels, most notably Rockstar Games and 2K, Take-Two is known for its groundbreaking action-adventure, sports-simulation and role-playing products. Through award winning and record breaking legacy titles such as Grand Theft Auto and Red Dead Redemption as well as high-traffic, yearly releases such as NBA 2K, Take-Two has cemented itself as a pillar of the video game industry and holds substantial market share. At its core, Take-Two fundamentally endeavors to be the most creative, innovative and efficient company in the interactive entertainment industry. In recent weeks, Take-Two announced the acquisitions of mobile game developer Nordeus and video-based, facial animation firm Dynamixyz. The purchase of privately-held Nordeus, announced one June 6, represents an active attempt by the firm to enhance its mobile gaming portfolio which currently includes several titles from labels Social Point and PlayDots. Nordeus was acquired for $378 million, and brings its Top Eleven soccer management game with over 240 million active users to Take-Two. Announced on July 1, Take-Two's acquisition of Dynamixyz, a company who had previously partnered with the Take-Two on titles such as Read Dead Redemption 2 and NBA 2K21, brings in an industry-leading suite of proprietary motion-capture, facial-analysis and 3D processing technology to enhance future product offerings. As of writing, the financial terms of the deal have not been disclosed.
Melanie Gong
Ticker: CMCSA
Name: Comcast Corporation
Number of Shares Outstanding: 4.59B
Market Capitalization: $259.19B
Stock Price History:
June 25: $56.42
June 28: $56.10
June 29: $56.54
June 30: $57.02
July 1: $57.75
July 2: $58.21
July 6: $57.66
July 7: $58.17
July 8: $58.23
July 9: $58.03
Comcast Corporation Executive Summary
Earlier this year, Comcast announced a $1 billion commitment over ten years to continue supporting digital equity. One of its main initiatives is Lift Zones, which complements Comcast’s Internet Essentials program and provides safe spaces fully equipped with Free Internet Access to those in need. Since 2011, Lift Zones has helped connect approximately 10 million low-income people to the Internet at home, including almost one million Texans.
Through the Lift Zones initiative, Comcast aims to establish Wifi-connected safe spaces in 1,000+ community centers for students and adults by the end of 2021. This past week, Comcast has brought 16 Lift Zones to the Boys and Girls Club of Portland Metro Area, 50 to Houston and surrounding areas, and 6 to Lancaster. Comcast has also partnered with North Chicago School District 187, who will purchase 12 months of Comcast’s Internet Essential Services on behalf of every eligible North Chicago household in the district who enrolls by May 15, 2022.
On June 30, 2021, Comcast announced its 10-year, $102.8 million contract with the United States Defense Information Systems Agency, which provides enterprise network and IT infrastructure to the U.S. Department of Defense. Comcast will provide Ethernet services to enhance connectivity and improve network performance while managing the overall cost through the Agency’s Defense Information Systems Network. The states this contract will be covering include Maryland, Washington, D.C., Virginia, West Virginia, Ohio, and Kentucky.
Elias Haynes
Ticker: RGLD
Name: Royal Gold
Number of Shares Outstanding: 65.61M
Market Capitalization: 7.67B
Stock Price History:
June 25, 2021: $112.40
June 28, 2021: $113.00
June 29, 2021: $114.02
June 30, 2021: $114.10
July 1, 2021: $114.53
July 2, 2021: $116.94
July 6, 2021: $116.94
July 7, 2021: $116.74
July 8, 2021: $114.89
July 9, 2021: $116.68
Royal Gold, Inc Executive Summary
Royal Gold is a Denver-based company focused on acquiring and managing precious metals royalties and streams that seeks to provide investors exposure to precious metals with lower levels of risk. Royal Gold owns interests in 187 properties on five continents, including interests in 41 production stage mines and 16 development stage projects. Managed by a team with extensive experience in the mining industry, Royal Gold has a longstanding reputation for diligence that has rendered it among the three largest precious metal streaming and royalty companies—which together control approximately 80% of the total value of streaming and royalty contracts. Royal Gold has established itself as a partner of choice for mining operators and a frontrunner in a space offering alternative forms of financing to mining companies. Royal Gold also adheres to sound ESG practices, taking time to contribute to the environment and local communities.
