Weekend Update #037
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.
After a Delta-variant induced slump on Monday, major indices reached record highs later in the week after companies reported better-than-expected earnings, lifting the S&P 500 to 4,411.79, the Dow Jones Industrial Average to 35,061.55 and the NASDAQ to 14,836.99. Among those that outperformed include Snapchat, who surprised many (but not us / see below) with their revenue and user growth, while Twitter and AT&T also topped estimates. Initial jobless claims registered an increase on Thursday of 419,000 from 368,000 the previous week when economists expected a drop to 350,000 new applicants. We’ll be seeing more company earnings next week, including reports for iRobot, Spotify, Comcast and PayPal—all companies covered by Blue Room.
NYSE:SNAP
Since Blue Room began covering Snap, Inc., we concluded that investors were missing the outstanding upside potential for the company, specifically because of their ability to attract and engage users, consequently attract advertisers. The creative engineers of Snap Chat have consistently found innovative ways to bring in new users and retain current ones. Augmented reality filters and interactive stories are just a few examples of this innovation. The "reel-like" nature of public snapchat stories allows advertisements to be integrated almost seamlessly into the content providing advertisers constant exposure to viewers. According to Blue Room Analyst, Jared Fenley, the company recognizes ad revenue through a bidding system which therefore makes getting those precious 10-15 seconds of airtime extremely competitive. Competition is good for business and the recent spike in Snap, Inc. stock seems to support our ongoing thesis.
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PLEASE ENJOY THIS
SNAP THROWBACK
2020 10 21 — Market Close Meeting
Wednesday
October 21, 2020
2 PM
BLUE ROOM
Investor Hub at Market Close
__________ _________ ________
featuring SNAP, Inc. the company who created Snapchat
How has our desire to connect and share ideas contributed to the global social network? What is the future of connectivity?
Hypothesis: Tools that connect people on dynamic social levels are the most important inventions and investment opportunities in the modern era and will likely continue to be.
I believe that most successful modern innovations have been based on the intrinsic human desire to connect which consequently leads to socialization on a global scale. According to Encyclopedia Britannica, socialization is the process whereby an individual learns to adjust to a group (or society) and behave in a manner approved by the group.
Netflix, Inc. provides entertainment services. It offers TV series, documentaries, and feature films across various genres and languages. The company provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, television set-top boxes, and mobile devices. It also provides DVDs-by-mail membership services. The company has approximately 209 million paid members in 190 countries. Netflix, Inc. was founded in 1997 and is headquartered in Los Gatos California.
***
What exactly is Cardano (ADA)?
Cardano is a decentralized blockchain platform that works as a Proof-of-Stake (PoS) blockchain platform; as opposed to Bitcoin or Ethereum which run on the more antiquated and inefficient Proof-of-Work (PoW) blockchain platform. The Proof-of-Stake blockchain platform is vastly more efficient than the traditional PoW platform. Cardano’s PoS platform can overcome major hurdles that PoW networks can’t. For example, the Ethereum network is constricted by infrastructure size, high energy consumption, sluggish transaction speeds, and growth costs. For those reasons, new technologies are being developed to solve the issues related to inefficiencies, security, and speed. The picture below provides a simplified breakdown of the differences between Proof-of-stake, and Proof-of-work.
I started walking to and from my house and school when I reached 10th grade. My older sister (who had also attended my school) had just started college, and it didn’t make as much sense for my parents to just drive me to school. So, for the first time, I started walking.
When my father tells me of his nearly two-hour walk to primary school, no less, through the hilly and rocky countryside of South Korea, I consider myself lucky to have had a pleasant 20-minute walk that takes me through quaint residential areas, a sidewalk that runs alongside the Henry Hudson Parkway, and a private community laden with trees and flowers in which my school is located.
A
R
T
Deborah Roberts: I’m
features all new work by the Austin-based artist (American, born 1962 in Austin, Texas), including collages, paintings, a sound and video installation, and text-based works on paper. Roberts critiques notions of beauty, the body, race, and identity in contemporary society.
Roberts's mixed media works on paper and on canvas combine found images, sourced from the Internet, with hand-painted details in striking figural compositions that invite viewers to look closely and to see through the layers. She focuses her gaze on Black children—historically, and still today, among the most vulnerable members of our population—investigating how societal pressures, projected images of beauty or heroicism, and the violence of American racism condition their experiences growing up in this country as well as how others perceive them. Simultaneously brave and insecure, playful and serious, powerful and vulnerable, the figures Roberts depicts are complex, as well as, occasionally, based on actual living or historical persons.
