Weekend Update #038
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.
Netflix confirmed in their earnings call last week that it is making a push into the gaming industry, after hiring former Facebook gaming exec Mike Verdu to be VP of Game Development. The offering, which is expected to launch in the beginning of 2022, will initially start with mobile games only and may contain content from the company's original IP. Although gaming would provide an additional element of entertainment on the Netflix platform, it will be included in members’ Netflix subscription at no additional cost.
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SPEAKING OF… WE WANT TO KNOW:
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WOULD YOU USE NETFLIX FOR GAMING?
= TUNE IN NEXT WEEK FOR THE POLL RESULTS =
{ END OF THE WEEK }
Market
— Debrief —
At the beginning of the week, the Nasdaq Golden Dragon China Index—which tracks 98 of China’s biggest firms listed in the US—fell 7% on Monday after regulators in China indicated it would curb education firms that teach school subjects from making profits, raising capital or going public. The Nasdaq followed suit on Tuesday, falling from 14,900 to 14,500, but then recovered as tech earnings topped estimates, including those from Microsoft, Apple, Alphabet (Google), Facebook, Amazon, Spotify and Qualcomm. Reactions for individual names were tepid, however as slowing growth kept investors weary about future upside potential.
On Wednesday the Fed indicated it would maintain the course of its interest rate-guidance and $120-billion-a-month asset-purchasing program, saying “we’re not there yet. And we see ourselves as having some ground to cover to get there,” referencing employment, inflation, and the emerging Delta variant.
Robin Hood IPO’d at $38 per share on Thursday, ultimately closing at $34.82. Blue Room discussed how the app is not exactly retail investor-friendly and is in some ways predatory in its practices.
Pinterest fell 18% during Friday trading after revealing its user trends were not meeting expectations.
Spotify Technology S.A., together with its subsidiaries, provides audio streaming services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline high-quality streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. The Ad-Supported segment provides limited on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its subscribers with no subscription fees. It also offers sales, marketing, contract research and development, and customer support services. As of December 31, 2020, the company’s platform included 345 million monthly active users and 155 million premium subscribers in approximately 79 countries and territories. Spotify S.A. has a licensing partnership with Saregama India Limited. Spotify Technology S.A. was founded in 2006 and is based in Luxembourg. The Group depends on securing content licenses from a number of major and minor content owners and other rights holders in order to provide its service.
Pinterest was incorporated in Delaware in 2008 and is headquartered in San Francisco, California. Pinterest is a visual discovery engine that people around the globe use to find the inspiration to create a life they love. The company generates revenue by delivering ads on its website and mobile application.
Vertex is a biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases. The company has multiple approved medicines that treat the underlying cause of cystic fibrosis (CF) — a rare, life-threatening genetic disease — and has several ongoing clinical and research programs in CF. Beyond CF, Vertex has a robust pipeline of investigational small molecule medicines in other serious diseases where it has deep insight into causal human biology, including pain, alpha-1 antitrypsin deficiency and APOL1-mediated kidney diseases. In addition, Vertex has a rapidly expanding pipeline of genetic and cell therapies for diseases such as sickle cell disease, beta thalassemia, Duchenne muscular dystrophy and type 1 diabetes mellitus.
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Corporate Profile:
We are rapidly translating our specific, efficient and versatile CRISPR/Cas9 gene-editing platform into therapies to treat hemoglobinopathies, cancer, diabetes and other diseases
Our lead program targeting the blood diseases β-thalassemia and sickle cell disease has entered clinical testing, as has our first allogeneic CAR-T program targeting B-cell malignancies. We are also advancing additional blood stem cell, immuno-oncology, regenerative medicine and in vivo programs towards the clinic.
We have our headquarters in Zug, Switzerland, our R&D operations in Cambridge, Massachusetts, USA and additional business operations in San Francisco, California.
Alphabet is a multinational conglomerate headquartered in Mountain View, California. Alphabet is the parent company of Google and several other subsidiaries. These subsidiaries include Calico, CapitalG, DeepMind, Google Fiber, GV, Intrinsic, Sidewalk Labs, X, Verily, Waymo and Wing. Google is the main arm and driving force behind Alphabet, supported by hardware, Gmail, Cloud, YouTube, Chrome, Search, Google Maps and Android.