More recently, Royal Gold (RGLD), whose stock is closely and unsurprisingly tied to the price of gold, took a significant hit on June 16 likely as a result of statements released by the Federal Reserve indicating future interest rate increases—ultimately dropping to $109 per share on June 18 (-11.5%). The stock has since bounced back slightly to approximately $114 per share as Royal Gold’s ex-dividend date (June 30) drew nearer, as well as following news of its recent $100 million gold stream acquisition of NX Gold Mine in Brazil. The deal offers gold revenue, immediate cash flow, a large land package with significant exploration potential, underutilized installed processing capacity, and 25% of the gold produced from the NX Gold Mine until the delivery of 93,000 ounces (and 10% thereafter).
Joe Kramer
Ticker: VIAC
Name: ViacomCBS Inc.
Number of Shares Outstanding: 650.59M
Market Capitalization: $29.182B
Weekly Stock Price History
July 01, 2021: 44.95
July 02, 2021: 44.16
July 06, 2021: 42.87
July 07, 2021: 42.80
July 08, 2021: 41.46
July 09, 2021: 42.77
July 12, 2021: 43.44
July 13, 2021: 42.58
July 14, 2021: 41.89
July 15, 2021: 41.29
July 16, 2021: 40.29
ViacomCBS inc. Executive Summary
After an initial merger in 2000, Viacom and CBS separated in 2006, and merged again in 2019. ViacomCBS Inc. is a global media and entertainment company that offers premium experiences and content for audiences around the world. Its portfolio includes CBS, SHOWTIME, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Smithsonian Channel, Paramount+ (formerly CBS All Access) and Pluto TV, among others. It operates through three primary segments: TV Entertainment, Cable Networks, and Filmed Entertainment. TV Entertainment and Cable Networks account for approximately 90% of consolidated revenues, with Filmed Entertainment rounding out the remaining 10%. These segments generate revenue mainly from advertising sales, content licensing and distribution, affiliate revenues and from the release and distribution of films.
This week ViacomCBS and Charter Communications - the #2 U.S. cable operator - came to a long-term carriage deal that includes distribution for streaming services. They’ll continue to offer their linear networks, which should still generate revenue despite the industry being in decline. The real news is the addition of streaming services to Charter’s repertoire. This could allow Spectrum, Charter’s consumer cable and broadband brand, to distribute ViacomCBS’s premium content, allowing them to reap some of the benefits of the advertisements on Paramount+, Pluto TV, BET+ and Noggin. This could open up more revenue opportunities for ViacomCBS in the form of marketing companies who want access to their air time. Especially considering Pluto TV’s potential to rapidly grow advertising revenues by Q4, this deal may have more of an impact than initially meets the eye. Not to mention, it’s good news to see Charter and ViacomCBS deciding to rejoin forces despite any lingering tensions from their previous negotiations in 2017.
Lexi Linafelter
Ticker: PYPL
Name: PayPal Holdings Inc.
Number of Shares Outstanding: 1.17B
Market Capitalization: $343.91B
Weekly Stock Price History:
July 02, 2021 $290.24
July 06, 2021 $292.64
July 07, 2021 $297.13
July 08, 2021 $295.05
July 09, 2021 $300.21
July 12, 2021 $302.97
July 13, 2021 $301.19
July 14, 2021 $300.75
July 15, 2021 $296.51
July 16, 2021 $294.63
PayPal Company Update (07/17/2021)
PayPal Holdings Inc. is an international financial technology and payment processing company headquartered in San Jose, California. Its payment solutions allow customers to both send and receive payments through a global network that connects merchants and consumers with 305 million active accounts across more than 200 markets. PayPal is committed to secure, timely and easy-to-use payment services, and operates through subsidiaries including Gopay, Braintree (Venmo), Xoom, Hyperwallet, Simility, CyActive, FraudSciences and Honey to foster a positive consumer and merchant experience. PayPal primarily earns revenues through charging fees for completing payment transitions and other payment-related services that are typically based on the volume of activity on the Payments Platform. In recent news, analyst reactions to PayPal’s announcement that Venmo will now facilitate business transactions (as opposed to previously being a platform exclusively for peer-to-peer transactions), have been positive regarding how this transition will benefit PayPal’s long-term growth. From a short-term perspective, it is very unlikely that the recently announced fees (1.9% plus $0.10 per transaction) on goods and services sales by individuals will end up meaningfully contributing to profitability this year. However, this decision–along with Venmo’s availability in general–will allow Venmo to continue to grow and retain its user base while adding higher-value offerings to the platform. Because of PayPal’s strong financial standing after reporting first-quarter earnings that dramatically exceeded expectations, it can afford to prioritize the long game of increasing profit by hopefully increasing revenue per customer, as opposed to short-term returns. Thus, this service will ideally attract a new client base for the free peer-to-peer payments who will ultimately become loyal to the growing suite of offerings available on the Venmo platform.