This past Tuesday I directed and acted in my first ever short film. The road to get to this point was long and arduous, but I am proud of getting this far and am excited to see what the future holds.
My appreciation for film began my senior year of high school; I was at a friend's house when he put on Kill Bill and I began to realize the beauty in the shots that Tarantino displayed in his scenes. Watching Beatrix Kiddo ride through the streets of Tokyo in a yellow jumpsuit on her yellow Kawasaki evoked a certain feeling in me. Seeing her silhouette fight of members of the Crazy 88s against the blue backdrop filled me with inspiration. I instantly wanted to make my own films, but quickly realized I didn’t have any of the skills.
A ONE STITCH WONDER
Earlier this week, a small tree frog accidentally found his way inside the RSPCA Animal Care facility in Brisbane, Australia, on eucalyptus leaves meant to feed the koalas. Although it seemed unlikely that the frog intentionally hopped a ride to the facility, his medical prognosis suggested otherwise. One veterinarian noticed the frog was having difficulty breathing. Upon closer inspection, it was revealed that the frog had a relatively large hole in his chest. The gaping hole was roughly a millimeter wide, and exposed the frog’s internal organs. Be it credited to the omniscient knowledge of the tree frog, or simply a veterinarian inclined to small acts of kindness, Meaghan Barrow was working that day and got a hold of him. The frog needed stitches. Barrow administered anesthesia diluted to one one-thousandth of a dose, while procuring other tiny medical equipment, and applied a single dissolvable suture—declaring the operation a ‘one-stitch success.’ Within a day, the frog was joyously hopping around, back to its normal coloring, and eventually released into the wild where it could go about its daily business of being a normal little frog.
Some Smaller, Amphibious, Feel-Good News
Often these little acts of kindness go unnoticed in a world focused on larger problems. What’s one very little frog against global pandemics and wars and billionaires in space? The little frog is a reminder of the day to day: of the little things that inhabit our lives and make the world in which we live unique and enjoyable. Perhaps the story of the tree frog is also a reminder to take advantage of the unexpected opportunities to help others, and that sometimes a seemingly small act of kindness can mean a world of difference.
This past week I went on a road trip in Florida with three college friends. I am a huge fan of tropical weather, but the mosquito bites just have been brutal. I would definitely recommend bringing bug spray for your next visit. We drove to a different city every day, and I want to share some of the memories with the Blue Room community!
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DRY STORAGE
===
— THANK YOU —
AND FAREWELL
COLTON
by
For those of you who may be unfamiliar with Dry Storage, it is an artisan mill that celebrates chefs, bakers, brewers, distillers, and farmers, based in Boulder, Colorado. They aim to transform the way we both think about and use grains through their community, mill, bakehouse and restaurants. Their focus is on the finished product, and they ensure that everything they grow and sell can turn into a delicious dish. They focus on organic and regenerative practices that positively impact the environment and buy directly from farmers. Ultimately, they aim to reach the “Last Mile,” which is the creation of personal, intimate consumer experiences.
Colton Steinter, Chef Kelly Whitaker and the Jones Family
Colton Steiner joined Id Est Hospitality as an intern at Basta when he was in culinary school at Johnson & Wales University in Denver. From his internship he was brought on as a line cook and eventually worked his way up to sous chef, all the while honing in on his growing passion for milling and grains. He played a huge role in launching Dry Storage’s bakery, and eventually, Dry Storage’s mill, no small feat during the middle of the pandemic, where he served as Head Miller. Id Est has immense gratitude to Colton and his dedication in growing and leading our mill operation. While he will be missed by our group, we can't wait to see the impact he continues to make in the grain community.
— GOOD LUCK —
in your future endeavors, Colton, and
THANK YOU
for everything you have brought to the Dry Storage family.
>>>
BLUE ROOM ADDRESSES
HOUSING COST + INVENTORY
BY CREATING THE
LIMINAL
SPACE
PROJECT
>>>
MEETING #19
Watch the team dig deep into numbers to test the validity of our model sensitivity.
