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Fraud Trial to Begin for Ozy Founder Carlos Watson 2024-05-20 09:02:16+00:00 - The 2010s were a frothy time for digital publishing. Billions of dollars flowed into publishers like BuzzFeed and Vice, with big media companies and venture capitalists betting those start-ups would eventually make lots of money. For the most part, those huge profits were a pipe dream. But despite the lost money, disappointed investors and a slew of negative press coverage, the executives who founded those companies never had to answer for their conduct in a courtroom. Until now. The jury trial of Carlos Watson, who is charged with trying to defraud investors in the digital media start-up he co-founded, Ozy Media, is scheduled to begin Monday with jury selection in federal court in Brooklyn. Mr. Watson has pleaded not guilty to all the charges against him. If convicted, he could face up to 37 years in prison. It remains unclear what Mr. Watson’s defense will be when the trial begins, or whether he will take the stand. But one of the arguments his lawyer has made in court filings leading up to the trial is unusual: The allegations involve the same “puffing and bluffing” practiced by the founders of BuzzFeed and Vice, but prosecutors singled out Mr. Watson for punishment because he is a Black man.
Palantir: This Brilliant Strategy Could Pay Off Big-Time 2024-05-20 07:29:00+00:00 - Have you ever watched a webcast or promo of a new technology and come away with more questions than answers? I definitely have. The biggest question I often have is: How can this be applied to my company? Explaining this in a general demo, especially with complex artificial intelligence (AI) software, is difficult. Palantir Technologies (NYSE: PLTR) has a solution, and it's pretty brilliant. What is Palantir AIP? Palantir's latest software is its Artificial Intelligence Platform, or AIP for short. Here's the 30,000-foot view. It immerses the AIP software into a company's existing systems. Now the data is all in one place rather than multiple silos. Next, AIP creates a complete model of the organization's business functions. The software allows the customer to use large language models to explore processes, examine potential actions, and ultimately make better decisions. AIP is available for governments (defense) and the private sector. Here are two examples that Palantir gives. Say there is an army unit in the field near hostile territory. The commander notes that the enemy is amassing weapons nearby. Using AIP, the commander can model scenarios, predict likely enemy formations, and see what assets are available to repel an attack. Next, imagine a private sector company with a warehouse in the path of a hurricane. The logistics department can model the impact of a warehouse shutdown and see which alternative sites are the most cost-effective for getting customers their orders. Palantir's strategy for bringing this complex software to the market is through what it calls "boot camps." Unlike demo videos, the five-day workshops allow potential customers to get hands-on experience and solve problems specific to their companies. This is clearly a more effective way to introduce a product. Palantir has completed boot camps with 915 organizations since mid-2023; it closed 136 deals in the first quarter 2024 and its U.S. commercial customer count grew 69% year over year in the quarter. Is Palantir stock a buy now? There was much to like in Palantir's Q1 earnings release and long-term trends. Sales increased 21% year over year to $634 million, a slight acceleration over the 20% growth posted in Q4 2023. More importantly, customer counts continue to expand rapidly, as shown in the charts below. Image source: Palantir. Growing the customer base is critical because Palantir's revenue model is recurring, i.e., customers pay for the software annually. Once Palantir gains a customer, it can reap the rewards for years. Story continues Palantir was often criticized for its lack of profitability after going public in 2020, but those days are behind it. The company reported its sixth straight quarter of generally accepted accounting principles (GAAP) net income and fifth straight quarter of GAAP operating income. It also generates tons of free cash flow (FCF). As depicted below, operating income and FCF are ramping up significantly. PLTR Operating Income (Quarterly) Chart Palantir used the profits and positive cash flow to build a fortress-like balance sheet, with $4.4 billion in current assets versus $751 million in current liabilities and no long-term debt. Responsible cash management provided $43 million in interest income in Q1, a 7% cherry on top of its $634 million operating revenue. The most significant risk for Palantir shareholders is the valuation. The stock trades for 20 times sales. Even though this is less than fellow growing software-as-a-service (SaaS) company CrowdStrike at 25, and similar to Datadog at 19, it isn't cheap. Investors are enthusiastic about AI companies, and there could be a pullback. Because of this, dollar-cost averaging is a terrific risk-mitigation buying strategy as you'd be buying shares with a set amount invested at a recurring interval. With its unique sales strategy, positive customer growth trends, and excellent financials, Palantir looks like a long-term winner in software and AI. Should you invest $1,000 in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $566,624!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of May 13, 2024 Bradley Guichard has positions in CrowdStrike. The Motley Fool has positions in and recommends CrowdStrike, Datadog, and Palantir Technologies. The Motley Fool has a disclosure policy. Palantir: This Brilliant Strategy Could Pay Off Big-Time was originally published by The Motley Fool
Speedier Wall Street Trades Are Putting Global Finance On Edge 2024-05-20 05:00:00+00:00 - (Bloomberg) -- When US markets reopen next Tuesday after the long weekend, everything will likely seem normal. It’s only after the close and in the following days that any cracks are expected to appear. Most Read from Bloomberg A spike in the number of failed trades, operational glitches and additional costs are among industry fears as the trading process for American securities accelerates, with the time allowed to complete every transaction halved to a single day. Spurred on by the original meme-stock frenzy, the Securities and Exchange Commission is pushing the shift to reduce the chance of something going wrong between when a trade is executed and when it’s settled. But the switch to what’s known as T+1 comes with risks of its own. International investors — who hold about $27 trillion in American markets — face a system in which the usual method of funding a US trade takes longer than they actually have to execute the deal. Unheralded parts of the trading process like affirmation (confirming details), fixing errors, and recalling securities out on loan must happen at least twice as fast. Global funds face a mismatch where cash flowing in and out moves at a different speed to the assets they have to buy and sell. And it all faces an immediate stress test as some of the world’s major indexes rebalance or reveal planned reconstitutions before the end of this month. “All hands will be on deck,” said Michele Pitts, Citigroup Inc.’s global head of custody data for securities services, noting the likelihood of increased trade fails across the industry. “There will be a significant uptick in settlement risks for the first several weeks.” ‘Lot of Anxiety’ Under current rules, anyone purchasing a US stock has two days between hitting the “buy” button and actually having to deliver money for the trade, while the seller has the same time to supply the share. This lengthy settlement period in such a large and sophisticated market is what remains from the days when transactions were manual, and investors had up to a week to complete. That’s been whittled away over the years, and new SEC rules will slash the settlement time again on May 28 to one day. Across Wall Street and beyond, major banks, asset managers and an assortment of specialized service firms are bracing for the fallout. Story continues At JPMorgan Chase & Co., internal modeling shows about a quarter of the currency trades it processes for clients are set to be impacted. Brown Brothers Harriman & Co. is putting clients through a “T+1 simulator” to identify those with potential issues. Institutions including Societe Generale SA, Citi, HSBC Holdings Plc, UBS Asset Management, Baillie Gifford and more say they’re either moving staff, reorganizing shifts or building new systems — and in some cases all three — in preparation for the switch. “There’s a lot of anxiety even just around the technology and the actual way by which settlement will take place,” Amy Hong, head of market structure and strategic partnerships for global banking and markets at Goldman Sachs Group, told the Bloomberg Sell-Side Leaders Forum this month. “There are going to be some mismatches around funding, there are going to be some FX-related issues that we’re going to need to work out.” The world of finance and investment can be famously averse to change, with doomsayers dependably appearing whenever new rules are proposed. Yet in the case of T+1, the concerns go beyond one or two market Cassandras. Just 9% of sell-side firms polled by Coalition Greenwich in April and May said they expect the T+1 switch to go smoothly, with 38% warning that buy-side managers are unprepared, and 28% believing trading platforms aren’t fully ready. Almost a fifth anticipate a large disruption with “many or severe issues.” The consensus view is that trade failures — when either a seller doesn’t deliver securities or a buyer fails to produce payment — are about to rise. The question is how large and persistent that uptick will be. Settlement failures are generally a tiny feature of the modern market, usually stemming from technical issues or human error. They can result in regulatory punishment, loss of capital tied up in the trade, and even — in very rare instances when the transaction is large enough — the collapse of parties in the deal. The T+1 regime increases the chance of failures because the compressed timeframe risks making errors more likely, while at the same time reducing the opportunity to correct them. Most crucially, it makes it harder for buyers and sellers to ensure their funds and securities are ready. The $7.5 trillion-a-day foreign-exchange market is a flashpoint of the shift, because currency trades typically settle on a T+2 basis. An overseas investor buying a US stock will soon need to either have dollars ready or find them within a day in an arena where it can take two. Friday Fears From its Edinburgh headquarters over 3,200 miles from Wall Street, the £225 billion ($285 billion) investment house Baillie Gifford has relocated two traders to New York and beefed up its settlement desk to help the firm stay active after the 4 p.m. US