My name is Uriel (Uri) Bonilla. I am a summer intern at Blue Room Investing. I was born and raised in Denver, Colorado, and I am entering my senior year of college at Colorado State University. At Colorado State, I am majoring in economics with a double minor in statistics and Spanish. At CSU, I am a member of the Economic Student Leadership Council, and I volunteer my time tutoring Spanish at an international academy in Fort Collins, Colorado. I chose to study economics and statistics because of its wide range of applications in both an academic and real-world setting. Studying economics has shaped the way I think critically about day-to-day situations, and has enhanced my problem-solving abilities.
Outside of the classroom I like to spend time with my family, friends and hobbies. I am a lover of the outdoors, and living in Colorado has allowed me to attain the full nature experience. I am also big into reading, and I like to play the piano and tennis.
As an intern at Blue Room, I have been able to apply my academic studies in a real-world setting and grow as a young professional. I entered this internship with a very basic understanding of finance and investing. But through great leadership, and a thriving learning environment, I have been able to learn many new skills and cultivate a great relationship with my peers. Blue Room’s investing and community outreach thesis aligns well with my personal views of life, family and community. And for that reason, I am grateful to be a part of this incredible organization. Over the past six weeks, I have been covering Workday (WDAY) and CrowdStrike (CRWD). The research and financial modeling process has been both intense and rewarding. Digging into the company's history and analyzing hundreds of pages of financial documents has made me realize the importance of attention to detail, while the construction of financial models has tested my analytical skills. I am thankful for this rewarding experience at Blue Room, and I hope the skills I continue to learn throughout this internship will have a positive effect on my future career and personal finances.
CHANGING LIVES, TOGETHER
Getting ahead of cancer is crucial no matter where people are in their cancer journey. From earlier cancer detection to treatment guidance and monitoring, we are helping people get the answers they need to make more informed decisions across the cancer continuum.
With a leading portfolio of products for earlier detection and treatment guidance, we help people face the most challenging decisions with confidence.
Our dedication to taking on the impossible fuels everything we do. We are continuously innovating, combining scientific rigor with an open-minded approach to deliver the next big thing.
I noticed one of Royal Gold’s closest competitors, Franco Nevada—which has almost five times the market cap of RGLD at 36.5 billion—mentions in their ‘interests’ section operations other than mining. The additional sector they mention is ‘energy,’ which is entirely composed of natural gas interests. It seems nuanced, but reminded me of what Royal Gold is at its core: a financing company.
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 designs and manufactures several products based on sustainable energy usage. The products within their Automotive sector are all various types of electric vehicles: Model S, Model 3, Model X, Model Y, Roadsterm, Tesla Semi and Cybertruck. Tesla’s Energy Generation and Storage sector comprises Powerwall, Powerpack, Solar Roof and Solar Panels which are all products focused on the generation, storage and consumption of renewable energy.
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AN EXCITING
WEEK
FOR
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— DRY STORAGE —
Numerous events are unfolding this week for Dry Storage. Firstly, this Friday (July 30th) Chef Whitaker will be cooking for 150 people for Outstanding in the Field, an international event that celebrates farmers and the community around cooking. The event will take place at McArthur Gulch in the South of Denver, and as said on the Outstanding in the Field website, they are “thrilled to host [Guest chef Kelly Whitaker] in the field kitchen at McArthur Gulch, where rolling grasslands, woodlands and wildlife encompass 480 acres of land protected by the Colorado State Land Board.”
Next, Chef Whitaker will be driving up to Snowmass to participate in Heritage Fire, a whole animal, live-fire outdoor, food and wine event, in celebration of family farming and breed diversity. There are roughly 20 featured chefs, and Chef Whitaker will be feeding around 600 to 700 people. This means that within the next few days, he will be feeding around 750 people with a purpose.