Ticker: SQ
Name: Square, Inc.
Number of Shares Outstanding: 392M
Market Capitalization: $113.33B
Weekly Stock Price History:
July 02, 2021 $241.08
July 06, 2021 $246.70
July 07, 2021 $244.64
July 08, 2021 $235.84
July 09, 2021 $241.89
July 12, 2021 $243.35
July 13, 2021 $241.43
July 14, 2021 $239.00
July 15, 2021 $235.16
July 16, 2021 $237.52
Square Company Update (07/17/2021)
Square, Inc. is an American financial services and digital payments company based in San Francisco, California. The company was founded in 2009 by Jack Dorsey and Jim McKelvey and launched its first platform in 2010 to build tools to empower small businesses and individuals to participate in the economy. Square, Inc. offers an array of payment acceptance and transaction operation services that allow sellers to use Square to reach buyers online and in-person, manage their business and access financing. Further, the Cash App platform can be used to spend, store and invest money. Square has offices in the United States, Canada, Japan, Australia, Ireland, Spain and the UK. Square earns revenue primarily through its P2P Cash App service; for consumers, transferring funds using the basic version of the platform is free, while for businesses, Square charges a 2.75% fee for every eligible transaction. This week, Square chief executiive Jack Dorsey announced plans on Twitter for further involvement in the cryptocurrency space by increasing availability within Square’s business capabilities. This is an attempt to make it easier for customers to get involved in the world of cryptocurrency through smoothly-operating and decentralized financial platforms. Further, this informal announcement reignited discussion regarding Square’s intention to create a hardware wallet to increase the ease and security of crypto transactions. While a launch of this service is extremely preliminary, it could be a step for Square in establishing itself as a leader in the digital currency space.
Julia Martin
Ticker: TSLA
Name: Tesla, Inc.
Number of Shares Outstanding: 963.33 M
Market Capitalization: $629.42B
Stock Price History
July 2, 2021 $678.90
July 6, 2021 $659.58
July 7, 2021 $644.65
July 8, 2021 $652.81
July 9, 2021 $656.95
July 12, 2021 $685.70
July 13, 2021 $668.54
July 14, 2021 $653.38
July 15, 2021 $650.60
July 16, 2021 $644.22
Tesla, Inc. produces electric vehicles and clean energy generation, storage, and consumption solutions. Tesla is focused on accelerating the integration of clean energy transportation and production into society in order to more quickly achieve a zero-emission future. Additionally, all of the new Automotive products include self-driving capabilities, and continuing to develop this Autopilot capability is at the core of Tesla.
During this past week, Tesla CEO Elon Musk had to testify in court to argue and defend the acquisition of Musk’s other company, SolarCity, by Tesla in 2016 for $2.6 million. Shareholders had sued Musk, arguing that Tesla’s acquisition of SolarCity was a bailout, rather than a decision that had the shareholders’ best interests in mind. During the trial, Musk shared that he has tried “very hard not to be the CEO of Tesla, but I have to or frankly Tesla is going to die.” This comment, as well as the trial and situation as a whole, highlights the fact that Elon Musk is a two-sided risk factor to be aware of when considering investing in Tesla. On one hand, Musk is known to be a very outwardly-spoken person who doesn’t shy away from taking to Twitter to share his thoughts and opinions. Additionally, he has a habit of making optimistic promises that he is unable to fulfill, which cause people to second-guess the information he shares regarding Tesla. On the other hand, though, he is more or less what holds the entire company together; without him, Tesla would be a very different company and not as successful. As an engineer and entrepreneur, he constantly pushes Tesla to innovate and stay on the frontier of the emerging electric vehicle industry.
