Archive for Emily Graffeo

Virgin Galactic stock-price target slashed 39% by Bank of America as analysts expect delays in commercial space flight timeline

Richard Branson in space aboard a Virgin Galactic rocket plane.
Richard Branson floats in space aboard a Virgin Galactic rocket plane.

Bank of America slashed its Virgin Galactic price target by 39% on Friday, citing concerns over delays in the company's commercial space flight timeline and lack of catalysts for the stock in the short-term.

Analysts led by Ronald J. Epstein lowered their price target to $25 from $41. Shares of Virgin Galactic traded just above $24 Friday afternoon and are down 4.8% for the week.

BofA said that a longer maintenance for Virgin's Eve Mothership will delay the company's first commercial passenger flight to late into the third quarter of 2022 from early 2022. This will result in lower short-term earnings estimates, said the analysts.

In the long term, analysts also anticipate that Virgin's shot at orbital customer travel won't come to fruition until 2035. They previously estimated 2028 for the base case.

Meanwhile, Virgin Galactic lacks short-term catalysts because of the delayed commercial space flight, BofA said. The stock may also face downward pressure as the next lock-up period expires in October, they added.

Virgin Galactic is up 1.9% year-to-date.

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The Delta variant has derailed the speed of the economic recovery and will prompt the Fed to delay tapering plans, Guggenheim’s Minerd says

Guggenheim's Scott Minerd speaks in front of a crowd
Scott Minerd in 2019
  • COVID-19 Delta variant is "throwing a wrench into the forward progress of the economy," said Guggenheim's global CIO.
  • The variant is likely to prompt the Fed to take a more cautious approach to the speed of its tapering plan, said Scott Minerd.
  • Wall Street is anxiously awaiting the next few Fed meetings for more clues on the bank's timeline for reducing asset purchases.
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COVID-19's Delta variant has made a material impact on consumer behavior and will delay the Fed's timeline for tapering asset purchases, Guggenheim's global chief investment officer said Wednesday.

Although Fed chief Jerome Powell has said it's not clear yet whether the Delta variant will have important effects on the economy, Scott Minerd said various data points suggest the variant is already having a negative impact on the recovery.

"The Delta variant is throwing a wrench into the forward progress of the economy," said Minerd, citing the July retail sales miss and slumping credit card spending, particularly on areas including restuarants, air travel, and hotels.

He also pointed to last week's unexpected drop off in the University of Michigan Consumer Sentiment survey, which historically moves in tandem with consumption patterns.

While the economic recovery is unlikely to fully reverse, a slowdown in economic activity will mount in the coming weeks, Minerd said.

This in turn will prompt the Fed to take a more cautious approach to the timing and speed of tapering plans, keeping Treasury yields low, he added.

When the Fed does decide to taper, yields could rise, would could change current assumptions underpinning stock valuations, according to Richard Saperstein, Treasury Partners CIO. The Fed's continued support of the economy is typically credited with propping up stock valuations.

Analysts on Wall Street have varying predictions for when the Federal Reserve will announce a plan to taper asset purchases-and when the central bank will go ahead with the plan.

On Thursday, Bank of America pulled forward its taper expectations to November 2021. The firm previously expected the Fed to start a reduction of purchases in January 2022.

BlackRock's Bob Miller, head of Americas fundamental fixed income, said the Fed could announce tapering in September and begin to taper as early as October 2021.




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SEC charges 3 former Netflix employees for running an insider trading ring that made more than $3 million

netflix
  • The US Securities and Exchange Commission charged three former Netflix employees and two close associates for insider trading.
  • One former Netflix employee tipped non-public information about Netflix's subscriber growth to his friends, per the SEC complaint.
  • The SEC said the individuals made over $3 million through the illegal trading.
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The US Securities and Exchange Commission charged three former Netflix employees and two close associates who were involved in an insider trading ring that generated over $3 million in total profits, the regulator said Wednesday.

