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Facebook’s Drama Continues

April 6, 2019 Published by

And the drama at Facebook continued on Wednesday when more than 540 million of the records, including account names, comments and likes, were publicly available on Amazon’s cloud servers after they were uploaded by two third-party apps.

Mark Zuckerberg spoke to ABC in an exclusive interview this past Saturday and said regulators should play a “more active role” in establishing rules that govern the internet.  Rightfully so, Facebook and the government are discussing a multibillion-dollar fine settlement over the company’s privacy lapses.

And as intenet privacy laws evolve in the US, Zuckerberg said Europe’s GDPR data laws could be a good framework.

Chinese regulator approves first foreign titles in more than a year

April 5, 2019 (updated April 5, 2019) Published by

Chinese regulator approves first foreign titles in more than a year (SCMP)

  • More than a year after the nine-month freeze has ended, the State Administration of Press and Publications (SAPP) published a list of 30 newly licensed foreign online games, including titles submitted by Tencent, NetEase and Perfect World.
  • While China has been approving games on a fairly regular basis, there were some concerns that licenses were only being granted to certain genres of games, or based solely on domestic IP. This new release clearly dispels that risk.
  • The SAPP is currently faced with a backlog of multiple thousand games waiting for approval, and two of the world’s most popular Battle Royale titles (Fortnite and PUBG) are still waiting to be cleared for in-game purchases.

Analysis & Comments

  • As a reminder, I see considerable upside for the Western developers from releasing their IP in China via Tencent and/or NetEase. At the moment I treat this as a free option.
  • Note that Ubisoft is waiting for approval for Rainbow Six Siege in China. The game is already a hit amongst Chinese gamers playing via Steam, but it is only possible to see considerable monetisation when publishing and marketing with a domestic player (Tencent).
  • Previous analysis suggests hat if Ubisoft can sell just 1.5-2m units in China for each of its 3-4 games released each year, and Tencent takes a 50% revenue share, I estimate this could add €9 (over 10% of current value) to the base-case valuation.
  • Activision Blizzard is also hoping to release a Call of Duty mobile game in partnership with Tencent.

Ubisoft Stock Price

Short Sellers Are Out To Get Lyft

April 5, 2019 Published by

Three days ago, I wrote about Lyft and the Greenshoe Option

Wall Street Secrets Revealed #7 – The Greenshoe Option

But the Greenshoe option is really a price stabilizer, to ensure that price doesn’t fall below the IPO price.  When a company’s stock price falls below the IPO price, the IPO is considered “broken,” the company and investors are disappointed and the lead underwriter suffers reputational damage.So if the company’s stock price breaks or falls below the IPO price, the underwriters will buy shares back from the market at the IPO price, which helps to stabilize the price and also removes shares

Cannabis…A Drug Store Near You

April 4, 2019 Published by

When President Donald Trump signed the 2018 farm bill with that came the legalization of hemp (which is defined as a cannabis plant with under 0.3% of tetrahydrocannabinol, or THC) and the opportunity to flood the market with cannabidiol, or CBD in drinks, snacks topical applications, etc.

NOTE: CBD is a non-psychoactive cannabis compound which promises to help everything from anxiety to pain.

This last week, Walgreens announced that they will sell CBD creams, patches and sprays in nearly 1,500 stores in select states.  This comes on the heels of CVS announcing two weeks ago, that it will sell CBD-containing topicals, including

AMD Just Got Upgraded

April 4, 2019 Published by

The semiconductor stocks when from being dogs when in late 2018 by shrinking demand by the smartphone makers to data center owners and the U.S.-China trade war to being darlings of 2019 so far.  And the sector could just be getting started. 

The Digitimes website said Taiwan Semiconductor Manufacturing Company, one of the world’s biggest chipmakers, will ramp up its 7 nanometer production rates thanks to renewed strength in orders for Android devices. The accelerated pace could see TSMC running at full capacity by the third quarter, the Digitimes reported, suggesting industry forecasts of a second half turnaround in global chip

GameStop…Is The Next Blockbuster – Part 2

April 4, 2019 Published by

Almost three weeks ago, I talked about the demise and the end of GameStop.

GameStop…Is The Next Blockbuster

My personal opinion is Gamestop is dead to me.  I think in the coming years, the stock price is going to $0.

Netflix went digital and ended Blockbuster’s physical distribution reign. 

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The same thing is happen with the distribution of games.  Microsoft plans to offer digital downloads at significant discount over the physical version. Sony introduced PlayStation Now, an on-demand game-streaming service that promises to deliver old PlayStation games over the Internet.  And because this form of distribution is cheaper, Sony and Microsoft can sale

Unusual Options Activity In CSI 300 China A ETF, ASHR – Part 2

April 3, 2019 Published by

If you though the first quarter for the US equity markets were smoking, have must of not paid any attention to China’s Shanghai stock market, which has surged almost 30% 2019 and is the best performer of major markets globally.

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Recently, the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to an eight-month high of 50.8 in March, beating the 49.9 forecast.

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Beijing has taken steps to support the economy to combat slowing growth and counteract the US-China trade ware through billions of dollars in planned tax cuts and infrastructure spending…and it might be working.

New orders climbed to their highest level in four

Don’t Take My Word For It, Just Ask The Kroger Insiders

April 3, 2019 Published by

Three weeks ago, I wrote a post about the demise of Kroger Supermarket,

Kroger Is Getting Amazoned

And now it’s not just in the digital world that Kroger must compete against Amazon.  The Wall Street Journal reported last week that Amazon is planning to open dozens of grocery stores in several U.S. cities.Kroger is in the process of getting Amazoned…oh, I already said that, but need to emphasize this point before going to the monthly chart.

Corporate officers and members of the board of directors have deeper insight into a company’s operations than any analyst or hedge fund.  Quite simply, they are in

Restoration Hardware Needs Some Resuscitation

April 2, 2019 Published by

The 10-year note hit its lowest level since late 2017 in recent days. Lower mortgage rates have given the housing market a boost, but the macro view is still showing signs of bearishness. For example, February’s housing starts dropped a more-than-expected 9% and home price growth slowed in January to the slowest pace in 6 1/2 years…which brings me to the post at hand.

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Restoration Hardware (RH), together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bath ware, décor, outdoor and garden, tableware, and child and

Wall Street Secrets Revealed #7 – The Greenshoe Option

April 2, 2019 Published by

Lyft’s stock began trading close to $90 on Friday, but quickly retraced and closed at $78.29.  On Monday, price fell again as institutional investors are questioning the company’s long term profitability in the soon to be era of autonomous vehicles, closing the day at $69.01, below the IPO price of $72.

In 2018, Lyft’s revenue more than doubled to $2.2 billion from $1.1 billion in 2017, according to its filing. But losses mounted, rising to $911.3 million last year from $688.3 million in 2017, though they declined as a percentage of revenue. Total costs and expenses were $3.1 billion in 2018,

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