Maxwell McIntosh
Ticker: ROKU
Name: Roku
Number of Shares Outstanding: 115.2
Market Capitalization: $57.754B
Weekly Stock Price History
July 16, 2021: $399.99
July 15, 2021: $406.00
July 14, 2021: $413.00
July 13, 2021: $427.12
July 12, 2021: $433.41
July 9, 2021: $431.61
July 8, 2021: $420.28
July 7, 2021: $419.01
July 6, 2021: $435.18
July 2, 2021: $430.32
Roku Company Update (7/17/21)
Roku had a very quiet week, declining a total of 632 basis points to a price of $406.00. Despite the dip this week, the company did release information that may signify prospects for future growth as the stock lowers to a more acceptable entry level. On Wednesday, the company premiered the first two episodes of “The Show Next Door,” starring Randall Park, created in collaboration with Maker’s Mark. The series is a product of the Roku Brand Studio, where marketers have the opportunity to expand on a 30-second ad spot and create original content that will be available on The Roku Channel for free. This is beneficial to both parties as The Roku Channel is beginning to gain traction among viewers with its growing catalog of Roku Originals, bringing more eyes to the products being marketed and more advertising revenue for Roku.
Roku also announced this week that it has doubled its upfront advertising spending commitments from the amount it received in 2020. Additionally, 42% of these commitments are from first-time advertisers on the platform. This is important for Roku as it attempts to move away from being a hardware distributor and leveraging its platform to drive revenue. An increasing number of advertisers are beginning to see the possibilities in connected TV services and are following the consumer trends into the streaming industry. It will be imperative that Roku continues to increase the desirability of its platform, and The Roku Channel in particular, to be able to retain advertising commitments going forward. As it currently stands, advertisers are vying for space around the upcoming Roku Originals and the more quality content the company can release the better its prospects will be.
Roku is set to release its Q2 earnings on August 4.
Mary Kate McIntyre
Ticker: NVDA
Name: Nvidia Corporation
Number of Shares Outstanding: 623M
Market Capitalization: $494.45B
Stock Price History
July 2, 2021 $819.48
July 6, 2021 $827.94
July 7, 2021 $814.87
July 8, 2021 $796.11
July 9, 2021 $802.01
July 12, 2021 $820.50
July 13, 2021 $810.00
July 14, 2021 $793.66
July 15, 2021 $767.30
July 16, 2021 $726.44
NVIDIA Corporation Executive Summary (7/16/21)
Autonomous Cars Amid a Semiconductor Shortage?
On Wednesday, Nvidia announced the release of a full self-driving taxi system through startup AutoX that will be powered by Nvidia DRIVE GPUs that use AI computing performance to ensure safe, efficient and autonomous transportation. AutoX has already released robotaxis in Shenzhen, China, and is looking to tackle large city traffic conditions without a human driver. The DRIVE GPU development platform is used by several of Nvidia’s partners, including Mercedes-Benz, DiDi, Volvo, Volkswagen, Audi and Hyundai, mostly as an assistive infotainment solution for drivers.
Although Nvidia cited “advancing the leading autonomous vehicle platform” as one of its business strategies in Item 1 of fiscal year 2021’s 10-K, the AV industry may be in jeopardy. The global semiconductor shortage has long been in the news headlines, as the high demands for chips combined with factory shutdowns for COVID-19 have sharply increased the prices for raw materials and have put enormous amounts of pressure on the supply chain that are likely to persist until the fourth quarter of fiscal year 2022. Nvidia, a fabless company, faces risk in that it must buy large quantities of inventory well in advance to anticipate growing demand for its GPUs. However, Nvidia’s chip manufacturer, TSMC, has pledged to spend $100 billion on increasing production over the next few years to meet surging demand after several global automakers have put pressure on TSMC to free up manufacturing capacities and prioritize auto chips.
It will be interesting to see how these factors play out in the short term; Nvidia estimates revenue to be $6.39 billion, plus or minus 2%, which is about a 13% increase from the previous quarter’s $5.66 billion. Nvidia is expected to release its earnings report for Q2 of fiscal year 2022 on August 18.
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Naia Morse
Ticker: CRWDTicker: LULU
Name: lululemon athletica, inc.
Market Capitalization: 49.224B
Shares Outstanding: 124.95M
Stock Price History:
July 2, 2021 $368.47
July 6, 2021 $371.37
July 7, 2021 $377.82
July 8, 2021 $373.53
July 9, 2021 $377.42
July 12, 2021 $368.91
July 13, 2021 $370.77
July 14, 2021 $376.99
July 15, 2021 $376.17
July 16, 2021 $372.31
lululemon athletica, inc. Update (7/17/21)
lululemon athletica, inc. is a leading athletic apparel company for yoga, running, training and other athletics with more than 500 company-operated stores in 17 countries. At the start of the pandemic, lululemon’s stock price hit a low of $138.98 on March 16, 2020 following the announcement of the closure of all stores in North America and Europe for the rest of that month, in a sector where retail earnings are very seasonal to begin with. So how exactly did a share of lululemon get to the price it’s at now? The daily life we all have learned to be accustomed to throughout the pandemic has changed apparel consumer preferences to comfortability, increasing the demand for athleisure. According to the Launchmetrics report, lululemon saw a 22% increase inn their media Impact valueAs previously referenced, the acquisition of MIRROR.
