Rachit Vats, Author at Elite Stock Chat

SKLZ – Why Cathie Wood Is Bullish On Skillz

Written by Rachit Vats on April 26, 2021. Posted in SKLZ, Stock Report.

Cathie Wood-led Ark Investment Management believes the mobile gaming company Skillz Inc (NYSE: SKLZ) has been a victim of misunderstanding after recent short-seller allegations against the company related to its revenue recognition practices and its NFL partnership.

What Happened: Skillz shares have risen 44.8% since Tuesday’s close on fresh investor support and are down 9.15% on a year-to-date basis amid Wolfpack Research’s classifying Skillz’s top games as “stagnant to declining.”

The New York-based hedge fund Ark said it reviewed the reports and believes the claims were either exaggerated or incorrect.

“The recent allegations against the company range from its revenue recognition practices to its recent NFL partnership. After reviewing the reports, we believe the claims to be either exaggerated or incorrect,” ARK Invest said in a stock commentary newsletter on Friday.

“We believe these short reports stem from a misunderstanding of the company, its position in the gaming ecosystem, and its future ambitions.”

Ark owns over 12 million shares in Skillz divided between ARK Innovation ETF (NYSE: ARKK) and ARK Next Generation Internet ETF (NYSE: ARKW), worth about $218.7 million as of Friday’s close.

Why It Matters: Skillz is a mobile games platform that enables competitive eSports-style play that hosts billions of casual esports tournaments annually.

Skillz shares tanked last month after Wolfpack said Skillz’s top three games — which make up for 88% of its revenues — had already peaked by the third quarter of 2020 and its growth story is falling apart in the first quarter of this year.

Wolfpack wrote that, while Skillz was projecting a 12.3% sequential growth and 61.4% year-over-year revenue growth in Q1 2021, third-party app data indicated that the company’s total installations had declined by double digits in the first two months of that period.

In February, Skillz announced a partnership with the National Football League to host a global game development competition.

Price Action: The stock closed 9.33% higher at $18.17 on Friday.

Photo courtesy: Skillz Inc.

Latest Ratings for SKLZ

Date	Firm	Action	To
Apr 2021	Jefferies	Initiates Coverage On	Hold
Feb 2021	UBS	Initiates Coverage On	Neutral
Jan 2021	Canaccord Genuity	Initiates Coverage On	Buy

View More Analyst Ratings for SKLZ

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NFLX – Netflix Chairman Reed Hastings Realized $612M From Stock Options Last Year

Written by Rachit Vats on April 26, 2021. Posted in NFLX, Stock Report.

Netflix Inc (NASDAQ: NFLX) Chairman and Co-CEO realized about $612.1 million from stock options in 2020, a regulatory filing revealed.

What Happened: Hastings exercised his stock options to acquire a total of 1,327,634 shares of the subscription video-on-demand company through the year.

Ted Sarandos, who became co-CEO last year, acquired a total of 105,372 shares, realizing a total of $30.45 million from stock options in 2020.

Hastings’ 2020 total compensation was valued at $43.2 million, compared with $38.6 million in 2019 — while for Sarnados the compensation was $39.3 million, up from $34.7 million in 2019.

Netflix said stock price needs to appreciate 40% before the employee is better off allocating cash to stock options. The SVOD company added it does not use performance-based bonuses as it believes that they tend to incentivize specific, typically short-term-focused behavior rather than encourage long-term stockholder value creation.

Why It Matters: Netflix broke subscriber records in 2020, with 37 million net additions in the year, compared with its previous record gain of 28.6 million new subscribers in 2018. It reported 208 million paid subscribers at the end of Q1, a 14% year-over-year increase but below the guidance figure of 210 million.

The SVOD company said in its first-quarter letter to shareholders that it believed “paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays.”

While some uncertainty due to COVID-19 persists, Netflix expects a strong second half with the return of new seasons of its “biggest hits and an exciting film lineup.”

Price Action: Shares of Netflix closed 0.63% lower at $505.55 on Friday.

MSFT – Discord Sets Aside Microsoft's Acquisition Bid In Favor Of IPO Plan Revival: WSJ

Written by Rachit Vats on April 21, 2021. Posted in MSFT, Stock Report.

Messaging platform Discord Inc has ended acquisition talks with Microsoft Inc (NASDAQ: MSFT) as it plans to stay independent and chase a potential initial public offering, The Wall Street Journal reported on Tuesday.

