Category: Companies Overviews

Apple’s Results in Q4 are Really Good, But Some Analysts Weren’t Excited

Barclays is worried that Apple’s average iPhone pricing is too low
In an attempt to increase its subscriber base for its services, Apple has been selling iPhones cheaper.
The iPhone 11 starts cheaper than last year’s iPhone XR.

Apple’s results in Q4 are great and investors are buying up Apple Inc. (AAPL) shares as the company beat expert estimations. Despite the fact that sales of the iPhone weren’t what was expected but iPad sales and increased Apple TV subscribers add more favorability to these shares.

Both hugely beat what investors anticipated.

Apple’s headlines took most of the attention after the closing bell Thursday. But what if Apple’s historically strong pricing power is slipping, Barclays’ Tim Long is worried.
In an aim to expand its subscriber base for its services, Apple is selling iPhones cheaper. According to Barclays, the price may be too low.

“iPhone revenues were in-line, but we believe ASPs were weaker,” Barclays analyst Tim Long said in a message to clients Thursday.

Don’t miss this How To Know If a Stock is Worth Buying

Apple’s results in Q4 came from services

The truth is that slow iPhone sales at lower prices did not halt Apple to come with the best Q4 revenue ever.

The company earned a record of $64 billion in revenue. Yes, iPhone sales are decreasing, but service revenue scored a great high result. That is the new Apple’s strategy and it shows the result. The most important thing isn’t hardware sales, instead, expanding the subscription services.

The $64 billion in revenue is up 2% correlated to Q4 2018, and quarterly earnings per diluted share of $3.03, up 4 percent from Q4 last year. Here is the full report.

The iPhone sales, Apple’s major moneymaker, proceeded to decrease contrasted to last year. This year it brings $33.36 billion in revenue but last year the iPhone sales brought $,3,40bn more. This year’s drop is a bit more than 9%. Also, Mac revenue was down nearly 5% to $6.99 billion. But earnings came from the other side, from the services business. Apple’s services had touched a record gaining $12,5bn in Q4, the previous quarter ended with $11.46 billion gained from the services. During this year Apple got over 120 million subscribers more than last year and now has over 450 million.

Some of Apple’s results in Q4 are not so good

Mac revenue was also down nearly 5% to $6.99 billion, although iPads ($4.65 billion in revenue) and Apple’s wearables/home/ accessories unit ($6.52 billion in revenue) both saw sizable jumps compared to last year.
Shares of Apple surged more than 1% on Thursday, only several hours after the company reported Q4 earnings and revenue. Apple recorded earnings of $3.03 per share on revenue of $64 billion.

Wall Street was foreseeing earnings of $2.48 per share on revenue of $62.99 billion.

Barclays now predicts a 12% average selling price drop in 2019 and a 6.5% average selling price drop in 2020.

On Apple’s official website, you can find a statement:

“Apple is providing the following guidance for its fiscal 2020 first quarter:
revenue between $85.5 billion and $89.5 billion
gross margin between 37.5 percent and 38.5 percent
operating expenses between $9.6 billion and $9.8 billion
other income/(expense) of $200 million
tax rate of approximately 16.5 percent”

From September this year, Apple has three new iPhone models: the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max.

The iPhone 11 is $699, which $50 cheaper than iPhone XR. These lower prices attracted more customers to Apple’s services business and the company covered the lost gains on the one side with growth on the other. The lower pricing strategy showed good results.

Bottom line

The experts’ concerns are all about average selling prices that were weaker. Investors’ fears are focused on the US-China trade deal. If it falls apart Apple could be faced with rising costs.
The main question now is Apple capable to set new 5G iPhones next year and how much it will cost.
Will Apple be able to charge enough without hurting demand? The lower pricing strategy can be very challenging for 5G. At least, the ASP for 5G iPhones has to be $150 higher.

That’s why Apple’s next quarter will be an intriguing one. Q1 quarter usually includes holiday sales, also it’ll be the first that adds the TV Plus service. Apple is projecting revenue for Q1 2020 in the range from $85.5 billion to $89.5 billion. The revenue in Q1 this year was $84.3bn.

1st November 2019
Fiat Chrysler and Peugeot Merger

Fiat Chrysler Automobiles will merge with PSA Groupe, owner of Peugeot automobiles

Fiat Chrysler (FCA) and Groupe PSA (Peugeot is the largest PSA brand), have agreed to continue a merger. That would form the fourth-largest carmaker in the world. Their boards are working together on a new relationship. The Wall Street Journal reported the companies are moving forward with a merger. Both companies confirmed this news.

The merger will give shareholders of each group equal ownership in the new entity.

On Thursday morning both companies stated that their boards have a mandate to finalize the negotiations in the next few weeks, which means FCA will not tie-up with Renault as was thought this summer.

The merger would create a company with revenues of €170bn, with an operating profit of over €11bn and vehicle sales of 8.7m. That would lead them ahead of General Motors and Hyundai-Kia in sales. The new potential entity would have a market value of between €45-50bn.