Kendall Smart
Ticker: MAC
Name: Macerich
Number of Shares Outstanding: 206.52M
Market Capitalization: 3.647B
Stock Price History:
July 2, 2021 $18.70
July 6, 2021 $17.58
July 7, 2021 $17.13
July 8, 2021 $17.20
July 9, 2021 $17.88
July 12, 2021 $18.16
July 13, 2021 $17.51
July 14, 2021 $17.52
July 15, 2021 $17.61
July 16, 2021 $16.78
Macerich: Company Update (7/17/21)
Macerich is a self-administered and self-managed real estate investment trust (REIT) that is involved in the acquisition, ownership, development, redevelopment, management and leasing of regional and/or community/power shopping centers. It owns around 50 million square feet of real estate, consisting mainly of interests in its 46 regional shopping centers. It specializes in retail properties in the country’s most attractive, densely populated markets, with a strong presence on the west coast, Arizona and the metro New York to Washington DC corridor. Macerich is also a recognized leader in sustainability, achieving the #1 GRESB ranking in the North American Retail Sector for six consecutive years (2015-20). The redevelopment of one of Macerich’s properties Paradise Valley Mall has recently begun with the demolition phase, as of July 8 (Source: KTar News in Phoenix). The former Sears store is one of the first to begin destruction, and the only stores still operating currently are JC Penney and Costco. In connection with closures and lease rejections of several Sears stores owned or partially owned in various Macerich properties, the company anticipates spending between $130 and $160 million at Macerich’s pro rata share to redevelop the Sears stores. The estimated range of redevelopment costs could increase if the company or its joint venture decides to expand the overall scope of redevelopments. On another note, Macerich announced that its second quarter 2021 earnings results will be released before market open on Wednesday, August 4, and management will hold a conference call at 10:00 a.m. Pacific Time on that day to discuss the quarterly results. These results will be important to analyze revenues given the re-opened properties and continually decreasing COVID-19 restrictions in comparison to the 2020 results.
David Kogan
Ticker: NXPI
Name: NXP Semiconductors
Number of Shares Outstanding: 275,000,000
Market Capitalization: $56,053,250,000 as of 6/24/2021
Stock Price History:
July 16, 2021: $190.11
July 15, 2021: $194.11
July 14, 2021: $203.55
July 13, 2021: $204.00
July 12, 2021: $204.41
July 9, 2021: $200.35
July 8, 2021: $195.99
July 7, 2021: $198.35
July 6 ,2021: $201.74
July 2, 2021: $202.73
NXP Semiconductors Executive Summary (7/16/21)
NXP Semiconductors is a global semiconductor company and a long-standing supplier in the industry. In addition to supplying chips, NXP manufactures and designs its own multichip modules, electronic products and software for its chips. The company has a combined portfolio of intellectual property, deep application knowledge, process technology and manufacturing expertise in cryptography, high-speed interface, radio frequency, mixed-signal analog-digital, power management, digital signal processing and embedded system design. End-market applications include Automotives, Industrial and IoT, Mobile, and Communication Infrastructure.
After sitting on a recent industry insider BWG call on 7.13.2021, it is clear that the semiconductor industry’s supply chain has never been in a greater state of disarray. Everything from raw materials, components like capacitors and resistors and end products are all in short supply and producers are scrambling to get as much as they can and sell it immediately. Furthermore, systemic supply chain issues are unlikely to abate until 4Q 2022 and a return to normal is likely to begin in 2023. For the next couple of years, lag times for any part of the semiconductor production process will experience lag times of at least one year until manufacturers and producers can rebuild inventory to have a surplus to meet booming demand. That being said, NXP is well positioned to fare better than fabless competitors like NVDA because they control more parts of their production process. This means that while NVDA can continue to design products, currently it will have to wait at least a year before anything can be put into production, while NXP can be more flexible with what it produces due to its foundry assets. More established control of their supply chain would suggest that NXP in the short term should experience less disruptions of spikes in operating costs, leading to a stabler business through this turbulent time in the semiconductor market. The same is also likely true for other large integrated equipment manufacturers in the industry.
