David Fuller and Eoin Treacy's Comment of the Day
Category - Technology

    World's Most Vaccinated Nation Struggles With Virus Variants

    This article by Gwen Ackerman for Bloomberg may be of interest to subscribers. Here is a section:

    The variant first identified in the U.K., 50% more infectious and possibly more virulent than the original virus, is to blame for the inability so far of the vaccination campaign and the lockdown to curb the spread, Israeli health ministry officials said.

    Although the vaccine is believed to work against the variant, the mutation’s more contagious nature means higher infections and hence more hospitalizations. The health ministry’s main goal now is to bring down the numbers of the seriously ill who are overwhelming hospital wards and exhausting medical teams.

    The rate of infections in Israel has declined to just over 9% from 10.2% earlier this month, and people seriously or critically ill has stabilized at about 1,100. But the number of patients on respirators has hit a record, Corona Commissioner Nachman Ash has said. More than 4,600 people in Israel have died from the virus, and more than 7,600 people are being diagnosed with it daily.

    Balicer said it would likely take another 10 days before the country sees critical cases decline, allowing the economy to begin to return to normal.

    Read entire article

    Big Ideas 2021

    Thanks to a subscriber for this report from Ark Invest. Here is an important chart:

    Coinbase is going public via direct listing

    This article by Lucas Matney for techcrunch.com may be of interest to subscribers. Here is a section:

    Last month, the company shared that it had confidentially filed an S-1 with the SEC, we still haven’t seen those financials but we now know that they have opted out of the traditional IPO process. Direct listings have been slowly gaining popularity and given some of the most recent first day pops from tech IPOs, it’s unsurprising to see a company like Coinbase which is likely flush with cash thanks to recent gains in the cryptocurrency market opt for a path to public markets that involves less fuss.

    Direct listings allow companies to skip much of the heavy-lifting of the IPO process by stripping the public debut of a release of new shares, instead giving existing shareholders like VCs and employees a path to just liquidate their equity in the company.

    This has been one of the friendliest IPO windows for tech stocks ever with investors racing to back technology companies that are primed for what’s been called the “digital transformation.” Coinbase is in a pretty favorable spot with the public markets and cryptocurrency markets aligned in frothiness. Bitcoin is currently trading near $33,000 just weeks after reaching on all-time-high.

    Read entire article

    Moderna Says Shot Works Against Variants, Developing Booster

    This article by Robert Langreth for Bloomberg may be of interest to subscribers. Here is a section:

    Moderna Inc. said its vaccine will protect against two known variants of the Covid-19 virus, but it plans to start human studies of a booster shot for a strain from South Africa that may cause immunity to wane more quickly.

    In laboratory tests, Moderna’s vaccine produced antibody protection against the B.1.1.7 strain first identified in the U.K. at levels comparable with older forms of the virus. But against the South Africa variant, known as B.1.351, the neutralizing antibodies produced were six-fold lower, the company said in a statement.

    Despite that gap, Moderna’s shot should protect against either strain, according to the company. While the South Africa variant hasn’t been seen in the U.S., the U.K. mutation -- which British officials said last week may be deadlier -- is spreading rapidly among Americans. Both strains are thought to be more transmissible than the original virus.

    “We expect that whatever immunity you get over time will wane. The question is will it wane faster if you have lower levels to begin with,” said Tal Zaks, Moderna’s chief medical officer, in an interview.

    Read entire article

    Don't Bank On the Glut of Savings Being Spent

    This article by Gary Shilling may be of interest to subscribers. Here is a section:

    From a broader perspective, inflation results from demand exceeding supply, but since globalization commenced three decades ago, it’s been an excess supply world. Asian countries are big producers of exports they send to the West, but they’re weak consumers. China’s consumer spending is just 43% of GDP, compared with 68% for the U.S. So the resulting Asian saving glut generates price-depressing excess supply. Barring a tariff wall that seals off imports from Asia, any revival of U.S. consumer spending wouldn’t be big enough to eliminate global excess supply. And President Joe Biden is less zealous on the trade war with China than former President Donald Trump.

    Finally, note that some investors aren’t anticipating surging inflation and interest rates. Technology-related and other growth stocks have low earnings yields, the inverse of price-to-earnings ratios, which are justified by low interest rates. The theory is that their present stock values equal the discounted value of future earnings, so the lower that discounting interest rate, the more their equities are worth
    today.

