Weekend Update #041
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.
On Thursday, the Department of Labor issued a released that showed new jobless claims in the U.S. totaled 348,000 for the week ended August 14th, 17,000 claims lower than expected. Continuing claims fell to 2.82 million or 79,000 fewer claims from the previous week. Both statistics are positive milestones that mark pandemic lows. Although the Delta variant is still a concerning challenge to the reopening sentiment, the jobless claims report shows that the average American may be ready to get back to work. As vaccinations are beginning to become mandatory in some work places, we may also begin to see an exponential uptick in fewer hospitalizations as well as a quicker return to pre-pandemic unemployment numbers.
Thank you, Blue Room Analyst IAN CARTER.
END OF THE WEEK
— Debrief —
Markets opened lower on Monday on the heels of the US withdrawal from Afghanistan which quickly went awry as the Taliban immediately took power. The S&P fell from the previous Friday’s high of nearly 4,480 to as low as 4,380 at Thursday’s close. It later pared losses on Friday, closing at 4,441.67 for a loss on the week of -0.85%.
On Tuesday it was revealed that intelligence software company Palantir has purchased nearly $51 million of gold in August according to a regulatory filing, prompting investors to ask what prompted those purchases.
On the Fed front, minutes from July’s Federal Open Market Committee showed that most Federal Reserve officials agreed the pace of bond purchases could begin tapering later this year. Additionally, Fed President James Bullard said he “prefers tapering to be done by the first quarter, with the fourth quarter of 2022 a ‘logical place’ for rate liftoff.” This paired with rising coronavirus hospitalization counts in Alabama, Florida, Mississippi, Georgia and Texas, and the perceived resulting effects on the economy, are what spooked investors on Thursday.
One of the companies on the Blue Room Watchlist, NVIDIA Corporation, a visual computing company, reported earnings on Wednesday, beating revenue and EPS estimates. A more detailed report can be found in this week’s newsletter, produced by Blue Room intern Mary Kate McIntyre.
Thank you Blue Room Leader OMAR GUZMAN.
Danimer is a next-generation bioplastics company. Danimer is a high-growth, eco-tech company that produces 100% biodegradable polymers for use in plastic applications. The Company is a developer and manufacturer of biodegradable materials. The Company’s applications for biopolymers include additives, aqueous coatings, fibers, filaments, films, hot-melt adhesives and injection-molded articles, among others. Its products include extrusion coatings, extrusion lamination materials, film resins, oil well polymers, injection molding resins, additives and thermoforming resins. The Company is creating environmental and natural alternative solutions to petroleum-based resins. The Company’s polymer, Nodax PHA (polyhydroxyalkanoate), is a plastic, produced using canola oil as a primary feedstock. PHA was the first polymer to be certified as marine degradable.
NVIDIA Corporation operates as a visual computing company worldwide. It operates in two segments, Graphics and Compute & Networking. It was the creator of the GPU, or Graphics Processing Unit, that had originally been used in the gaming market but has since been leveraged to create platforms for scientific computing, artificial intelligence, data science, autonomous vehicles, robotics, and augmented and virtual reality. NVIDIA Corporation was founded in 1993, and has been led by CEO Jen-Hsun Huang since its inception.
This past Monday (August 16th) I was able to tour the New York Stock Exchange building in Manhattan and witness the opening bell ceremony on the trading floor. During my visit I learned about the history of the NYSE and how it has evolved over the years. The NYSE dates all the way back to 1792 when 24 brokers and merchants signed an agreement under a buttonwood tree, calling it the Buttonwood Agreement. This established the grounds for trading and began with 5 securities: three government bonds and two bak stocks. The NYSE recognizes and celebrates its founding as this signing event on May 17, 1792.
“In my head I’d pictured a chaotic and frantic floor full of people shouting at one another and rushing around like I’d seen in the movies. The reality did not quite mirror my expectation…”
Activision Blizzard is a digital entertainment company known for producing video game franchises like Call of Duty, World of Warcraft and Candy Crush. The company operates in three segments: Activision Publishing, known for producing Call of Duty; Blizzard Entertainment, known for creating World of Warcraft and Overwatch; and King Digital Entertainment, known for the hit-mobile franchise Candy Crush. The company also operates eSports leagues for its two most popular first-person shooter games: Call of Duty and Overwatch.