stock close. Thanks to the T+1 shift and a 6 p.m. deadline at CLS Group (a platform at the center of the market that settles over $6 trillion of currency transactions every day), that will become a crucial period for asset managers seeking dollars to fund their US trades. But it also falls around the start of what are known as the witching hours in foreign-exchange circles because of the famous lack of liquidity. “If you look at the bid-offer spreads, they’re generally tight throughout the day and when you get to the 5 p.m. to about 8 p.m. Eastern, they just widen out,” said Brendan Burke, a managing director at BBH. “It’s as simple as there’s less liquidity in the market because the banks aren’t staffed.” Baillie Gifford has lobbied US regulators to get banks to extend their foreign-exchange trading hours and to continue providing liquidity until at least 6 p.m. in New York, five days a week. Since moving its staff in January, the firm has been trading as if T+1 was already in force to ensure everything goes smoothly, according to Adam Conn, head of trading. “It’s about trying to mitigate the additional operating risk which is falling on asset managers,” said Conn. There will only be a “very short window” after the US market close to resolve problems, he said. Friday afternoon is emerging as a particular area of concern, because currency markets close on weekends, meaning liquidity is typically at its lowest just before the US joins Europe and Asia in clocking off. JPMorgan’s Brijen Puri, head of global FX services, said “neither the buyside or sellside really knows what will happen” in those periods following the switch. “Once there is more data about what's happening in that time zone, that's when banks as well as asset managers may decide on providing more coverage,” Puri said. “Like you have a night desk, you may have a Friday evening desk.” The Foreign Exchange Professionals Association reckons the problem will also be acute at month- and quarter-ends and around national holidays, risking “significantly increased volatility and wider spreads.” Overseas investors acquiring US securities before a local holiday will effectively be faced with T+0 settlement. “There’s 25 to 30 days a year where there’s potentially specific challenges,” said Vincent Bonamy, head of global intermediary services at HSBC. He has organized staffing for “specific holidays on a global basis” to help clients with liquidity provision. For all the preparation, the European Fund and Asset Management Association estimates as much as $70 billion of its members’ daily currency trades may miss the CLS deadline for next-day settlement. Firms without a US presence can use workarounds including purchasing dollars in advance or outsourcing their currency trades, but all approaches come with their own additional costs and challenges. “Liquidity will be a big issue,” said Natsumi Matsuba, head of FX trading and portfolio management at Russell Investments in Seattle. “It’s going to be a learning experience for everyone.” Double Jeopardy The move to T+1 is intended to cut risks at the broker-dealer level of the US equity market, after the 2021 meme-stock frenzy forced retail-investor platforms like Robinhood to restrict trading in certain securities. That was because the collateral they needed to post — the cash to cover trades over the two-day settlement process — threatened to exceed what they could pay amid the surge in volume. The T+1 switch should alleviate such concerns because less collateral will be needed across a single day of risk. It may also improve domestic liquidity as cash in the market will be recycled faster. But it heaps pressure on the processes required to complete each transaction. The new rules require that affirmations are finalized by 9 p.m. in New York on the date of a trade. Data from the Depository Trust & Clearing Corp., which oversees post-trade functions for the bulk of American securities transactions, show that affirmation rate rose to 83.5% in April from 74.95% a month earlier. The firm says that represents “significant progress” as T+1 implementation approaches. But with only weeks to go it’s short of the DTCC’s own target for a 90% same-day affirmation rate. “It’s not actually a compression to 24 hours, but rather five hours, if you think that the market closes at 4 p.m. and you need to affirm by 9 p.m.,” said Pitts at Citi. In preparation for the switch, the DTCC has been conducting regular tests for nine months that will continue to the end of May. This has included gauging the industry’s ability to handle a “double-settlement day” like the one that will occur next Wednesday, when transaction volumes will surge as trades from Friday (still using T+2) and next Tuesday (T+1) will need to complete at the same time. The DTCC has added staff ahead of the transition and its plan for this weekend includes “watch events,” where members of the technical and product teams closely follow transaction flow, according to Val Wotton, general manager of institutional trade processing. “We are confident in our ability to support volumes on day one,” he said. Kinks in the Chain The US switch to T+1 means it’s leaving other jurisdictions behind, which is a headache for many investment vehicles operating across borders. While Mexican and Canadian markets are also moving to one-day settlement next week, others including Europe remain on slower cycles. In the new system, a US investor selling an ETF should get cash for their shares within one day, but the proceeds from the sale of a fund’s underlying international stocks will likely take at least two days to arrive. And when most overseas investors buy a fund containing US stocks, the new underlying assets should be paid for in one day, even though the payment for the ETF shares may take two or more. It’s the kind of mismatch that has previously existed across various geographies, but never on this scale, and it risks adding friction and operational costs to many investment vehicles. Adding to the pressure, the T+1 switch comes just days before MSCI Inc. indexes rebalance, with corresponding funds all over the world due to reshuffle holdings at the end of next week. For UBS Asset Management that’s the “largest trading date of the year,” according to Lynn Challenger, head of trading at the $1.7 trillion manager. “We anticipate a lot more funding requirements” on rebalance day, said Challenger. He said any issues may be compounded by the fact that much of the order flow could be in the same direction. “We’re speaking to brokers to make sure the funding will be there,” he said. To prepare for T+1 more generally, Challenger said UBS Asset has trained up additional US staff so they can generate FX orders and has built a new trading process to facilitate more same-day settlement. Many financial firms have these kinds of robust transition plans in place. The Coalition Greenwich research showed most sell-side respondents were not concerned about the readiness of their own desks. Yet each is connected to others through a string of trade processes, meaning any kinks in the chain could create problems for otherwise well-prepared institutions. “The sellside thinks there will be issues, but it will be someone else’s fault,” said Jesse Forster, a senior analyst of market structure and technology at Coalition Greenwich. “We could be in for a lot of finger-pointing over the coming months.” --With assistance from Katherine Doherty, Isabelle Lee, Carter Johnson and Alice Gledhill. Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
The stock market's bull rally could last another 5 years, but it'll end in a 'spectacular bursting of a bubble,' veteran tech investor Gene Munster says 2024-05-20 02:01:00+00:00 - There's a 3-5 year bull market forming in tech stocks, according to Gene Munster Brian Ach/Getty Images The stock market's current bull rally could last for another 5 years, according to tech analyst Gene Munster. Munster said a new crop of AI companies will go public and drive a boom in the stock market. But Munster expects the stock market rally to morph into a bubble that eventually bursts. The stock market's bull rally is poised to continue higher for the next three to five years before it ends in a spectacular bubble that ultimately pops, according to veteran tech analyst and Deepwater Asset Management managing partner Gene Munster. Munster doesn't make this prediction lightly, as he still has painful memories of being a tech analyst during the 1990's dot-com boom and bust, but he sees potential for massive upside, and eventual downside, in stocks driven by the growing adoption of AI technologies. "We're in the early stages of what is a three to five year bull market, and that may seem out of touch given the market run that we've had more recently... but if you ultimately believe in the substance of AI is going to be greater than the hype, then the market is going to continue," Munster told CNBC on Friday. Munster said the broader tech trade should continue to power the stock market higher but that investors shouldn't count on just mega-cap tech stocks to drive the bulk of the gains. Instead, much of the upside that Gene sees inflating the stock market bubble will come from smaller AI-focused companies. "The substance of the bubble is going to come from a different class of tech companies that are going to power this higher. I think part of it is going to be an IPO class of AI-first companies," Munster said. Meanwhile, the Magnificent 7 tech stocks should "continue generally to be well positioned, they're going to benefit, but that's not where you're going to get this kind of 2x to 3x type of appreciation," Munster said. Munster's bullishness is based on the idea that AI technologies are going to have double the impact that the internet had. "The concept of a machine to be able to function with general intelligence to me is a 2x bigger factor than what the internet is," Munster said. "I think that's going to come from some of the smaller middle cap and some IPOs that ultimately will be the next Mag 7 call it five years from now." And while Munster sees the stock market rally morphing into a bubble that comes to a painful end towards the end of the decade, that doesn't mean investors should avoid owning stocks. Story continues "This is going to end in the spectacular bursting of a bubble, but I think there's a lot of wealth creation that can happen between now and then," Munster said. Munster also highlighted Alphabet and Meta Platforms as unique, flagship holdings in Deepwater Asset Management's tech-focused portfolio thanks to their in-house build AI technologies. "These two companies are unique because their AI future is not dependent on someone else," Munster said. "If you go to Microsoft, Apple, look at what Amazon's doing. All of those are requiring third party models to really power what they're doing." "So when I think about just really cutting to who are going to be some of the biggest winners in AI specifically, I think it comes down to Meta and Google." Read the original article on Business Insider
