T Stock – The GameStop Music Is Playing Again. Don’t Be Left Standing When It Stops.
The meme trade is back.
And it’s not just GameStop. Another meme stock,
is up 15% in premarket trading after jumping 18% Wednesday.
was also getting a bump.
Meme stocks don’t fall into traditional growth or value stock buckets. Rather, they’re companies popular on social media, typically posted about with many rocket, star and diamond emojis.
Everyone loves to get rich quick, but the moves in GameStop make little sense. They are a function of tracking tweets and posts, not earnings or cash flow. And the financials aren’t pretty.
GameStop same-store sales fell 24% year over year in the company’s most recent reported quarter. The company has roughly $1.2 billion in debt, isn’t making money right now, and burned through roughly $90 million in cash over the past couple of years.
Barring a miraculous business turnaround, GameStop stock will most likely be down significantly in the long run.
Traders believe they know what they are doing. But the key with meme stocks is to not be the one left standing when the music in the current game of meme-stock musical chairs stops.
And the music always stops.
*** Join Barron’s senior managing editor Lauren R. Rublin, healthcare industry reporter Josh Nathan-Kazis, and Geoffrey Porges, director of therapeutics research at Diversified Biopharma, for a discussion on the learnings from the Covid pandemic today at noon. Sign up here.
Johnson & Johnson’s Vaccine on Track for FDA Approval by the Weekend
The long-awaited Covid-19 vaccine from
Johnson & Johnson
is on the verge of being approved by the Food and Drug Administration this week. Because it involves a single shot and doesn’t require ultracold storage, its rollout is expected to accelerate U.S. vaccination efforts and make it easier to reach underserved and rural populations.
After finding the vaccine safe and effective on Wednesday, the FDA will turn next to the recommendation of its advisory committee, which meets Friday, to decide on emergency use authorization. The
drugs received such approval within a day after they were endorsed by the same committee.
- The J&J vaccine appears less effective overall than approved drugs from Pfizer and Moderna—around 66% versus 95% and 94%, respectively. While it is 72% effective for the overall U.S. population, it is only 42% effective among people 60 and over.
- J&J plans to make 20 million doses available by the end of March and a total of 100 million doses by the end of June. Pfizer and Moderna combined have shipped 80 million doses to the U.S. to date, and are promising a total of 200 million by the end of March.
What’s Next: The J&J vaccine also appears to be 52% to 64% effective in South Africa, where a worrisome strain first emerged that has since spread to the U.S. Rival Moderna said Wednesday that it is starting trials of a booster shot that specifically protects against that variant.
—Janet H. Cho
Chinese EV Makers’ Earnings Will Signal How Hot the Market Still Is
After a rocky few months for Chinese electric vehicle makers, investors will soon learn how well three, fast-growing players in the world’s largest car market are doing at narrowing
global lead when they report quarterly earnings.
which reported today, generated positive cash flow in the fourth quarter. Its deliveries rose 67% in the quarter. It said it would deliver 11,000 vehicles in the first quarter, a decline from the fourth quarter. The stock is up more than 150% since its summer IPO, but shares are down 35% over the past three months.
Analysts expect losses for
which reports March 1 and is the largest Chinese-based EV maker by sales, delivering almost 43,000 vehicles last year. Its shares are down 4% over the past three months.
which is the smallest of the three companies and makes a luxury sedan and SUV, reports March 8. Its shares are down 45% over the past three months and analysts expect a loss.
What’s Next: Beyond earnings, investors will pay attention to the outlook for deliveries. For now, Tesla doesn’t have to worry about anyone stealing its crown: It delivered about five times as many vehicles as Li, NIO and Xpeng combined in 2020.
—Janet H. Cho
Federal Reserve’s Financial-Services Systems Are Disrupted for Hours
The Federal Reserve’s financial-services systems were down for several hours on Wednesday. A Treasury Department official said there was no indication of a cyberattack, according to The Wall Street Journal.
- The systems, which are used by banks, businesses and government agencies for electronic fund transfers, redeeming and selling of Treasury bills, among other services, were disrupted by an unspecified error, the Journal reported.
- “While root cause is currently being evaluated, there is no indication that the issue is the result of a cyberattack,” a Treasury Department official said in a statement to regulators, according to the Journal.