Royal Gold, Inc. is a precious metals stream and royalty company engaged in the acquisition and management of precious metal streams, royalties, and other similar production-based interests. The Company focuses on production, development, evaluation, and exploration stage streams and royalties located in prolific, politically stable gold and mineral regions. Royal Gold owns a large portfolio of interests in high-quality, long-life mines, development projects, and evaluation and exploration properties, and seeks to offer mining companies an alternative and more flexible financing vehicle. In a peer comparison, Royal Gold has the highest revenue exposure to gold and, in terms of revenue sourcing, the highest exposure to primary gold operations. Royal Gold also devotes considerable attention to ESG risks, which are monitored by the members of the Royal Gold Enterprise Risk Management Committee
On August 18, 2021 Workday announced a groundbreaking partnership with the U.S federal government. The rollout of Workday Government Cloud marked a notable milestone in Workday’s growth opportunity. The Federal Risk and Authorization Management Program (FedRAMP) authorized Workday to help accelerate the U.S government's software infrastructure. Workday will enable the federal agencies to transform IT, and address critical challenges across financial sustainability, workforce development, and compliance.
Thursday
August 19, 2021
12 PM
__________ __________
BLUE ROOM
MEETING NUMBER SIXTY TWO
__________ __________
UPDATES
+ + + +
__________ __________
Dear Blue Room:
This week, Interns begin investment team presentations.
I really love this part of the program, when it all comes together.
What we hope:
Teach how to tell a financial analytical story, which is a story of numbers, and instill the sense of confidence when able to wield this craft for purpose.
For Blue Room, we value fresh approaches to looking at investment opportunity. Building a portfolio of low correlation requires investment ideas, which are prospected, vetted, carefully one at a time.
For Investors, they will value investments in their portfolios which have low correlation to their existing risk exposures. Therefore, one strategy is to focus our growing analytical capability on stock ideas which are not already widely owned (Apple, Amazon, Facebook, Microsoft, etc).
The Value, Therefore, is in Being Different
linkedin.com/pulse/protest-financial-calvinism-thinking-differently-minyoung-sohn
///
VIACOMCBS
BULLPEN FINANCIAL MODELING
+ JOE KRAMER +
Thursday
Friday August 20, 2021
9:30 AM
__________ __________
BLUE ROOM
Investment Team Bullpen
__________ __________
ViacomCBS
ACTIVISION BLIZZARD
BULLPEN FINANCIAL MODELING
+ Logan Chang +
Thursday
Friday August 20, 2021
9:30 AM
__________ __________
BLUE ROOM
Investment Team Bullpen
__________ __________
ACTIVISION BLIZZARD
My name is Logan Chang, and I am finishing my summer internship here at Blue Room Investing. I lived in New York City for a few years before moving out to Long Island, New York, where I still live with my parents. I will be starting my sophomore year at Dartmouth College this fall, where I plan to major in Computer Science. I enjoy computer science because I like the logical and systematic nature of the field, but I also appreciate the creative freedom that constructing programs and solving problems affords. It's also really cool to build smartphone apps, price trackers for items on my Amazon wishlist, and AIs that can read handwritten digits. At school, I am also a member of the Men’s Tennis team, and I’m excited for our first full year of competition (hopefully!).
This summer, I became interested in golf. I played a little bit growing up and in high school, but I started playing a lot more during the pandemic. Some of my favorite moments from this summer have been hanging out with friends at various golf courses across Long Island and catching up with each other. Following the end of the summer internship program, my parents and I will play golf for a few days along the Pacific coast in Oregon, which I’m greatly looking forward to. I also enjoy reading and have gotten really into Game of Thrones in my free time this summer.
As a BLUE ROOM intern, I have covered Activision Blizzard (ATVI) and the broader video game industry. My research has consisted of reading many of the company’s earnings filings, transcribing and modeling the company’s financial performance, and listening in on earnings calls and analyst forums through BWG Strategy. I’ve also had the pleasure of becoming familiar with my fellow summer interns and BLUE ROOM’s fellows, full-time employees, and tribal elders throughout the summer. The entire team at BLUE ROOM has helped broaden my financial knowledge and taught me that the core of any successful operation is the great people that make it work. Through my research and our daily bullpen meetings, I have gained an impressive breadth of knowledge about many aspects of the market and the process of fundamental valuation while also building a great depth of knowledge around Activision Blizzard. My time as an intern here at BLUE ROOM has been invaluable, and I cannot believe that it is coming to an end.
