Musk's fortune rose by $6.07 billion on Friday, Bloomberg News said, following a 10.8% jump in the electric carmaker's stock. Buffett's net worth dropped earlier this week when he donated $2.9 billion in Berkshire Hathaway
With the market getting extra frothy, it is legitimate to wonder whether we are in the midst of a bubble. Despite the growing disconnect between Wall Street and Main Street, the surge has been almost relentless since the coronavirus inflicted meltdown in March. Tech stocks, in particular, have outperformed, including the world’ largest company by market cap – Apple (AAPL).It has become increasingly hard to keep up, as Apple has repeatedly notched new all-time highs recently. In a research note to clients, Deutsche Bank analyst Jeriel Ong ponders this exact issue.“AAPL's prior pre-COVID peak was ~$325 back in Feb-20,” Ong noted, “and we can't say that the fundamentals behind the stock for 2021 and beyond are ~15% better than the pre-COVID era as the present difference in all-time highs today vs. back then suggests.”Additionally, aside from “the speed and magnitude of the rebound,” going forward, Ong says, Apple’s surge is at risk of being derailed due to several possible elements. These include a contracting economy with high unemployment rates and less spending from “smaller wallets,” a second COVID-19 wave which will result in stores closing again and the risk of delays to the anticipated iPhone 12 launch.So, with these concerns laid out, is now the time for investors to step aside and come back after Apple has cooled off?Uh-uh. Looking ahead, the pluses outweigh the minuses.Ong explained, “Long-term, we see investors building more confidence in 4 drivers of the stock (iPhone, AirPods, Services, and GM mix shift) as the market continues to stabilize. Simply put, while we see the risks outlined above and perhaps negative catalysts on the horizon (maybe a weak 4Q guide as a result of a delayed next-gen iPhone launch?) ultimately we continue to believe the reward/positive catalysts outweigh the risks, at least at this point in time.”Therefore, Ong keeps his Buy rating intact, and somewhat surprisingly given the concerns, increases the price target. The figure moves up from $380 to $400. (To watch Ong’s track record, click here)Among the analyst fraternity, Apple remains a firm favorite. AAPL's Strong Buy consensus rating is backed by 1 Sell, 6 Holds and a resounding 26 Buys. However, the Street expects shares to decline by 8%, should the $355.52 average price target be met over the following months. (See Apple stock-price forecast on TipRanks)To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. More recent articles from Smarter Analyst: * Aurora Cannabis (ACB): Transformation on Track * 3 “Strong Buy” Penny Stocks That Could See Outsized Gains * Amazon Is Said To Offer $100M In Stock Awards To Keep Zoox Talent * Walgreens Reports $1.7B Quarterly Loss, Cuts 4,000 Jobs Due To Covid-19 Impact
(Bloomberg) -- A coronavirus vaccine may be two years away, if one is ever found, and low levels of infection may become a part of life, Australia’s deputy chief medical officer warned.New infections in Tokyo exceeded 200 for a third day, though fell short of Friday’s record, Kyodo reported. Masked fans returned to baseball in Japan, making the country among the first to restart major sport with spectators. Germany’s infection rate stayed below a key level that’s crucial to preventing a second wave.In the U.S., Texas hospitalizations topped 10,000 for the first time and California suffered its second-highest day of deaths. Florida’s biggest county had a record number of patients in intensive care.Key Developments:Global Tracker: Cases top 12.4 million; deaths surpass 560,000Wuhan shows the world how economies may recover‘Back to the nightmare’ as virus shuts Hong Kong schoolsTesting bottlenecks are hindering U.S. statesBillionaire’s empire unexpectedly thrives in BrazilMasked fans return to baseball in JapanSubscribe to a daily update on the virus from Bloomberg’s Prognosis team here. Click VRUS on the terminal for news and data on the coronavirus.German Infection Rate Rises Slightly (2:28 p.m. HK)Germany’s coronavirus cases rose by 331 while the death rate held steady, according to data from Johns Hopkins University. Deaths increased by 6 to 9,063, a smaller increase than most days since the beginning of March. The reproduction factor -- or R value -- rose slightly to 0.80, according to the latest estimate by the Robert Koch Institute, Germany’s health body. That’s under the key threshold of 1.0, seen as crucial to preventing a second wave of infections.Tokyo Finds 206 New Cases: Kyodo (2:02 p.m. HK)Tokyo confirmed 206 new cases of coronavirus, Kyodo reported Saturday, citing unidentified people. The number of new cases exceeded 200 for the third straight day, but fell short of Friday’s daily record of 243.Hong