Good morning! Today’s word count is 1,229 words, or a 7-minute read. Let’s get to it:
“The S&P 500 is hovering just a few points below its record closing high from February, shortly before the coronavirus pandemic ravaged financial markets,” The Wall Street Journal writes.
- S&P 500: $3,380.86
- Nasdaq: $11,083.20
- Bitcoin: $11,904.49
- U.S. 10-Year: 0.680%
Justin Oh’s Quick Read
Moderna, Inc. ($MNRA) looks over-priced on the Covid-19 vaccine hype. We don’t know how profitable the vaccines will be, and there seem to be better vaccines that will compete post-pandemic. Furthermore, the whole management team has been aggressively selling its shares. My intel shows that the CMO and CTO have completely sold all their shares in the company.
Catching Up on Where TikTok Stands
President Trump signed an executive order Friday compelling ByteDance to sell TikTok’s U.S. operations within 90 days.
- Trump stated there is “credible evidence” leading him to believe that ByteDance “might take action that threatens the national security of the United States.”
- The new order revises the previously set 45-day timeline but clarifies that TikTok’s only path to survival is a sale to an American buyer.
- Microsoft remains the favorite, with talks ongoing to buy TikTok’s operations in the U.S., Canada, Australia and New Zealand. Twitter has also expressed interest.
TikTok employees are planning to file a lawsuit against the Trump administration’s executive order.
- If TikTok is banned, it could prevent the company from paying its U.S. employees.
- The group is looking to file an injunction to avoid that outcome.
- “The employees claim that the executive order would result in approximately 1,500 ByteDance and TikTok employees in the U.S. losing their paychecks.”
- Blackstone Law Group managing partner John Lovi will represent the group and internet law specialist Mike Godwin will consult on the case.
Trump may not stop at TikTok and WeChat.
- “President Trump suggested that he is considering targeting other Chinese companies after his administration’s recent crackdown on TikTok and WeChat in the U.S.,” according to Reuters.
- “Separately, Trump over the weekend opened his verified account on video-sharing app Triller, one of TikTok’s U.S. competitors whose downloads have surged due to the challenges facing TikTok.”
Whichever company does wind up with TikTok’s U.S. business, safety concerns still need to be remedied.
- “In July, TikTok classified more than a third of its 49 million daily users in the United States as being 14 years old or younger.”
- However, there are several users TikTok “believes” might be younger than 13 using the app, which raises questions about whether the company is doing enough to protect them.
Read More: (WALL STREET JOURNAL)
NHL and Sportradar Reportedly Agree to Gambling Data Rights Deal
After holding a competitive auction, sports data firm Sportradar has reportedly won the exclusive rights to distribute the NHL’s gambling data to sportsbooks in the U.S. and abroad.
Why It Matters
With the deal, Sportradar just swept the big four American sports.
- The Switzerland-based company provides in-depth sports data to media companies, bookmakers, sports federations and government authorities.
- Its business has attracted high-profile investors such as Mark Cuban, Michael Jordan and Ted Leonsis.
- If the NHL deal goes official, Sportradar would have gambling data rights in all four major U.S. sports (it shares the rights to MLB and the NBA).
Why is gambling data so valuable?
- A deal like this makes Sportradar an attractive middleman between the league and gambling operators.
- While the deal includes basic stats like goals and assists, the NHL is rolling out its puck and player tracking technology, which will produce thousands of new data points per second.
- New data allow new wagers such as fastest skater or hardest shot, which would be impossible to track off a live video feed.
It’s a massive financial windfall for the NHL.
- The final terms of the deal are unknown, but late-stage bidding for the ten-year contract reportedly crossed $250 million and may include equity for the league.
- The NHL, like its peers, sees gambling as an opportunity to increase fan engagement and could earn upwards of $200 million per year in added revenue from betting.
And equity would be huge because Sportradar is going public.
- Last month, Sportico reported Sportradar was exploring plans to go public through a reverse merger.
- The company had a multi-billion valuation as recently as 2018.
Numbers to Consider
- $2.4 Billion – Sportradar’s valuation back in 2018.
- $216 Million – The potential added revenue per year the NHL could generate from sports gambling.
Read More: (SPORTICO)
A Quick Look
Goldman Sachs Boosts S&P 500 Target as Strategists Catch Up
- Goldman Sachs became the latest firm to boost its year-end price target for the S&P 500, with David Kostin raising his forecast from $3,000 to $3,600.
- The rally has caught investors by surprise – the S&P now sits at $3,380.86, 51 percent off its March lows – and threatens to surpass its February closing record. Goldman’s growth expectations stem from positive news in the race to a Covid-19 vaccine.
- “Large stimulus injections have fueled the climb in the S&P 500 since the March sell-off sparked by the pandemic. The gauge briefly surpassed an all-time high last week, helped by better-than-expected economic and earnings data, and optimism about an early rollout of a vaccine.”
- J.P. Morgan strategists also advised investors to stay bullish on U.S. equities despite substantial gains and upcoming U.S. election risks citing “U.S. sectoral exposure to growth and defensive stocks will help it outperform other developed markets, and that American profit growth will likely beat that of Europe.”
Read More: (BLOOMBERG)
Worth Your Time
Headaches and Woes: Amazon’s antitrust woes are only getting worse. Germany’s antitrust regulator announced its probing Amazon’s pricing of third-party sellers’ products, especially during the Covid-19 pandemic. How Amazon treats its third-party sellers has drawn repeated scrutiny in some of its essential regions (Germany is Amazon’s second-largest market). Last week, Canada’s antitrust organization opened a similar probe, and authorities in the U.S. and Europe are also conducting investigations. (THE INFORMATION)
So Soon We Change: “Prodded by governments and investors to address climate change concerns about their products, Europe’s oil companies are accelerating their production of cleaner energy — usually electricity, sometimes hydrogen — and promoting natural gas, which they argue can be a cleaner transition fuel from coal and oil to renewables. For some executives, the sudden plunge in demand for oil caused by the pandemic — and the accompanying collapse in earnings — is another warning that unless they change the composition of their businesses, they risk being dinosaurs headed for extinction.” (NEW YORK TIMES)
Novavax has started Phase 2 trials of its Covid-19 in South Africa with 2,665 healthy adults and another 240 who are HIV positive (whose disease is well-controlled by medication).
“The Commerce Department issued new rules restricting Huawei Technologies Co.’s access to foreign-made chips, further tightening U.S. curbs on the Chinese telecom company’s ability to obtain crucial components.”
“Diageo PLC has agreed to pay up to $610 million to acquire Aviation American Gin, which is partly owned and pitched by actor Ryan Reynolds, and other brands in its latest bet on a celebrity-backed premium liquor.”
A group of investors led by model Karlie Kloss has bought W Magazine, the influential fashion brand, from Future Media Group.
Rising competition in the Chinese electric vehicle market spurred a 24 percent drop in the registered number of Teslas built in China during July.
Chinese Cosmetics startup Perfect Diary is in talks to raise between $100 million and $200 million, and if it’s successful, the company’s valuation will double to $4 billion.
Tencent purchased an undisclosed minority stake in the $1.4 billion mobile gaming company Voodoo.
A Couple Cents Content
Activision Blizzard’s stock is blowing up thanks to the success of “Call of Duty: Warzone.” But how much firepower does it have? (POST)
In case you missed last night’s Live Show, Justin Oh discussed Tesla’s stock split, Nvidia, Fundrise, Beyond Meat, Square and more. (YOUTUBE)
Teladoc and Livongo are merging. Justin Oh breaks it down. (POST)