A
R
T
@MCA
BATHING THE ROOM
WITH BLUES
September 10, 2021 to January 30, 2022
Jason Moran (born in Houston, TX, 1975) has achieved wide acclaim as a jazz pianist, composer, and artist. Moran is Artistic Director for Jazz at The Kennedy Center and was named a MacArthur Fellow in 2010. His activity includes recordings and performances with jazz masters including Charles Lloyd, Bill Frisell, and the late Sam Rivers, as well as his work with his trio The Bandwagon (with drummer Nasheet Waits and bassist Tarus Mateen) that has resulted in a profound discography for Blue Note Records and his own label Yes Records. Moran has produced collaborative artworks and performances with artists including Adrian Piper, Joan Jonas, Glenn Ligon, Stan Douglas, Adam Pendleton, Lorna Simpson, and Kara Walker. In 2018, his first solo museum exhibition at the Walker Art Center, Minneapolis, MN, traveled to the Institute of Contemporary Art, Boston, MA; Wexner Center for the Arts, Columbus, OH; and Whitney Museum of American Art, New York, NY.
+++
THIS WEEK’S
UPDATE
===
— DRY STORAGE —
All-Day Experience
Arrives
September 1.
Tinned seafood / square pizza / sourdough / croissants
/ wine / coffee / onigiri / & so much more
Served via counter service, to-go or limited evening reservations.
Dry Storage has new extended hours on the horizon, as an “All Day” menu will be coming September 1st! You are now able to book a dinner reservation at Dry Storage. There are options for both patio and indoor dining reservations, and the bakery will be open to dine all day Tuesday through Saturday and for brunch on Sundays.
If you are interested in buying Dry Storage grains, aside from the bakery, their retailers include Cured Boulder, Shamane’s Bakery + Cafe, Somebody People, Santo, Boulder County Farmers Market, Infinity Goods, Local Coffee House, Pearl Convenience, and Matriarch Mercantile. For those of us outside of Colorado, you are able to shop online for blends, original, and special boxes at DRY.
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: 141.5M
Market Capitalization: $3.014B
Stock Price History:
August 9, 2021 $22.63
August 10, 2021 $22.03
August 11, 2021 $21.25
August 12, 2021 $21.17
August 13, 2021 $21.44
August 16, 2021 $21.15
August 17, 2021 $22.17
August 18, 2021 $21.76
August 19, 2021 $21.01
August 20, 2021 $23.45
Allogene Therapeutics Company Update
Allogene Therapeutics is a biotechnology company currently developing allogeneic CAR T cell product candidates for the treatment of various cancers. On August 11, David Chang, the CEO of Allogene Therapeutics, appeared in a panel discussing allogeneic products in oncology from Canaccord Genuity. Pascal Touchon, President and CEO of Atara Biotherapeutics, Jae Park, MD, a hematologic oncologist at Memorial Sloan Kettering Cancer Center and Kevin Curran, MD, a physician specializing in cellular therapy and Memorial Sloan Kettering Cancer Center also appeared on the panel. This panel, as it focused on off-the-shelf T cell approaches in oncology, largely discussed the clinical and scientific aspects of Allogene’s product pipeline. Similar to the discussion of Allogene’s earnings calls and other conference appearances, a strong focus was placed on the bullish attitude towards Allogene’s CD19 program with product candidates ALLO-501 and ALLO-501A. CEO David Chang discussed the 2 studies in which over 60 patients were treated with ALLO-501 or ALLO-501A. Dr. Chang seemed especially pleased by the good safety profile and the higher response rate due to the consolidation program. By increasing the dosing, Allogene was able to see a subsequent increase in complete responses from 36% to 63%. This bodes well as ALLO-501A heads into its Phase II pivotal trial later in 2021. Especially with the promising preliminary data from consolidation therapy, Allogene should be able to capitalize off the inherently opportunistic field of off-the-shelf cell therapy and enter into this growing market.
Joe Kramer
Ticker: VIAC
Name: ViacomCBS inc.