Kong Adds at Least 20 Cases: SCMP (1:53 p.m. HK)Hong Kong confirmed at least 20 new coronavirus cases on Saturday, the South China Morning Post reported, citing a medical source. It’s not yet known how many of Saturday’s cases were locally transmitted, the SCMP said. On Thursday, the city recorded 34 locally transmitted infections, the most in a single day since the pandemic began.In response, the government reintroduced social restrictions that cap restaurant capacity at 60% and limit eight people to a table. Australia Warns of Two-Year Vaccine Wait (1:21 p.m. HK)Australia’s Deputy Chief Medical Officer Nick Coatsworth said a vaccine may not be available for between 18 and 24 months and the country must be able to keep the virus under control at low levels. “We need to prepare for a world without a vaccine,” he said at a media conference Saturday.Mask-wearing will be critical to reopening Australia’s second-most populous state as it seeks to curb a second wave of infections, Victoria Premier Daniel Andrews said earlier.Two million masks will be ordered and distributed to “priority groups,” he said Saturday. The state recorded 216 new cases and one death in the past 24 hours, and he urged Victorians to stay home this weekend as much as possible.Emirates to Cut 9,000 Jobs, BBC Reports (11:08 a.m. HK)Emirates Airlines plans to cut 9,000 jobs because of the coronavirus outbreak, BBC reported, citing airline President Tim Clark.The company had 60,000 employees before the pandemic, the BBC said. The airline plans to increase job cuts to as much as 15% of its workforce, having already reduced employee numbers by 10%, Clark told the news service.South Korea New Cases Fall (9:29 a.m. HK)South Korea reported 35 more cases in 24 hours, raising the total tally to 13,373. There no additional deaths, leaving the total at 288, the Korea Centers for Disease Control & Prevention said.The country reported 45 new cases of infection on July 10 and one additional death.Japan’s Contact-Tracing App Fails (8:49 a.m. HK)Japan’s health ministry suspended the registration of positive cases on its contact-tracing smartphone app Cocoa as it worked to fix an error that left some people unable to enter their information.The ministry aims to get the feature running again next week, according to a statement. The ministry encouraged users to keep using the app, which had 6.5 million downloads across iOS and Android phones as of Friday evening.Texas Hits Milestone (5:35 p.m. NY)More than 10,000 people were hospitalized with Covid-19 in Texas Friday, the first time the state has reached that benchmark. Cases there jumped by 9,765, an increase of 4.2% compared with the seven-day average of 3.9%. The state has added close to 10,000 cases for each of the last four days, and deaths have begun to spike in tandem, with another 98 fatalities exceeding the seven-day average.Governor Greg Abbott stepped up efforts to encourage people to wear masks, making the rounds of local television stations to warn that deaths are likely to rise in coming days. California to Release Prisoners (4:30 p.m. NY)California plans to release about 7% of its prison population, roughly 8,000 non-violent offenders, to relieve pressure on a chronically overcrowded correctional system that’s now struggling with a spike in coronavirus cases.The move will enable prisons to maximize available space to implement physical distancing, isolation and quarantine efforts, the California Department of Corrections and Rehabilitation said in a statement. It estimated that about 8,000 currently incarcerated people could be eligible for release by the end of August.U.S. Cases Rise 1.9% (3:55 p.m. NY)U.S. cases rose by 59,782 from a day earlier to 3.14 million, according to data collected by Johns Hopkins University and Bloomberg News. The 1.9% jump matched the average daily increase over the past week. Deaths rose 0.7% to 133,677.California Has Second-Deadliest Day (2:21 p.m. NY)California reported 140 new virus deaths, second only to the 149 reported Thursday as the most yet for the pandemic. The 14-day average is 75, according to state health data.Total confirmed cases rose by 7,798, or 2.6%, pushing California’s total infections to 304,297. While the gain was less than the 3% average over the past seven days, the state’s outbreak has been accelerating: Infections have exceeded 300,000 just two weeks after crossing the 200,000 milestone.Gilead’s Remdesivir Linked to Death Reduction (9:36 a.m. NY)Gilead Sciences Inc. said its remdesivir virus treatment is associated with a 62% reduction in the risk of death compared with the standard of care. The death rate with remdesivir was 7.6% at Day 14 versus 12.5% among those not taking remdesivir.The finding is based on an analysis that combines results from a Phase 3 trial and a “real-world” retrospective cohort of patients with severe disease, the company said, noting that it requires confirmation in prospective clinical trials.