Is UPS the Best Dividend Stock? 2024-05-20 01:18:00+00:00 - UPS' (NYSE: UPS) current forward dividend yield of around 4.4% is highly attractive for income-seeking investors, but is the payout sustainable? The company's earnings have disappointed recently, and the dividend cover looks pretty thin in 2024. Is UPS a stock for dividend hunters to buy? Here's what you need to know before buying the stock. UPS' dividend The company's trailing-12-month dividend cost it about $5.4 billion, and as you can see below, following a disappointing 2023, its free cash flow (FCF) per share didn't cover its dividend last year. Clearly, that's not a sustainable situation, and investors should buy UPS stock more for where the company is going than where it just came from. UPS Free Cash Flow Per Share Chart Though, in fairness, last year was a uniquely bad one for UPS. Its delivery volumes fell much more than management expected due to a slowing economy and a natural retraction from the boom of previous years caused by stay-at-home measures. In addition, a protracted labor dispute over a contract renewal caused customers to divert volumes in fear of strike action. Where UPS is heading That said, management's plans involve significantly improving profit margins and delivery volumes and growing revenue per piece in excess of cost per piece by using technologies such as automation to consolidate facilities and smart facilities to improve productivity. In addition, UPS continues to grow its higher-margin small and medium-sized business (SMB) and healthcare-based revenue. Management aims to hit FCF of $5.9 billion to $6.7 billion in 2024, and ultimately $17 billion to $18 billion from 2024 to 2026. The low end of that figure would produce an average of $5.6 billion per year, which would cover the dividend. Moreover, the guidance looks conservative given the target of $5.9 billion to $6.7 billion (before pension contributions) in 2024 and the aim of hitting roughly $7 billion in FCF in 2026. Wall Street analysts have UPS hitting $18.3 billion in FCF from 2024 through 2026. Still, whichever way you look at it, UPS' FCF to dividend cover isn't looking great. However, that didn't stop CEO Carol Tome saying on the recent earnings call: We have a targeted dividend payout ratio of 50%. We are higher than that. It's our intent to earn back into a 50% payout ratio over time. She went on to outline that she had "no intent" to cut the dividend, with outgoing CFO Brian Newman noting, "We're committed to a stable and growing dividend." It's a confident narrative from management. Still, it's hard to see a significant increase in the dividend, given the kind of FCF generation management outlined for the next few years. Story continues Is UPS a dividend stock to buy? The company is in recovery mode in 2024, with management expecting to pass an inflection point in volumes through the year as it laps easier comparisons with 2023. In addition, margins should expand as they come up against the cost increases associated with the new labor contract in 2023. Image source: Getty Images. Meanwhile, the technology investments are logical, and UPS is hitting all its internal targets for growth in healthcare and SMB revenue. On the downside, any economic deterioration, mainly when there's overcapacity in the delivery package industry, would hit UPS hard and lead to serious questions over its capital allocation strategy, starting with the dividend. On the other hand, recent earnings saw management confirm that it expects a "slight uptick" in delivery volumes in its domestic business in the second quarter, leading into a low-single-digit increase in the second half. That's a key number to watch because if it comes through, then UPS is on the way to muddling through the next few years while keeping its dividend growing, albeit slowly. Should you invest $1,000 in United Parcel Service right now? Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Parcel Service wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $566,624!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of May 13, 2024 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy. Is UPS the Best Dividend Stock? was originally published by The Motley Fool
3 Top Tech Stocks to Buy in May 2024-05-20 00:00:00+00:00 - Over the past year, many tech stocks rallied on the prospects of interest rate cuts. But with the Nasdaq now hovering near its all-time highs, it might seem like the right time to take profits in some of those stocks before the bears come back. That's a prudent strategy, but I believe investors should still be adding more high-quality blue-chip tech stocks to their portfolios instead of hastily liquidating them. For me, these three stocks are still no-brainer buys in May: Nvidia (NASDAQ: NVDA), Meta Platforms (NASDAQ: META), and CrowdStrike (NASDAQ: CRWD). Image source: Getty Images. 1. Nvidia Nvidia, the world's leading producer of discrete GPUs, has been one of the market's hottest growth stocks. Its shares have soared more than 560% over the past three years as the explosive growth of the artificial intelligence (AI) market has driven more companies to buy its high-end data center chips to process AI tasks. That growth spurt initially surprised the bears. Back in fiscal 2023 (which ended in Jan. 2023), its revenue growth flatlined as its adjusted EPS dropped 25%. That deceleration was caused by the PC market's post-pandemic decline and macro headwinds for the data center market. But in fiscal 2024, its revenue and adjusted EPS soared 126% and 288%, respectively, as the popularity of ChatGPT lit a raging fire under the generative AI market. For fiscal 2025, analysts expect Nvidia's revenue and adjusted EPS to grow another 84% and 93%, respectively, as the demand for new AI chips continues to outstrip available supply. Those are incredible growth rates for a stock that trades at 39 times forward earnings. Nvidia's long-term growth could eventually be throttled by competition from AMD's cheaper data center GPUs, first-party chips at hyperscale cloud providers, and the tightening export curbs on its chip sales to China. But for now, it arguably remains the easiest way to profit from the secular expansion of the global AI market. 2. Meta Platforms Meta Platforms -- the world's top social media company, which owns Facebook, Messenger, Instagram, and WhatsApp -- saw its shares rally more than 50% over the past three years even as it weathered some tough challenges. In 2022, Meta's revenue and EPS declined 1% and 38%, respectively. That slowdown was caused by Apple's privacy changes on iOS, intense competition from ByteDance's TikTok, and macro headwinds for the digital advertising market. At the same time, it ramped up its spending on its unprofitable Reality Labs segment. That mix of slowing growth and higher spending spooked the bulls. Story continues But in 2023 Meta's revenue and EPS rose 16% and 73%, respectively. It countered Apple's iOS changes with new tools for gathering first-party data, widened its moat against TikTok by expanding Reels, and offset its declining ad prices with more ad impressions. It also attracted an influx of spending from Chinese e-commerce and gaming companies that wanted to reach more overseas customers. It also approved a $50 billion buyback and initiated its first dividend earlier this year. For 2024, analysts expect Meta's revenue and EPS to grow 18% and 36%, respectively. Those are robust growth rates for a stock that trades at 24 times forward earnings. 3. CrowdStrike CrowdStrike is one of the world's fastest-growing cybersecurity companies. Unlike many of its peers, which install their services through on-site appliances, CrowdStrike only provides its end-to-end security tools as cloud-native services -- which are stickier, more cost-efficient, and easier to scale as an organization expands. CrowdStrike's revenue surged 54% in fiscal 2023 (which ended in Jan. 2023) and grew 36% in fiscal 2024. Its growth decelerated as the macro headwinds made it harder for the company to lock large customers into longer contracts. As a result, its net new annual recurring revenue (ARR) declined in the first half of fiscal 2024. But in the second half of fiscal 2024, its net new ARR increased year over year again. That stabilization was supported by its market share gains, new government contracts, and generative AI upgrades for its extended detection and response (XDR) platform. It's also cross-selling more modules to its existing customers. For fiscal 2025, analysts expect CrowdStrike's revenue and adjusted EPS to grow 30% and 27%, respectively. Its stock might seem pricey relative to its peers at 88 times forward earnings, but I believe its rapid growth and early mover's advantage in the cloud-native cybersecurity space justify its premium valuation. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $566,624!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of May 13, 2024 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Leo Sun has positions in Apple, CrowdStrike, and Meta Platforms. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, CrowdStrike, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy. 3 Top Tech Stocks to Buy in May was originally published by The Motley Fool
Bruce Nordstrom, former chairman of Nordstrom's department store chain, dies at 90 2024-05-19 22:40:00+00:00 - Bruce Nordstrom, a retail executive who helped expand his family's Pacific Northwest department store chain into an upscale national brand, has died. Seattle-based Nordstrom Inc. said its former chairman died at his home on Saturday. He was 90. "Our dad leaves a powerful legacy as a legendary business leader, a generous community citizen and a loyal friend," said a statement from his sons, Nordstrom CEO Erik Nordstrom and Pete Nordstrom, the company's president. The chain traces its roots back to a Seattle shoe store opened by Swedish immigrant John Nordstrom and a partner in 1901. Bruce Nordstrom at the 32nd Annual Footwear News Achievement Awards in New York, NY, on December 4, 2018. Patrick MacLeod/Footwear News/Penske Media via Getty Images Bruce Nordstrom and other members of the third generation took leadership reins in 1968. They brought the company public in 1971 and expanded its footprint across the U.S. while also launching the lower-priced Nordstrom Rack stores. Bruce Nordstrom retired from his executive role in 1995 as the third generation handed over leadership to the fourth. He retired as chairman of Nordstrom's board of directors in 2006. He was one of several Nordstrom family members who in 2017 made a push to take the company private, proposing to buy out the 70% of the department store's stock they didn't already own. Those talks failed in 2018 but earlier this year, his sons started another series of buyout negotiations. In addition to two sons, Nordstrom's survivors include his wife, Jeannie, his sister and fellow philanthropist Anne Gittinger, and seven grandchildren.