2021 07 21 BLUE ROOM Housing Meeting #19
Wednesday
July 21, 2021
3 PM
__________ __________
BLUE ROOM Housing
Liminal Space
with
Madelon of Brooklyn, New York
__________ __________
Meeting #19
Financial Modeling
—THE ECONOMIC CLUB OF COLORADO—
PRESENTS
COMING OUT OF COVID
A Look at the Next 10 Years presented by Tim Sheesley
Thursday
June 24, 2021
11:30 AM
Denver Country Club
Denver, Colorado
__________ __________
The Economic Club of Colorado
Tim Sheesley, Member and Chief Economist for Xcel Energy
Presents His Long Range Economic Forecast to Members & Guests at the Denver Country Club.
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Tim has been a member of Economic Club for longer than he can remember, and we are so lucky to have him among us. I first met Tim at a Signature Luncheon (must have been 2013). We became friends over our conversation of how the new Tesla Model S, and electric vehicles, would impact the grid. He would know as Xcel Energy, one of the largest public utilities, and headquartered in Minneapolis, serving 3.3 million people across 8 states, operates the electrical grid systems of Minnesota and Texas.
Outside of his day job, Tim is an avid individual kayaker who has cherished Colorado’s great rivers since his youth. He traces his family lineage in Colorado to the Territorial days. He cares about K-12 Education, Economic Literacy and Workforce Development in the Age of Automation — He cares about people and human capital development.
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: 141.54M
Market Capitalization: $3.121B
Stock Price History:
July 12, 2021 $23.67
July 13, 2021 $23.02
July 14, 2021 $22.04
July 15, 2021 $22.35
July 16, 2021 $22.63
July 19, 2021 $22.28
July 20, 2021 $23.42
July 21, 2021 $22.65
July 22, 2021 $22.24
July 23, 2021 $22.05
Allogene Therapeutics Company Update (7/24/21)
Allogene Therapeutics is a biotechnology company focused on developing allogeneic CAR T cell therapies for the treatment of various cancers. Allogene Therapeutics is a clinical stage company, meaning that they only have product candidates in the preclinical phase or in clinical trials. Should these therapies be approved by the FDA, they would provide an off-the-shelf CAR T therapy for cancer, thus increasing access and decreasing costs for this next-generation treatment of cancer.
As a clinical stage company, Allogene is consistently generating losses. The company has never experienced a positive net income, as it has no products to generate revenue while spending enormously on research and development for its product candidates. A recent article by Simply Wall St titled “We're Not Worried About Allogene Therapeutics' (NASDAQ:ALLO) Cash Burn” delves into Allogene’s cash runway as a tool to assess how long it can operate while incurring significant losses as it develops product candidates. Using the data for cash and cash equivalents and dividing it by the rate at which Allogene is spending cash, Simply Wall St arrives at a cash runway of 3.8 years. However, during the first quarter of 2021, Allogene received its first revenue segment in the form of $38.3m from collaboration revenue. It will be interesting to see, when Allogene releases its earnings for the second quarter of 2021 on August 4, whether this cash runway will be affected by newly generated revenue and/or changes in operating expenses.
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 12 $185.50
July 13 $181.32
July 14 $169.00
July 15 $170.05
July 16 $171.18
July 19 $172.52
July 20 $181.98
July 21 $184.06
July 22 $185.89
July 23 $183.47
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.
A recent article by Nature magazine elaborated upon TXG’s role within the expanding multi-omics world. As a leader in the single-cell sequencing market, TXG’s many pioneering technologies like the Visium instruments have built upon the existing methodologies to allow for simultaneous molecular identity and positional analysis. 10x Genomics has additionally helped to create technologies that have simplified and expedited previously complex, multi-pronged processes. Whereas capturing information about chromatin accessibility, cell-surface protein abundance and cellular lineage used to require three separate methodologies, the company’s release of a microfluidics kit has optimized collecting this data all at once.
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: 605.59M
Market Capitalization: $26.26B
Weekly Stock Price History
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
July 19, 2021: 39.87
July 20, 2021: 40.39
July 21, 2021: 41.30
July 22, 2021: 40.87
July 23, 2021: 40.99
ViacomCBS inc. Executive Summary (7/24/21)
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.
It was confirmed this week that Comcast CEO Brian Roberts and ViacomCBS chairman Shari Redstone met last month to discuss the possibility of working together. With both companies seeking to increase their global presence, a potential course of action could be bundling Peacock and Paramount+ together in international markets. A merger or acquisition seems less likely as it would have to work around antitrust laws that prevent major broadcasting stations, including NBC and CBS, from being owned by the same company. They could potentially merge if one of the broadcast networks were divested, though that would reduce the value of the merged company. There is also the possibility that NBCUniversal and Comcast could split, and the newly independent NBCUniversal would then merge with ViacomCBS. Instead of Comcast and ViacomCBS merging with each other, they could also merge with Warner Bros. Discovery, once that deal closes in mid-2022.