What Happened: Microsoft was in advanced talks to buy the fast-growing gaming communications startup Discord, with a bid of around $10 billion. The tech giant has been on the lookout for big-ticket purchases to reach more consumers and acquired Nuance Communications Inc (NASDAQ: NUAN) for $16 billion last week.

Microsoft came near to buying Chinese video-sharing social networking site TikTok’s operations in the United States, Canada, Australia, and New Zealand last year in a deal that could have fetched $20 billion to $30 billion.

Launched in 2015, San Francisco-based Discord was in talks with at least three other companies, the WSJ report noted. The social networking startup runs a free online platform to enable conversations by means of text, audio, and video. It is primarily popular among gamers.

Also Read: Why Is Microsoft Interested In Acquiring Discord?

Why It Matters: Microsoft’s deal with Discord would have helped it expand its social media presence beyond LinkedIn Corp and Xbox gaming business. Discord users rely on the platform to communicate with each other while playing games and find it offers better audio and features than competition including Microsoft-owned Xbox and Skype.

The startup claims to have doubled its monthly user base last year to about 140 million as daily life moved online amid the COVID-19 pandemic. The still-not-profitable company delivered $130 million in revenue in 2020, up from nearly $45 million in 2019.

Several startups with ties to the videogame industry have gone public recently, including developers Roblox Corp (NYSE: RBLX) and Playtika Holding Corp (NASDAQ: PLTK), game-hardware maker Corsair Gaming Inc. (NASDAQ: CRSR) and game-creation tool provider Unity Software Inc (NYSE: U).

Price Action: Microsoft shares closed 0.19% lower at $258.26 on Tuesday.

RIDE – Lordstown Endurance Truck Falls Short Of Completing Desert Race, Withdraws At 40 Miles

Written by Rachit Vats on April 19, 2021. Posted in RIDE, Stock Report.

Lordstown Motors Corp (NASDAQ: RIDE) said on Sunday its electric pickup truck Endurance, which competed in the off-road desert race SCORE International San Felipe 250, failed to cross the finish line in Baja California, Mexico.

What Happened: According to reports, the Ohio-based startup’s electric pickup Endurance clocked about 40 miles, just one-seventh of the total distance of 290 miles.

The company had last week unveiled the pickup would participate in the race and said, every year, about 350 purpose-built vehicles compete in the harsh race and less than 50% ever cross the finish line.

“We did not cross the finish line, but we are proud of the work our team and partners put in to make entering this race possible,” the company said in a tweet.

Lordstown did not provide any details but said its hub motors, battery pack and software performed well under the treacherous conditions in Mexico.

The company said the race has provided valuable insights and it has pulled out of the race to now focus on the Beta builds ahead of production in September.

Lordstown had last month said it will begin Endurance production in September. The pickups are made at a manufacturing facility previously operated by General Motors Co (NYSE: GM). For its battery supply chain, Lordstown has signed a multi-year agreement with LG Energy Solution.

Rivals such as Tesla Inc (NASDAQ: TSLA), Ford Motor Co (NYSE: F), and Amazon.com Inc-backed (NASDAQ: AMZN) Rivian are racing to start producing their own full-size electric pickups.

The Endurance pickup is expected to have a target range of 250 miles and a price of $52,500, or $45,000 after reducing the $7,500 federal tax credit.

Why It Matters: The withdrawal comes at a crucial time for the electric vehicle startup which went public through a merger with a blank-check company DiamondPeak Holdings in October last year.

It came under investor scrutiny after short seller Hindenburg Research published a report accusing the company of fudging order data and production capabilities.

Shares of the company dived 12% in March after the electric truck maker disclosed that it had received a request for information from the U.S. Securities and Exchange Commission regarding accusations by Hindenburg related to its order book.

The company said in January it had received more than 100,000 non-binding production reservations from commercial fleets for its electric truck. Hindenburg had said Lordstown’s orders are largely fictitious and used as a prop to raise capital and confer legitimacy.

Price Action: Lordstown shares, which have seen their value halved since the beginning of the year, closed 2.35% higher at $10.02 on Friday.

Photo by Trump White House Archive on Flickr

RMO – Why Romeo Power Stock Spiked 60% Today

Written by Rachit Vats on April 7, 2021. Posted in RMO, Stock Report.

Romeo Power Inc (NYSE: RMO), the electric vehicle battery maker which went public recently via a special purpose acquisition company, saw its shares close 59.60% higher on Tuesday.

What Happened: The California-based company has signed a long-term contract with medium- and heavy-duty truck maker Paccar Inc (NASDAQ: PCAR) to supply battery packs, modules, and battery management systems for its upcoming electric vehicles.

