Author: Kuldip K. Ambastha

By Kuldip K. Ambastha

DiDi Global Inc. (DIDI) is a Chinese vehicle for hire company, with corporate headquarters in Beijing. The company went public on Wednesday, June 30, 2021, on the New York Stock Exchange (NYSE). On Tuesday, July 6, 2021, the stock had a significant -19.6% decline for the day. The Cyberspace Administration of China has announced a probe of DiDi. 25 DiDi mobile apps are going to be removed from app stores, with the Cyberspace Administration of China stating that these apps have been illegally collecting user data. Furthermore, the Cyberspace Administration of China has instructed DiDi to stop registering new users.

The prospect of aggressive Chinese government crackdowns on various China-linked companies such as DiDi has spooked many investors. While Tuesday, July 6, 2021 had the largest daily percentage decline for the stock of DiDi since the company went public, every trading day from Friday, July 2, 2021 through Thursday, July 8, 2021 showed a negative daily percentage return for the stock. On Friday, July 9, 2021, instead the stock was up by +7.3% for the trading day. If the Communist Party of China makes more efforts to rein in companies connected to the People’s Republic of China, expect even greater turbulence going forward.

Keywords – DiDi Global Inc., DiDi Global, DiDi, DIDI, vehicle for hire, apps, New York Stock Exchange, NYSE, People’s Republic of China, China, Communist Party of China, Cyberspace Administration of China, government, regulation, user, data.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in DIDI.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

Krispy Kreme, Inc. (DNUT), a specialty retailer mainly focused on doughnuts, had its second IPO during this past trading week. Thursday, July 1, 2021 was the first trading day for its stock on the NASDAQ Global Select (NasdaqGS) Market platform. The stock reference price range was initially set at $21-$24 per share, but the final reference price ended up at $17 per share. On Thursday, July 1, 2021, the stock opened at $16.30 per share and closed at $21.00 per share. On Friday, July 2, 2021, the stock closed at $19.12 per share.

Despite the volatility seen in these first two trading days, Krispy Kreme CEO Michael Tattersfield is bullish about the long-term prospects for the company. Krispy Kreme has aggressive international and U.S. expansion plans which may drive growth in the future. In 2016, JAB Holdings had taken Krispy Kreme private, after which Krispy Kreme management claims significant brand, cultural, and business model changes have been made. Through the IPO process, 29.4 million shares were sold and a total of $500 million was raised. Krispy Kreme was unable to raise $640 million as initially hoped for, and the $500 million will be used to pay down debt.

Keywords – Krispy Kreme, Inc., Krispy Kreme Inc., Krispy Kreme, DNUT, JAB Holdings, NASDAQ Global Select Market, NasdaqGS, NASDAQ, IPO, Initial Public Offering, initial public offering, public, private, specialty, retail, retailer, doughnut, doughnuts.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in DNUT.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

On Wednesday, June 23, 2021, U.S. Supreme Court rulings (on Collins vs. Yellen, 19-422; Yellen vs. Collins, 19-563; and Mnuchin vs. Yellen, 19-563) led to Federal National Mortgage Association (Fannie Mae, FNMA) having a -32.1% loss and Federal Home Loan Mortgage Corporation (Freddie Mac, FMCC) having a -36.8% loss. Fannie Mae had been chartered by the U.S. Congress in 1938 and buys mortgages in the secondary mortgage market from large commercial banks, pools the mortgages into securities, and sells these securities to investors around the world. Freddie Mac had been chartered by the U.S. Congress in 1970 and buys mortgages in the secondary mortgage market from smaller banks to pool and sell akin to what is described in the previous sentence related to Fannie Mae.

Fannie Mae and Freddie Mac are both overseen by the Federal Housing Finance Agency (FHFA). As government-sponsored enterprises (GSEs) which are now publicly traded, Fannie Mae and Freddie Mac are well-known for playing a large role in providing liquidity to the American mortgage market. The U.S. Supreme Court rulings allowed President Joe Biden to remove the Director of the FHFA and replace this individual with an Acting Director of the FHFA. Also, the U.S. Supreme Court dismissed the claim of Fannie Mae and Freddie Mac shareholders that sought to terminate a 2012 decision which directed Fannie Mae and Freddie Mac to send profits to the U.S. Treasury. This claim was sent back to a lower court (the 5th Circuit Court of Appeals) to determine what remedy shareholders may or may not have as related to the 2012 decision on profits.

Various efforts to overhaul Fannie Mae and Freddie Mac over the years have failed to gain traction. With the change in leadership seen at the top of the FHFA, expect a change in vision as to how Fannie Mae and Freddie Mac should operate going forward. Fannie Mae and Freddie Mac profits will continue to go to the U.S. Treasury and not shareholders, unless the 5th Circuit Court of Appeals rules otherwise in the future.

