The List
No changes to the List this week. Most of the stock prices have been rebounding over the past couple of weeks with the exceptions of Square (SQ), pulled down by Bitcoin, and the China stocks Alibaba (BABA) & JD.com (JD), more details below.
See historical performance
Is the market going to wake ‘up’ or fall ‘down’?
I seem to be writing about this same topic each week; basically no one can agree what is happening in the market right now.
What is clear is that speculation and the some smaller-cap tech names have been rebounding over the past few weeks as crypto has pulled back. Does that mean simply that the speculative money has just sloshed back into stocks? The experts can’t agree.
Sometimes it’s ‘hey no worries, just take comfort in a growing market’:
CNBC: Will the S&P hit Tom Lee’s 4,400 target during the summer?
Others are seeing risks everywhere, like the aforementioned speculative rebound & overall inflation, leading to calls for a pullback in late summer:
Then again, the economy is booming on based on reopening. And the buyers are back. So probably we should expect a stronger summer, right?
CNBC: “Halftime” traders debate J.P. Morgan call on market’s ‘next leg higher’
I’m taking a cautious approach and assuming that things will pull back so that then I can be pleasantly surprised if stocks boom instead. That feels like a more reasonable position to be in and less likely to lead to disappointment after having been burned since many growth names collapsed earlier in the year.
Automation at work leads to sweet ARR
It might be a good time to look at UiPath (PATH). They IPO’d in April this year and the stock price fell recently after their Q1 earnings, in spite of posting some impressive numbers.
I’m most interested in the sustained Annual Recurring Revenue (ARR) growth of 64%. With 8,500 customers, big & small, they should have a solid business for years to come. I have not purchased any yet but will be watching it closely.
Highlights from Q1 result from Twitter:
Numbers summary
Key slides from Q1 results
Investors.com: UiPath Stock Tumbles On First Earnings Report As Public Company
Read more about the company
Wikipedia UiPath & Corporate site
Waiting for China tech stocks to bottom
Both Alibaba (BABA) & JD.com (JD) have been on The List for quite some time and while their respective businesses have been booming, their stock prices have been super ‘meh’ for months.
It seems like they haven’t really found their bottom yet but below a few articles that hopefully mean that the bottom is just around the corner.
JD – Someone’s buying a lot of September & October JD options (calls). The theory among friends in Shanghai is this buyer is betting that JD will shine once they release the sales results from the special June ‘6/18’ sales.
Benzinga: Options Traders Bet Big On JD.com
More about ‘6/18’ sale: China’s 618 shopping festival has become the latest battlefield in the country’s brutal e-commerce market after Singles’ Day
BABA – After the Ant Group Hong Kong IPO was suspended, the stock price has struggled to rebound. They paid a massive fine and are hopefully slowly coming back to life with news like this starting to trickle in.
CNBC: Ant Group gets nod to operate consumer finance firm, a key step in fixing regulatory issues
Peloton is confident in their (digital) future
Despite the bad news, recalls and stock price slump, Peloton (PTON) is still going strong as a business. There is no specific news item here for them but I was impressed when I saw that they had more than 600 open jobs on Angel List. AngelList is a startup & investor community site so it tends to attract tech talent.
Scanning Peloton’s jobs, I see a ton of software positions. Make no mistake, viewing them as a “Bike maker” is far too limited. They are fitness software company that happens to have high-end devices. It will be interesting to see how they expand & sprawl through partnerships & technology.
Angel co: Jobs at Peloton Interactive
When will Apple’s stock price wake up
Apple’s (AAPL) Worldwide Developers Conference (WWDC) is finished and there were few eye-catching updates nor new physical products introduced. This meant that it didn’t get too much attention and there wasn’t much movement in the stock price.
The more interesting chatter that I saw was related to how Apple is pushing further into social media territory and using marketing privacy as a feature, driving a bigger wedge between themselves and social apps.
That said, some people are still asking, is Apple dead money?
My feeling is that we’re in a consolidation period and it wouldn’t surprise me for the stock to accelerate into the fall & winter. We can probably expect new MacBooks in the fall and another strong quarter performance, which could wake up the stock.
For a more optimistic take on what WWDC means and the future for Apple, look to Loup Ventures.
WWDC, the Calm Before the Innovation Storm
That’s all for this week. Good luck trading & hodl-ing.
-B
Spare Ventures is a free weekly newsletter, sign up below. Unsubscribe anytime. I will not share your information with anyone.