According to the SEC's complaint, Sung Mo "Jay" Jun, while employed at Netflix in 2016 and 2017, repeatedly passed information related to the growth in Netflix's subscriber base to his brother, Joon Mo Jun, and his close friend, Junwoo Chon, who both used it to trade in advance of multiple Netflix earnings announcements.

After Sung Mo Jun left Netflix in 2017, he obtained confidential subscriber growth information from another company insider, Ayden Lee, the US regulator said. He then traded himself and tipped his friends before Netflix earnings announcements through 2019.

The SEC also alleges that Sung Mo Jun's former Netflix colleague Jae Hyeon Bae tipped Joon Jun based on Netflix's subscriber growth information before the company's July 2019 earnings.

The regulator alleges that several of the individuals tried to "evade detection" by using encrypted messaging applications and paying cash kickbacks.

The SEC's complaint was filed in federal court in Seattle. All the individuals but Bae have consented to the entry of judgement which, if approved by the court, would enjoin each from violating the charged provisions, with civil penalties, if any, to be decided later by the court, said the SEC.

Bae consented to the entry of a final judgment, also subject to court approval, permanently enjoining him from violating Section 10(b) of the Exchange Act and Rule 10b-5 and imposing a civil penalty of $72,875.

Sung Mo Jun also agreed to an officer and director bar. The complaint said Sung Mo Jun was at the "center" of the insider trading ring.

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Legendary investor Bill Miller doubled down on his crypto conviction and bought Coinbase in the 2nd quarter of 2021

Bill Miller

Legendary fund manager and bitcoin bull Bill Miller took a position in cryptocurrency exchange Coinbase during the second quarter of 2021, a recent 13F filing shows.

Miller Value Partners scooped up 121,185 shares of Coinbase worth roughly $30 million in the quarter. Coinbase is currently down nearly 24% from the close on its IPO day in April.

Miller has been a longtime bitcoin bull as he started buying the cryptocurrency around $200 to $300 a coin.

In a recent interview, he said his average cost into bitcoin was about $500. Bitcoin is currently trading around $45,000, suggesting Miller has scored a roughly 9000% gain on his investment.

The fund manager lost roughly 90% of his net worth during the financial crisis, but has said that his early bets on both Amazon and bitcoin have propelled him to billionaire status.

Miller Value Partners also took up a $130 million stake in software company Splunk in the second quarter. It's one of the largest holdings in the fund, behind more notable names including Amazon and Alibaba.

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US stocks mixed as retail sales data shows spending slowed more than expected in July

trader upset angry sad nyse

US stocks were mixed on Tuesday after spending at retailers and restaurants fell more than expected in July and concerns mounted over the pace of the economic recovery.

Retail sales fell 1.1% to $617.7 billion last month, the Census Bureau announced Tuesday morning. Economists surveyed by Bloomberg expected sales to fall 0.2% to roughly $620 billion.

Investors are also adding the Afghanistan crisis to a growing list of factors that could impact stock returns, said Nigel Green, chief executive and founder of deVere Group. The fallout from the delta variant of COVID-19, concerns about peak earnings, disappointing Chinese economic data, and how this week's Fed minutes will impact policy are among the other concerns.

"There will be questions regarding stability in the Middle East, the global influence of the U.S. and the mounting pressure on Biden, the prospect of increasing international terror threats, and the growing dominance of China's renminbi," Green said.

Federal Reserve Chairman Jerome Powell will host a town hall with educators and students today at 1:30 pm ET. Traders will be listening for the Fed chair to drop any hints about changes to economic policy.

Here's where US indexes stood at the 9:30 a.m. ET open on tk:

Boston Fed President Eric Rosengren added fuel to the debate over when the Federal Reserve will begin tapering late Monday, when he said that continued job gains could give the central bank reason to cut its monthly asset purchases.

"If we get another strong labor market report, I think that I would be supportive of announcing in September that we are ready to start the taper program," the Fed policymaker told CNBC.

West Texas Intermediate crude slipped 0.37% to $67.05 per barrel. Brent crude, oil's international benchmark, slid 0.1%, to $69 per barrel.

Gold was flat at $1791 per ounce.

