The Market News Reel for this week! Get the most important market news & updates for the week ahead each Monday!
Major headlines, excerpts from news sources and a link to the full article are shown below. "Breaking Thoughts" section is purely our opinion.
Facebook is Now 'Meta' as it Seeks to Build the Metaverse
"Facebook Inc. is re-christening itself Meta Platforms Inc., decoupling its corporate identity from the eponymous social network mired in toxic content, and highlighting a shift to an emerging computing platform focused on virtual reality.
“The metaverse is the next frontier,” Chief Executive Officer Mark Zuckerberg said in a presentation at Facebook’s Connect conference, held virtually on Thursday. “From now on, we’re going to be metaverse-first, not Facebook-first.”
The new name won’t affect how the company uses or shares data, and the corporate structure isn’t changing. Apps including the flagship social network, Instagram, Messenger and WhatsApp will also keep their monikers. The company said its stock will start trading under a new ticker, MVRS, on Dec. 1.
Adoption of virtual reality gadgets -- like Meta’s Oculus headset -- has so far been minimal and their use mostly relegated to games and other niche applications. While achieving the broader vision of the metaverse is still years away, at Thursday’s event Meta announced a handful of product updates meant to advance that goal." - read more on BNN Bloomberg here
Breaking Thoughts: Zuckerburg has been talking about the Metaverse since at least 2015, as the next computing platform after mobile. This change solidifies the company's commitment to that vision, and helps justify the $150+billion they will spend over the next 5-10 years to build that. Going into hardware and appstore based platform puts them into direct competition with Apple/Google/Microsoft, it is likely all companies will try to win this type of future.
For consumers, this means more interesting VR/AR products to try or use as our daily compute platforms. For investors, you have been put into a trickier situation. A few months ago you were buying a mature internet monopoly with high growth, and massive profit generation that was trading at forward PEs of less than 25. Now you have to buy into the idea of them spending much more in CAPEX & OPEX (thus earning less profit & less free cash flow) in the medium term, in order to build these platforms and win the future. We expect more volatility in $FB (soon $MVRS) as conservative investors leave and new more innovation oriented investors buy in.
Check it out:
Hertz Buys 100k Tesla EVs, Partners with Uber & Carvana
"Hertz Global Holdings Inc., fresh off a blockbuster order for 100,000 Teslas, reached an exclusive agreement to supply Uber drivers with electric vehicles and signed up Carvana Co. to dispose of rental cars it no longer wants.
Taken together, the deals represent a trifecta of aggressive and innovative initiatives with the potential to upend the car-rental business and hasten the transition to greener transportation. The order for Model 3s on Monday, the largest-ever for EVs at US$4.2 billion, was such a watershed moment that it propelled Tesla Inc.’s valuation past US$1 trillion.
Partnering with Uber and Phoenix-based Carvana addresses two key weaknesses in the rental industry: asset-utilization -- how actively a car is rented out; and resale recovery -- how much of the purchase price is recouped when the car is sold." - read more on BNN Bloomberg here
Breaking Thoughts: Hertz's new CEO - Mark Fields (former CEO of Ford) is betting big on EVs, ridesharing, and e-commerce car selling marketplaces. Interestingly, he chose to order from Tesla saying that "Tesla is the only company that can build EVs at scale", a stunning viewpoint from the former CEO of Ford.
Investor's interested in Hertz ($HTZZ) should beware that the firm recently exited bankruptcy due to the collapse of car rentals during the pandemic related lockdowns. Hertz has a long way to go before being profitable again, but the stock has rebounded on the news of these initiatives.
Major Earnings This Week
Monday November 1:
AMC Entertainment (AMC): Expected Q3 earnings of $-0.53 per share
NXP Semiconductor (NXPI): Expected Q3 earnings of $2.72 per share
Zoominfo Tech (ZI): Expected Q3 earnings of $0.12 per share
Tuesday November 2:
Activision Blizzard (ATVI): Expected Q3 earnings of $0.70 per share
Bausch Health (BHC): Expected Q3 earnings of $1.04 per share
Corsair Gaming (CRSR): Expected Q3 earnings of $0.22 per share
Global Payments (GPN): Expected Q3 earnings of $2.15 per share
KKR (KKR): Expected Q3 earnings of $0.93 per share
Lyft (LYFT): Expected Q3 earnings of $-0.03 per share
Match Group (MTCH): Expected Q3 earnings of $0.55 per share
Zillow Group (Z): Expected Q3 earnings of $0.16 per share
Wednesday November 3:
Canada Goose (GOOS): Expected Q2 earnings of $-0.10 per share
Discovery (DISCA): Expected Q3 earnings of $0.41 per share
DXC Technology (DXC): Expected Q2 earnings of $0.83 per share
Electronic Arts (EA): Expected Q2 earnings of $1.17 per share
Qualcomm (QCOM): Expected Q2 earnings of $2.26 per share
Thursday November 4:
BCE (BCE): Expected Q3 earnings of $0.82 per share
Carvana (CVNA): Expected Q3 earnings of $-0.28 per share
Cloudflare (NET): Expected Q3 earnings of $-0.04 per share
Datadog (DDOG): Expected Q3 earnings of $0.06 per share
Dropbox (DBX): Expected Q3 earnings of $0.35 per share
Expedia (EXPE): Expected Q3 earnings of $1.70 per share
First Solar (FSLR): Expected Q3 earnings of $0.59 per share
Open Text (OTEX): Expected Q1 earnings of $0.80 per share
Square (SQ): Expected Q3 earnings of $0.40 per share
Uber (UBER): Expected Q3 earnings of $-0.34 per share
Friday November 5:
Berkshire Hathaway (BRK.B): Expected Q3 earnings of $2.99 per share
Magna International (MGA): Expected Q3 earnings of $0.64 per share
Telus International (TIXT): Expected Q3 earnings of $0.24 per share
Major IPOs Expected This Week
Wednesday October 27:
Allbirds (BIRD) shoe company is raising up to $269M at a $2B valuation
See you next week!
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