The model of the merger is a 50-50 all-stock.

PSA is listed on the Euronext Paris stock exchange.

Since 2014, FCA is officially listed on the NYSE.

After the Fiat Chrysler and Peugeot Merger

When the two companies do a merger, PSA chief executive Carlos Tavares is assumed to lead that new group while John Elkann, Fiat Chrysler’s chairman will hold the same position at the new entity.
Despite this speed, a final agreement of merger needs time and regulatory scrutiny.

According to Reuters, a merger between FCA and PSA could build a “$50-billion giant better placed to tackle a host of costly technological and regulatory challenges facing the global auto industry.” Details were not published, but some aspects have known.

For example, the Journal published that the new company would be “legally domiciled in the Netherlands,” with “operational headquarters in the U.S., France, and Italy.”
Further details and any influence on employment are not yet transparent. The known fact is that FCA has plans to add nearly 5,000 jobs to the Detroit factory to build SUVs. So, the obvious conclusion is that a merger would eventually help FCA in Detroit.

It isn’t a secret that the Peugeot Group has plans to re-enter the U.S. market. The merger with FCA would provide it through the Chrysler/Dodge/Jeep/Ram dealer network.
To adjust the value of the two companies, the PSA shareholders should get about a €3bn dividend from the sale of the 46% stake in parts carmaker Faurecia.
FCA shareholders will receive a €5.5bn ($6.12 billion) cash payout and incomes from the sale of its robot-making Comau unit, estimated at between €200m to €300m.

New headquarters

The new group will be based in the Netherlands, a neutral location, where FCA is domiciled and listed in Paris, Milan and New York. The Financial Times reported the FCA will “continue to maintain a significant presence in the current operating head-office locations in France, Italy and the US.”

Around €3.7bn in predicted annual run-rate synergies are targeted, 80% during the first 4 years. The total one-time cost of achieving the synergies is estimated at €2.8bn, the two companies revealed in the statement.

Bottom line

Carmakers are facing large investments in electric cars. That is the reason behind the merge. Costs. This merger would create one of the biggest carmakers groups in the world with well-known brands Citroen, Jeep, Opel, Alfa Romeo, Peugeot, and Vauxhall. This has the potential to be a true rival to Volkswagen, Toyota and the Renault-Nissan Alliance.

The merger of those two companies looks as wise given the global competition, capital power, and industry complexity from autonomous technologies.

This could create a global automotive leader.

31st October 2019
This Week is Full of Q3 Earnings Reports – Stay, Watch and Monitor

This week will start with Q3 earnings reports on Monday with Halliburton and TD Ameritrade.

The question arises, will economic instability and trade worries continue to frighten investors? Let’s see what we can expect from the Q3 earnings reports.

Tuesday is a day D for Procter & Gamble, McDonald’s, Kimberly-Clark, United Technologies, Chipotle Mexican Grill.

Procter & Gamble (NYSE: PG)

It will be on the schedule before the morning bell. Wall Street wants a profit of $1.24 per share and revenue of $17.4 billion to start off the company’s 2020 fiscal year.

Procter & Gamble’s stock has grown from $81.91 in September 2018 to $117.47 now. In Septembre this year, it was $123.

This company managed to grow earnings at a rate of 7% per year, but revenue has risen by a slight more 1% per year over the past 3 years. It is expected that the company will report earnings per share at $1,24. For the first quarter, it was $1.12. Also, the analysts’ consensus estimates revenue at $17.43 billion. That is 4.4% bigger than the $16.7 billion gained last year.

In the last quarter of 2019, earnings rose by 17% and revenue rose by 4%. Analysts foresee earnings to increase by 7% in fiscal 2020, and revenue to increase by 3.5%. The return on equity was 23.9% and a profit margin of 21.9% which is solid for the management’s effectiveness.

Yes, someone may say it isn’t so good if compare with some high-tech stock, but Procter & Gamble is giant, one of the oldest in the US and the consumer packaged goods company.

McDonald’s (MCD)

It looks like Mickey D’s hits an increase in third-quarter profits and sales. Investors will like to know how McDonald’s will capitalize on two new trends such as the chicken sandwich craze and the demand for meat-alternative burgers. In September, McDonald’s began testing a Beyond Meat plant-based burger in Canada.

McDonald’s is scheduled to report earnings on Tuesday, Oct. 22, before the market bell. According to analysts’ consensus estimate, the company is expected to report $2.21 a share profit on sales of $5.49 billion.

McDonald’s shares are displaying peaking and finished the week at $208.50.

It looks that new products such as all-day breakfast or doughnut sticks attracted new consumers and Mickey D’s global sales gain a great increase. Investments in new technologies continue to pay off and are increasing traffic. Good news for investors because share momentum again revives.