This Thursday the 29th, was flour delivery day to Denver for the mill, one of the largest yet, as flour sales continue to increase. Also taking place Thursday, Dry Storage is shipping out their first 4,000 lbs of sonora white wheat to Los Angeles for an organization called Tehachapi Grain Project. This particular wheat is grown for flour tortillas, so Dry Storage is sending the 4,000 lbs out to them to help make up for their tough year, and is the largest order and is shipping out from the millside.
Lastly, the new mill arrives in Denver on Friday (July 30th), and we are excited to see what it will produce going forward. And to top it off, Kelly Whitaker will be interviewed on a podcast by the Museum of Contemporary Art for a series that creates informative conversations on artists and how people create art.
This Thursday the Blue Room team enjoyed a wonderful lunch at BRUTØ, a restaurant by Whitaker that is a part of Id Est Hospitality. It is located on the alley entrance of the Free Market on the Dairy Block of downtown Denver. This vibrant community offers a beautiful ambience for dining and even greater food. From the oysters to the tortas to the freshly made tepache and agua de Jamaica beverages, the a la carte menu was an all around hit, both in terms of presentation and taste.
Before sitting down to eat, we were able to watch firsthand how the Dry Storage grains were being used in the kitchen. The chefs were making and working with masa, a dough made from corn flour, to make tortillas, and something that I was unfamiliar with before then. We were able to see how deliberate and thoughtful they are about the food they create, and how the heritage grains serve as a foundation for each and every dish.
Our lunch at BRUTØ:
chefs working with masa and the oysters on the half shell.
>>>
BLUE ROOM ADDRESSES
HOUSING COST + INVENTORY
BY CREATING THE
LIMINAL
SPACE
PROJECT
>>>
WITH MADELON OF NEW YORK
MEETING #20
FRIDAY // JULY 30 // 2021
Focusing on ATTAINABLE housing
and discussions about capital raising.
Snap Inc. is a camera company.
We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate.
We contribute to human progress by empowering people to express themselves, live in the moment, learn about the world, and have fun together.
—FIRESIDE CHAT—
WITH
ALFONSO MEDINA
and
EDUARDO SARABIA
Thursday
July 29, 2021
12:00 PM
__________ __________
BLUE ROOM
MEETING NUMBER 59
__________ __________
Fireside Chat with Blue Room Tribal Elders
Alfonso Medina is Co-Founder and CEO of Madelon Group of Brooklyn, New York. Madelon believes in housing not just as a human right, but as a tool, a tool to make peoples' lives better. Therefore, we created a completely new development model that is informed by technology and the ever-changing financial and social needs of individuals.
Madelon was founded by Alfonso Medina, Joseph Ruiz and Dane Andrews. Blue Room is working with Madelon to create a first-of-its-kind ground up development to advance truly livable housing where the cost is attainable.
Eduardo Sarabia’s work has been inspired by the independent economies and folk history of northern Mexico. His work has been exhibited in numerous museums such as Tamayo Museum in Mexico City in 2016; 2014 at Centro Cultural Cabañas in Guadalajara and Museo de Arte Contemporaneo Oaxaca, Mexico, in the same year at ASU Art Museum, Arizona; in 2013 he had a solo show for his paintings at Museum of Contemporary Art, Denver; and venues such as Los Angeles County Museum of Art, 2008 at the Whitney Biennial, and New Museum in New York. He has received 2 grants for the Durfee Grant Foundation (2004 and 2008) and has been invited to be an artist in residence at Tokyo Wonder Site in Tokyo, Japan were he completed a large public ceramic mural.
Blue Room is proud to support the art and practice of Eduardo Sarabia.