Number of Shares Outstanding: 605.6M
Market Capitalization: $25.40B
Weekly Stock Price History
August 6, 2021 $41.55
(Earnings release - up 7%)
August 6, 2021 $41.50
August 9, 2021 $40.29
August 10, 2021 $40.75
August 11, 2021 $40.82
August 12, 2021 $39.96
August 13, 2021 $39.16
August 16, 2021 $38.52
August 17, 2021 $39.03
August 18. 2021 $40.47
August 19, 2021 $39.57
August 20, 2021$39.71
ViacomCBS inc. Executive Summary
ViacomCBS is a global media and entertainment company that’s shifted its focus toward streaming over the course of 2021. It has expanded its global footprint significantly over the past year, with plans to expand the availability of Paramount+ to over 25 countries by the end of 2021, and to over 45 countries by the end of 2022. To complement this global exposure, ViacomCBS announced this week that it will be partnering with Comcast’s Sky and launching a combined streaming service in 20 select European markets. ViacomCBS and ComCast felt there wasn’t enough of an appetite for multiple products in these markets, so they decided to combine their services. The service will be named SkyShowtime, and will feature content from the likes of Peacock, NBCUniversal, Showtime, Paramount Pictures, and Nickelodeon. Although neither company released what pricing will look like, it’s safe to say they’ll shoot for a price that makes them competitive with other large players already in the market such as Netflix or Disney. SkyShowtime will be home to over 10,000 hours of content, including first-run movies and TV seasons every month, with a quality library of all-time favorites, classics, and family and kids programming. “With the launch of SkyShowtime we are well positioned to utilize our global content engine to create a compelling streaming offering, quickly and at scale, with a smart strategic phased investment. As a complement to our recently announced Paramount+ partnership with Sky in the UK, Italy, and Germany, SkyShowtime represents a huge opportunity to accelerate our market expansion and build a leadership position in SVOD in Europe,” said Raffaele Annechino, President and CEO of ViacomCBS Networks International. This partnership provides an opportunity to monetize content across Europe and create strong brand recognition.
Lisa Wong
Ticker: TGX
Name: 10x Genomics, Inc.
Number of Shares Outstanding:87.27M
Market Capitalization: $20.855B
Stock Price History:
August 2, 2021: $178.24
August 9, 2021 $172.71
August 10, 2021 $164.77
August 11, 2021 $161.41
August 12, 2021 $161.21
August 13, 2021 $160.28
August 16, 2021 $160.08
August 17, 2021 $162.75
August 18, 2021 $157.81
August 19, 2021 $154.16
August 20,2021 $155.72
10x Genomics, Inc. Company Update
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 webinar, 10x Genomics discussed the applicability of their newest product, Chromium X, within the single cell research market. The company specifically noted the benefits of single cell assays for drug screening. With high-throughput screening (HTS), TXG allows for more comprehensive cellular phenotyping, giving researchers deeper insight into cell pathways, transcriptomic readout, and morphology. In an experiment, TXG highlighted how HTS provided a more complex overview of how FDA approved drugs targeted lung cancer mutations. In doing so, TXG demonstrated how its HT single cell gene expression assay, when used in combination with Chromium X, can be utilized to identify the impact of therapies early-on during the drug development pipeline.
Melanie Gong
Ticker: CMCSA
Name: Comcast Corporation
Number of Shares Outstanding: 4.58B
Market Capitalization: $269.68B
Stock Price History:
August 2 $58.47
August 3 $58.23
August 4 $57.97
August 5 $58.34
August 6 $58.69
August 9 $58.28
August 10 $58.45
August 11 $59.09
August 12 $59.05
August 13 $59.18
Comcast Corporation Company Update
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.
This week, Comcast announced that Xfinity Mobile will be carrying the new Samsung Galaxy Z Fold3 5G and Galaxy Z Flip3 5G at Samsung Unpacked. Customers adding a new line and porting a new number can receive $400 off these new devices, and Xfinity Mobile customers who add these devices to their existing line will receive a $400 Visa prepaid card. Samsung is building a foldable device equipped with IPX8 water resistance and with the strongest aluminum on any Galaxy smartphone--Armor Aluminum. Xfinity Mobile customers can preorder the Samsung Galaxy Z Fold3 5G and Galaxy Z Flip3 5G on XfinityMobile.com in advance starting August 27th.