Here's the moment Nvidia became the AI king and what it must do this week to keep the throne 2024-05-19 21:50:00+00:00 - It's all about to happen. But until it happens, then no money should be made waiting for it. We have to see its success to invest in it. Otherwise, the heck with it. There. That had been the bear case against artificial intelligence, generative AI, accelerated computing and large language models (LLMs), all the essential gobbledygook until May 2023. That's when Nvidia and CEO Jensen Huang "missed" by $4 billion. That's right, they reported $4 billion more in revenue than expected. I say "missed" because Jensen likes to tell the story that way. Every time he does, he knows he gets a laugh from me, although my wife was a little baffled about how it could be a "miss" when Jensen told the same joke to her. I like the metaphor, though, because until that quarter you had to be in on the "joke," so to speak, you had to be in on how Nvidia's chips were being used by all the Titans, a word I like far more than "hyperscalers," a word given to us by another total fave of mine, Jayshree Ullal. She's the CEO of Arista Networks , the preferred networking solution Titans including Club names Amazon , Alphabet , Microsoft and Meta Platforms . No one is laughing about Jayshree's company, either, as her white box solutions are beating Cisco Systems when it comes to the internet plumbing that connect Nvidia chips to the Titans. Nvidia was just shedding its identity as a gaming chip company, and not known as either an accelerated chip company or a company at the heart of generative AI, with chips that can be trained and then give you the power of inference. It's the wonder of inference behind all the systems that allow you to input questions to ChatGPT (Microsoft-backed OpenAI), Claude (Amazon-backed Anthropic) and Gemini (Alphabet's Google). It powers the AI assistants that you have right now, although when Microsoft unveils its assistant in your personal computer, it should cause the biggest refresh in PC history, a reason why we own Best Buy even as it won't propel the stock until late fall. But let's not get ahead of ourselves. Last year at this time, Nvidia snuck into the U.S. trillion-dollar market cap club, with that May quarter. That took 24 years. The next trillion in stock market value took 270 days. Now, it is knocking on the door of a third trillion — the likes of which have only been topped by Club name Apple and Microsoft. But ahead of that $3 trillion milestone for Nvidia is the roadblock of Wednesday evening's earnings . So much is ahead of Nvidia because so many people still haven't seen what the company's chips can do. Right now, Nvidia seems to be behind what ads you get when you order something, or what movements robots make, or small but productive changes in call centers, and requests to retailers that can be answered by something far better than a human. It allows machines to be doctors and give you answers with emotions. It is, in short, the genesis behind something that's between a parlor game — ChatGPT give me a haiku about my love of baseball — and something that might make it so people are more productive. It all seems such small potatoes, frankly, which is why Wednesday seems such a looming day. Last year was about the "beat." This year, the expectations are so high that everyone's worried that the bar has, at last, caught up with the analysts who have taken it so high that there's no way it can give you the magnitude you got last year. A beat and raise seems impossible — and if it is possible, it won't be next time. So, we have gone from the phase of "it's about to happen" to "we better see more success" because right now not only it is not worth $3 trillion in market cap, but it might not be worth $2 trillion if all the Titans have their chips and Advanced Micro Devices (AMD) is about to burst on the scene The zeitgeist of Nvidia's trajectory is so fought that even I, the ultimate "don't trade it, own it" believer, dread that moment not long after Wednesday's 4 p.m. ET closing bell rings. What can Nvidia possibly do for an encore? Isn't that what everyone is thinking? But what if the answer is, this time, you will actually see the initial fruits of Blackwell, the master machine that is so much faster than Nvidia's current iteration? Until this Wednesday, I think that most people believe Nvidia is like Intel in the 1990s when the 286 and 386 chip and then the 486 kept beating expectations because each new iteration was so much more powerful — and yet, at the same time, then Intel CEO Andy Grove was able to master a transition that nobody thought could be mastered. That transition included those months when we had the tail-end of the old chip and the front end of the new chip. Why buy a 386 when the 486 was around the corner? Somehow, the transition produced no gap in earnings. It remains a mystery how it was really pulled off thirty years later. What does Nvidia really have to do then for an encore? Simple. Nothing. It has to come up with a whole new shot. When you scream encore at the opera, you just hope to get one more song, one more aria. Blackwell, much more of a supercomputer, isn't an aria. It's a new way to compute, something that happens when it is so much faster than the accelerated computing that Nvidia currently provides. It doesn't obviate the old — unlike Intel's then-386, it doesn't go out of style when the 486 arrives. The old is still good when stacked together with more old. But the new is so revolutionary and so expensive that if you project Nvidia's earnings it might be worthy of $3 trillion status. If each Blackwell costs, $40,000 and Nvidia can produce a huge number of Blackwells and Blackwells can be so much smarter than, say, the H100, then the analysts will be baffled but will recognize still one more gigantic new beat and raise scenario from this not-so-small company. I think it is a much taller problem than what Intel faced, not because of a difficult transition—Jensen has made sure that its H100s are still valuable — but because the mortals who decide stock prices won't be able to get their brains around what Blackwell can do. What does it mean, for instance, if a Blackwell-led platform — not a chip but a platform — can ingest video? What does it mean if it can speed research from years to weeks? Will it be able to help cure ALS, as the team I introduced Friday on "Mad Money," EverythingALS , hopes to do? When I say help cure I mean allow all of the genetic material that can be harvested from ALS victims to be explored and changed so people, at first, don't die from it and then make it just chronic, and then cure it — the path that Merck is on with Keytruda, its cancer solver? Is that what speed does? Is that what this machine can produce? The task then is two-fold on Wednesday: We have to see the results from the current iteration and it has to be dramatically special and we have to be able to perceive the results of what Blackwell can do. That's a one-two punch equivalent to Apple having the iPhone challenged if not dwarfed by the Vision Pro. Yes, it may be that hard. With that in mind let me give you the "own it don't trade it" case for Nvidia. First, the next iteration has to make it so anything that currently moves, including moves made by humans, can be mimicked by robots. For shorthand, the best example is a robotic bartender that can take a drink order, make it better than a human and virtually sympathize with a patron because of training and inference. Second, we have to think that such a creation is not a trick but something that can be put to work right now to flip burgers or sell an annuity. Third, it has to distance itself from anything AMD makes or that Amazon or Google or Microsoft makes so we realize that those are not rivals, just augmenters of their own systems that allow Nvidia to put its chips to work within the ecosystem of those customers. Too much to ask? Now we are getting into what Jensen does to beat expectations. No, he doesn't care as much about his stock as Grove did, as "Only the Paranoid Survive," the best business book ever written that makes the others look like silly, soporific name-dropping tomes. But he does care about beating or he wouldn't have been so proud of what happened last May. If Jensen can't pull it off? Here's the virtue of Wednesday. He may be able to tell the story, through Nvidia CFO Collette Kress, of what Blackwell can do over the next several years as the chips that will be known as supercomputers going forward can do. Maybe we can imagine what they can do after Nvidia explains what they can do that's so different from the current iterations. Tall order, but Nvidia is a company that's beaten tall orders routinely we just didn't really know it until last May. So, we have to hope for the realistic and the ethereal in one earnings report, something far more than a simple beat-and-raise l, and I am betting that we get that, or at least we get the future picture of such an animal. If we do, then the stock can go higher. Anything less than that? We get a sell-off and perhaps a sell-off of large-scale proportions that could drive us as far away from tech as possible, maybe to General Mills or Union Pacific or Club stock Eli Lilly , and GE Vernova , or anything else because everything else will be a safe haven from a tech sector that is inflated by the worth of Nvidia and really nothing else including Microsoft, Alphabet and Apple (my other "own it, don't trade it stock). A tall order indeed from the sales, the profits, and the forecast lines that will come over the tape within the half hour after Wednesday's close on Wall Street. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. Nvidia founder and CEO Jensen Huang displays products on stage during the annual Nvidia GTC Conference at the SAP Center in San Jose, California, on March 18, 2024. Josh Edelson | Afp | Getty Images
Trump is planning a rare Republican campaign stop in the Bronx to court minority voters. Will it make any difference? 2024-05-19 21:21:49+00:00 - Trump plans to headline a campaign event in the Bronx on Thursday. Trump has little chance to win the NYC borough but saw a jump in support there from 2016 to 2020. His campaign is working to attract more minority support by leaning into the economy. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time. Advertisement Former President Donald Trump is set to make an unusual pit stop for a Republican candidate later this week. On Thursday, the native New Yorker will headline a campaign event in the Bronx, one of New York City's five boroughs and one of the bluest jurisdictions in the country. The Bronx is so thoroughly Democratic that the borough is generally an afterthought for Republican presidential candidates and even most statewide GOP candidates. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .