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: $3.107B
Stock Price History:
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
July 26, 2021 $21.70
July 27, 2021 $21.61
July 28, 2021 $22.57
July 29, 2021 $22.37
July 30, 2021 $21.95
Allogene Therapeutics Company Update (7/31/21)
Allogene Therapeutics is a biotechnology company currently developing product candidates for allogeneic CAR T cell therapies for the treatment of various cancers. As a clinical stage company, Allogene currently has candidates in clinical trials as well as in the preclinical stage. There are currently five FDA approved CAR T cell therapies: Abecma®, Breyanzi®, TecartusTM, KymriahTM and YescartaTM. However, these approved therapies all differ from Allogene’s platform in that they are autologous, as compared to Allogene Therapeutics which intends to deliver allogeneic CAR T cell therapies. As the approved therapies are autologous, they are derived from the patient’s own cells, and the patient must go through a process of collection, modification, multiplication, chemotherapy, infusion and inpatient hospitalization, and recovery. In contrast, an allogeneic CAR T cell therapy would be delivered on demand, making it available off-the-shelf. The therapy itself is made from healthy donor cells, where the genes are then edited to decrease autoimmune response and avoid rejection. This differentiation in manufacturing and delivery would potentially facilitate a faster, smoother and more standardized treatment. Additionally, as each patient does not require an individualized process for creating the treatment with allogeneic therapies, Allogene’s products would be less expensive. While Allogene’s pipeline seems promising, it is currently in the early stages of development and clinical trials, and would not be readily available for a number of years, contingent upon FDA approval.
Jackson Blaufeld
Ticker: QCOM
Name: Qualcomm, Inc.
Number of Shares Outstanding: 1.13 B
Market Capitalization: 168.591 B
Stock Price History:
July 19, 2021: $138.79
July 20, 2021: $139.55
July 21, 2021: $142.17
July 22, 2021: $142.44
July 23, 2021: $144.88
July 26, 2021: $143.50
July 27, 2021: $140.93
July 28, 2021: $142.44
July 29, 2021: $150.99
July 30, 2021: $149.80
Qualcomm, Inc. Executive Summary (7/31/2021)
Qualcomm, Inc., a global leader in the semiconductor industry, announced their 2021 3Q earnings this week on July 28. Qualcomm’s Earnings per share and revenue numbers exceeded expectations, reflected in the increase in stock price above. Qualcomm’s reported earnings per share of $1.92, as well as $8.00 billion in revenue. Earnings per share numbers more than doubled annually, and the company’s revenue is up 63% from the same period last year.
The majority of this growth was driven by chip sales, as the Qualcomm CDMA Technologies segment reported $6.47 billion in revenue, a 70% increase annually. The Qualcomm Technologies Licensing segment, which includes revenue from 5G patents and other technologies, rose 43% to $1.49 billion.
New CEO Cristiano Amon has shown that his vision for the company’s future has merit, as Amon spearheaded the growth of the QCT segment over the past several years before becoming CEO. Amon has been clear that the company intends to continue to develop cutting-edge technology in 5G and beyond, with a focus on creating computer chips with the acquisition of NUVIA that can compete with Apple and the computer market.
Ticker: WORK
Name: Workday
Number of Shares Outstanding: 189M
Market Capitalization: $58.107B
Stock Price History:
July 19, 2021 226.15
July 20, 2021 230.83
July 21, 2021 237.36
July 22, 2021 237.92
July 23, 2021 240.40
July 26, 2021 238.61
July 27, 2021 230.66
July 28, 2021 234.39
July 29, 2021 235.25
July 30, 2021 234.40
Workday Global CFO Survey Results:
On July 28, Workday announced results of its CFO Survey. The survey’s primary objective was to explore the impacts that COVID-19 had on businesses across the globe. The survey interviewed 260 Chief Financial Officers around the world who lead the finances of companies between 500 and 5,000 employees. Conducted in March 2021, a year after the world came to a halt due to the pandemic. Workday’s CFO survey reported three key takeaways regarding the adversity businesses around the world faced in the last year and a half, and how they plan to address them.
Almost half of CFOs (49%) reported their organizations biggest problem during the pandemic was associated with lack of accurate data. CFOs could not make quick and accurate business decisions because they did not have accurate and timely data at their disposal.
CFOs prioritized infrastructure investments to close data gaps over the past year.
50% of CFOs reported they made strides in the past 12 months to close data gaps by investing in intelligent data software.
CFOs are planning on prioritizing cloud and machine learning investments in the upcoming years. Almost 60% of CFOs surveyed are investing in innovative solutions to their finance operations by employing machine learning and artificial intelligence solutions into their digital financial data.
