Article: Share buybacks roar back – but how good an idea are they?

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Share buybacks roar back – but how good an idea are they?

Adrian Holliday, 13 May 2021

Spurred by the speed of global vaccination roll-outs, stimulus boosts and a white-hot US first-quarter earnings period, some US companies have upped dividend payments to their shareholders. Alternatively, they’re buying back their own shares in ‘buybacks’. So what are share buybacks? Is the UK seeing a similar wave – and how good an idea are share buybacks for investors? Continue reading “Article: Share buybacks roar back – but how good an idea are they?”

Article: Global holdings of US Treasury Debt

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Global holdings of US Treasury Debt

Mark Lundeen , 26 April 2021

During 2007-09 credit crisis the global banking system suffered from a grand-mal seizure. Trillions in their reserves becoming insolvent. The global payment system broke down. There was no way the big Wall Street banks and the financial markets would be spared from his slaughter unless Dr Bernanke and his FOMC began “stabilizing” the financial markets with a brilliant new contrivance; a QE.

As always, we begin with a Bear Eye’s View (BEV) of the Dow Jones, with this BEV chart beginning in January 1982. What’s a BEV chart? It’s a view of a market’s price series where each new all-time high registers as a 0.00%, or a “BEV Zero.” All other data points NOT a new all-time high are converted into a negative percentage claw back from its previous BEV Zero. Continue reading “Article: Global holdings of US Treasury Debt”

Article: Rippling Cyberattacks Force Corporate Boards to Rethink Risk

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Rippling Cyberattacks Force Corporate Boards to Rethink Risk

Andrea Vittorio, Jake Holland, 15 April 2021

Corporate boards, in the wake of cyberattacks on software providers SolarWinds Corp. and Microsoft Corp., are seeking out expertise from consultants, lawyers and associations that offer cybersecurity training—an oversight boost that could cushion them legally in the event they’re sued or penalized by regulators after a breach.

The recent hits have forced boards of directors to rethink cybersecurity challenges and their potential ripple effects as companies face mounting legal and reputational risks from costly hacks. The attacks also show how cyber incidents in a connected system can quickly spread to contaminate thousands of companies at once. Continue reading “Article: Rippling Cyberattacks Force Corporate Boards to Rethink Risk”

Article: Nancy Pelosi’s Husband Uses Call Options To Buy Microsoft Ahead Of Big Govt Contract

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Nancy Pelosi’s Husband Uses Call Options To Buy Microsoft Ahead Of Big Govt Contract

TYLER DURDEN, 14 April 2021

Legalized Insider Trading
It is OK for members of Congress to trade on inside information including government contracts before deals are announced.

House Speaker Nancy Pelosi did just that, rather, her husband did.

Purchase of Stock Via Call Options
Barron’s reports Nancy Pelosi’s Husband Bought Roblox, Microsoft Stock

The Barron’s article is behind a paywall. Fox News also reports the same thing: Pelosi’s Husband Bought $10M in Microsoft Shares Through Options. Continue reading “Article: Nancy Pelosi’s Husband Uses Call Options To Buy Microsoft Ahead Of Big Govt Contract”

Article: GameStop Slips as Skeptic Warns That Reddit Rally Will Fade

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GameStop Slips as Skeptic Warns That Reddit Rally Will Fade

Bailey Lipschultz, 12 April 2021

(Bloomberg) — GameStop Corp.’s Reddit-fueled trading surge is likely going to fade as threats from digital game downloads sink in, according to one skeptical Wall Street analyst.

The stock slumped after Ascendiant Capital Markets analyst Edward Woo downgraded the retailer to sell from hold, saying increasing digital sales for video-game publishers is a looming risk given GameStop’s minimal market share. He warned clients in a note about the long-term prospects for the company as the market for new gaming systems matures after new launches from Microsoft Corp. and Sony Group Corp. Continue reading “Article: GameStop Slips as Skeptic Warns That Reddit Rally Will Fade”

Article: GameStop plans to elect activist investor Cohen as chairman

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GameStop plans to elect activist investor Cohen as chairman

Reuters, 08 April 2021

GameStop Corp, which has been part of a recent Reddit-driven trading frenzy, said on Thursday it intends to elect activist investor Ryan Cohen as chairman, putting him in the driver’s seat as he looks to transform the videogame retailer.

Since Chewy co-founder Cohen joined GameStop’s board in January, he has been pushing towards transformation of the brick-and-mortar retailer into an e-commerce firm that can take on big-box retailers such as Target Corp and technology firms such as Microsoft Corp.

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Article: Why Is Everyone (Still) Talking About GameStop Stock?

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Why Is Everyone (Still) Talking About GameStop Stock?

Keith Noonan, 19 March 2021

GameStop (NYSE:GME) has to be 2021’s most interesting stock. The video game retailer started to pick up momentum ahead of the launch of new game consoles from Sony and Microsoft last year, and over the past two months, short-squeeze mania and other big developments have led to incredible swings for the the company’s share price.

GameStop’s stock climbed as high as $483 per share during the height of short-squeeze mania. While the stock briefly returned to trading in the range of $50 per share, it’s bounced back once again and traded at $201.75 at Thursday’s close. That price represents a 971% increase year to date and a 4,715% increase from the $4.19 share price the stock had one year ago.

Why is GameStop surging, and what comes next?

How did we get here?
The start of GameStop’s improbable, supercharged rally can be traced back to the introduction of Sony’s PlayStation 5 console and Microsoft’s Xbox Series X and Series S platforms in 2020. New console launches have historically led to a cyclical upcycle for GameStop’s business and stock performance.

Pricing momentum created by the new hardware launches was further intensified by news that activist investor and Chewy co-founder Ryan Cohen was amassing a large stake in the company and would advocate for pushing the business toward an e-commerce focus.

From there, Reddit’s WallStreetBets group began championing the stock as a potential target for a huge short squeeze. Social media users noticed that enormous short interest had amassed against GameStop — and that a massive run for the stock could potentially be generated through a bit of favorable news and coordinated buying.

Prior to the first major short squeeze, GameStop had about 50 million shares of its stock outstanding. At the same time, roughly 70 million shares of the company’s stock had been sold short — meaning that investors had placed bets against more shares of the company’s stock than actually existed.

Short interest exceeding the company’s actual outstanding share count was made possible through a practice called naked short selling, which allows bets to be placed against shares that haven’t actually been borrowed. WallStreetBets members wound up being right about the squeeze, and GameStop bulls notched incredible gains as short-sellers were forced to buy back the stock at elevated levels in hopes of avoiding massive losses.

A combination of continued short-squeeze momentum and indications that the company would be aggressively pursuing its pivot to online retail have added new chapters to the story of GameStop’s incredible rally, and it currently stands as one of the best-performing stocks of the year. Cohen has been appointed chairman of a new committee to accelerate the business’s online retail push, a bounce for the stock has once again attracted new short interest, and the GameStop saga rages on.

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