According to the deal, Romeo Power will supply batteries for Paccar-owned Peterbilt 579 and 520 battery electric vehicles in the United States and Canada through 2025. The production is expected to begin after 2021.

Founded in 2016, Romeo Power has engineers from Tesla Inc (NASDAQ: TSLA) and Amazon.com Inc (NASDAQ: AMZN), among others.

The company supplies battery packs for trucks and buses, and auto parts supplier BorgWarner Inc (NYSE: BWA) is known to own 20% of the company.

Romeo makes the lithium-ion battery modules and packs them at its California facility. It claims its battery packs deliver an average of 30% greater power density than competitors which in turn ensures more capacity on wheels, longer range as well as warranty.

Why It Matters: Competition among electric commercial vehicle battery makers is rising as more and more blank check-backed startups hop on to the ongoing electrification drive. Romeo, which counts Nikola Corp (NASDAQ: NKLA) among customers, had said in its October-listing event that it has secured $300 million worth of revenue and is in advanced talks to grab contracts worth $2.4 billion.

Romeo claims it has capabilities to address the commercial electric vehicle market from Class 3 to Class 8 trucks and it already has an order book with customers that make up 70% of the North American Class 8 commercial vehicle market.

Price Action: Romeo Power shares were down 4.30% in extended hours. Shares of Paccar closed 1.18% lower at $92.85 on Tuesday and were up 0.28% in extended hours.

IEP – Icahn Enterprises Hires Former GE M&A Head To Be New CEO

Written by Rachit Vats on April 5, 2021. Posted in IEP, Stock Report.

Billionaire investor Carl Icahn’s investment firm Icahn Enterprises (NASDAQ: IEP) has hired a former General Electric Co (NYSE: GE) executive as the company’s CEO, the Wall Street Journal reported on Sunday.

What Happened: Aris Kekedjian, a 30-year GE veteran, left the company in 2019 where he was leading the conglomerate’s M&A strategy as the Chief Investment Officer since 2016. Kekedjian replaces Keith Cozza, who had been serving as Icahn Enterprises CEO since 2014.

Icahn announced plans to relocate his home and business to Florida from New York in 2019. According to the report, Cozza and SungHwan Cho, the chief financial officer at the company are leaving the company due to the relocation.

Icahn Enterprises, a listed company with a market value of more than $13 billion and with significant investments in energy, autos, real estate, plans to name a new CFO later.

After leaving GE, Kekedjian has been a strategic adviser to Rainmaker Worldwide Inc (OTC: RAKR) whose technology can provide water in arid environments.

Brett Icahn, a graduate of Princeton University, joined Icahn Capital in 2002 and is expected to take over the reins at the investment management firm from his father, Carl Icahn, 85.

Price Action: Shares of Icahn Enterprises closed 2.48% higher at $55.05 on Thursday.

ARKX – Cathie Wood's Ark Space Exploration ETF To Begin Trading On Tuesday

Written by Rachit Vats on March 29, 2021. Posted in ARKX, Stock Report.

Cathie Wood-led ARK Investment Management’s newest fund, the ARK Space Exploration & Innovation ETF (BATS: ARKX) will begin trading on Tuesday, according to a notification from CBOE Global Markets.

What Happened: This will be Cathie Wood and ARK’s first ETF launch in nearly two years. In January, the hedge fund filed an offering for the Ark Space Exploration ETF to be listed under the symbol “ARKX.”

The ETF will invest 80% in stocks that are engaged in the investment theme of space exploration and innovation, as per the earlier filing.

Ark defines space exploration as “leading, enabling or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.”

The fund is grouping space exploration into four categories — orbital aerospace companies, suborbital aerospace companies, those enabling technologies companies, and aerospace beneficiary companies.

Why It Matters: Among the names that could be included in the new Space ETF from Cathie Wood are large caps like Boeing Company (NYSE: BA) and Lockheed Martin Corporation (NYSE: LMT). The ETF could also include smaller names like Virgin Galactic Holdings (NYSE: SPCE).

Ark joined the list of top ten ETF companies with $41.5 billion in assets compared to $3.5 billion a year ago this year, as reported by Bloomberg.

Ark’s active ETFs include ARK Fintech Innovation ETF (NYSE: ARKF), ARK Genomic Revolution ETF (NYSE: ARKG), ARK Innovation ETF (NYSE: ARKK), ARK Autonomous Technology & Robotics ETF (NYSE: ARKQ) and ARK Next Generation Internet ETF (NYSE: ARKW).