On Wednesday Ford is scheduled for Q3 Earnings Reports

Ford Motor Company (NYSE:F)

It will release Q3 earnings on October 23, after the market close. The fears among investor is great. The largest automakers is challenging difficulties in improving demand for its cars. Analysts forecast that the company will report $0.26 a share profit on sales of $36.86 billion.

Ford has several very hard years behind. After so many successful years, this carmaker giant is forced to restructure because the demand for its sedan cars is decreased.

This restructuring will result in cutting salaried jobs, some oversea factories may be closed and also the car dealer. Ford has to build the capacity to manufacture electric and driverless cars if wants to stay in the focus of buyers. And yes, the management already took some steps toward this. But the company’s shares are still under pressure and currently are traded at $9,29. At the end of the last trading week, the stock rose by 2%.

Thursday is for Intel’s Q3 Earnings Reports.

Intel (NASDAQ:INTC)

The globe’s largest chipmaker will also come under intense analysis when it reports earnings on Thursday, Oct. 24. It is scheduled after the close. According to analyst consensus, it is expected to report $1.23 a share profit on revenue of $18.02 billion.

Its last report showed that the company is able to outdo everyone’s expectations. Over that period Intel Intel profited from growing demand for personal computers, and sales of higher-priced server chips. Investors will check is this semiconductor giant was able to maintain that demand surge in Q3. Also, they would like to know what are the company’s plans for the end of the year.

Intel shares were closed at $51.36 on Friday. But have underperformed the benchmark S&P 500 Index this year. The main reason is concerns due to the trade war. If it escalates and China raises tariffs it can be tricky for this company because China is a major semiconductor market.

Coming Q3 earnings reports could help exclude some of those questions.

Bottom line

This week is overflowing with questions about whether economic instability and trade worries will continue to scare investors. It will be a very hard week for many companies. What investors can do is to watch and monitor to be able to react if it is necessary.

21st October 2019
Five Singapore Companies Listed by Dow Jones – Reviews

5 min read

by Guy Avtalyon

According to Business Insider “, five Singapore companies on the Dow Jones Sustainability Index 2019 Asia Pacific, and two are on the World list.”

And BusinessInsider added

“On Tuesday (September 17), five of these firms -CapitaLand, City Developments, DBS Group Holdings, Sembcorp Industries, and ComfortDelGro – saw their initiatives recognized by the Dow Jones Sustainability Index (DJSI), which is seen as a key reference point for sustainability investment globally.”

So, let’s see the inside of these Five Singapore companies.

CapitaLand Ltd.

Ticker SES(C31)
Market cap $13,198.89M

One of five Singapore companies on the Dow Jones list is CapitaLand. The main activity of this company is a real estate and consultancy services. CapitaLand Ltd. is the biggest real estate investor in Southeast Asia. It was founded in 2000 by a merger of DBS Land and Pidemco Land, two real estate investors in Singapore linked to the government. Temasek Holdings, Singapore’s wealth fund, holds an almost 40% share. CapitaLand is managed by CEO Lee Chee Koon.

The majority of its assets are in Singapore and China. CapitaLand has plans to grow more in China.

About 80% of CapitaLand’s assets are in Singapore and China, where the company plans to expand more.

The uniqueness and power of this company lie in developing many types of real estate such as shopping centers, apartments or individual projects. But CapitaLand owns The Ascot, one of the global biggest chains of international serviced apartments. Among other business, it holds 5 publicly listed real estate investment trusts and numerous private equity funds. For example, it privatized CapitaMalls Asia and immediately delisted it from the Singapore Exchange. The explanation was, it is a part of the restructuring. Australand Property Group was the part of CapitaLand but it has been sold.

The parts of this company are in Singapore, Malaysia, and Indonesia under ticker CL SMI, China under ticker CL China, Vietnam and there is, also, CapitaLand International. The company is geographically separated. Each part is involved in the area from where operates.

The CL International part involves in Europe, the US and the Middle East, but also in Singapore, Malaysia, Indonesia, China, and Vietnam. CapitaLand headquarter is in Singapore.

You want to know: Singapore Stock Market – Why To Invest?

City Developments Limited

Ticker SES(C09)
Market cap $6,481.47M

Another one of five Singapore companies on the Dow Jones is City Developments. It is one of the biggest real estate development companies in Singapore with a long history. Its focus is on residential and hotel development. It was established in 1963 and went public the same year, its shares were listed on the Malayan Stock Exchange. Today it is listed on the Singapore Exchange. City Developments is managed by Kwek Sherman. He is a grandson of the founder of Hong Leong’s Group and heir to one of the wealthiest families in Southeast Asia, Kwek Hong Png. Hong Leong Group still holds the majority of City Developments’ shares.

Its portfolio holds large condos, retail and office complexes in Singapore and overseas. It is the majority shareholder of Millennium & Copthorne Hotels and its more than 110 hotels all over the world, which is listed in London exchange.