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The airline industry has been hit hard by COVID-19. Border closures and shelter in place measures brought the industry to a standstill during the virus’ initial wave, as air traffic was grounded across the globe.Whether the pandemic has peaked or not, United Airlines (UAL) upcoming flight schedule acknowledges normality is still a way off. Air travel volume remains weak and currently United’s cash burn rate amounts to roughly $40 million a week. As a result, United has issued warnings that almost half of its workforce might be furloughed in the fall.Further keeping air travel rates down are recent measures by New York, New Jersey, and Connecticut which require any travelers from states with COVID-19 test rates above 10% to self-quarantine for two weeks. The measures have resulted in a slew of discount offers from United.However, recent United data shows the promise of low prices is not enough to entice the public while the risk of quarantine still looms. As a result, United’s August schedule is expected to drop by 65% compared to last year’s capacity. This is lower than the expected 60% drop United were anticipating only a week ago.Still, the latest figures are an improvement on June and July’s numbers, which were down year-over-year by 88% and 75%, respectively. United have said the rest of 2020’s schedule will probably resemble that of August’s.What this means to Deutsche Bank analyst Michael Linenberg, is that more uncertainty lies ahead.The 5-star analyst said, “The bottom line is that, although we believe the industry is exhibiting signs of a nascent recovery, investors should be prepared for an unpredictable (and at times erratic) rate of improvement until either the federal government coordinates interstate quarantines and/or an effective therapeutic/vaccine becomes widely available.”Nevertheless, Linenberg keeps a Buy rating on UAL, along with a $54 price target. The implication for investors? Potential upside of a hefty 65%. (To watch Linenberg’s track record, click here)Overall, Wall Street almost evenly split between the bulls and those choosing to play it safe. Based on 13 analysts tracked in the last 3 months, 6 rate UAL a Buy, 6 say Hold, while only 1 recommends Sell. Notably, the 12-month average price target stands at $42.82, marking a nearly 31% in return potential for the stock. In other words, even the analysts that are hedging their bets have some healthy optimism reflected in expectations.(See UAL stock-price forecast on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not […]
Not all biotechs are highflyers in 2020. Despite some pharma companies’ elevated coronavirus driven valuations, some have had to settle for more pedestrian performances.Take for instance biotech Biogen (BIIB). The large cap has had a middling 2020 so far, with shares down by 6% since the turn of the year.Might that be about to change in the second half of the year, following a recent encouraging development?On Wednesday, Biogen disclosed it had submitted a BLA (biologics license application) to the U.S. Food and Drug Administration (FDA) for its potential Alzheimer treatment, aducanumab.Focus now turns to the FDA’s reaction. The agency has 60 days to approve the filing, following which (if approved), the application will be reviewed. Biogen hopes the drug will be granted priority status due to the disease’s unmet medical need. This means the review could be completed within 6 months instead of the 10 months it normally takes. J.P. Morgan analyst Cory Kasimov is not entirely convinced the treatment will make it through the whole regulatory process. The approval prospects for aducanumab, he notes, are “little better than a coin flip,” and he estimates the possibility of success at 55%. After conducting a poll among 30 US Alzheimer’s physicians, Kasimov argues aducanumab remains a controversial subject among industry professionals.“In short,” said the 5-star analyst, ”The results suggest that the majority of docs don’t believe that aducanumab should be approved… but plan to prescribe the drug to a substantial number of early Alzheimer’s patients if it reaches the market. With safety not being a major sticking point for most of these respondents, we suspect the regulatory debate is likely to come down to whether perceived tolerability + the unmet need win out over a questionable efficacy data + trial conduct/analysis.”All in all, Kasimov reiterated a Hold rating on BIIB shares along with a $293 price target, which implies a modest 5% upside. (To watch Kasimov’s track record, click here)Overall, based on Biogen’s Hold consensus rating, the rest of the Street agrees. The breakdown consists of 8 Buys, 13 Holds and 4 Sells, and is accompanied by a $312.16 price target. There’s upside of 11%, should the