With a large portion of CFOs surveyed looking for innovative software solutions, Workday will have the ability to provide their services to these mid-sized businesses, and streamline their financial and human resource software solutions.
Lisa Wong
Ticker: TGX
Name: 10x Genomics, Inc.
Number of Shares Outstanding: 87.27M
Market Capitalization: $20.855B
Stock Price History:
July 19 $172.52
July 20 $181.98
July 21 $184.06
July 22 $185.89
July 23 $183.47
July 26 $179.57
July 27 $179.75
July 28 $187.00
July 29 $184.11
July 30 $183.23
10x Genomics, Inc. Company Update (7/31/21)
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.
In a recent SEC filing, 10x Genomics and competitor Bio-Rad have reached a legal settlement, ending their long-running patent war over single-cell analysis products and services. 10x Genomics—which was founded by former Bio-Rad employees—had previously been embroiled in numerous legal disputes with Bio-Rad over intellectual property.
This settlement grants both companies a global patent cross-license to produce single-cell technologies and requires each company to pay the other past and future royalties through 2030. TXG predicts that expected future royalty payments will impact the company’s gross margins by less than 1%. Notably, this legal settlement only encompasses technologies related to single-cell analysis; it doesn’t include In Situ or spatial analysis technologies.
Melanie Gong
Ticker: CMCSA
Name: Comcast Corporation
Number of Shares Outstanding: 4.58B
Market Capitalization: $269.68B
Stock Price History:
July 16 $56.63
July 20 $57.08
July 21 $57.81
July 22 $57.79
July 23 $58.36
July 26 $58.70
July 27 $58.56
July 28 $57.98
July 29 $58.48
Comcast Corporation Q4 Earnings Update (7/31/21)
Comcast Corporation is a media, entertainment and communications company providing video, internet and phone services. The company was founded by Ralph J. Roberts in 1963 and is headquartered in Philadelphia, Pennsylvania. Segments Comcast operates include Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, Theme Parks and Sky. The Cable Communications segment provides video, Internet, voice and security services through Xfinity. The Cable Networks segment consists of national and international cable networks, regional sports, news networks and cable television studio production operations. The Broadcast Television segment includes NBC and Telemundo broadcast networks. The Filmed Entertainment segment is involved in the production, acquisition, marketing and distribution of filmed entertainment. The Theme Parks segment manages Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan. Finally, the Sky segment consists of Sky, one of Europe's largest B2C entertainment companies providing video, internet, voice and wireless phone services.
On July 29, 2021, Comcast released the company’s 2nd Quarter 2021 Earnings Results. Some highlights include:
Consolidated Adjusted EBITDA increased 12.6% to $8.9 Billion; Adjusted EPS increased 21.7% to $0.84; Generated free cash flow of $4.8 Billion
Cable Communications Total Customer Relationship Net Additions were 294,000; total Broadband Customer Net Additions were 354,000. Both are best second quarter results on record
Cable Communications Adjusted EBITDA increased 14.5% and Adjusted EBITDA per Customer Relationship increased 8.9%
Cable Communications Wireless Customer Line Net Additions were 280,000, which is the best quarterly result on record
NBCUniversal Adjusted EBITDA increased 12.5% to $1.6 billion
Theme Parks experienced its first profitable quarter since the first quarter of 2021, mainly driven by Universal Orlando.
Sky Revenue Increased 28.0% to $5.2 billion
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
Stock Price History:
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
July 26, 2021: 42.16
July 27, 2021: 41.34
July 28, 2021: 41.65
July 29, 2021: 41.69
July 30, 2021: 40.93
ViacomCBS inc. Executive Summary (7/31/21)
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.
With rapid consolidation of the streaming industry, larger players are trying to gain content advantages. Amazon acquired MGM and Discovery is in the process of merging with Warner Bros. ViacomCBS is becoming a smaller and smaller fish in the game. This has led ViacomCBS to give more thought to a merger with Comcast. Given the recent movements by the Biden Administration to encourage stricter enforcement of antitrust laws, however, it makes this deal less likely to take place. One of the major broadcast stations, CBS or NBC, would have to be divested if the current laws stay as they are. A collaboration could be possible as the two companies could combine only their streaming services to appeal to more markets and create a larger offering of content, while also working around the antitrust laws in place. It doesn’t sound like this will happen anytime soon though.