When Singapore’s property market was a slowdown, the company find a place for developing in Japan. At the end of 2014, it bought 16,815 sq. meters of the estate in Tokyo’s downtown to build condos. At the same time, City Developments expanded in Australia.

City Developments Ltd. is focused on property development, rental properties, and hotel operations. But there is a so-called The Others Sector part which covers clubs ownership, other investments, consultancy services, etc. The company was founded on September 7, 1963, and its headquarters is in Singapore.

DBS Group Holdings

Ticker SES(D05)
Market cap $46,913.89M

DBS Group Holdings was founded in 1968 as The Development Bank of Singapore. At first, it was a financing company for Singaporean businesses and city development projects. But the bank expanded in China and Southeast Asia and in 2003 the name was changed to DBS as it became a regional bank.

DBS Group has the largest chain of over 2300 offices and self-service ATMs. It also holds the leading role in Singapore’s banking sector.

CEO Piyush Gupta is on the head of the group since 2009. Under Gupta’s management, DBS is experiencing expansion beyond the region. It bought Societe Generale’s private banking business in Singapore and Hong Kong in 2014 for $220 million. The aim was clear, to grow its money management business to attract millionaires in Asia. DBS was also the first Singaporean bank registered in China. It was in 2007. Now DBS has offices in 10 major Chinese cities, with more than 50 offices in Hong Kong only.

DBS Group Holdings Ltd. is an investment company. It is focused on retail, small and medium-sized companies, corporate, and investment banking assistance. It works as consumer banking/wealth management, institutional banking, and treasury markets. The Treasury Markets section is all about structuring, market-making, and trading of treasury products. The company was established in 1968 and its headquarter is in Singapore.

Sembcorp Industries

Ticker SES(U96)
Market cap $2,880.48M

This is one of Singapore’s largest conglomerates. Sembcorp Industries has three main businesses: marine, utility and urban development. The marine and offshore business are handled by publicly-listed subsidiary Sembcorp Marine. Its rigs and platforms are present in almost all foreign offshore oil places all over the world.

Sembcorp has an important position in various governmental industrial park development plans in China and Vietnam. The current Group President Neil McGregor is CEO too. In 2006 with Tang in the head, Sembcorp Industries won the bid for water desalination and power plant project in the United Arab Emirates. It was its first big project in the Middle East. Temasek Holdings is its largest shareholder with about 50% ownership.

Sembcorp Industries Ltd. is an investment holding company. It is engaged in the production and supply of utility services, storage of oil products and chemicals. It operates through main sections: utilities, marine, and urban development. It is also involved in businesses relating to minting, design and construction activities, and offshore engineering. The company was established in 1998 and its headquarter is in Singapore.

Read this: Singapore Stock Market – Why To Invest?

ComfortDelGro Corp. Ltd.

Ticker SES(C52)
Market cap $3,852.21M

ComfortDelGro is a land transport and an investment holding company with more than 46,000 taxis, buses, and rental vehicles all over the world. It was established in 2003 with the merger of the Singaporean transport companies Comfort Group and DelGro. London’s Metroline (city bus operator) is one of ComfortDelGro’s major branches. The interesting fact about ComfortDelGro is that no shareholder holds more than 10% of shares.

Because of the limited area and population in Singapore, the company was forced to find opportunities away from this city-state. In 2013, it has bought a part of London’s FirstGroup’s bus business. In the same year, it bought the Melbourne bus operator Driver Group. Almost half of the company’s operating profit is produced from businesses in China, Australia, the U.K., Ireland, Vietnam, and Malaysia. Yang Ban Seng is managing director and group’s CEO.

ComfortDelGro is holding company which mainly invests in the ground transportation services. It is involved in several areas through separate divisions. It operates a public transportation service, which covers bus, rail, and taxi services. Bus division is also involved in operating shuttle and coach rental services, and fare collection. Taxi division is involved in operating the bureau services and advertising of it. The automotive engineering division is involved in the maintenance, manufacturing of specialized vehicles, coach assembly, collision repairs, automotive engineering services, and sale of diesel fuel. The inspection and testing division provides MOT and similar regulatory mandated vehicle testing, but also non-vehicle testing, inspections and consulting. The driving centers division is providing services for driving schools. While the car rental and leasing division is covering services of vehicle renting and leasing to customers.
The company was established in 2003 and its headquarter is in Singapore.

18th September 2019
Top Blue – Chip Stocks Today

3 min read

These top-quality stocks lead their industries, and they’ve been good to investors over the long run.

We know, you are wondering how to choose the best stock for you. There are a billion stocks out there and it is difficult to find the right one. So, it is time to say something about blue-chips stocks.

Many investors would advise you to choose the leading company in its industry. So, the biggest companies with long track records of performances are blue-chips stocks.

And you are wondering which they are? Let’s take a closer look at some.

The companies we would like to recommend to your attention are among the biggest in the world. They already have a high market cap but they plan to grow more.

