The standard method of determining what industry a company is in is by looking at its underlying business. By that standard, Tesla is clearly in the auto business. Virtually all of the company’s revenues and costs are related to building, selling, and servicing automobiles. But there is another way of checking whether a company is an industry that has implications for investors. The idea is that if two companies are in the same industry, then their stock prices should tend to move together. For example, when the Covid-19 crisis arose, the stocks of all major airlines collapsed together. This raises the question of whether using this second criterion Tesla is in the auto industry. Before turning to the results, a couple caveats are in order.
(more…)Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Gold Pullback Needed
Note from Tim: I didn’t write this! Anyway………
The gold price reached a new record high this week, beating the previous record set on Sept. 5, 2011. The gold price kept rising past the record high to new heights as the week wore on, and now the $1,940 record that was set on July 28 appears to have become the new floor for the price amid today’s pullback.
The organization said this week’s record high gold price has been driven by a combination of several factors. They are high uncertainty, very low interest rates and positive price momentum. All of these factors support investment demand, but the World Gold Council added that there are reasons to believe that the market is still early in the cycle.
The coronavirus pandemic is still far from being over, and its impact on the world’s economy is still being worked out. The organization said some countries like China, South Korea and parts of Europe seem to be turning a corner. Globally though, hope of a rapid recovery is gone.
(more…)Best H1 Activist Short Calls
Those shorting stocks during the COVID-19 pandemic have made more than $50 billion in profits. Billionaire Bill Ackman recently said that activist short sellers are far more efficient than regulators at unearthing corporate frauds, and that regulators should work with short sellers. Here we take a look at the top 10 best performing activist short calls in the first half of 2020 that paid off big time.
Shorting stocks is a challenging business, especially during an economic crisis when regulators try to restrict short selling. But a crisis also brings tons of opportunities for short sellers.
Short sellers bet that a stock is going to fall. They borrow shares of a stock and sell them, hoping that it would tumble within a specified period. When it falls, they buy from the open market at dirt cheap prices and return the borrowed shares to the lender, pocketing the difference.
(more…)Quintessential Capital
Quintessential’s most recent target is Akazoo. The firm released its short thesis on the Luxembourg-based company in April. Akazoo was listed on the NASDAQ but then delisted in May following Quintessential’s campaign.
In Grego’s short thesis for Akazoo, he described it as “a castle of cards” and “a scheme conceived by management to enrich themselves at the expense of shareholders.” The company marketed itself as a successful multinational music streaming company that could rival Pandora and Tidal in terms of size, revenue and profits.
However, Grego argued that Akazoo was “just a tiny, loss-making company based in Greece with negligible user base and sales.” He believed that the company’s accounts may have been hiding serious irregularities or worse.
(more…)Accelerating Toward Dollar Crisis
As US economy is heading toward its disastrous 2nd quarter results, the Trump administration is considering the expansion of the trade war to finance, which could destabilize the US dollar and derail the post-pandemic global economy.
After its failure in the COVID-19 containment and the expected -53 percent plunge of real GDP growth in the 2nd quarter, President Trump’s re-election campaign is in serious trouble. To deflect the blame, his administration has launched a series of provocative measures against China thereby fueling elevated bilateral tensions.
Worse, the White House is reportedly considering moving from a bilateral trade war to an effort to exclude China from the dollar-denominated international payment network. In Beijing, that would be seen as weaponization of US dollar.
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