“Would you buy this stock?” is a question that’s come up quite often this week in our investment team bullpens. I’ve been going back and forth on this and am still not completely sure where I stand. On the one hand, I’m confident in ViacomCBS’s ability to realize some short-term growth from its streaming services. Paramount+ just started out and offers a good variety of exclusive content. On the other hand, I’m unsure just how many additional subscribers it can squeeze out of the highly saturated market that exists today, especially considering the sheer scale of its competitors. If the merger between Discovery and Warner Bros. goes smoothly, I’d consider it more likely that the government would allow Comcast and ViacomCBS to work together, but it’s no guarantee. Teaming up with Comcast in some capacity is ViacomCBS’s best shot at remaining afloat. For now, I think I’d stay away from ViacomCBS, but its earnings release next week could change my mind if its streaming operations see significant growth.
Lexi Linafelter
Ticker: PYPL
Name: PayPal Holdings Inc.
Number of Shares Outstanding: 1.17B
Market Capitalization: $351.84B
Weekly Stock Price History
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
July 26, 2021 306.80
July 27, 2021 300.48
July 28, 2021 301.98
July 29, 2021 283.17
July 30,2021 275.53
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. PayPal reported earnings on Tuesday, July 28, and results differed from analyst estimates. In terms of revenue, second quarter net revenue totaled $6.24 billion, which was a 18.6% increase year-over-year, but missed the expected guidance mark by $30 million. This was cited to be due, in large part, to PayPal’s move away from a reliancy on eBay as one of the primary platforms for transactions, and the creation of short-term stunting of revenue growth. However, GAAP earnings per share of $1.00 surpassed guidance by $0.28, and Non-GAAP EPS beat expectations by $0.03, totaling $1.15. Transactions increased by 27% this quarter, totalling 4.7 billion transactions accompanied by a 40% (on spot basis, 36% FXN) increase in total payment volume to $311 billion this quarter. Venmo processed approximately $58 billion this quarter in total payment volume, growing by 58% year-over-year, which was encouraging following their rollout of new Venmo capabilities within the past year. In regards to the usage of Venmo and other subsidiaries, it will be interesting to see how the rollout of their SuperApp capabilities will contribute to their revenue growth in the future, considering they are becoming more and more intertwined with their competitors.
Julia Martin
Ticker: TSLA
Name: Tesla, Inc.
Number of Shares Outstanding: $615.95 Billion
Shares Outstanding: 963.33 M
Share 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 $649.26
July 23, 2021 $643.38
July 26, 2021 $657.62
July 27, 2021 $644.78
← -1.95% a day after Q2 ‘21 Financial Results released
July 28, 2021 $646.98
Corporate Profile:
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 designs and manufactures several products based on sustainable energy usage. The products within their Automotive sector are all various types of electric vehicles: Model S, Model 3, Model X, Model Y, Roadsterm, Tesla Semi and Cybertruck. Tesla’s Energy Generation and Storage sector comprises Powerwall, Powerpack, Solar Roof and Solar Panels which are all products focused on the generation, storage and consumption of renewable energy.
Maxwell McIntosh
Ticker: ROKU
Name: Roku
Number of Shares Outstanding: 115.2 M
Market Capitalization: $59.527B
Weekly Stock Price History:
July 30, 2021: $428.31
July 29, 2021: $449.60
July 28, 2021: $468.35
July 27, 2021: $459.37
July 26, 2021: $479.50
July 23, 2021: $473.65
July 22, 2021: $420.65
July 21, 2021: $422.13
July 20, 2021: $417.20
July 19, 2021: $407.70
Roku Company Update (7/31/21)
Roku has experienced a great deal of volatility over the past two weeks as it heads into earnings on Wednesday, August 4th. Expectations for Roku’s Q2 are high as well, analysts have projected quarterly earnings of $0.13 per share and revenues of $617.2 million. These estimates are up 137.31% and 73.3% respectively YoY. They also fall in line with Roku's own guidance provided in their Q1 shareholder letter in which they predicted strong revenue growth to 615 million in Q2 of this year. In this quarter especially, Roku faces easier YoY comps as COVID-19 stay-at-home were put in place during the same period last year leading to decreased spending. Going forward into Q3 and Q4, however, the company expects major headwinds as stay-at-home spending began to increase in the latter half of the year leading to an influx of new accounts and users. There have also been supply chain constraints that they expect to continue to persist throughout the end of year contributing to a pessimistic attitude towards revenue growth.