Longevity fanatic Bryan Johnson says 'sleep is the new coffee' 2024-05-19 21:07:46+00:00 - There's a new mantra in the corporate world: sleep > caffeine. "Sleep is the new coffee," longevity enthusiast Bryan Johnson told the Journal. Experts say workers who sleep more are likely to be more productive and focused. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time. Advertisement Some tech execs aren't starting their days anymore with a jolt of caffeine — they're betting on sleep instead. "I think sleep is the new coffee," Bryan Johnson told The Wall Street Journal. Johnson, who built his fortune founding companies like payments platform Braintree and neuroscience startup Kernel, is best known these days for his antiaging regimen. His doctors say it has helped him achieve the heart of a 37-year-old and the lung capacity of an 18-year-old — even though he's 46. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .
Biden's Campaign Shuts Down Trump's Challenge For Additional Debates: 'The Debate About Debates Is Over, No More Games' 2024-05-19 21:00:00+00:00 - Loading... Loading... The campaign for President Joe Biden has declined two additional debates proposed by the campaign for former President Donald Trump. What Happened: The Biden campaign rejected the proposed debates on Friday. The debates were to be hosted by NBC News and Telemundo, and Fox News at Virginia State University, respectively. Trump had accepted the debates, aiming to reach larger Latino and Black audiences. This move was perceived as a challenge to the Biden campaign, which has been struggling to connect with the communities, reported NBC News. A Biden campaign official stated, "The debate about debates is over. No more games.” The Trump campaign criticized Biden's decision, alleging that Biden's team was afraid to let the president defend his record. "The Telemundo/NBC debate would be widely watched by Hispanic voters, but Biden’s handlers are petrified to allow him to defend his disastrous record," Danielle Alvarez, a campaign spokeswoman, said. "Crooked Joe Biden is too 'cobarde' to address the Hispanic community and answer for his failures on the debate stage!" Earlier this week, the Trump and Biden campaigns bypassed the traditional process run by the Commission on Presidential Debates and agreed to two presidential debates. CNN will host one in Atlanta on June 27 and ABC News will host another on Sept. 10, the location of which has yet to be determined. Also Read: Ivanka Trump Could Back In The Political Limelight As Donald Trump's Influence Grows: Report The Biden campaign also accepted an offer for a vice presidential debate hosted by CBS News, but the Trump campaign has not yet confirmed its participation. Why It Matters: This development follows a series of events that have shaped the current political landscape. Trump had made an unusual demand, insisting that Biden undergo a drug test ahead of their debates scheduled for June and September. The former president claimed that Biden was under the influence of drugs during his State of the Union address in March. Furthermore, Biden has been gaining ground against Trump in six pivotal swing states, marking a significant shift in the electoral landscape. This surge for Biden emerged after five months during which Trump consistently led. The momentum shift started following a State of the Union address that not only unified Democrats but also alleviated some concerns regarding Biden’s age. Now Read: Trump Vs. Biden: Poll Shows One Candidate Holding Slim Advantage Over Another In Hypothetical Matchup This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. Photo: Shutterstock
Bruce Nordstrom, who helped grow family-led department store chain, dies at 90 2024-05-19 20:23:04+00:00 - SEATTLE (AP) — Bruce Nordstrom, a retail executive who helped expand his family’s Pacific Northwest department store chain into an upscale national brand, has died. Seattle-based Nordstrom Inc. said its former chairman died at his home on Saturday. He was 90. “Our dad leaves a powerful legacy as a legendary business leader, a generous community citizen and a loyal friend,” said a statement from his sons, Nordstrom CEO Erik Nordstrom and Pete Nordstrom, the company’s president. The chain traces its roots back to a Seattle shoe store opened by Swedish immigrant John Nordstrom and a partner in 1901. Bruce Nordstrom and other members of the third generation took leadership reins in 1968. They brought the company public in 1971 and expanded its footprint across the U.S. while also launching the lower-priced Nordstrom Rack stores. Bruce Nordstrom retired from his executive role in 1995 as the third generation handed over leadership to the fourth. He retired as chairman of Nordstrom’s board of directors in 2006. He was one of several Nordstrom family members who in 2017 made a push to take the company private, proposing to buy out the 70% of the department store’s stock they didn’t already own. Those talks failed in 2018 but earlier this year, his sons started another series of buyout negotiations. In addition to two sons, Nordstrom’s survivors include his wife, Jeannie, his sister and fellow philanthropist Anne Gittinger, and seven grandchildren.
Rescheduling Marijuana: How DOJ's Action Could Transform The Industry - AdvisorShares Trust AdvisorShares Pure US Cannabis ETF (ARCA:MSOS) 2024-05-19 20:20:00+00:00 - Loading... Loading... By Todd Harrison via Cannabis Confidential (May 17) The Justice Department formally started the process of classifying marijuana as a less dangerous substance, moving toward a historic change in US drug policy. The agency submitted a rulemaking notice to shift cannabis’ legal status to Schedule III from Schedule I. A 60-day public comment period will now begin, after which the DEA and DOJ will make a decision on how and when to stick the final landing. Read the Room Nearly 7 out of every 10 voters, including a majority of Republicans, support legalizing cannabis, according to a Fox News poll that found that 69% of registered voters in the U.S. want to end prohibition altogether (45% of which “strongly” favor the reform). There’s support across the political and demographic spectrum, too. Dems are most likely to back the policy at 81% but 55% of GOP voters and 65% of independents are also on board. Eurovision Medical cannabis is taking over Europe as well, with efforts to decriminalize cannabis in numerous countries at local levels. Similar to what took place in the U.S., European nations are legalizing medical or adult-use cannabis through a patchwork of new laws. Of the 27 EU countries—Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden—only six (Bulgaria, Hungary, Latvia, Lithuania, Slovakia and Sweden) are still affixed to their prohibitionist roots. Click here to get Cannabis Confidential delivered to your inbox daily. Research Assistant Loading... Loading... If marijuana is rescheduled to a Schedule III substance, it won’t change laws regulating cannabis research but the demand for research of the plant and cannabis for research purposes will grow, legal experts and marijuana producers say. “It’ll make researchers within universities or hospitals and private companies better armed to say, ‘We should be doing this, and we can be doing this.’” We believe they’ll be absolutely amazed at what they find. Stocks & Stuff It was another whippy day in Cannaland as the ETF spend the session in search of it’s special purpose as the clock ran out on May paper. U.S. cannabis ETF MSOS MSOS finished the session -2% to end this five-session set with a 3.5% gain. Below, we’ll dive into the rulemaking process and timing thereof, digest the interplay bw the structural impediments and technical agendas, recap best-in-breed earnings, synthesize the well-placed aggravation and spy the upside of anger. All that and more, just scroll down. SPY 0.00%↑ QQQ 0.00%↑ IWM 0.00%↑ MSOS 0.00%↑ PT Notional: $175M/ $116M DOJ Advances Marijuana Rescheduling Plan Favored by Biden Biden endorses cannabis reclassification, slamming 'failed approach' 69% Of American Voters—Including Majority Of Republicans—Support Marijuana Legalization, Fox News Poll Finds Twenty-One of 27 European Union Countries Legalized Medical Cannabis Why rescheduling could be boon to cannabis research GOP House Leaders Propose Reducing Regulatory Barriers For Some Hemp Growers In Draft Farm Bill Ohio gears up for legal marijuana sales for adult use NJ Senate Committee Passes Bill to Regulate Intoxicating hemp Nebraska MMJ advocates surpass one of two key signature hurdles Wild West of Weed: Oklahoma Struggles to Regulate Booming MMJ Industry Industry Headlines The proposed marijuana rescheduling rule will be officially published in the Federal Register on Tuesday 👀 Tilray to sell a large block of stock as it preps for cannabis reclassification Cannabis reclassification a real milestone for industry, says Boris Jordan Village Farms Considering Strategies to Enter Legal US Marijuana Market Pregame (written 7:15AM) I was planning on taking today off to celebrate our daughter but old habits die hard so when I’m up at 5AM, scanning the world for cannabis news, it almost seems like a waste not to share the observations, especially now. So, a few things: Yesterday’s DOJ news was “monumental,” to quote President Biden, but it was still an imperfect catalyst for a few reasons: It was already out there. We talked about how the White House had postured publicly and privately that SIII was fait accompli and two weeks ago we got that short-lived spike on reports this was coming. In other words, there was stock for sale on the news, on top of the stock people didn’t get off on the last spike. Equilibriums remain vulnerable until the structural impediments are addressed, custody is solved + real order books, market makers and exchanges are in place; it’s one thing to have a voluntary buyer’s strike, which we do, to a certain extent, but another to have an involuntary strike via system-wide custody restrictions. Markets like clarity and as detailed last night with a little help from