Keywords – Federal National Mortgage Association, Fannie Mae, Fannie, FNMA, Federal Home Loan Mortgage Corporation, Freddie Mac, Freddie, FMCC, U.S. Supreme Court, 5th Circuit Court of Appeals, U.S. Congress, U.S. Treasury, Federal Housing Finance Agency, FHFA, Director, Acting Director, government-sponsored enterprise, GSE, mortgage, loan, President Joe Biden.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in FNMA or FMCC.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

On Monday, June 14, 2021, the stock of Corsair Gaming, Inc. (CRSR) had a +11.2% gain for the trading day. Why? Corsair Gaming is a new meme stock being followed closely by people on Reddit’s r/WallStreetBets and other online platforms. Corsair Gaming provides high-performance hardware equipment for videogame players and content creators. The company has benefited from lockdowns initiated worldwide due to the coronavirus pandemic. With more and more people staying at home, the company’s hardware equipment saw greater demand than in the past. If and when public health conditions massively improve in the future, this greater demand may fade away. Retail investors on Monday, June 14, 2021 were able to generate a big gain for the trading day through Corsair Gaming, but the rest of the trading week saw negative trading day returns posted instead for the stock. As always, the future is uncertain and only time will tell if Corsair Gaming can deliver strong, positive trading day gains going forward.

Keywords – Corsair Gaming, Inc., Corsair Gaming, Corsair, CRSR, videogaming, videogames, videogame, gaming, games, game, hardware, equipment, Reddit, r/WallStreetBets, COVID-19, coronavirus, pandemic, lockdown, public, health, past, present, future.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in CRSR.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

Biogen Inc. (BIIB), a biotech company, had a memorable Monday of this past trading week. On Monday, June 7, 2021, Biogen had a +38.3% gain for the day on its stock. Biogen’s Alzheimer’s disease treatment was approved by the U.S. Food and Drug Administration (FDA) as part of an accelerated approval process. The intravenous infusion treatment is called ADUHELM (Aducanumab), and a wholesale treatment price for it is $56,000 per year. In approximately two weeks from now, Biogen is expecting to start shipping the treatment to various infusion centers. Cost and efficacy concerns exist around ADUHELM, which is not a full cure for Alzheimer’s disease.

While controversial, ADUHELM may improve the lives of people suffering from Alzheimer’s disease. As part of the accelerated approval process, the FDA has required a Phase 4 clinical trial to further assess ADUHELM. After the results of the Phase 4 clinical trial are known and analyzed, the FDA could take ADUHELM out of circulation. For now, investors in the stock benefited from the +38.3% gain seen from ADUHELM on Monday, June 7, 2021 for Biogen, a company in the boldly innovative and highly volatile biotech sector.

For past coverage of this stock, see below:

What Caught Our Attention in the Investment World? – Week of June 15-19, 2020

What Caught Our Attention in the Investment World? – Week of October 21-25, 2019

Keywords – Biogen Inc., Biogen, BIIB, biotechnology, biotech, Alzheimer’s, disease, treatment, ADUHELM, Aducanumab, Food and Drug Administration, FDA.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in BIIB.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

As the table above shows, AMC Entertainment Holdings, Inc. (AMC) had a volatile trading week like what a rollercoaster ride could entail. AMC Entertainment Holdings is a holding company with movie theaters all over the world. AMC Entertainment Holdings is one of several meme stocks watched closely by retail investors on Reddit’s r/WallStreetBets and other online platforms. As coronavirus-related lockdowns are easing, AMC Entertainment Holdings has started to see improved movie ticket sale figures, though the future is still quite uncertain and movie ticket sale figures have not yet reached pre-lockdown levels. Many consumers prefer to watch movies online from home currently, as opposed to going to movie theaters.

Even as professional investors are seeking to take undue risks out of their investment portfolios and / or are going short on the shares of AMC Entertainment Holdings due to weak fundamentals, retail investors are still bullish about AMC Entertainment Holdings. On Thursday, June 3, 2021, AMC Entertainment Holdings reaped the rewards of the bullish sentiment by raising $587.4 million through a share sale. This new money could strengthen the corporate balance sheet and fund new projects, among other potential uses. Like a rollercoaster ride as noted above, the stock price of AMC Entertainment Holdings has been going up and down in the recent past. Only time will tell if this particularly wild rollercoaster ride ends well or not for AMC Entertainment Holdings.

Keywords – AMC Entertainment Holdings, Inc., AMC Entertainment Holdings, AMC Entertainment, AMC, movie, theater, ticket, sales, retail, professional, institutional, investor, meme, stock, share, equity, Reddit, r/WallStreetBets, COVID-19, coronavirus, pandemic, lockdown, rollercoaster.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in AMC.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

Virgin Galactic Holdings, Inc. (SPCE) had two impressive trading day returns in the past trading week. On Monday, May 24, 2021, the stock had a +27.6% return. Over the past weekend, the company had its first successful test flight to space in over two years. Also, on Thursday, May 27, 2021, the stock had a +15.1% return. Bullish new Wall Street equity research coverage drove this return for the trading day. If Virgin Galactic Holdings can continue to have successful test flights in the future plus bring down costs, space tourism may become a mainstream part of people’s lives going forward.