figure be met over the following months. (See Biogen stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Aurora Cannabis (ACB – Research Report) continues to confirm a strong transformation to a cannabis company focused on profitable growth while Canopy Growth (CGC – Research Report) is still chasing large market opportunities with wild spending. The company is now on track to spend about 25% of the SG&A as the largest Canadian cannabis stock while approaching the same revenue levels.The Edmonton-based company is a far better value on weakness despite having no major investor and struggling over the last year with a weak balance sheet. The company still has work to get done to reach EBITDA profits, but Aurora Cannabis is the far better stock with the transformation on track.Operational ExcellenceThe best part of the story is that Aurora Cannabis set a transformational target in February and the company is already hitting this goal. With the targets in sight on transforming SG&A costs, the company is now moving forward with consolidating production facilities to the low-cost areas with considerable capacity and eliminating the high-cost facilities no longer needed for the global opportunity that never materialized.Aurora Cannabis forecasts reaching an SG&A target of C$42 million in FQ1, thereby cutting operational expenses by an astonishing 50% in just a few months. Staff levels were cut by 25% to achieve these goals with some apparent high cost consultants let go as well.The company can now achieve EBITDA profits on substantially lower revenues. The good news is that consolidating production facilities will help improve gross margins with Pablo Zuanic of Cantor Fitzgerald forecasting an 8-point boost to gross margins.In prior quarters, Aurora Cannabis was stuck on mid-40s gross margins while clearly over producing inventory similar to the rest of the Canadian cannabis industry. The consolidation of five small facilities will help reduce costs that were averaging C$1.15 per gram while other industry players were down below C$1.00.Once the cannabis company reaches C$100 million in quarterly revenues, the new 50% gross margins will generate up to C$8 million in operating income. This metric assumes a stable C$42 million SG&A quarterly run rate as revenues rise.Focused OpportunityCanopy Growth highlighted how the once promising global opportunity is limited to the U.S., Canada and Germany. These three countries are set to account of C$63 billion or up to 90% of the global total addressable market by 2023.Aurora Cannabis is a strong player in both the Canadian cannabis market and Germany medical that make up the majority of the revenue TAM outside of U.S. Similar to Canopy Growth, both companies have recently entered the U.S. CBD market while being currently blocked from the massive C$42 billion TAM in the U.S. recreational and medical cannabis markets.The key here is that both companies have the same market opportunities and areas of focus, but one still plans to spend wildly on SG&A due to a C$2.0 billion cash balance while the other has become a strong operator due to the requirement to focus. Aurora Cannabis is on the path to positive EBITDA while Canopy Growth has no apparent EBITDA profit goals.TakeawayThe key investor takeaway is that the valuation equation for Aurora Cannabis remains far more compelling here as the market has pushed the stock back down to a market valuation of $1.4 billion. Canopy Growth is far too expensive at $5.7 billion with no meaningful improvement in financials while Aurora Cannabis is on schedule for solid EBITDA profits in FY21 starting in July.To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclosure: No position. More recent articles from Smarter Analyst: * 3 “Strong Buy” Penny Stocks That Could See Outsized Gains * Amazon Is Said To Offer $100M In Stock Awards To Keep Zoox Talent * Walgreens Reports $1.7B Quarterly Loss, Cuts 4,000 Jobs Due To Covid-19 Impact * Moderna Inks Deal With Rovi To Supply Potential Covid-19 Vaccine Outside U.S.
U.S. Customs and Border Protection has admitted that there is no practical way for Americans to avoid having their movements tracked by its license plate readers, according to its latest privacy assessment.
CBP published its new assessment — three years after its first — to notify the public that it plans to tap into a commercial database, which aggregates license plate data from both private and public sources, as part of its border enforcement efforts.
The U.S. has a massive network of license plate readers, typically found on the roadside, to collect and record the license plates of vehicles passing by. License plate readers can capture thousands of license plates each minute. License plates are recorded and stored in massive databases, giving police and law enforcement agencies the ability to track millions of vehicles across the country.