The issue is that only one of the two can merge with Warner Bros. Discovery. ViacomCBS and Comcast can either work together and both be somewhat better off, or one company can merge with Warner Bros. Discovery and be better off, leaving the other to fend for itself. This is a prisoner’s dilemma. Warner Bros. Discovery merger will already take time; a second merger immediately after closing out the first one would have significant costs and take even longer. This is all speculation at the moment and nothing is concrete, as there are a variety of directions these companies could go. However, the industry is consolidating rapidly and ViacomCBS and Comcast will need to consider the best strategy for their long-term futures in the coming months.
Lexi Linafelter
Ticker: PYPL
Name: PayPal Holdings Inc.
Number of Shares Outstanding: 1.17B
Market Capitalization: $343.91B
Weekly Stock Price History
July 12, 2021 $302.94
July 13, 2021 $301.19
July 14, 2021 $300.75
July 15, 2021 $296.51
July 16, 2021 $294.63
July 19, 2021 $294.85
July 20, 2021 $298.07
July 21, 2021 $301.77
July 22, 2021 $303.69
July 23, 2021 $308.53
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, beginning Wednesday, July 20, Venmo began allowing users to sell products and services through personal accounts, adding to their arsenal of transaction services just before their upcoming earnings call. PayPal reports second quarter earnings on July 28, 2021, and is expected to perform highly to match their previous growth. Revenues are expected to be $6.32 billion, which would be a 20.1% increase from the year ago quarter, and quarterly earnings are expected to grow by 5.6% year-over-year, totaling $1.13 per share. After an extremely positive and profitable first quarter earnings report in March, the release of second quarter results is highly anticipated and likely will have a direct impact on the price of the stock this coming week.
Ticker: SQ
Name: Square, Inc.
Number of Shares Outstanding: 392M
Market Capitalization: $113.33B
Weekly Stock Price History
July 12, 2021 $243.45
July 13, 2021 $241.43
July 14, 2021 $239.00
July 15, 2021 $235.16
July 16, 2021 $237.52
July 19, 2021 $233.69
July 20, 2021 $246.47
July 21, 2021 $257.25
July 22, 2021 $260.59
July 23, 2021 4264.00
Julia Martin
Ticker: TSLA
Name: Tesla, Inc.
Number of Shares Outstanding: 963.33M
Market Capitalization: $629.42B
Stock Price History
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
July 19, 2021 $646.22
July 20, 2021 $660.50
July 21, 2021 $655.29
July 22, 2021 $654.44
July 23, 2021 $643.48
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.
Tesla stock prices have remained rather stable over the past 10 days leading up to their 2021 Quarter 2 report on Monday, July 26. Last week, Tesla reported record Q2 vehicle sales and deliveries which is causing analysts to predict Q2 revenues to be over $11 billion. While Tesla has had, per usual, supply chain shortages this quarter, they were able to outperform vehicle production goals. To remedy some of these shortage issues, Tesla has recently struck a nickel supply deal with BHP (an iron ore company headquartered in Australia) to make the supply chain more sustainable. Musk has historically shared concerns regarding the sustainability of nickel, especially with expected increases in demand. Nickel is an important component of lithium-ion batteries, which are utilized in electric vehicles, including Teslas. Tesla has also established deals with other mining companies to establish secure supply chains for various materials including a cobalt deal with Glencore Plc. Supply chain deals such as these are crucial to solidifying Tesla’s role as a leader in the electric vehicle industry, especially in light of the continued, varied supply chain shortages over the past years. While Tesla cannot stop demand for these materials from skyrocketing, it can be as offensive as possible by creating deals like these, for example.
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: 2.49B
Market Capitalization: $483.35B
Stock Price History
July 12, 2021 $205.13
July 13, 2021 $202.50
July 14, 2021 $198.41
July 15, 2021 $189.66
July 16, 2021 $181.61
July 19, 2021 $187.80
July 20, 2021 $187.80
(4:1 Stock Split in effect)
July 21, 2021 $188.82
July 22, 2021 $194.12
July 23, 2021 $195.58
NVIDIA Corporation Executive Summary (7/24/21)
Nvidia has grown over 80% in shares in the past year, with a market capitalization larger than competitors Intel and Broadcom combined. Nvidia has recently been listed in the top 10 publicly traded companies in the United States. Some Wall Street Journal analysts attribute Nvidia’s outperformance to its ties to the cryptocurrency market, namely Bitcoin mining.