F – Chip Shortage Leads Ford To Idle F-150 Plant Through Sunday

Written by Rachit Vats on March 26, 2021. Posted in F, Stock Report.

Ford Motor Co (NYSE: F) is idling production at the Dearborn, Michigan plant — where it makes the highly profitable F-150 pickup trucks— from Friday to Sunday due to the global semiconductor chip shortage, Reuters reported on Thursday.

What Happened: A global semiconductor chip shortage has forced automakers across the world to delay or cut vehicle productions and are also disrupting global supply chains at a time when economies are reopening after being hit by the pandemic and consumer demand for personal mobility is on the rise.

Ford and other automakers are focusing on building their most profitable vehicles first but a production halt for its full-sized pickups indicates the chip shortage is worsening.

The second-largest U.S. automaker had said last week it would build F-150 trucks and Edge SUVs without certain parts and hold them for a number of weeks until they can be completed and shipped.

Why It Matters: Asian chipmakers are rushing to expand their production capacity to meet a global semiconductor shortage that is hurting carmakers the most even as companies such as Ford, General Motors Co (NYSE: GM), Tesla Inc (NASDAQ: TSLA) Honda Motor Co (NYSE: HMC) and many others have all said they are shutting down certain assembly lines due to the shortages.

Price Action: Shares of Ford closed up 1.5% at $12.32, those of GM up 1.4% at $56.6, Tesla up 1.61% at $640.4 and those of Honda were up o.36% at $30.25, as of Thursday’s close.

Photo by Kevauto on Wikimedia

AME – Ametek In Advanced Talks To Buy Abaco Systems For $1.5B: Report

Written by Rachit Vats on March 22, 2021. Posted in AME, Stock Report.

Ametek Inc (NYSE: AME) is said to be nearing a $1.5 billion deal to acquire Abaco Systems Inc for as much as $1.5 billion.

What Happened: The electronics instruments maker is talking with its current owner and private equity firm Veritas Capital to acquire the former General Electric Co (NYSE: GE) subsidiary, Bloomberg reported on Sunday, citing people with knowledge of the matter.

Abaco primarily offers products and services related to rugged computing in sectors like defense and aerospace in addition to commercial and industrial organizations. It was bought by Veritas in December 2015 for an undisclosed amount and was then named GE Intelligent Platforms.

Why It Matters: Ametek employs about 17,000 people across 30 countries, Bloomberg noted based on its website. The stock has risen about 107% over a year, and is down about 0.2% year-till-date.

Veritas, which raised its first fund in 1998, focuses its deals on businesses that interact with the government, including in aerospace, defense, and technology, according to its website.

A final decision hasn’t been made and Veritas could decide to sell to another buyer or keep the business, the Bloomberg report said.

Price Action: Ametek shares closed 0.75% lower at $120.7 on Friday.

Photo: Courtesy of Abaco

TBA – ironSource Confirms $11B SPAC Deal With Thoma Bravo To Go Public: What You Need To Know

Written by Rachit Vats on March 22, 2021. Posted in Stock Report, TBA.

U.S. private equity firm Thoma Bravo’s blank-check company Thoma Bravo Advantage (NYSE: TBA) has reached an agreement to take Israeli mobile monetization company ironSource public through a merger that values the combined business at $11.1 billion, the companies said on Sunday.

What Happened: Thoma Bravo Advantage, a special purpose acquisition company, or SPAC, will help fund the deal with $1.3 billion of new investment from a group of blue-chip asset managers that include Tiger Global Management, Wellington Management and Seth Klarman’s Baupost Group. Bloomberg first reported the news last week, citing people familiar with the matter.

Under the terms of the deal, ironSource shareholders will receive $10 billion, including $1.5 billion of cash and a majority of shares in the combined company. ironSource is expected to have $740 million of cash upon completion.

Orlando Bravo, founder and managing partner of Thoma Bravo, the private equity giant behind the SPAC, will join the board of ironSource at the closing of the deal.

Why It Matters: Tel Aviv-based IronSource is a software company that counts app creators among its users. The company co-founded by Tomer Bar Zeev has described itself as “profitable from almost day one.”

Under Bravo, the firm has built a reputation for buying cloud software companies, keeping existing management in place and backing them in a way more akin to venture capital.

ironSource posted 2020 revenue and adjusted EBITDA of $332 million and $104 million, respectively.

Price Action: TBA shares closed at $10.82 on Friday.

Author: Rachit Vats

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