our friends at ATB, there were remaining questions re: the DEA’s final position even though there is clear language delegating the authority to the DOJ, particularly as they have an OLC opinion in their back pocket. MSOS is +39% YTD and 76% YoY. Yes, it has a long way to go on this arduous road to redemption but it’s not like the ol’ college try ain’t there—but I don’t sense respect or appreciation on X, that’s for sure, and while I get the frustrated fret, I also believe: Biden wants this done before the election so they can run on 2.0: finishing the job. Yesterday’s announcement + several procedural moves designed to expedite the process now validate this intention and while it won’t be a particularly smooth path, we should see steady progress from here to there. The bears will not go quietly. The know the structural impediments are the soft underbelly of the bulls that can be gutted by applying the right pressure at the right time, be in the face of good news, while attempting a technical breakout, or heavy pressure and/ or odd-lot prints on the bid into the close. Mechanics are FUBAR: A NYSE-listed ETF with 25 stocks all listed on lower-tiered exchanges where compliance/ security protocols are (cough) lacking and, without order books/ real market makers/ enforcement on naked shorting, let’s just say they’ve had their way with this structurally bastardized gimp for some time. Riddle me this: if a derivative is a financial contract whose value is dependent on an underlying asset, what happens when that derivative becomes outsized vs. the asset? Beyond the exchange listing dichotomy, there’s ~500,000 MSOS calls and 150K MSOS puts on the board for the remainder of this year; add the 100X multiplier and you tell me how many of those fleas are wagging the tail that’s driving this dog? The last two bullets are the primary reasons why we feel these markets are structurally managed. When large funds/dealers are caught on the wrong side of a bet (say, short vol), they have the muscle to overwhelm the “market” until they effect the prices they want/ need (say, to pin strikes on expiration). I would go so far as to argue there’s a structural short in place, but I digress. I’ll end this stream with the upside of anger: On Toby’s Spaces last night, Cura chair Boris Jordan mentioned HF advisors are bearish on policy given historical precedent, which is aggravating but also bullish as it means the buyers are still in front of us. Between-the-Bells Today we slipped from the typical script as MSOS didn’t register it’s daily 2% decline until 11:00 AM, which was more than an hour behind schedule. Mornings with deuce-like drawdowns are like Harold Melvin w/out the Bluenotes—they never goin’ platinum. As we readied for the midday lunch crunch, I pulled up the MSOS primary trendline… …which would arrive in the low $9s, depending on when, to demonstrate the whack-a-mole we so often discuss. If you don’t look at that chart and see a concerted effort to keep that ETF from triggering a breakout > $10, then idk what to tell you. Volumes picked up into lunch, or at least that’s when slugs of Cresco + Verano traded, as we erased the rest of the official DOJ rescheduling move, not to be confused with the reported DOJ rescheduling move, which is, of course, different than the WH video announcement alluding to the news that was done back in February. As we edged into the afternoon and I readied to step away for that thing called life, it felt like the dynamics discussed—composition of volume, motivation of the marginal buyer—Madame Expiration as the Dom—were playing out in realtime as MSOS kept a wary eye on the trendline below, trading as low as $9.42 (-4%). By 2PM, the ETF halved its losses as GTI GTBIG and Trulieve TCNNF tried to lead a late-day reversal, but the space felt tired, if not trapped. Great expectations and lurching, bureaucratic processes don’t make the best bedfellows, particularly when one side of the stadium is still sitting in their cars. When the dust settled and the ink dried, it was a nothing-burger of a session in the context of an incrementally positive week, as measured by prices—but an entirely more profound week, through the lens of historical progress. Jefferies on U.S. Cannabis Earnings: GTI: Cash Generation Remains Stand-Out The thing that has really separated GTI from peers the last couple of years is its consistent financial delivery, cash generation and strong balance sheet, and it was more of the same in the recent Q. While we would like to see broader expansion for greater long-term success, its current core provides a very strong foundation to deliver on this, allowing it to invest appropriately when opportunities arise. Stay Buy. PT to C$47.60.' Cresco: Well-Placed To Now Go On Offense Again Cresco's underlying strength in brands/wholesale is industry best. With this to be main driver of long-term value, in our view, it remains one of our top-picks. That said, recent top-line delivery has not reflected this strength. With the cost structure now in a much stronger place, however, the company is now well-placed to go on offense again, with the potential for near-term M&A to also support. Stay Buy. PT to C$19.50. Cura: Long-Term Positioning Remains Industry Best While recent delivery may be viewed as soft, the outlook for the year remains robust, and we are more focused on long-term positioning anyway. Here, Cura looks industry stand-out. It has broad state exposure, good strength at wholesale and international optionality. The announcement to enter Hemp THC also highlights this long-term thinking. Finally, its bus restructuring also provides a path to NASDAQ listing before peers, in our view. Stay Buy. PT to C$23.60. AYR: About to See Inflection Top-Line Momentum Ayr has established an attractive set of assets. The issue, to date, has been evidence they can drive any meaningful value from them. One major thing holding them back, and specifically the ability to really invest, has been a sizable near-term debt overhang. With this now largely addressed, attention should turn to top-line acceleration, with encouraging 1Q24 signs and a compelling set-up into 2H24 and FY25. Stay Buy. PT to C$7.90. TSNDF: Really Like the Set-Up From Here While possible disappointment on delivery the last couple of Q's, we really like the set-up from here. One, it has a skew to states that have recently switched to adult-use or are likely to; two, it is seeing strong momentum in its wholesale business, and three, additional M&A, inc. transformational deals, are likely near-term. Added to this, its bus restructuring should also provide a path to NASDAQ listing before peers, in our view. Stay Buy. PT to C$7.00. Trulieve: Very Strong 1Q24, Driven By Florida Credit where it's due, delivery in 1Q24 was very strong, with improvements in the cost structure really impressing. Taking a near-term view, potential 2025 adult-use in Florida could also provide meaningful support. That said, we like to focus on the long term, where we continue to think its reliance on Florida is a negative, and the company seeing limited success to date outside this state, particularly in wholesale. Stay Buy. PT to C$26.10. ATB on the Rescheduling Process Investors should keep 4 things in mind regarding DOJ’s proposed rulemaking posted yesterday (full note here): The rulemaking was initiated by the AG, not the DEA. In fact, DEA hasn’t made a decision on cannabis scheduling, and appears to be against it at this point. The AG has ultimate authority over re-scheduling, so even if DEA doesn’t agree with it, re-scheduling can get done. However, can DEA’s disagreement delay the process? Has there been any instance of a substance being re-scheduled by a determination of the AG while DEA disagrees with it? Does this increase the chances of judicial challenges? The AG is relying on a legal memo by the OLC, which states that re-scheduling would not infringe on international treaties. However, the memo states that DEA may satisfy the US’ Single Convention obligations by imposing additional restrictions on cannabis. DEA will consider those additional cannabis-specific controls concomitantly to the rulemaking process. Can those additional controls be material and impact state-legal operators? We don’t think they will, but it adds uncertainty. There is a strong political will to get this done before the election. The President and VP both posted videos announcing re-scheduling. We think the administration will do what it takes. The 60-day comment period starts today, taking us to July 16. After that, it’s a matter of addressing the comments and coming up with a final rule. After the final rule gets published, it would come into effect in 30 to 60 days. All considered, there’s enough time to get it done before November. However, judicial challenges could delay it. Overall, we think it’s more likely than not re-scheduling will happen this year (the 75% probability assigned by investors in our Spring 2024 Survey appears about right). We’re one step closer to it, but there are still some lingering questions that add noise to the subject and may remain an overhang until it actually gets done. Because of this, we think (i) stocks will remain volatile on noisy headlines, and (ii) stocks will not fully price in re-scheduling just yet. Bloomberg Intelligence on 280E Tax Stuff “DEA reclassification of marijuana to Schedule III would end the applicability of 280E on the MSOs, cutting the tax liability among the five largest by around $500 million.” Stems & Seeds A study of cannabis-based medicines in people with multiple sclerosis found "significant improvements were observed in health-related quality of life." AI is making cannabis cultivation smarter Enjoy your weekend, stay safe and please enjoy responsibly. If you’d like to help Mission [Green] change federal cannabis policies, please click here. CB1 has positions in / advises some of the companies mentioned and nothing contained herein should be considered advice. This article is from an external unpaid contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.