Bitcoin mining is the process of verifying the legitimacy of transactions and entering new bitcoins into circulation. Bitcoin miners receive Bitcoin as a reward for verifying transactions that are successfully added to the blockchain. It cannot be done without a sophisticated computer that can solve extremely complex computations, making it costly but rewarding. Nvidia GPUs are among the most popular computing devices used in mining rigs.
But the cryptocurrency market is volatile. In 2018, Nvidia was victim to a crypto bubble that increased demand for its chips, but after the ethereum prices plunged, Nvidia’s share price fell 31%. CEO Jensen Huang mentioned in the Q4 earnings release of fiscal year 2019 that “it was a turbulent close to what had been a great year”. Since then, Nvidia has strategically made GPUs that are specialized for mining, including the NVIDIA CMP HX, so as to not affect the sales of GPUs for gaming and other segments. Nvidia has also taken technical measures to ensure that gaming chips are less useful for mining.
Bitcoin has nearly halved since April of this year, while inflation has risen. It is widely argued that speculation is the biggest driver in Bitcoin price; just earlier this week, Bitcoin prices got a bump after Elon Musk revealed he had personal holdings of the cryptocurrency. In May, China cracked down on bitcoin mining by restricting service on government electricity power plants “making [miners] uncertain and desperate to find other locations” and forcing some miners to dump GPUs on the secondhand market. One report recorded a 45% decrease in price of Nvidia’s GeForce RTX 3060 in June.
In more recent news, this Tuesday, Nvidia’s 4:1 stock split went into effect. The split was announced in a press release in May, stating the reason for the split was to make shares of the stock more affordable for investors and employees. A stock split does not affect the value of the stock, but rather increases the number of shares outstanding and lowers the price of each individual share. Therefore, shares outstanding is multiplied by 4, from 623 million to 2.49 billion.
Note - blue words in article are linked to sources
Naia Morse
Ticker: LULU
Name: lululemon athletica, inc.
Market Capitalization: $49.224B
Shares Outstanding: 124.95M
Stock Price History:
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
July 19, 2021 $373.04
July 20, 2021 $383.30
July 21, 2021 $383.62
July 22, 2021 $395.85
July 23, 2021 $402.79 All time high
lululemon athletica, inc. Update (7/24/21)
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. Last week, biotechnology company LanzaTech announced it has partnered with lululemon to create the world’s first yarn and fabric using recycled carbon emissions. LanzaTech’s process sources carbon from different types of feedstocks, from industrial emissions to syngas from gasified agricultural or household waste and atmospheric CO2. The gas stream is fermented into ethanol or other chemicals. Polyester fiber is one of the most popular synthetic fibers which commonly uses petroleum-based feedstock, using FENC®TOPGREEN®Bio3-PET fiber made from LanzaTech’s ethanol shows lululemon’s commitment to sustainability. This new fabric possesses not only the same appearance but also the same properties and functionality of virgin polyester. Lululemon continues to make moves to deliver on its Impact Agenda goals as it targets making 100% of its products with sustainable materials and end-of-use solutions by 2030.
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 23, 2021: $196.20
July 22, 2021: $194.31
July 21, 2021: $198.62
July 20, 2021: $193.31
July 19, 2021: $188.62
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
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.
In recent news, NXP has partnered with MOTER Technologies to Extend Connected Vehicle Insurance Opportunities. Essentially, NXP with MOTER is creating a secure data exchange platform that connects data from “smart vehicles” to help insurance providers improve risk assessment and cost modeling. This will be done through taking advantage of NXP’s S32 G2 vehicle network processors, with MOTER data analytics software creating a powerful way to monetize vehicle data for improved automotive insurance service from providers. As well as potential big data insights and trend spotting. This is really good news for NXP and its continuing presence in automotive markets, network connectivity and data infrastructure. This partnership is a proprietary way to process tons of already existing data from smart vehicles that insurance providers would be unlikely to develop on their own. Furthermore, this is yet another strategic partnership NXP has made in recent months to focus on specializing in their own products while taking advantage of their partners’ expertise. Overall, this is an encouraging piece of news and it is great to see NXP offer a service via collaboration that has intrinsic value and offers new applications and utility.