Apple

The famous Apple has had a huge impact on purchases electronics and new technology in modern history. The first Mac users, those from the 90s, still use this Macs. The modern ones, of course, but Mac. That is loyalty. But Apple built consumers’ confidence with diligence. After first Macs, it made a revolution with the iPod, iPhone and Apple Watch were on the scene. And it is still one of the biggest companies in the world. That is a blue-chip company.

You may ask how it is a great possibility without new products in recent years. Yes, that is true, Apple has started to look more like an old guy in the new era. The added catch is that Apple has yielded huge amounts to shareholders during the past several years. So, you may ask why they didn’t reinvest it? So many investors are asking that almost every day.

Traders-Paradise wouldn’t bet that they don’t have. I just think they are watching and preparing something revolutionary. Recently, they said they are not a high-tech company anymore. Don’t worry about that, it is due to some taxes and regulations. But it looks like everything is okay now. Their focus is on Apple TV+ service to take part in the video-streaming industry. And beat the rivals. There is still a lot of work but definitely, Apple is worth being in your plan as a top blue-chip company.

Berkshire Hathaway

It is one of the most successful blue-chip stocks in history with legendary Warren Buffett. He is still in the head of this company.

Berkshire Hathaway has a large portfolio of 100-percent-owned companies and publicly traded stocks. Where are the blue-chip stocks out there? Berkshire’s top holdings are Apple and JPMorgan Chase. There is GEICO, also, and railroad giant BNSF, altogether with the Dairy Queen restaurant chain. Its share price is very high, they are traded currently a bit above $300,000. Truly Class A stocks. They have one of the best track record performance over a long long time. This conglomerate isn’t a member of Dow. But you don’t have to be a genius to understand why Berkshire Hathaway is a top blue-chip stock.

JPMorgan Chase

The other company from the conglomerate.

JPMorgan Chase is an important player in the U.S. banking industry.

But you have to know something. JPMorgan Chase was so close to slipping the edge during the 2008-2009 financial crisis. The bank performed a significant role in supporting the financial system through its buying of Bear Stearns and Washington Mutual and ended up on financial support from the federal government. It took time for the bank to grow from a difficult period.

Today JPMorgan is recovered completely. This bank is stronger than ever. High returns on net tangible equity provide it a valuable advantage in an atmosphere of low-interest rates. And it is capable to gain on chances to grow in main fields on its business divisions. Investors can be safer than ever with this top blue-chip stock and rank that JPMorgan Chase owns.

Facebook

We were thinking should we add Facebook among the top blue-chip stocks. Facebook exists a bit more than 15 years and is a publicly-traded since 2012. But it is the pioneer of social media and it became a giant.

Moreover, Facebook still has a lot of ways in which it can develop. Its Instagram app is strong followed among youngsters. But, the company still didn’t generate large revenue from WhatsApp or from Oculus. One is for sure, the future could make those parts much more important to Facebook’s overall returns. Facebook is the clear leader in the social media field.

Little after its IPO, Facebook’s stock experienced huge declines. It didn’t take too long and Facebook’s stock price rose. The company successfully turn its PC-focused platform to mobile devices and showed the ability to keep up with the times. So, profitability is out the question. So, it is a top blue-chip stock.

Visa

The credit card giant originally had the name BankAmericard, formed by Bank of America. In the 1970s, the company changed its name to Visa. A long time before its IPO, it was a private corporation. In 2008, Visa finally became a publicly-traded company.

Visa is a blue-chip stock because of its leading position in the credit and debit card industry. With billions of cards issued, Visa exists all over the world. Moreover, Visa pioneered in electronic payments. Visa is producing huge profits.

The competition has risen, and that’s forced Visa to be careful in its territory and been successful. Visa aims to maintain its status by making it easier for clients to use mobile devices to transfer money more efficiently. Taking all this into consideration, Visa should be a top blue-chip stock in the payments industry for a long time.

26th August 2019
Binance Security Warning For Its Crypto Users

2 min read

Binance security warning was issued for crypto exchange users. The world’s largest cryptocurrency exchange warned users that they are investigating the possibility of leaking of verification data, reported Forbes. That could hit up to 60,000 users who gave personal identification data to Binance during the last year, also Coindesk reported.

According to Binance security warning, a hacker announced to hold 10,000 photos of users that have some connections to the exchanges know-your-customer data. KYC is a legal demand by financial companies to prevent money laundering and fraud. It is an obligation for all customers who want to trade, deposit or withdraw funds. Every customer has to provide such information for this cryptocurrency exchange.

The Bitcoin and cryptocurrency exchange, which is based in Malta, announced it was blackmailed by the hacker. The hacker was demanding $3,5 million worth 300 bitcoin. Binance revealed the “inconsistencies”. They compared the hacker’s data to the data in its system, and found “no evidence has been supplied that indicates any KYC images have been obtained from Binance.”