9 Things You Must Do When Your Retirement Savings Reaches $250,000 2024-05-19 20:00:00+00:00 - skynesher / Getty Images You’ve worked hard, put money aside for retirement, and have a nest egg of $250,000 in your portfolio. Now it’s time to protect and grow your savings so you can achieve financial freedom during retirement — but how? Check Out: Here’s Exactly How Much Savings You Need To Retire in Your State Read Next: 5 Genius Things All Wealthy People Do With Their Money GOBankingRates spoke with financial experts who shared solid strategies for increasing your wealth and mapping out the best ways to have enough saved for your golden years. Use the Proper Accounts “One of the first things people should do once their retirement savings reach $250,000 is to start thinking about the types of accounts they’re using to accumulate their wealth,” retirement income specialist Antwone Harris, CFP, MBA and chief planning strategist at Platinum Bridge Wealth Strategies, told GOBankingRates. “Many tend to focus on retirement savings programs through their respective jobs, such as a 401(k) or 403(b),” he said. “While these are excellent vehicles, it’s imperative to build up assets outside of these areas because assets accumulated in them become what we call a ‘tax time bomb’ in retirement.” Harris added: “If an account like this compounds at normal historical market rates, it should double roughly every 8 to 10 years. With regular contributions, that means that many people will end up with over a million dollars in their 401(k) account by the time they retire. If these accounts are allowed to continue to compound until the required minimum distribution, which is currently age 73, some people will have rather large 401(k) accounts.” “Every dollar that comes out of this account is taxable as ordinary income,” he said. Learn More: $5 Million in Retirement Savings — Here’s How Much You Could Withdraw Per Year Be Mindful of Taxes Another thing Harris noted is to consider taxes when deciding where to put your money. “For people who have other assets that are being used for retirement, such as Social Security, these distributions can put them in a rather high tax bracket in retirement, and they are forced to continue to take money from these accounts for the rest of their lives.” He continued, “This becomes a situation where we can no longer control the tax liability, so it’s very important to build up money outside of these accounts that are typically taxed at rates lower than ordinary income tax rates for tax diversification purposes.” Meet With a Financial Advisor Having a finance expert help guide you through retirement is vital, according to Brian Kent, vice president, program manager, wealth management with FAIRWINDS Credit Union. “Meet with a financial advisor annually,” he said. “If you haven’t already, connect with a financial advisor to ensure your portfolio is diversified appropriately and to explore potential investment strategies to continue growing your savings while minimizing risk.” Story continues He added, “In this meeting, review the entirety of your retirement budget, factoring in the future cost of living, potential healthcare costs, any large purchases you envision for you and your family, and inflation.” Diversify Whenever Possible “With a substantial amount of retirement savings, you want to diversify your investments,” Betterment‘s director of investing, Mindy Yu, told GOBankingRates. “This can include a mix of stocks, bonds, and other asset classes such as real estate. Diversification helps manage risk so you’re not ‘putting all your eggs in one basket.’ It mitigates the risk of experiencing severe losses during a market downturn and increases the potential for long-term growth in your investments.” Know Where To Allocate Funds Harris additionally pointed out the importance of distributing funds to different accounts. “It’s important to start thinking about allocating a portion of your 401(k) contributions to a Roth 401(k) if it is available,” he said. “This also allows us to diversify from a tax perspective. While you are forgoing some immediate tax breaks, it allows you to pull assets from the Roth accounts later in life tax-free.” Study Proper Investment Placement Investing is also crucial to consider for retirement. “It makes sense to start thinking about where you’re placing certain types of investments,” Harris said. “For example, if you have Investments that pay qualified dividends that are typically taxed at 15% and you place them in a 401(k) account or an IRA account, you’re converting the tax rate from the qualified dividend rate to an income tax rate because every dollar that you pull out is taxed at your ordinary income tax rate,” he explained. “Thus, you potentially have converted a lower tax liability to a higher tax liability unnecessarily,” Harris added. “So, as you start to accumulate assets, thinking about asset placement investment placement is critical.” Protect Yourself Against Inflation Preparing for retirement is complicated. Not only do you have to save enough to cover yourself throughout, but you also have to plan for things like inflation. “We look at investments like Treasury Inflation-Protected Securities and sectors like healthcare that typically keep up with or outpace inflation,” Rhett Stubbendeck, CEO at Leverage Planning, explained. “This strategy has helped clients like one who shifted part of her investment to healthcare stocks, which are generally robust against inflation pressures.” Incorporate Steady Income Sources Stubbendeck also suggested including regular income streams in your retirement plan. “I recommend including bonds or fixed annuities in your portfolio,” he said. “These can provide reliable income and help reduce your exposure to market dips.” Gareth Boyd, a finance expert and head of growth at CreditCardCompare.com.au, agreed. “One of the smartest moves you could do is to gradually shift more of your portfolio into bonds and other fixed income investments, think of property or other physical assets. These provide stability and generate reliable cash flow. I generally recommend aiming for a 60/40 split between stocks and bonds at this stage.” Invest in Precious Metals Like Silver and Gold “One of the best things you can do to protect your retirement savings is to invest in precious metals,” said Tamara Genwright, owner of Wealth Advisory Solutions, LLC. “For centuries, gold and silver have maintained their value (performing well even during inflation, pandemics, and economic instability). Gold and silver allow you to ‘be your own bank’ and build wealth ‘off the grid’ without paying interest, fees, and penalties that eat away at your retirement nest egg.” More From GOBankingRates This article originally appeared on GOBankingRates.com: 9 Things You Must Do When Your Retirement Savings Reaches $250,000
U.S. and Europe Move Closer to Using Russian Assets to Help Ukraine 2024-05-19 19:54:49.050000+00:00 - The United States and Europe are coalescing around a plan to use interest earned on frozen Russian central bank assets to provide Ukraine with a loan to be used for military and economic assistance, potentially providing the country with a multibillion-dollar lifeline as Russia’s war effort intensifies. Treasury Secretary Janet L. Yellen said in an interview on Sunday that several options for using $300 billion in immobilized Russian assets remained on the table. But she said the most promising idea was for Group of 7 nations to issue a loan to Ukraine that would be backed by profits and interest income that is being earned on Russian assets held in Europe. Finance ministers from the Group of 7 will be meeting in Italy later this week in hopes of finalizing a plan that they can deliver to heads of state ahead of the group’s leaders meeting next month. The urgency to find a way to deliver more financial support to Ukraine has been mounting as the country’s efforts to fend off Russia have shown signs of faltering. “I think we see considerable interest among all of our partners in a loan structure that would bring forward the stream of windfall profits,” Ms. Yellen said during her flight to Germany, where she is holding meetings ahead of the Group of 7 summit. “It would generate a significant up-front amount that would help meet needs we anticipate Ukraine is going to have both militarily and through reconstruction.”