Lexi Linafelter
Ticker: PYPL
Name: PayPal Holdings Inc.
Number of Shares Outstanding: 1.17B
Market Capitalization: $317.94B
Weekly Stock Price History:
August 9, 2021 $278.15
August 10, 2021 $274.37
August 11, 2021 $276.41
August 12, 2021 $274.59
August 13, 2021 $274.91
August 16, 2021 $278.28
August 17, 2021 $271.10
August 18, 2021 $268.84
August 19, 2021 $270.58
August 20, 2021 $272.96
PYPL Company Update
PayPal Holdings Inc. is an international financial technology and payment processing company headquartered in San Jose, California. Its payment solutions allow customers to both send and receive payments through a global network that connects merchants and consumers with 305 million active accounts across more than 200 markets. PayPal is committed to secure, timely and easy-to-use payment services, and operates through subsidiaries including Gopay, Braintree (Venmo), Xoom, Hyperwallet, Simility, CyActive, FraudSciences and Honey to foster a positive consumer and merchant experience. PayPal primarily earns revenues through charging fees for completing payment transitions and other payment-related services that are typically based on the volume of activity on the Payments Platform.In recent news, PayPal announced this week that they will no longer charge late fees for missed payments on buy now, pay later (BNPL) products. This will take effect in the United States, United Kingdom, and France beginning October 1, 2021, similarly to the operation model of the BNPL solutions in Australia and Germany. This decision by the company is likely to build customer acquisition momentum, and was cited by the company to be an attempt to be more customer focused, and to help both merchants and customers by offering flexible payment solutions. This decision bodes well for the company in this new and highly competitive space, as Square has also recently gained traction in the BNPL market with their acquisition of the Australian payment company, Afterpay; similarly, other companies are making strong efforts to maintain their presence in the space including Affirm Holdings (in collaboration with Shopify), Mastercard, and Visa. Although there
Julia Martin
Ticker: TSLA
Name: Tesla, Inc.
Number of Shares Outstanding: 990.01 M
Market Capitalization: $639.208B
Stock Price History:
August 11, 2021 $713.76
August 12, 2021 $709.99
August 13, 2021 $707.82
August 14, 2021 $722.25
August 15, 2021 $717.17
August 16, 2021 $686.17
August 17, 2021 $665.71
August 18, 2021 $688.99
August 19, 2021 $673.47
August 20, 2021 $680.26
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.
On August 19, 2021, Tesla had AI Day which is a public event hosted by the company to highlight coming technological developments, similar to their Battery Day. According to Musk, the event is mostly geared towards recruiting AI and robotics experts to join Tesla’s AI projects, but it is clearly for the benefit of investors as well. One of the key takeaways from the event is the development of a new chip that will be used to power Dojo. Dojo is a neural network training supercomputer that Tesla’s AI systems are dependent upon. Dojo can process large amounts of camera imaging data much faster than other computer systems, thus giving Tesla an edge over computers. This additional chip, which is called D1, allows Tesla to take the chip process inhouse and improves AI bandwidth and performance to better optimize machine abilities. Dojo will be used beyond just Tesla’s Full Self-Driving (FSD) system and will hopefully be operational by next year. Tesla’s Autopilot system will become under investigation by the National Highway Transportation and Safety Administration due to the recent 11 accidents in which a Tesla vehicle crashed into parked emergency vehicles. While Tesla’s Autopilot and FSD features are extremely advanced and impressive, their technology will need to continue to improve
Maxwell McIntosh
Ticker: ROKU
Name: Roku
Number of Shares Outstanding: 115.2 M
Market Capitalization: $59.527B
Stock Price History:
August 2, 2021 $421.37
August 3, 2021 $417.80
August 4, 2021 $420.32
August 5, 2021 $403.38
← Post Earnings Share Price
August 6, 2021 $398.47
August 9, 2021 $397.73
August 10, 2021 $379.26
August 11, 2021 $369.21
August 12, 2021 $369.52
August 13, 2021 $357.59
Roku Company Update
Roku, Inc. prides itself on pioneering the bringing the consumer streaming experience to fruition. The TV streaming platform utilizes the Roku Operating System, Roku OS, to provide consumers with on demand access to movies and television episodes, as well as, live sports, music, news and more. Roku also partners with television brand partners that manufacture Roku TV sets built to run on Roku OS. This allows the company to offer Roku branded products within a wide range of price points lowering the barrier of entry for consumers interested in the technology. As a complement to Roku OS and Roku TV, the company additionally offers Roku Smart Soundbars and Streambars that improve a user's auditory experience. The company hopes to capitalize on the growing amount of streaming hours by consumers worldwide and are looking for avenues to monetize user activity. Possible streams of revenue they hope to explore include video advertising, brand sponsorships and subscription services among others.