How the leaking was revealed

This data was distributed on an unnamed group on app Telegram. Binance’s reaction isn’t surprising: “by joining or spreading the link of the Telegram group, you are helping malicious hackers (at least giving attention). What we should do as an industry is to fight them. Stay on the positive side. Report the group, then leave.”

Binance has offered a 25 bitcoin prize worth $290,000 for the information that could reveal the hacker’s identity.

Security warning for crypto exchange is not rare

Bitcoin exchange hacks and security cracks are not so rare. Still, it is a relatively common problem. Exchanges are working on fixing that issue but the success isn’t always the best.

One of the problems is that the bitcoin price always drops when it comes to a situation like this one. Losing users data is an enormous problem. The security is most important for every single crypto exchange if they want to keep their coins safe and have more customers.

Binance is under hacker’s attack and blackmailed as well.

So, the arising question is if such an exchange, the world’s largest by trading volume, is hacked and has a security problem, what we can expect from the smaller ones?

Binance has engaged a third-party

The most surprising fact is that hacker didn’t hack Binance’s system to collect data. According to a statement by Binance CEO CZ, the data was collected from an outsourced company.

The leaked data is linked to an engaged company. Last year Binance outsourced some company to handle user data sent through the KYC system.

The consequence of a security problem

The data leak could force users, back to use sites that allow them to obtain cryptocurrency but without giving any personal data, or at least the minimum of it.

Data leaking was already a problem to Facebook, Yahoo, Capital One Financial Corp. We experienced it.
Crypto exchanges are hacker’s targets for a long time. Sometimes they would require coins, sometimes they would collect customers personal data. During the past 10 years, almost $1,5 billion has been stolen.

What all users of cryptocurrency exchanges want is to be anonymous and safe as much as their coins. That’s all. The exchanges must guarantee that. Otherwise, the nature of crypto will be damaged.

9th August 2019
Tesla’s Claims Fall Short – Again

2 min read

When ordered to produce evidence of alleged danger presented by a short-seller, Tesla withdraws its request for a court-ordered restraining order. Tesla’s claims fall short once again.

Earlier this year Tesla has filed a request for a restraining order against a member of short-seller community TSLAQ known as “skabooshka”, real name Randeep Hothi, to the Alameda County Superior Court in Alameda County, California. In filing Tesla has claimed that Mr. Hothi has injured a security guard at Giga Factory in a hit-and-run incident, and also nearly caused a traffic accident while pursuing a test model of Model 3 during a test run on April 16. Upon being granted a temporary injunction by the court, Tesla was requested to provide audio and video recordings of those two incidents as evidence.

Surprising turn-over

But, in a surprise move the car producer has withdrawn request for the restraining order on July 19.

In the letter to the court, Tesla’s lawyers have expressed the opinion that the request of the audio and video recordings of the incidents are an undue imposition on the privacy of their employees, stating that such materials contain personal and private conversations. They have expressed a belief that “restraining order against Mr. Hothi is necessary and appropriate to protect its employees at their workplace.” Further claiming that the company was forced to choose between employees’ safety and exposing their personal conversation to the public. Thus, the document states, the company has decided to pursue the safety of its employees “by other means”.

And what those other means could be should make people worried, as the history of Tesla’s retaliation against its critics illustrates.

Tesla’s claims fall short

Shortly after the Reveal from The Center for Investigative Reporting has published a piece alleging that Tesla is under-reporting the work-related injuries, one of the CIR’s insiders have alleged retaliation. Said doctor alleged that a complaint to the relevant Medical Board was lodged against her, while also an anonymous call was placed to state’s Child Protection Service accusing her of negligence to her children and requesting that her kids be placed under the protective care of the state.

But such false accusations look to be the modus operandi of Tesla when handling the critique.

Last year Ars Technica has published a story about the alleged attempt of a mass shooting at Giga Factory by a whistleblower Martin Tripp. At that time the Tesla representative has told Ars that they have received an anonymous call at Giga Factory by a male caller claiming that Mr. Tripp is “extremely volatile” and “heavily armed”. But according to the information provided to Mr. Tripp’s attorney and then to Ars the alleged call was made to Tesla’s call center in Las Vegas and then forwarded to Giga Factory’s head of security, Sean Gourthro. Gourthro then has texted to Story County Chief Deputy Tony Dosen that an anonymous female caller has alerted them that Mr. Tripp is en route to “shoot up Tesla”, per Story County Sheriff’s Office report. According to an in-depth investigation by Bloomberg, when police officers have tracked down Mr. Tripp they have discovered that he presents no danger for Tesla’s employees.

“He said he was terrified of Musk and suggested the billionaire might have called in the tip himself. A sheriff’s deputy attempted to cheer up Tripp and then called Tesla to tell the company that the threat, whoever had made it, was bogus.”