Want to Beat the S&P 500? History Says Avoid This Top Warren Buffett Stock 2024-05-19 19:12:00+00:00 - It's hard to argue with the S&P 500's (SNPINDEX: ^GSPC) historical performance. In the past 20 years, the broad index has produced a total return of 610%, translating to an annual average of 10.3%. If you're someone who likes to pick individual stocks, then I'd assume the goal is to try to outperform the S&P 500 over the long term. A good place to look for investment ideas might be Berkshire Hathaway's portfolio. The Oracle of Omaha's conglomerate owns dozens of stocks. But to be clear, not all of them should be purchased, especially if you want to beat the S&P 500. In fact, history says you should avoid this top Buffett stock if outperformance is the ultimate objective. Not quenching growth investors' thirst Investors looking to score huge returns should not buy shares of Coca-Cola (NYSE: KO). The global beverage giant currently makes up 6.8% of Berkshire's portfolio, behind only Apple, Bank of America, and American Express. In the past five- and 10-year periods, the stock produced a total return, including dividends, that has significantly lagged the S&P 500. That track record points to the fact that Coca-Cola is a mature business that operates in an industry that won't register growth that much better than the rise of global gross domestic product (GDP). That's because non-alcoholic ready-to-drink beverages aren't being consumed in larger quantities on a per-person basis, especially in the U.S. And Coca-Cola already sells its products in more than 200 countries and territories, so there isn't really more room to further penetrate new markets. Coca-Cola's revenue in 2023 was actually slightly lower than what the business reported 10 years before in 2013. On the bottom line, net income rose at a 2.2% annualized pace, thanks to the help of some operating leverage. It's no wonder the shares have been a notable underperformer. If sales and earnings increased at a higher clip, I'm almost positive the stock would have done much better. The valuation also looks expensive. Trading at a price-to-earnings ratio of 25.3, the stock goes for a premium relative to the S&P 500. That seems off to me, particularly when you realize that you'd have been better off just investing in the broader index in recent times. A quality business Coca-Cola might not have the potential to put up strong investment returns going forward. But to be clear, the company is still a high-quality enterprise for three very obvious reasons. I'm sure Buffett is familiar with these points. Story continues The business possesses one of the world's most powerful brands. This not only results in customer loyalty -- it helps management flex its pricing power. Even better, the brand differentiates Coca-Cola from the large number of rival products on the market. Unlike many companies, especially in the technology sector, Coca-Cola operates in an industry that doesn't invite much in the way of disruption and innovation. And that's a good thing. It means there is a minimal chance Coca-Cola will become irrelevant anytime soon. In other words, the business has durability. It will almost undoubtedly be around 50 years from now. I'll also point to the company's ability to consistently produce operating income and free cash flow, regardless of the economic cycle. Steady profits have helped Coca-Cola raise its dividend in 62 straight years and counting. So, while Coca-Cola might not satisfy investors looking to generate outsized returns, perhaps the stock catches the attention of those who prioritize having a passive income stream. Should you invest $1,000 in Coca-Cola right now? Before you buy stock in Coca-Cola, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Coca-Cola wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $566,624!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of May 13, 2024 Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has a disclosure policy. Want to Beat the S&P 500? History Says Avoid This Top Warren Buffett Stock was originally published by The Motley Fool
90-Year-Old Breaks Record As Oldest Astronaut With Blue Origin's Launch 2024-05-19 19:10:00+00:00 - Loading... Loading... In a significant milestone for space tourism, Blue Origin, the space venture of Jeff Bezos, has successfully launched its first crew to suborbital space since 2022. The crew included the oldest person and the first U.S. Black astronaut candidate from the 1960s. What Happened: As per Reuters, the six-person crew was launched from West Texas on Sunday, marking the revival of Blue Origin's space tourism operations. Among the crew members was Ed Dwight, who at 90 years and eight months, set the record for the oldest person to travel to space. The launch took place from Blue Origin's facilities near Van Horn, Texas. The rocket separated from the capsule, which then ascended to 65.7 miles (105.7 km) beyond Earth's atmosphere. The booster returned to land as planned, and the capsule descended back to Earth under parachutes after a mission lasting roughly 10 minutes. See Also: China Slams Rival Nations Amid Espionage Attempts In Space Sector: 'Spare No Effort To Contain And Suppress Us' Ed Dwight was the first Black astronaut candidate selected by former U.S. President John Kennedy in 1961. Despite this, he had never flown to space until now. "I am ecstatic," Dwight said upon landing. Why It Matters: Blue Origin's New Shepard rocket had been grounded since a mid-flight failure in September 2022. The company implemented 21 corrective actions, including an engine redesign and organizational changes, before resuming flights. These changes were overseen by the U.S. Federal Aviation Administration. Under the leadership of new CEO, Dave Limp, who was appointed last year, Blue Origin has prioritized resuming New Shepard's routine missions. The company also plans to debut its larger rocket, New Glenn, by the end of this year, further expanding its space tourism operations. Read Next: Jeff Bezos-Owned Blue Origin To Resume Space Tourism Flights After Nearly 2-Year Long Hiatus This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo: Shutterstock
Biden confronts 2024 weak spots with young, Black voters at Morehouse commencement 2024-05-19 19:01:00+00:00 - U.S. President Joe Biden addresses Morehouse College graduates during a commencement ceremony in Atlanta, Georgia, U.S., May 19. President Joe Biden on Sunday addressed the war in Gaza and discussed his investments in Black communities during a commencement speech at Morehouse College, part of a larger effort to reinvigorate the voter coalition that helped elect him in 2020. "We're connecting Black neighborhoods cut off by old highways and decades of disinvestment when no one cared about the community," the president said at Morehouse, a historically Black men's college in Atlanta. The president spotlighted several other policy victories to rally his audience, including his student loan relief program and a new $16 billion investment for historically Black colleges and universities, or HBCUs. Biden's commencement address at Morehouse comes as recent polling has showed Black voters, especially young ones, have weakening enthusiasm for the president. Biden's support among Black voters so far is 7 percentage points lower than it was at the same period in 2020, according to an NBC News average of national polls since April 1. Meanwhile, former President Donald Trump's support from Black voters has increased by 9 percentage points. But Biden still has the majority of support among Black voters, at 69% vs. Trump's 18%. While he still holds steady ground with older Black voters, Biden's weakness with young voters is spurred in part by the ongoing tensions over the Israel-Hamas war, which have reached a fever pitch in recent weeks as college campuses have become hotbeds of protest. "Your voices should be heard, and I promise you I hear them," Biden said during the address. "What's happening in Gaza and Israel is heartbreaking. … That's why I've called for an immediate cease-fire." The roughly half-hour speech went basically uninterrupted by protests, though some students and faculty members expressed their support for Gaza during the ceremony. Biden's remarks were even well-received by some students. "I'm happy with his words that he said," Morehouse graduating senior Sebastian Gordon told NBC News after the remarks. "I'm just gonna continue to watch to make sure his actions line up with that." The Morehouse speech is one prong of a multifront strategy to reach out to the Black voter coalition and regain the momentum that propelled Biden to the White House in 2020, when 87% of Black voters supported him, according to NBC News exit polling data. On Saturday, before the commencement address, Biden held a campaign event with Georgia voters and was set to meet with small-business owners in Detroit later Sunday, after which he was slated to deliver remarks to the NAACP, according to a campaign memo obtained by NBC News. The campaign events come alongside an administration-wide effort to make the case for why Biden has been an effective president for Black communities. Vice President Kamala Harris has spent years reaching out to Black voters over the course of Biden's first term. Most recently, she has been on a weeks-long "Economic Opportunity Tour," spotlighting the administration's attempts to lower costs and advance economic freedom for underserved groups, especially Black communities. That pitch is not just coming from the top of the ticket. For example, Treasury Undersecretary Wally Adeyemo who typically makes international trips to discuss G7-level economic security issues, has been making the rounds in U.S. battleground states to highlight Biden's economic agenda. Adeyemo is scheduled to tour Nevada, a key voting bloc, with the state's Democratic Rep. Steven Horsford on Monday to tout Biden's progress on lowering energy and child care costs. That comes after his trip to Wisconsin last Thursday with Harris' Economic Opportunity Tour. "The number of Black small businesses have doubled during the Biden-Harris administration," Adeyemo said at the event Thursday. "And when Black Americans do well, everyone does well."
From IV treatments to cold plunges here are the biggest anti-aging trends sweeping the nation 2024-05-19 18:56:31+00:00 - High-end longevity clinics that offer everything from genetic testing to cocktails of supplements are growing in popularity — especially among high-income groups. Clinique La Prairie's seven-day premium revitalization package claims to stimulate cell regeneration, fight the signs of aging, and reinforce the immune system, for more than $50K a week. Clinique La Prairie Many of these longevity centers offer packages or retreats that can be pretty pricey — sometimes upwards of tens of thousands of dollars a week — but longevity experts contend that they are some of the best places to get practical longevity guidance. "The truth is that most people are probably wasting time and money on products that will never materially help them," Matt Fellowes, an advisory council member at the Stanford Center on Longevity and cofounder of health insights platform BellSant, told Business Insider by email. "One exception are some of the clinics that cater to high-income adults, which are actually science-based and, most importantly, create highly personalized assessments and guidance for people – meaning, they only focus on what their specific bodies need." At Clinique La Prairie — a more than 90-year-old longevity center in Switzerland — the seven-day, six-night "premium revitalization" package includes longevity consultations, sleep quality assessments, DNA tests, personalized nutrition guidance, and personal training sessions, alongside luxury accommodation and limousine service for about $53,000. The program "stimulates cell regeneration, fights the signs and causes of aging, and reinforces the immune system through a four-pillared approach of medicine, nutrition, wellbeing, and movement," a spokesperson for Clinique La Prairie previously told BI. There are less expensive options, however.
Disneyland Character Workers at California Park Vote to Unionize 2024-05-19 18:36:31.998000+00:00 - A majority of Disneyland cast members who perform as characters such as Mickey and Minnie Mouse and dance in parades at the amusement park, in California, voted to unionize with the Actors’ Equity Association on Saturday, the union said. The Actors’ Equity Association, the national labor union that represents more than 51,000 professional actors and stage managers, said it had exceeded the threshold it needed in a vote overseen by the National Labor Relations Board, winning a 79 percent majority with 953 yes votes and 258 no votes, according to a statement. Among the key issues that brought workers together to fight for representation in future negotiations with the company were securing improvements in safety and scheduling and demanding “a living wage,” as well as other workplace benefits, the union said. “They say that Disneyland is ‘the place where dreams come true,’ and for the Disney cast members who have worked to organize a union, their dream came true today,” Kate Shindle, the actor association’s president, said in a statement on Saturday.