- A Federal Reserve spokesman said the central bank would extend hours of operation to handle transactions disrupted by the outage, the Journal reported.
What’s Next: Central banks in other countries—including England, Brazil and Mexico—implemented instant payment systems more than a decade ago. The Fed doesn’t anticipate doing so until 2023.
Recession Takes Hold in Europe Amid Regional Pandemic Resurgences
A two-day video summit of EU heads of states and governments starting today will have to grapple with an uptick of the pandemic in some countries, as the continent’s economic woes could worsen with the persistent problems of the block’s vaccination campaigns.
- New infections are on the rise in France, Hungary and the Czech Republic even if they are in gradual decline elsewhere on the continent.
- Only about 6% of the EU population has so far received one dose of a vaccine, in contrast with the UK. (28%) and the U.S. (20%).
- A survey from the European Central Bank showed Thursday that banks in the eurozone had tightened credit conditions last month on worries about the financial state of some or their clients.
- The ECB’s chief economist said in speech Thursday that the preservation of “favorable financing conditions” in the eurozone was the major reason why “ample monetary stimulus remains essential” in the coming months.
What’s Next: Calls for EU leaders to agree on a new round of large fiscal stimulus, modeled after the U.S., are likely to remain ignored this week. That will reinforce the solitude of the central bank as main architect of the economic response to the pandemic.
Finding Investment Opportunities in Healthcare Discussed
Pfizer’s chief scientist Mikael Dolsten outlined the company’s plan for fighting the spread of Covid-19 and helping to bring an end to the pandemic at a virtual Barron’s Healthcare Roundtable event on Wednesday.
- Pfizer is working on novel oral and intravenous Covid-19 treatments that “are able to actually act against all mutants and many different coronaviruses,” Dolsten said. An oral antiviral designed to combat Covid-19, as well as its variants and other forms of coronavirus, is on track to enter a clinical trial in the first quarter of 2021.
- The company’s intravenous antiviral is currently in a Phase 1b trial; Pfizer expects that treatment to enter a Phase 2/3 trial by the second quarter of this year.
- While therapeutics will have a role in fighting infections, Dolsten said large-scale vaccination is key to preventing future mutations.
- The event also featured Louise Chen, Cantor Fitzgerald managing director and senior equity research analyst, who spoke about the opportunities in China for healthcare investors. “Within the next 10 years, we think the Chinese domestic pharma market could become one of the largest pharmaceutical markets in the world, if not the largest.”
- Charles D. Kennedy, managing partner and CEO of Blue Ox Healthcare Partners, said there’s still plenty of healthcare innovation to bring to the market. “I believe we’re only scratching the surface of the power of proteomic analysis, genomic analysis, whole-genome sequencing … and on and on and on.”
What’s Next: Watch the entire conversation here.
If you invested in Bitcoin or other cryptocurrencies in 2020, how will it affect your taxes?
Treasury Department Secretary Janet Yellen is not big on Bitcoin, a point she reiterated recently when she called the digital currency speculative and “inefficient.”
That doesn’t mean Yellen and the department she leads—which includes the Internal Revenue Service—don’t care about the cryptocurrency.
Now that it’s income tax filing season, people holding Bitcoin and other cryptocurrencies will see the IRS is actually very curious about a taxpayer’s cryptocurrency transactions.
So much so, they’ve tweaked the first page of the Form 1040—the main piece of income tax paperwork taxpayers file yearly—to ask taxpayers if they’ve received, sold, sent, exchanged “or otherwise acquire[d] any financial interest in any virtual currency?”
A ‘yes’ could mean more taxes, but not necessarily so, tax experts told MarketWatch.
Cryptocurrencies keep getting a higher profile. Last week, Bitcoin hit a market value above $1 trillion. As more people eye cryptocurrency, more people have to face up to the tax rules at play.
“It can be super, super easy, or it can be insanely complicated,” said Matt Metras of MDM Financial Services in Rochester, N.Y. Some transactions can spur multiple tax events at once, but tax professionals have scant IRS guidance to work off, he said.
Here’s a primer on some tax time issues when it comes to cryptocurrency.
Read more here.
—Newsletter edited by Matt Bemer, Anita Hamilton, Mary Romano, Stacy Ozol, Ben Levisohn
T Stock – The GameStop Music Is Playing Again. Don’t Be Left Standing When It Stops.
Tags: T Stock