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Trade volumes on OpenSea have surged nearly 950% in the last month as the NFT craze continues stronger than ever

Non-fungible tokens are purchased using cryptocurrencies, such as ether coins.
  • Trade volumes on NFT marketplace OpenSea have soared in the last month as the craze for non-fungible tokens continues.
  • OpenSea has done $1.22 billion (or 387,100 ETH) in volume in the past 30 days, a roughly 950% increase from the previous 30 days, per DappRadar.
  • The NFT resurgence may be a sign that animal spirits among crypto investors are reawakening, said one industry expert.
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Trade volumes on NFT marketplace OpenSea have soared in the last month as the craze for non-fungible tokens continues.

OpenSea has done $1.22 billion (or 387,100 ETH) in volume in the past 30 days, a roughly 950% increase from the previous 30 days, per DappRadar. This August, the exchange has seen nearly $800 million in volume, according to data compiled by The Block Crypto. It's staggeringly higher than the $284 million the marketplace saw for the month of July.

Opensea's trade volume increase comes as Ether's price rallies. The native token behind the Ethereum blockchain is up roughly 70% over the last month and currently trades around $3,200.

Meanwhile, Opensea has seen 1.36 million transactions over the last 30 days, a 180% increase in the previous 30-day period.

The NFT resurgence may be a sign that animal spirits among speculative cryptocurrency investors are reawakening, said Paolo Ardoino, CTO of cryptocurrency exchange Bitfinex. He highlighted altcoin Solana's impressive gain as another sign of speculation in the cryptocurrency space. The coin jumped nearly 30% to an all-time-high Monday.

Last month, OpenSea raised $100 million in Series B funding led by the high-profile venture capital firm Andreessen Horowitz, also known as a16z.

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Billionaire investor Seth Klarman has nearly $900 million in SPACs – but trimmed his stake in Bill Ackman’s blank-check company during the 2nd quarter

Seth Klarman

Billionaire investor Seth Klarman's Baupost Group has nearly $900 million invested in special purpose acquisition companies, according to data compiled by CNBC.

But during the second quarter of 2021, the hedge fund trimmed its stake in one high-profile SPAC: Bill Ackman's Pershing Square Tontine Holdings.

According to recent SEC filings, Baupost Group slashed its stake in PSTH by 20% in the second quarter. The hedge fund which manages about $32 billion total held 10,090,655 shares of PSTH at the end of the second quarter. The stake would be worth roughly $201 million based on Monday's stock price.

Seth Klarman is often nicknamed "the next Warren Buffett" as he has embraced a value investing style for decades. But his increased interest in high-growth SPACs showcase a change of pace for the investor.

According to data analyzed by CNBC, at the end of the second quarter Klarman had $891 million invested in blank check companies and companies that went public via a SPAC.

Klarman first bought Pershing Square in the third quarter of 2020. He then slashed the stake by 27% in the next quarter and didn't change his position in the first quarter of 2021.

Last month, Bill Ackman revealed that his Pershing Square Tontine Holdings would not go through with a complicated deal to buy 10% of Universal Music. Instead, the blank-check company will complete a conventional SPAC deal and have 18 months to close one unless shareholders vote for an extension.

Read more: These 5 stocks offer the most short-squeeze potential for retail investors this week, according to Fintel

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Lumber prices spike as wildfires cause producers to cut output, citing ‘significant’ supply chain challenges

Bootleg Fire burns through vegetation in Oregon, tree on fire
The Bootleg Fire burns through vegetation near Paisley, Oregon, U.S., July 20, 2021
  • Lumber futures have jumped in recent days on concerns over the impact of wildfires on supply.
  • One of North America's largest lumber producers said it would cut output at sawmills due to the fires.
  • One lumber expert told Insider the production cut was the catalyst that confirmed to traders prices had hit a bottom.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Lumber futures have jumped in recent days as concerns mount that wildfires in Canada and the Western US will snarl production and supply chain routes.