Alex Chang
Ticker: TTCF
Name: Tattooed Chef, Inc.
Number of Shares Outstanding: 81.94M
Market Capitalization: 1.649B
Stock Price History:
July 1, 2021: $21.40
July 2, 2021: $20.94
July 6, 2021: $20.60
July 7, 2021: $19.64
July 8, 2021: $19.95
July 9, 2021: $20.08
July 12, 2021: $20.00
July 13, 2021: $20.60
July 14, 2021: $19.54
July 15, 2021: $20.12
July 16, 2021: $20.00
Tattooed Chef, Inc. Company Update (7/17/2021)
Tattooed Chef, Inc. is a leading plant-based food company with a wide range of sustainably sourced innovative products, ranging from ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls, Mexican-style street corn and cauliflower pizza crust, all available in the frozen food sections of many leading national food retailers across the country. Aiming to meet the ever-evolving lifestyles and diets of not just vegetarians, but flexitarians, vegans and those seeking organic or gluten-free options, Tattooed Chef targets the younger demographics of Gen Z and Millennials looking for plant-based, great-tasting, nutritious and sustainably sourced frozen food.
Earlier this week on Monday, July 12, Tattooed Chef announced its plans to launch a variety of its branded products in around 1,800 Kroger stores across the nation by September. The products offered will include 12 different plant-based frozen foods from a variety of cuisines, including Gochujang Chow Mein (Korean/Chinese) and Mexican Style Street Corn.
This partnership with Kroger and the products offered represent a doubling down on Tattooed Chef’s previously stated strategies of focusing on growing the Tattooed Chef brand and its products, as opposed to private label products, and offering a highly diverse array of products suited to various diets, lifestyles and tastes. Critics of Tattooed Chef have pointed to other plant-based food companies such as Beyond Meat and Impossible Foods as competitors with far higher capacities for research and development and healthier financials, yet Tattooed Chef seems to understand the potential of focusing on growing their brand and the diversification of its products. Increased investment in marketing was largely responsible for Tattooed Chef’s negative income in the previous quarter, and it remains to be seen how well their previous marketing efforts will gain traction.
If Tattooed Chef’s efforts to generate further demand have planted seeds in the minds of potential customers, this Kroger partnership could yield quite a harvest, and with Tattooed Chef’s revenue growth outstripping the company’s own forecasts, there is ample reason to watch this space. Stock prices initially rose and then fell after the news broke, in line with previous trends of inconsistency in the market’s valuation of Tattooed Chef, but it is of little doubt that TTCF is one ticker to keep your eyes on.
Logan Chang
Ticker: ATVI
Name: Activision Blizzard, Inc.
Number of Shares Outstanding: 777.02M
Market Capitalization: $71.78B
Stock Price History:
June 25: $92.26
June 28: $95.40
June 29: $95.61
June 30: $95.73
July 1: $93.90
July 2: $94.27
July 6: $94.40
July 7: $93.50
July 8: $92.18
July 9: $92.38
Activision Blizzard, Inc. Executive Summary
Activision Blizzard Inc. is a digital entertainment company known for producing video game franchises like Call of Duty, World of Warcraft and Candy Crush. The company operates in three segments: Activision Publishing, known for producing Call of Duty; Blizzard Entertainment, known for creating World of Warcraft and Overwatch; and King Digital Entertainment, known for the hit-mobile franchise Candy Crush. Although Activision Blizzard continues to profit from releasing new premium full-games, like Call of Duty: Modern Warfare and World of Warcraft: Shadowlands, its inherent business model has begun to evolve. Increasingly, Activision Blizzard has placed a greater focus on deepening player investment in its games with more frequent downloadable in-game content updates, free-to-play offerings and expanding compatible devices to mobile smartphones. The recurrent incremental release of content not only provides additional high-margin revenues but also increases player engagement, as opposed to the traditional “seasonality” of the video game industry driven by the timing of new premium full-game releases. In the second half of 2021, Activision Blizzard expects to deliver ongoing content for its various franchises. This includes continued in-game content releases for Call of Duty: Black Ops Cold War—which includes seasonal content updates for Call of Duty: Warzone and Call of Duty: Mobile—along with content updates for World of Warcraft, expansion packs and content updates for Hearthstone, and an ongoing focus on the Candy Crush franchise. Activision Blizzard also looks to improve their standing in the mobile gaming industry with the anticipated releases of Crash Bandicoot: On the Run! and Diablo Immortal.
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