In other company news, Roku established a partnership with the Olympics to host exclusive content on its platform for fans to view throughout the duration of the events. This was met with positive sentiment from investors as the stock price immediately jumped on the move. Partnerships such as these are a step in the right direction for Roku as it allows them to invest in original content without the upfront cost of producing the content themselves. The ability to license original content from other suppliers will attract more viewers to the platform driving up ad revenue at a discounted rate to the company. The ability for Roku to continue finding innovative ways to increase the attractiveness of the platform will play a major role in their sustained growth moving forward.
Mary Kate McIntyre
Ticker: NVDA
Name: Nvidia Corporation
Number of Shares Outstanding: 2.49B
Market Capitalization: $483.35B
Stock Price History:
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
July 26, 2021 $195.58
July 27, 2021 $192.08
July 28, 2021 $195.03
July 29, 2021 $196.62
July 30, 2021 $194.99
NVIDIA Corporation Executive Summary (7/31/21)
A 5,000-square-foot convenience store in Denver has become an exemplar of how Nvidia’s AI capabilities are transforming the way we live. Choice Market, located on 939 Bannock Street in Denver, has provided a contactless and independent shopping experience, where customers can enter the store, choose the items they want and exit the store without traditional checkout. AI computer vision technology, powered by California-based startup AiFi and its partnership with Nvidia, enables customers to pay for their food carts on an app linked to each customer's credit card. Choice Market in Denver has increased sales by 20%, as well as improved their cost efficiency, since the switch to autonomous shopping.
The success of AiFi’s Choice Market launch can be attributed to NVIDIA Inception, a program that provides expertise, technology, and market support to AI startups like AiFi. AiFi’s stores use edge AI powered by Nvidia GPUs, but partnering with Nvidia does not only provide top-line technologies; Nvidia’s Inception program and Deep Learning Institute also offers the opportunities for startups to receive critical seed-funding from investors. By expediting the proof-of-concept stage for AI startups, Nvidia demonstrates its influence as a leader in the industry.
Having a frictionless and contactless business model is cost-effective, because it eliminates the need for human labor. Choice market has increased sales by 20%after the switch to a camera-only platform powered by AiFi and Nvidia. The mobile app that customers scan upon entry of Choice Market tracks and records which products they buy, and how often they visit the store. This information improves supply chain planning, decreasing stockout and perished goods. Additionally, Choice Market is able to keep track of customer demographics used to better target demand. By having the entire shopping interface on one app for customers, Choice Market is a trailblazer in autonomous shopping, but as CEO Jensen Huang stated in the GTC Keynote in April, “eventually everything will become autonomous”.
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: 275M
Market Capitalization: $56.05B
Stock Price History:
July 30, 2021: $203.59
July 29, 2021: $204.27
July 28, 2021: $198.48
July 27, 2021: $194.25
July 26, 2021: $198.16
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
NXP Semiconductors Executive Summary (7/31/21)
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.
On August 2, 2021 NXP will release its Q2 earnings. For investors, it will be interesting to see how well NXP is fairing with its supply chain and how much variable costs have risen relative to other Semiconductor companies. Additionally, since NXP controls much of its supply chain, NXP should feel less burnt from the ongoing supply chain issues. Furthermore, the Delta variant poses a huge threat to future production of components as Covid-related shutdowns of facilities that manufacture capacitors and resistors persist into the foreseeable future throughout the globe. Ideally, NXP should show strong revenue earnings growth in Q2 YoY relative to 2020 especially in the Automotive and Mobile sectors without a large rise in variable costs.
Alex Chang
Ticker: LSF
Name: Laird Superfood, Inc.