On Tuesday, Canfor Corporation, one of North America's largest lumber producers, said it was curtailing approximately 115 million board feet of production capacity at its Canadian sawmills. The company cited "significant supply chain challenges" amid a "transportation backlog in Western Canada as a result of the extreme wildfire conditions."

Lumber futures jumped 10.8% Thursday, and are trading nearly 15% higher than Tuesday's prices. Lumber is still more than 62% below the record-high reached in May. Prices skyrocketed earlier in the year as the pandemic-fueled housing boom pushed up demand, though recently supply and demand levels have begun to even out.

"The market overcorrected, it was waiting for a catalyst," said Michael Goodman, director of speciality products at Sherwood Lumber, referring to recent moves higher after weeks of lumber prices falling.

He added that curtailment of operations at sawmills was not the sole reason for lumber's recent price movement, but instead the catalyst that showed people prices had hit a bottom.

Goodman now sees prices moving higher as customers start buying again, though he also expects the market to be highly volatile for some time.

While prices are rising and production cuts are creating new supply constraints, Goodman said lumber will be volatile for the next year.

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Lumber prices spike as wildfires cause producers to cut output, citing ‘significant’ supply chain challenges

Bootleg Fire burns through vegetation in Oregon, tree on fire
The Bootleg Fire burns through vegetation near Paisley, Oregon, U.S., July 20, 2021
  • Lumber futures have jumped in recent days on concerns over the impact of wildfires on supply.
  • One of North America's largest lumber producers said it would cut output at sawmills due to the fires.
  • One lumber expert told Insider the production cut was the catalyst that confirmed to traders prices had hit a bottom.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Lumber futures have jumped in recent days as concerns mount that wildfires in Canada and the Western US will snarl production and supply chain routes.

On Tuesday, Canfor Corporation, one of North America's largest lumber producers, said it was curtailing approximately 115 million board feet of production capacity at its Canadian sawmills. The company cited "significant supply chain challenges" amid a "transportation backlog in Western Canada as a result of the extreme wildfire conditions."

Lumber futures jumped 10.8% Thursday, and are trading nearly 15% higher than Tuesday's prices. Lumber is still more than 62% below the record-high reached in May. Prices skyrocketed earlier in the year as the pandemic-fueled housing boom pushed up demand, though recently supply and demand levels have begun to even out.

"The market overcorrected, it was waiting for a catalyst," said Michael Goodman, director of speciality products at Sherwood Lumber, referring to recent moves higher after weeks of lumber prices falling.

He added that curtailment of operations at sawmills was not the sole reason for lumber's recent price movement, but instead the catalyst that showed people prices had hit a bottom.

Goodman now sees prices moving higher as customers start buying again, though he also expects the market to be highly volatile for some time.

While prices are rising and production cuts are creating new supply constraints, Goodman said lumber will be volatile for the next year.

Read the original article on Business Insider

Ark Invest’s Cathie Wood defends bitcoin as an inflation hedge in crypto panel with Elon Musk

Cathie Wood
Cathie Wood
  • Cathie Wood defended bitcoin's role as an inflation hedge during a panel with Jack Dorsey and Elon Musk.
  • The Ark Invest founder and CEO said bitcoin will serve as an inflation hedge in emerging market countries.
  • She said citizens in emerging markets with "significant inflation" will migrate to bitcoin and other means to preserve their purchasing power.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Ark Invest founder and CEO Cathie Wood defended bitcoin's role as an inflation hedge during a Wednesday panel discussion alongside Jack Dorsey and Elon Musk.

The fund manager said bitcoin will serve as a hedge against inflation in certain situations, citing emerging markets as an example.

"There are a lot of emerging markets that are suffering from significant inflation-in other words, the purchasing power of those populations is going down. So they are going to migrate to bitcoin and other ways to preserve purchasing power," Wood said.

She made the remarks when asked what advice she would give for institutions looking to put bitcoin on their balance sheets. Wood added that being able to sell to people who have migrated to bitcoin in inflationary situations would be "very useful" for corporations.

Earlier in the panel, Wood discussed how bitcoin's fixed supply of 21 million tokens helps it's role in preserving purchasing power.

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