Naia Morse
Ticker: LULU
Name: lululemon athletica, inc.
Market Capitalization: $49.224B
Shares Outstanding: 124.95M
Stock Price History:
August 2, 2021 $402.65
August 3, 2021 $407.51
August 4, 2021 $410.47
August 5, 2021 $414.39
all time high
August 6, 2021 $408.52
August 9, 2021 $407.64
August 10, 2021 $405.87
August 11, 2021 $408.82
August 12, 2021 $408.91
August 13, 2021 $408.72
lululemon athletica, inc.
Founded in Vancouver, Canada, in 1998, lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails, yoga-inspired, technical athletic apparel and accessories for women, men, and female youth through company-operated stores and their online marketplace. The company’s core values of personal responsibility, entrepreneurship, honesty, courage, connection, fun and inclusion are at the heart of its company culture. At the end of 2020, we operated 521 stores in 17 countries across the globe.
Kendall Smart
Ticker: MAC
Name: Macerich
Number of Shares Outstanding: 206.52M
Market Capitalization: 3.647B
Stock Price History:
August 2, 2021 $16.15
August 3, 2021 $16.45
August 4, 2021 $15.58
August 5, 2021 $16.61
August 6, 2021 $16.84
August 9, 2021 $16.84
August 10, 2021 $17.00
August 11, 2021 $17.15
August 12, 2021 $16.99
August 13, 2021 $16.86
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: $56.1B as of 6/24/2021
Stock Price History:
August 20, 2021: $204.53
August 19, 2021: $203.02
August 18, 2021: $203.82
August 17, 2021: $206.50
August 16, 2021: $213.18
August 13, 2021: $215.11
August 12, 2021: $214.53
August 11, 2021: $218.42
August 10, 2021: $217.26
August 9, 2021: $217.11
NXP Semiconductors Executive Summary
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.
While there is no news to report for NXP this week, I would like to share an interesting discovery from my research instead. Below, you will find a snapshot of my revenue model and in particular relative differences in change for profit and net income relative to revenue, and revenue on a cost basis for each of the four key revenue streams for NXP. An interpretation for 2Q 2021 would be that NXP gained $2.31 in gross profit for every $1 in revenue. For the cost basis it would be for every $1 of cost of revenue, NXP generated $1.07 in automotive revenue. What I would like to highlight is the fact that while the Revenue to Cost ratios of Industrial IoT, Mobile, and Comm. Infra & Other are between approximately .3-.5. Automotive is at a ratio of above 1. In other words, at worst it seems that on a per dollar cost basis that when NXP sells an automotive product, they are generating twice as much revenue as the second best alternative on a cost basis. As a potential investor, this information highlights that for NXP to become a more profitable company, they don’t necessarily require more capital investments or a larger market share. NXP can potentially double revenue it seems by adjusting what products they produce given they can find customers.
Alex Chang
Ticker: LSF
Name: Laird Superfood, Inc.
Number of Shares Outstanding: 8.99M
Stock Price History:
August 2, 2021: $26.67
August 3, 2021: $25.46
August 4, 2021: $23.81
August 5, 2021: $24.15
August 6, 2021: $23.91
August 9, 2021: $25.06
August 10, 2021: $24.46
August 11, 2021: $24.66
August 12, 2021: $19.93
August 13, 2021: $21.49
Laird Superfood, Inc. Company update
Laird Superfood, Inc., co-founded by famous big wave surfer Laird Hamilton, is a producer of plant-based food products ranging from plant-based coffee creamers in powdered and liquid form, coffee blends, hydration energy drink mixes, and snacks, which are functional, nutritious, delicious, and sustainably sourced. The company, based in Sisters, Oregon, went public in September of 2020. Laird Superfood’s commitment to social and environmental justice manifests in the form of their Ohana Cares program, with a number of initiatives such as fighting food insecurity and reducing the environmental impact and greenhouse gas emissions of their operations.