The agency updated its privacy assessment in part because Americans “may not be aware” that the agency can collect their license plate data.
“CBP cannot provide timely notice of license plate reads obtained from various sources outside of its control,” the privacy assessment said. “Many areas of both public and private property have signage that alerts individuals that the area is under surveillance; however, this signage does not consistently include a description of how and with whom such data may be shared.”
But buried in the document, the agency admitted: “The only way to opt out of such surveillance is to avoid the impacted area, which may pose significant hardships and be generally unrealistic.”
CBP struck a similar tone in 2017 during a trial that scanned the faces of American travelers as they departed the U.S., a move that drew ire from civil liberties advocates at the time. CBP told Americans that travelers who wanted to opt-out of the face scanning had to “refrain from traveling.”
The document added that the privacy risk to Americans is “enhanced” because the agency “may access [license plate data] captured anywhere in the United States,” including outside of the 100-mile border zone within which the CBP typically operates.
CBP said that it will reduce the risk by only accessing license plate data when there is “circumstantial or supporting evidence” to further an investigation, and will only let CBP agents access data within a five-year period from the date of the search.
A spokesperson for CBP did not respond to a request for comment on the latest assessment.
CBP doesn’t have the best track record with license plate data. Last year, CBP confirmed that a subcontractor, Perceptics, improperly copied license plate data on “fewer than 100,000” people over a period of a month-and-a-half at a U.S. port of entry on the southern border. The agency later suspended its contract with Perceptics.
We look at Rackspace’s finances, a Facebook code change causes numerous app issues and electric vehicle company Rivian raises $2.5 billion. Here’s your Daily Crunch for July 10, 2020.
The big story: Rackspace is going public again
The cloud computing company first went public in 2008, before accepting a $4.3 billion offer to go private from Apollo Global Management. Rackspace says it will use the proceeds from the IPO to lower its debt load.
Alex Wilhelm took a deep dive into Rackspace’s finances, concluding that the proper valuation is a “puzzle”:
The company is tech-ish, which means it will find some interest. But its slow growth rate, heavy debts and lackluster margins make it hard to pin a fair multiple onto.
The tech giants
New report outlines potential roadmap for Apple’s ARM-based MacBooks — Analyst Ming-Chi Kuo said that a 13.3-inch MacBook powered by Apple’s new processors will arrive in the fourth quarter of this year.
Facebook code change caused outage for Spotify, Pinterest and Waze apps — Looks like Facebook was responsible for some crashing apps this morning.
California reportedly launches antitrust investigation into Google — This makes California the 49th state to launch an antitrust investigation into the search giant, according to Politico.
Startups, funding and venture capital
Rivian raises $2.5 billion as it pushes to bring its electric RT1 pickup, R1S SUV to market — The company plans to bring its electric pickup truck and SUV, as well as delivery vans for Amazon, to market in 2021.
A glint of hope for India’s food delivery market as Zomato projects monthly cash burn of less than $1 million — “We’ll only lose $1 million this month” doesn’t feel like a huge accomplishment, but at least things seem to be headed in the right direction.
Advice and analysis from Extra Crunch
How Thor Fridriksson’s ‘Trivia Royale’ earned 2.5 million downloads in 3 weeks — The latest game from the QuizUp founder was (briefly) the top app in the App Store. We talk to Fridriksson about how he did it.
COVID-19 pivot: Travel unicorn Klook sees jump in staycations — With bookings for overseas experiences plummeting, Klook began offering do-it-yourself kits for stay-at-home projects and partnered with landmark sites to offer virtual tours.
Operator Collective brings diversity and inclusion to enterprise investing — The firm, founded last year, said it currently has 130 operator LPs, 90% of them women and 40% of them people of color.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
NASA signs agreement with Japan to cooperate across Space Station, Artemis and Lunar Gateway projects — Japan first expressed its intent to participate in the Lunar Gateway program in October 2019, making it one of the first countries to do so.
Equity: Silicon Valley is built on immigrant innovation — The latest episode of Equity discusses how recent visa changes will affect Silicon Valley.
Five reasons to attend TC Early Stage online — July 21 and 22! I will be there!
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