    Earnings of $10 in 10 years hence is worth $9.05 today with a 1% discounting rate, but only $5.58 at 6%. So if investors expected a leap in inflation and interest rates, they’d probably be dumping growth stocks now.

    Read entire article

    Short-Seller Citron 'Walks Away' After 'Angry Mob' Tried to Silence Him on GameStop (GME), Turning Info Over to Feds

    This article from StreetInsider may be of interest to subscribers. Here is a section:

    GameStop (NYSE: GME) short-seller Andrew Left of Citron Research says an "angry mob" that owns the stock spent the last 48 hours committing multiple crimes against him and his family that he will turn over to the FBI, SEC, and other government agencies.

    He said what he experienced is nothing short of "shameful and a sad commentary on the state of the investment community" and he will no longer be commenting on GameStop.

    Left said this was not just name-calling and hacking but "serious crimes such as harassment of minor children."

    Left said they are "investors who put the safety of family first and when we believe this has been compromised, it is our duty to walk away from a stock."

    Read entire article

    Bitcoin Losses Gather Pace, With Prices Nearing Three-Week Low

    This article by Anchalee Worrachate and Eric Lam for Bloomberg may be of interest to subscribers. Here is a section:

    “Bitcoin has already achieved the fastest-ever price appreciation of any must-have asset,” wrote JPMorgan Chase & Co. strategists John Normand and Federico Manicardi in a report on Thursday. “Current prices are so far above production costs that mean-reversion lower in returns is a recurring concern.”

    Bitcoin was down 10% to $31,532 as of 10:08 a.m. in New York. Prices are on track for their first back-to-back weekly decline since early October.

    Adding to the anxiety, a report in a trade blog suggested that there had been what’s known as a double purchase, where the same “coin” is used in two separate transactions.

    “This really will chill a lot of that relentless buying and belief that Bitcoin is a stable form of providing transactions” if a double-spend actually happened, said Edward Moya, senior market analyst at Oanda.

    Read entire article

    Jack Ma's Brief Video Chat Prompts a $58 Billion Sigh of Relief

    This article by Lulu Yilun Chen, Coco Liu and Abhishek Vishnoi for Bloomberg may be of interest to subscribers. Here is a section:

    Much about the future of China’s most famous businessman remains unclear. Yet analysts said Wednesday’s video was a sign that worst-case scenarios -- such as jail time for Ma or a government takeover of his companies –- are probably now off the table. It’s unlikely Ma would have participated in the event without at least tacit approval from Beijing; state-run media including the Global Times were among outlets that posted snippets of his talk or wrote stories about his appearance.

    “There’s still a lot of uncertainty on regulators’ next moves, but this does mean the status of Jack Ma is much better than a lot of people speculated,” said Fang Kecheng, a professor at the Chinese University of Hong Kong.

    Read entire article

    3D Systems, ExOne Rally After Stifel Sees 3D Printing Growth

    This article by Ryan Vlastelica for Bloomberg may be of interest. Here is a section:

     

    Shares of 3D printing companies rose on Tuesday, extending their recent gains, after Stifel started
    research coverage on the group with a broadly positive view.

    * The firm issued buy ratings on ExOne, Stratasys and Desktop Metal
    ** XONE up 11%, SSYS up 7%, DM up 3.2%
    * Analyst Noelle Dilts wrote that XONE is “well-positioned to benefit from increased adoption of 3D printing technology for industrial end part production,” while DM should be supported by “a dramatic increase in the use of 3D printing for end-use part production” over the coming decade
    ** PT $20 for XONE, $30 for DM
    * On SSYS, Stifel wrote that it’s in a “mature position where it can leverage its existing infrastructure” for further growth
    ** The company is working to be the first choice in the polymer 3D printing marketplace, which is “expected to more than double by 2025”

    Read entire article

    Email of the day - on the early stages of a secular bull market.

    Until the beginning of last year you often spoke on the theme of the early stages of a secular bull market. David had begun speaking about it as long as 4 years ago. But with the onset of the pandemic, you have been largely silent about it. Has it stalled or, in your view, already peaked?

    Read entire article