Number of Shares Outstanding: 8.99M
Market Capitalization: 251.57M
Stock Price History:
July 19, 2021 $29.36
July 20, 2021 $28.75
July 21, 2021 $29.35
July 22, 2021 $28.21
July 23, 2021 $27.98
July 26, 2021 $27.98
July 27, 2021 $28.35
July 28, 2021 $28.14
July 29, 2021 $27.77
July 30, 2021 $27.91
Laird Superfood, Inc. Company update (7/31/2021)
Laird Superfood, Inc., co-founded by famous surfer Laird Hamilton, produces plant-based food products that are functional, nutritious, good-tasting and sustainable. Laird Superfood’s products include their original plant-based coffee creamer, snacks, coffee blends, hydration energy drink mixes, with an aim towards providing products that are functional, delicious and accessible. The company, based in Sisters, Oregon, went public in September of 2020. Laird Superfood’s commitment to social and environmental justice is acted on by their Ohana Cares program, with a number of initiatives aimed at causes such as fighting food insecurity and reducing the environmental impact and greenhouse gas emissions of their shipments.
Earlier this week, Laird Superfood achieved SQF (Safe Quality Food) Level 2 Certification for its plant-based powdered vegan creamers and Hydrate drink mixes. The SQF Program is overseen by the Food Marketing Institute in the United States, and is benchmarked to the Global Food Safety Initiative, a globally recognized set of requirements and standards for food companies. This SQF certification of Laird Superfood’s flagship products certifies their quality and safety in accordance with worldwide standards.
With the company’s acquisition in May 2021 of Picky Bars, a provider of nutritious and performance-boosting snacks including bars, granola, pancakes and nut butter, Laird Superfood seems to be aware of the potential payoffs of strengthening and expanding their product range to meet the ever-growing demand for plant-based food.
Logan Chang
Ticker: ATVI
Name: Activision Blizzard, Inc.
Number of Shares Outstanding: 777.02M
Market Capitalization: $64.974B
Stock Price History:
July 19: $90.30
July 20: $91.51
July 21: $91.17
July 22: $90.47
July 23: $91.50
July 26: $90.14
July 27: $84.05
July 28: $84.82
July 29: $83.57
July 30: $83.62
Activision Blizzard Sued Over Sexual Harassment: Another Episode in the Gaming Industry’s Saga of Gender Inequality.
Last Tuesday, the California Department of Fair Employment and Housing sued Santa Monica-based video game publisher Activision Blizzard for sexual discrimination and harassment. The suit accuses Activision of paying female employees less than their male counterparts and providing them with fewer opportunities to advance. Furthermore, “female employees were routinely subjected to unwanted sexual advances and other harassing conduct so severe or pervasive that it created a hostile work environment,” according to the State Department. Activision’s leadership called the allegations in the State’s lawsuit “false and distorted.” However, more than 2,000 current and former Activision employees have signed a petition against Activision's “abhorrent and insulting” response to the lawsuit, saying it “creates a company atmosphere that disbelieves victims.” CEO Bobby Kotick later apologized for the company's initial response after several hundred workers threatened to go on strike.
The lawsuit filed against Activision has brought the video gaming industry’s treatment of women back into the spotlight. In 2014, thousands of people in the gaming community began to use the hashtag “#GamerGate” to harass, threaten and dox several outspoken female game developers on social media over the belief that industry journalists were promoting a feminist agenda. GamerGate and its associated drama didn’t last longer than a few months. But, the issues that GamerGate struggled over—gender discrimination and ethical conflict—are also issues of great conflict and importance.
In many respects, GamerGate helped birth the increasingly prevalent systematized online harassment and ideological polarization in today’s American society. It was a proxy war of the immense cultural battle over space, visibility and inclusion. GamerGate and its divisive momentum is eerily similar—in both motivation and methodology—to the online efforts of Trump supporters leading up to the storming of the US Capitol earlier this year. As Activision’s recent lawsuit and inner backlash renew the gaming community's woes with sexual equality, we are left to wonder: does the gaming industry help persist misogynistic attitudes that disguise a more dangerous threat to our cultural stability?
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