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: $70.794B
Stock Price History:
July 12: $92.21
July 13: $93.25
July 14: $92.32
July 15: $90.68
July 16: $90.84
July 19: $90.30
July 20: $91.51
July 21: $91.17
July 22: $90.47
July 23: $91.50
Activision Blizzard, Inc. Executive Summary (7/23/21)
Like many video game companies, Activision Blizzard, a digital entertainment company based in Santa Monica, California, best known for producing video game franchises like Call of Duty, World of Warcraft and Candy Crush, is focusing on mobile game releases in the coming years as consumers spend less time on their consoles and PCs with the pandemic nearing an end.
Game publishers are looking to expand their user bases by bringing existing franchises and new content to player’s smartphones. Industry revenue from mobile games is projected to continue rising in 2021, while revenue from PC and console games—which boomed during the pandemic as people were stuck at home—is projected to decline. Mobile game revenue, which accelerated rapidly in 2020, is expected to rise 4.4% from a year earlier to $90.7 billion and account for slightly more than half of overall global video game revenue in 2021. Still, Bill Anker, Vice President of Business Development & Licensing at Digital Development Management and former Vice President of Acquisitions at Activision, noted in a recent forum that the mobile gaming industry is still lacking funding as new projects are struggling to gain traction. Anker believes that any video game publisher looking to make the first considerable foray in mobile gaming needs to be willing to take risks and “experiment.”
Activision Blizzard has already begun establishing its foothold in the mobile gaming space after the successful release of Call of Duty: Mobile in 2019. The game broke the then-record for the best launch of any game, with more than 100 million downloads worldwide in its first week. Activision plans to release its next title, a mobile version of its Diablo franchise, later this year and ultimately to make a mobile version of each of its games where possible. The company wants to expand its user base to one billion active users from 400 million and sees mobile games as the “most imperative vehicle to get there,” said Daniel Alegre, the company’s president.
togetherism
Let’s talk: TOGETHER.
In our Thursday meeting this week, the Blue Room team tackled a series of simple questions with an endless possibility of answers. How will life in the future compare to life today? If you could know one thing about the future, what would it be? In 10 years, Elon Musk + SpaceX finalize a maiden voyage to colonize Mars, do you join?
In the context of recent expeditions by billionaires to the edge of the atmosphere, people of all walks of life have begun looking forward to the possibilities of extraterrestrial expeditions. As such, the publicity surrounding private journeys to space begs a series of questions about money, morality and our world as we know it. In fact, it is not difficult to find oneself down a rabbit hole of questions derived from the seeming absurdity of the subject. How might this type of travel be normalized in the future? Will this new frontier of space travel be an accessible mode of leisure going forward or a luxury only awarded to billionaires and A-list celebrities? At the end of the day, where will entities of conflicting interest find middle ground in celebration of our differences?
Having a series of technological advancements so great they echo the wonders found in sci-fi movies become a reality before our eyes is certainly something special. Moreover, in reflecting upon this meeting and my experience with our new-found national obsession with recreational space travel, I have found that my primary takeaway from the commotion that these conversations have generated to be uniquely uniting, even if the opinions surrounding the place space travel holds in our future differ greatly.
There was a question brought up by Mr. Sohn in the meeting that I found to be very simple, yet truly insightful regarding what space travel, or the conversations surrounding it here on Earth, might mean for our society faced with conflict, division, and interpersonal misunderstanding:
What unites us? Does it require an alien invasion, a seemingly apocalyptic event or, maybe, a pandemic to bring us together? Or can we find a more understanding and harmonious global community in another form of interconnectedness?
While these hypotheticals generate an abundance of differing opinions on the things that unite people of differing perspectives and walks of life, I realized as a result of this meeting that it is possible that simply being able to collectively rally around the mystique and childlike wonder that accompanies this kind of unprecedented technology generates a subconscious unity that far outweighs the conflict generated in disagreements about the details.
This conversation amplified the Blue Room ethos of ‘Togetherism’ in a way that I found comforting and optimistic for an overall unified future. Further, it amplified the notion that hope, understanding, and positive change come from a place of listening and perspective, regardless of whether or not there is complete alignment in the details. In the end, the impact of recreational space travel on global cultural integration or what unites our world may be complicated questions; however, when considering how we can build a more genuine, authentic and appreciative world, I imagine that engaging in the conversation is the perfect place to start.
10% OF ALL BLUE ROOM REVENUES GO DIRECTLY TO FUND OUR NON PROFIT TOGETHERISM.
WE CAN ACCOMPLISH ANYTHING TOGETHER.