On Wednesday of this week, Laird Superfood released their Q2 2021 earnings, along with the sudden announcement that CEO Paul Hodge would be stepping down. In spite of an increase in net sales to $9.2 million, which represents 64% year-on-year growth and an increase from the previous quarter’s figure of $7.4 million, this is accounted for almost chiefly by revenues from Laird Superfood’s acquisition of Picky Bars, their new revenue stream of harvest snacks.
Sales of coffee creamers, hydration/beverage enhancing supplements, and coffee/tea/hot chocolate products all experienced either near-negligible growth or decreases from the previous quarter. Sales of coffee creamers, Laird Superfoods’ signature product, increased by a paltry 1.13% from Q1 2021, from $5.02 million to $5.08 million. Hydration/beverage supplement sales did see an increase of 54% from $1.06 million to $1.51 million, but coffee/tea/hot chocolate sales decreased by 12.6% from $1.90 million to $1.66 million.
Further compounding these lackluster sales results was the news that the launch of Laird Superfood’s shelf-stable liquid creamer, initially planned for Q3 2021, would be delayed to at least 2022, due to the co-packer’s inability to meet both delivery and quality demands. The company’s previous earnings calls cited the launch of this product as a key reason for optimism regarding Laird Superfood’s growth prospects in the latter half of 2021.
Logan Chang
Ticker: ATVI
Name: Activision Blizzard, Inc.
Number of Shares Outstanding:777.02M
Market Capitalization: $64.11B
Stock Price History:
August 2, 2021: $82.76
August 3, 2021: $79.83
August 4, 2021: $81.52
August 5, 2021: $80.32
August 6, 2021: $82.43
August 9, 2021: $81.41
August 10, 2021: $82.99
August 11, 2021: $85.00
August 12, 2021: $85.17
August 13, 2021: $83.85
Activision Blizzard Company Update: What’s Next for the Call of Duty Creator and CEO Bobby Kotick?
The State Department of California’s sexual discrimination and harassment lawsuit against Activision Blizzard has had significant immediate ramifications on the company. Former Blizzard president, J. Allen Brack, and former president of corporate affairs, Frances Townsend, have both stepped down in light of the lawsuit. Hundreds of employees staged a walkout last Wednesday, demanding greater pay transparency and a “dramatic change to improve conditions for employees at the company, especially women.” The brunt of the lawsuit’s animosity falls on the shoulders of Activision Blizzard CEO Bobby Kotick. Although Kotick already issued a formal apology for the company’s initial response to the lawsuit’s details, Kotick and the company are far from out of the woods.
The gaming industry—and tech at large—have faced accusations of sexism, racism, and a lack of diversity for years. Former Reddit interim CEO Ellen Pao filed a discrimination lawsuit against Silicon Valley VC firm Kleiner Perkins in 2015, bringing long-swirling allegations of sexism in Silicon Valley front and center in the public domain. Uber suffered similar accusations of “rampant sexism” at the company in 2017, causing then-CEO Travis Kalanick to resign. Spurred on by the California lawsuit and its aftermath, several employees across the gaming industry are now speaking out about sexual harassment, pay disparities, and other aspects of the culture. All eyes will now be on how Activision Blizzard's leadership, and Kotick in particular, handles the situation and whether it faces more consequences or changes beyond the announcement of Brack’s and Townsend’s departure.
So far, in Activision Blizzard's case, there has been no explicit demand for the typical next step in corporate scandals: the resignation of the CEO. Under Kotick's leadership, Activision Blizzard has grown into one of the world's biggest gaming companies, with revenue of $2.3 billion last quarter and more than 9,500 employees worldwide. But, Kotick was the center of a controversial say-on-pay proposal earlier this year, earning only 54% shareholder approval after adjourning the initial vote on his over $155 million compensation package. However the situation shakes out, Kotick will find the enormous public pressure—in addition to the pressure from California's investigation itself—impossible to ignore. And much of that comes down to how empowered employees feel to voice their opinions and their discontent.
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