In Silicon Valley, there are hundreds of privately-held companies known as “unicorns.” That’s a term for a company that has a valuation of over $1 billion based on the last round of equity they sold to private investors. Many of these unicorns will continue to grow and increase in value. Others will fail. A handful will go public. A few have already gone public this year, with more on the way. Some of the biggest names this year have been the ride-sharing companies. In this space, the biggest company in terms of market share isUber (UBER). However, it let competitorLyft (LYFT) go pub...
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Key Takeaways From the Berkshire Hathaway Annual Meeting
While investors typically have a passive role in their investments, they do get to weigh in once a year during a company annual meeting. Usually, that’s a boring affair, laden with Wall-Street speak and accounting terms designed to make eyes glaze over. But there’s one huge exception: the annual meeting of Berkshire Hathaway (BRK-A). The meeting makes Omaha the ultimate travel destination in the first week in May for any investor. It’s a circus with all sorts of booths, attractions, and resembles a bit of a country fair or circus as much as a corporate business meeting. And while cor...
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Tesla Turns to the Markets But It Might Not Help in the Long Run
Tesla (Nasdaq: TSLA) recently announced that it would sell about $2 billion in stock and bonds to help fund its operations after a worse than expected first quarter. Regulatory filings show Tesla plans to raise between $2 billion and $2.3 billion, consisting of $1.35 billion to $1.55 billion in five-year convertible senior notes (debt with a low interest rate of 1.5%-2% that can be converted to stock if the share price rises roughly 30%), plus $650 million to $750 million of common stock. There is little chance of failure since the deal is being managed by Goldman Sachs, Citigroup, Morga...
MoreCrisis Investing 101: Buy During Panics
There’s an old investment adage to buy when things look dour. While that sounds great in theory, human psychology makes it difficult. Even thinking about investing in a stock that’s been declining—or has been making news headlines for a defective product—tends to put our caveman brain into flight mode and avoid it all together. But a pause to think more rationally is where the opportunity arises to beat the market. Recognizing that a company is out of favor for short-term reasons, we can then look a bit further down the line. If that company can solve the problem before it goes bankrupt...
MoreTake a Fast Pass on Disney Shares at This Price
The Walt Disney Company is known for many things—Mickey Mouse, princesses, world-class theme parks. Its more recent acquisitions into Marvel, Pixar, and now Fox Entertainment make it a great company. But a great company doesn’t always mean it’s trading at a great price for investors. That’s the case right now. Shares of the media conglomerate surged following the announcement of its new streaming service, Disney+. With a huge entertainment catalogue and a starting price point of $7 per month, the company will be going head-to-head with the lowest-cost streaming services, some of w...
MoreWhy Kraft-Heinz Fell, and Why It Will Rise Again
Big companies get into trouble all the time. Most of them are big enough to recover.Kraft-Heinz (KHC) is no exception. Right now, expectations at the company are low. That’s due to the company’s $15 billion write off of goodwill on its balance sheet. Goodwill is an intangible item, indicating how much the company paid to put together the merger versus what shares were priced at when the offer was made. It’s a standard accounting item—everything has to balance. It’s one that doesn’t impact cash flow or earnings. However, the write-down was an acknowledgement that the company wasn’t pe...
MoreWhen – or Should—You Buy Lyft Shares?
Going public is a sign that a company has a proven and tested concept. While it may not be profitable yet, it plans to be. The process of going public involves filing paperwork for an initial public offering, or IPO. Ride-share firm Lyft just joined the ranks of publicly-traded companies last week with its IPO, beating out other ride-share company Uber. Initially priced at $72 per share, early trading saw shares rally to over $80, before falling under the IPO price and into the $60 range. What happened? All IPOs should ideally price shares high enough that initial investors can get o...
MoreAre Apple (AAPL) Shares a Buy Following their Event?
Nobody can replace the simplicity and genius that Steve Jobs brought to Apple. But Tim Cook is bringing in lower costs, more revenue opportunities, and ultimately higher profit margins for shareholders. That’s the key takeaway from the Apple event earlier this week. The tech company is adding a suite of services, from a credit card to a digital news subscription service to a video subscription service and so on. While many may have been hoping for some new, outside-the-box product, this is a great development for shareholders. The company has been long derided for coming out with sli...
MoreAvoid Companies that Announce These Things
There’s more to actionable trading ideas than just earnings season. Companies often report extraordinary projects well outside their mandated reporting period. And by doing so, they can give investors some timely tips on when to buy—or when to avoid, or even sell, their company’s shares. For instance, a company reporting a new, lavish headquarters building may look like a great investment. They’re clearly growing and need the space, justifying the multi-million (or even multi-billion) dollar investment. But that’s also a sign that a share price is going to lag—or drop entirely. Even ...
MoreTwo Ways Companies Set Themselves Up For Future Success
Investing is a never-ending marathon, not a sprint. Yet Wall Street traders tend to rely heavily on trading opportunities centering on earnings season. Four times a year, a company reports earnings, as well as their guidance for future quarters. These days can see big swings in a company stock price—making it one of the best times to trade. But there are other developments the other 89 days of the quarter. And with so much focus on bottom-line earnings, more mundane announcements often don’t cause a rapid price move in shares. That’s good news—or bad news—for investors, depending on ...
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