Bottom line

Since we wrote so many times that any news may have an influence on the stock price of some company, it will be interesting to make a comparison in stock price before and after incidents like this one. Do investors take care of how companies treat their employees? Is the company’s public outlook important for them? We will see. Today Tesla’s stock looks like this:

Tesla stock target price: $890.00

Current price: $255.68

Stay tuned and follow the market

24th July 2019
Who Controls The Libra

Alexandria Ocasio-Cortez had a dispute with Facebook’s crypto boss, David Marcus.

By Traders-Paradise Team

The subject was about who controls the Libra currency

Two days of US congressional hearings were quite enough for everyone to reveal what problems may arise with a new cryptocurrency named Libra. We are not sure it is crypto at all, by the way.

AOC asked Marcus about who are the members of the Libra Association and how did they selected, trough election or on some other way. He answered that they are not democratically elected instead governed by membership criteria.

Ocasio-Cortez concluded that Libra is “a currency controlled by an undemocratically-selected coalition of largely massive corporations.”

Alexandria Ocasio-Cortez centered on a commentary David Marcus, CEO of Calibra. He said he would trust all of his assets in Libra.

“You said yesterday you would be comfortable taking 100 percent of your pay in Libra. In the history of this country, there is a term for being paid in a corporate-controlled currency,” and asked, “Do you know what that term is?”

Marcus’ answer was negative.

Who controls the Libra

Ocasio-Cortez proceeded,

“It’s called ‘scrip.’ Do you think there’s a risk in taking your pay this way?”

There was no answer from Marcus again.

What is ‘scrip’?

Scrip is a replacement for the government-issued legal tender. Some companies practice this to pay their workers. It is possible to use scrip only at those companies’ shops. For example, recently Amazon gave to their top-employees “Swag Bucks” and they could make purchasings only Amazon-themed merchandise.

This tactic is well-known from the past. It was used to pay miners in the faraway mining camps where the cash was rare. And, of course, the price in such stores are under the control of the company.

So, TP may conclude the Libra is fake currency. But, who controls the Libra is still unknown.

Business insider published a transcript of their conversation in the US House Financial Services Committee.

The full article you can read HERE

The other AOC’s attack happened when she asked Marcus about who support Facebook’s Libra digital currency.

He said that Libra will be supported by real financial assets, particularly pointed to the US dollar, the euro, and government securities. To pacify the audience, Marcus has accentuated that Libra will be conducted by a consortium of organizations.

“So we are discussing a currency controlled by an undemocratically selected coalition of largely massive corporations,” AOC concluded.

We have to say that national currencies are under the competence of governments. Do Marcus claims and Facebook’s plans show their influence on broad of governments or they want to say that their Libra, even declared as digital money isn’t crypto in essence.

This aspect of Libra could become a stumbling rock for Facebook.

Who will trust it?

About Traders-Paradise’s doubts, you can read HERE

Jamie Dimon, The CEO of JP Morgan Chase, said that he thinks Facebook’s future cryptocurrency Libra will not have a short-term influence on the bank.

When asked about Facebook’s approach to the financial sector by creating its own cryptocurrency, he said:

“We’re going to be talking about Libra three years from now. I wouldn’t spend too much time on it. To put it in perspective, we’ve been talking about blockchain for seven years and very little has happened.”

Anyway, JP Morgan has its own plans connected to crypto. They plan to employ JPM Coin, but internally in order to speed up transactions, as he said. Is this script too? We’ll see.

19th July 2019
Huawei is banned from the US market

3 min read

Huawei is banned. Last week the global markets dropped as trade pressures promptly increased between the U.S. and China.

There is an expectation that the trade communications between the US and China will be settled positively. But putting on the blacklist Huawei by the US could indicate even extra market volatility advance.

Wall Street shares have closed lower.

The Dow Jones Industrial Average fell 0.33% to 25,679.76, the S&P 500 lost 0.68% to 2,840.09 and the Nasdaq Composite dropped 1.46% to 7,702.38.

Thanks to Huawei ban, the tech stocks dropping, beginning another week of losses.

Broadcom and Qualcomm, which gets at least half their income from China, stocks dropped Monday. They are big Huawei’s suppliers.

The same was with Micron Technology and Xilinx.

The U.S. choice to ban technology sales to Huawei caused the tech companies stock losses. Investors are disturbed the move against Huawei could decrease selling for companies, particularly chipmakers. Their income is extremely attached to China.

Amazon, Nike, and Starbucks are hit too. Their stocks dropped yesterday.

But T-Mobile and Sprint are between the few businesses to make profits. Those two companies are expecting the merger worth $26,5 billion.

The investors moved to less-risky holdings.

For example, utilities and energy are the sectors where you can see gains.

It is so natural because the investors typically in circumstances like this, want to invest their money into the safer field.

Chipmakers have sunk because of U.S. ban on technology sales to Huawei.

The U.S. government states that Chinese suppliers, meaning Huawei and its rival, ZTE Corp., are an espionage peril.

The reason behind is they are indebted to China’s ruling Communist Party.

And Google bans Huawei phones, strengthening U.S. consumers’ dependence on Apple and Samsung.

