July 21, 2021

Market recap

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Top Story

Bezos Goes to Space

Blue Origin’s First Passenger Flight

Blue Origin’s first passenger flight to the edge of space with Amazon (AMZN) founder Jeff Bezos aboard was a success, ushering in what the billionaire hopes will be a new era of space travel.

Yesterday morning Bezos and three passengers reached the edge of space and returned safely in a flight that took a little more than ten minutes. The passengers were able to experience weightlessness for a few minutes. This is a milestone for a company which had hoped to bring tourists to the edge of space years earlier. Following the successful flight, Blue Origin opened ticket sales for future flights, including two slated for sometime this year. The company is not disclosing pricing for the flights.

Space Market Poised for Serious Growth

The Bezos-backed space company is in a market where millions of dollars are being invested in startups and publicly traded companies. While space travel has long been the purview of the government, private firms have been entering the industry recently. They are going after what Wall Street thinks will be a more than $1 trillion market by 2040.

Just last week Richard Branson, the founder of Virgin Galactic (SPCE), and five other passengers traveled to the edge of space in a flight aimed at spurring interest in space travel. Meanwhile, SpaceX, Elon Musk’s space company, will take four commercial customers to space on its rocketship.

More Than Just Space Tourism

Blue Origin does not want to be just a space travel company. In addition to space tourism, it is bidding on government contracts from agencies including the National Aeronautics and Space Administration. It is also developing New Glenn, a 321-foot rocket made to send payloads into orbit. Additionally, it is working on a new engine to replace ones currently used for secretive military and intelligence launches.

The historic Blue Origin flight could be the beginning of a new era for space travel. It will be interesting to see how the race to space among private companies unfolds.

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Brian Walsh, SoFi Financial Planner, walks through the basic questions and high-level considerations that you should know before investing in cryptocurrency. Watch on
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Apple Eyes Film Production Expansion

Apple Scouting Film Studio Space in LA

Apple (AAPL) is deepening its presence in Hollywood, working with real estate developers to lease space for movie and television production. The new campus could be more than a million square feet in size. The iPhone maker, which operates a growing entertainment business, already leases soundstages in Los Angeles and other locations around the world.

The move comes as Apple seeks to bolster its AppleTV+ streaming content platform. While it has produced hits such as Ted Lasso and The Morning Show, its output is small when compared to rivals Netflix (NFLX) and Amazon (AMZN).

Apple Needs More Content

While Apple has been slow to build a massive library of content, the tech giant now realizes it needs to spend more on entertainment to lure and keep subscribers. That is particularly true in the current environment where dealmaking between movie studios and streaming services is becoming commonplace. The tie-up between Warner Music (WMG) and Discovery is just one example of how streaming platforms are trying to differentiate themselves.

Apple has been signaling that it intends to bulk up its entertainment offerings recently, announcing new movies with celebrity casts, making acquisitions in the entertainment industry, and launching other initiatives for its streaming platform. In order to achieve these goals, it needs more space to produce new films and shows.

Finding Real Estate Proves Difficult

With a number of streaming platforms competing to get ahead with content, securing locations in LA to film has become extremely difficult. Soundstages across the city tend to be booked for months in advance. That has prompted some companies to acquire the space outright or lock in leases for several years. Apple, as a result, has been looking for locations for several months. Both Amazon and Netflix own studios in Los Angeles while the latter has also set up production in New Mexico.

While Apple is the undisputed leader in the smartphone market, it needs to beef up its entertainment offerings to stay competitive in the streaming world. It will be interesting to see if the tech giant’s investments in film production real estate help it achieve this goal.

Moderna to be Added to S&P 500

Moderna’s Rise From Obscurity

Thanks to a COVID-19 vaccine that saved millions of lives, drugmaker Moderna’s (MRNA) stock has been on a tear. The company is being added to the S&P 500 Index, kicking out rival Alexion Pharmaceuticals (ALXN). Moderna currently has a market capitalization of more than $113 billion and has injected hundreds of millions of people with its COVID-19 vaccine. This is pretty impressive for a company that only a year ago had nine vaccines in clinical trials but not one product on the market.

Then the pandemic set off a race among pharmaceutical companies to develop an effective vaccine. Moderna’s successful vaccine helped the company become a household name.

Moderna’s Bets on mRNA Pay Off

Moderna’s ability to quickly bring an effective COVID-19 vaccine to the market was a result of work which had been taking place for years. When the company started in 2010, Moderna was developing drugs in stealth mode using messenger RNA or mRNA. When modified, mRNA teaches cells how to make the proteins necessary to fight back against an infection and prevent people from contracting an illness.

The technology behind mRNA proved invaluable when the pandemic hit. In mid-January 2020 the genetic sequence for COVID-19 was released by Chinese scientists, and by the end of February, Moderna was shipping its first doses of its vaccine for phase 1 trials. By December 2020, phase 3 trials demonstrated the vaccine’s 94.1% efficacy rate, prompting the FDA to clear it for emergency use in the US, Canada, and Europe.

Bulls and Bears Analyse Moderna

The COVID-19 vaccine, Moderna’s first commercially available product, has enabled the company to achieve profitability for the first time. It currently has 23 vaccines and therapeutic treatments in the pipeline focused on the flu, HIV, and Cytomegalovirus (CMV). All use the mRNA technology Moderna relied on to develop its COVID-19 vaccine.

That has some bulls betting that Moderna can become one of the biggest biotech companies in the market over the next decade. But bears point to the fact that the stock has had a huge run, the company only has one product on the market, and demand for the COVID-19 vaccine is waning. It will be interesting to see what comes next for Moderna.

Not-So-Breaking News

  • Nasdaq Private Market, a platform for investors to trade private companies, was spun out by Nasdaq. Morgan Stanley (MS), Citigroup (C), Goldman Sachs (GS), and SVB Financial Group (SIVB) are investing in the new independent company.

  • The price of Bitcoin fell below $30,000 on Tuesday for the first time since June 22. The declines impacted the broader crypto landscape and about $89 billion was wiped off the cryptocurrency market in a matter of 24 hours.

  • Peloton (PTON) inked a deal with UnitedHealthcare, giving nearly 4 million members access to free live and on-demand classes. This marks the first deal between Peloton and a large healthcare company.

  • UBS’s (UBS) second-quarter earnings topped Wall Street’s expectations, driven by its wealth management unit. Net profit of $2 billion was up 63% year-over-year, and much higher than the $1.34 billion Wall Street forecasted.

  • The White House said Facebook (FB) and other social media companies should be held accountable for spreading misinformation on their platforms. The Biden administration has previously said Facebook (FB) is hurting its users by publishing misinformation about the COVID-19 vaccine.

  • In crypto, there are a lot of unique terms and phrases. For crypto beginners, learning these niche acronyms and phrases is essential before investing. Learn more with Popular Terms Every Crypto Beginner Needs to Know.

Financial Planner Tip of the Day

“If you have savings that is not currently earmarked for a specific financial goal, take some time to think about what goal you’d like to apply it to. A great first saving goal is to have three to six months of living expenses in an emergency fund. After that, it might be good to turn your attention toward retirement savings and investing.”

Brian Walsh, CFP® at SoFi

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