Keywords – Virgin Galactic Holdings, Inc., Virgin Galactic Holdings, Virgin Galactic, Virgin, Virgin Group, Sir Richard Branson, Richard Branson, test flight, space, space tourism, Wall Street, equity research, revenues, costs.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in SPCE.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

On the trading day of Thursday, May 20, 2021, the stock of Kohl’s Corporation (KSS) had a -10.2% loss. Kohl’s Corporation, a prominent American department store retail chain, beat its 1Q2021 consensus estimates in terms of key metrics such as revenues, sales, and earnings. However, the stock price still saw a significant decline due to skepticism from Wall Street research analysts. Despite the strong 1Q2021 results, Kohl’s Corporation management only raised its full fiscal year performance forecast slightly. Full year sales growth of about 26% would be needed for Kohl’s Corporation to be able to match the sales figure seen in fiscal year 2019. This is a high hurdle for management to be able to potentially surpass.

Kohl’s Corporation management was cautious and conservative in updating the company’s performance forecast figures, perhaps due to several factors such as the potential end of government stimulus programs, problems with the supply chain, and increases in inventory levels being held in anticipation of consumers shopping more as coronavirus pandemic lockdowns are eased worldwide. It remains to be seen what the stock of Kohl’s Corporation will do going forward in terms of overcoming Wall Street skepticism.

Keywords – Kohl’s Corporation, Kohl’s Corp., Kohl’s, KSS, American, department store, retail chain, 1Q2021, revenues, sales, earnings, stock price, management, forecast, COVID-19, coronavirus, pandemic, lockdowns, public health, Wall Street, research analysts, skepticism, skeptic, cautious, conservative.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in KSS.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

The Trade Desk, Inc. (TTD) is a global technology company in the digital advertising campaigns space. The company was founded in 2009 and is headquartered in California. Its stock went public in 2016.

On Monday, May 10, 2021, the company’s stock saw a dramatic -26.0% loss for the trading day. Though key performance metrics (such as earnings, revenues, and net income) for the last quarter (1Q2021) were broadly positive, investors bid down the share price. As part of announcing details related to 1Q2021 performance, corporate executives ascribed the company’s success mainly to programmatic ad buying in the connected TV arena.

(Programmatic ad buying refers to a way to buy and optimize digital advertising, without a need to negotiate financial terms directly in-person with publishers. Connected TV, also known as smart TV, refers to when a TV unit has integrated Internet and interactive Web 2.0 features allowing a user to browse the Internet, stream music & videos, and view photos alongside watching standard TV content.)

Success in this one facet of the digital advertising campaigns space was not enough for investors, who presumably were wanting to see success across multiple facets instead. Fears of potential inflation did not help either, and led to stocks in the technology sector showing volatility on a day-to-day returns basis during the trading week. If inflation is seen in the future, then interest rates worldwide may be raised by central banks, investors may prefer to save as opposed to invest, and riskier growth equity sectors (such as the technology sector of which The Trade Desk, Inc. is a part) will suffer.

Keywords – The Trade Desk, Inc., The Trade Desk, Trade Desk, TTD, technology, tech, digital advertising, digital ads, California, performance, metrics, earnings, revenues, net income, 1Q2021, programmatic ad buying, connected TV, smart TV, Internet, Web 2.0, inflation.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in TTD.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.

By Kuldip K. Ambastha

Peloton Interactive, Inc. (PTON) is a luxury exercise gear maker which was in the news prominently during this past trading week. The company was also mentioned on this website once before (What Caught Our Attention in the Investment World? – Week of December 23-27, 2019).

On Wednesday, May 5, 2021, the company’s stock saw a -14.6% loss for the day. After safety concerns were discovered, Peloton had to recall its Tread and Tread+ treadmill machines. Despite the safety issues, Peloton still has an extremely loyal base of customers. Peloton management views the safety recall as only impacting the stock’s performance over the short-term, and not over the long-term. The recall will likely cost about $165 million in lost revenues.

Initially, Peloton management had denied safety warnings communicated to the company by regulators, but then later on apologized for what happened in terms of software and hardware issues as part of announcing the safety recall on Wednesday. Stationary bikes form most of the company’s revenue presently. Treadmills only compose a small percentage of the company’s revenue at this time, but are seen as a potentially large part of future revenues. Aside from the recall, Peloton has struggled with expanding supply to meet customer demand for several months. Peloton management has said it is firmly committed to changing its practices in order to improve going forward.

If customers stay loyal and problems are fixed, Peloton may improve its stock’s performance in the future.

Keywords – Peloton Interactive, Inc., Peloton Interactive, Peloton, PTON, luxury, exercise, gear, fitness, health & wellness, products, services, Tread, Tread+, treadmill, stationary bike, safety, recall, regulation, customer loyalty, software, hardware, revenues, supply, demand, short-term, medium-term, long-term, past, present, future.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in PTON.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2021 – Ambastha Financial LLC.