But what will happen with users?

Google confirmed that it had canceled Huawei’s Android license, as Reuters reported. Huawei devices 002502, +2.20% will only be able to use an open-source version of the Android platform.

Access to Google services such as Gmail and YouTube and Google Play app store for third-party apps are restricting.

Google did this to comply with a Trump administration policy.

Trump’s administration policy requires federal-government approval for all purchases made by Huawei.
Also for affiliated businesses of U.S.-made microchips, software, and other parts.

Government officials became suspicious of Huawei. They worry that the Chinese government could use the phones to spy on US citizens.

“For users of our services, Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices,” said a Google spokesperson.

But the U.S.users could stay with fewer smartphone options.

Apple and Samsung rule the smartphone market in the U.S. The two companies control approximately 80% of the mobile market, according to data from GlobalStats.

Huawei tried to break the U.S. market. According to GlobalStats, the company’s market share in the US is less than 1%. And Huawei had retreated from the U.S. market in expectation of a confrontation with the US government.

For example, Huawei doesn’t sell its leading Mate 20 models directly in the U.S., but the phones are accessible from third-party retailers.

Market will recover

Despite the new blast of market volatility, Edward Yardeni marks a return to all-time highs this year.

He believes U.S. multinational companies, which are endangered to the trade war, will eventually provide the market increase.

“I think it moves higher partly because there’s a recognition that even companies that do business with China are going to find ways to deal with this escalating trade tension like moving some of their supply chains to other countries,” said the Yardeni Research president Friday for CNBC.

The last UPDATE Huawei is Riding Again in the US market

Risk Disclosure

21st May 2019
Nobel Laureate is a senior adviser at Pimco

2 min read

Pimco wants to understand the retirement patterns and it selected Nobel Laureate, Richard Thaler as a senior adviser.

Nobel Laureate Dr. Thaler is a professor of behavioral science and economics. He is teaching at the University of Chicago Booth School of Business.

Two years ago, in 2017, he got a Nobel Prize for his “contribution to behavioral economics”.

Pimco, Pacific Investment Management Company, plans to use Thaler’s expert help in order to serve clients.
The main goal is to help them to allocate assets in a “thoughtful way”.

That includes even retirement in unpredictable circumstances.

The chief executive of Pimco Emmanuel Roman said:

“We know that understanding how we behave and the decisions we make are critical inputs to help make us better investors and better managers. Dr. Thaler’s insights will help enhance our ability to make the best possible decisions for our portfolios, our clients and our employees worldwide.”

Pimco also freshly stated long-term cooperation with the Center for Decision Research at the Booth School. The goal here is to help “deliver the best possible outcome for investors”.

Who is Nobel Laureate, Dr. Richard Thaler?

Nobel Laureate, Richard Thaler

Thaler studies behavioral economics and finance, and the psychology of decision-making.

A very interesting subject that fills in the slot between economics and psychology.

Thaler examines the hint of the conventional economic theory that everyone in the economy is rational and selfish, instead of considering the chance that some of the factors in the economy are occasionally mortal beings.
In other words, we’re not excellent.

We all like to suppose that we are intelligent, rational beings, constantly performing in best ends. Actuality, it is the ruling economic theory.

What was left of this myth was further ruined by Nobel Laureate Richard Thaler.

And The Royal Swedish Academy of Sciences, when gave him the Nobel prize in economics.

Nobel Laureate Thaler is a pioneer in the field of behavioral economics, which studies humanity’s defects, say that.

He is seeking for the answer, why we don’t make reasonable economic decisions.

He is the co-author of bestseller “Nudge: Improving Decisions about Health, Wealth and Happiness with Cass Sunstein”. In this book, and in many other studies, Nobel LaureateThaler reveals the faults and prejudices that determine our behaviors.

The point of this theory is that you can employ mental nudges to encourage people to make better judgments.

It is particularly preferred when planning, for example, saving for retirement.

People can perform poor economic decisions based on the “endowment effect”, as Thaler described it.

It is the theory that people appreciate and value something more when they own it.

To be more exact, if we are selling something we would like to get more money than in the situation we are buying the same thing.

This correlates to another theory, identified as loss aversion.

People have a negative perception of loss more heavily than they have the positive feeling of a profit of the same volume.

For instance, when we are selling some object, our reference value is the price we paid for it.

Even if the value of that item is evincible decreased, we are anchored to the buying price. The reason is we want to bypass that feeling of loss.

This effect, called anchoring, can lead to injury in financial markets, in particular.

Sound logical and we all have been experienced this effect.

Thaler established the idea of using nudges to build alternative routes of actions.

Making good long-term decision but keep freedom of choice.

How to do that? Simply.

One method is changing the default option, switching users from opt-in to opt-out. This has been used in case of “nudge units” in the US and UK, to increase retirement savings and organ donation, for example.

So, we will see how this theory will going on practice with Pimco.

risk disclosure

17th May 2019