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SoFi Daily News: Friday July 17

SoFi

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*Ticker link, use Sheet: https://docs.google.com/spreadsheets/d/1RKEEchhoYPoF_iDTv8uSdvmNDiDfUbFPOPYAaayq6lY/edit#gid=0

BR:
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  • A

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–>

A new airline partnership, a look at the canned tuna market, and new funding for Thrasio, Auth0, and Medly Pharmacy








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SoFi Daily News



Thursday

JUL 16, 2020

 
 
Market Recap

Dow Jones
26734.71
(-0.5%)


S&P 500
3215.57
(-10.99%)


Nasdaq
10473.83
(-0.73%)


JetBlue
$11.02
-$0.53 (-4.59%)


Costco
$326.27
-$0.43 (-0.13%)


Spotify
$268.68
$10.18 (+3.94%)
 

Amid evolving news + uncertainty surrounding COVID-19, your financial needs are our top priority.
For more information on COVID-19 and your finances click here.

 
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TOP STORY
JetBlue and American Airlines Join Forces
 
Weathering the Coronavirus Storm
American Airlines (AAL) and JetBlue (JBLU) have created an alliance, which the two companies hope will help them through the pandemic.

Domestic leisure travel slowed dramatically when the pandemic set in. Though there were signs of recovery in late May, flight booking numbers have fallen again as COVID-19 cases rise. Bookings for international and business travel ground to a halt as well and have not recovered since.

Airlines have parked planes and cut tens of thousands of jobs. Analysts expect that domestic air carriers will lose $23 billion in 2020, and the airline industry will be about 25% smaller in 2021 than it was before the pandemic.

A Combined Effort
Every airline is working to think of creative solutions for survival. American Airlines and JetBlue believe that by combining their unique strengths, they will be able to come out ahead of competitors like Delta Air Lines (DAL) and other carriers.

American and JetBlue are making plans to connect their loyalty programs and to help each other with marketing. A main goal of the program is to achieve dominance in the Northeast, specifically Boston and New York. JetBlue has a large, loyal customer base in the Northeast. American has added more flights than most other carriers since air travel hit record lows in April. The airlines hope that combining these two advantages will help them come out ahead.

New Routes and Strategies
The proposed alliance is subject to regulatory approval. If it takes effect, the partners would be the biggest air carrier in New York by number of outgoing flights.

American also plans to roll out new international routes, thanks to a larger customer base through the partnership with JetBlue. JetBlue will also add its own transatlantic routes. Additionally, JetBlue aims to expand its presence at Newark Liberty International Airport, where United Airlines (UAL) currently leads and plans to add more flights to and from LA. Airlines will likely continue to face turbulence for some time. Investors will be watching carefully to see if JetBlue and American’s partnership helps them come out ahead of their competitors.

 

Demand for Canned Tuna Stays Strong
 

Sales Hit Record Highs
For decades, canned tuna producers struggled with declining sales and a consumer base that thought of their products as old-fashioned. Then the coronavirus pandemic hit, and sales of canned tuna went through the roof. Analysts say this trend is likely to continue for some time.

Bumble Bee Foods reported that sales of canned and pouched tuna rose 100% between mid-March and early April. Costco (COST) placed limits on how much tuna people could buy when panic-purchasing began. This was not just a temporary surge in sales. Canned tuna has continued to fly off shelves since the pandemic began.

Due to supply chain constraints, producers are having a difficult time keeping up with the demand increase. Retailers have been able to keep tuna prices stable so far, but wholesale tuna prices have spiked 41% since last year. This contrasts with trends in other wholesale seafood markets, where prices are dropping sharply due to restaurant closures.

The Canned Tuna Supply Chain
The tuna supply chain is long and complicated. About 40% of commercial tuna is caught in the western and central Pacific Ocean near very small countries like Tuvalu and Kiribati. Then, the fish is processed on Pacific islands, or in Asia or South America. Often, it then makes its way to a third country to be canned before reaching its final destination in a grocery store.

Though it has been a successful year for tuna fishing, border issues related to the pandemic have caused bottlenecks in the supply chain. Demand for tuna shows little sign of slowing down, and producers are working to streamline their processes.

More Than Just Panic Buying
Analysts have been surprised by the longevity of the canned tuna boom since the pandemic began. Many believe that this trend is here to stay, at least for a while. Joerg Ayrle, the CFO of Thai Union (TU:TB) which owns the tuna brand Chicken of the Sea explained, “People are asking, is this pantry-loading? Is this consumption? I would say, every pantry-loading leads to higher consumption. People are not just leaving that in their pantry. They are consuming it.”

Tuna is one of the cheapest protein sources available, costing as little as $1 per 5-ounce can. People may keep consuming tuna, not just because it lasts long and is a good way to avoid frequent trips to the store, but because it is cost-effective.

 


Friday Fundings: Thrasio, Auth0, and Medly Pharmacy
 

Thrasio Raises $260 Million in Series C
Thrasio, a company which acquires Amazon third-party private-label businesses, has raised $260 million in a Series C funding round. The company now has a valuation of $1 billion. The rapidly-changing consumer products industry is worth $13 trillion. Legacy brands are losing their competitive advantage as online sales boom, and Thrasio sees an opportunity for huge growth. It has acquired almost 60 Amazon businesses in total. 17 of those purchases happened over the past quarter.

This round of funding, led by Advent International, was the fourth major investment in Thrasio over the past year. Thrasio also became the fastest-profitable US company to achieve unicorn status.

Auth0 Raises $120 Million in Series F
Auth0, an identity verification platform, raised $120 million in a Series F round. Its valuation is now at $1.92 billion. The round was led by Salesforce Ventures, with participation from DTCP, Bessemer Venture Partners, and others.

Last year, Auth0 saw 70% year-over-year growth, and has projected at least 50% growth this year. It currently has about 10,000 paying users and 20,000 people using the free version of its platform. The COVID-19 pandemic has led to a boom in online operations. Companies are doing more business through websites and apps than ever before. All of these platforms need identity verification, which has led to increased demand for Auth0’s services.

Medly Pharmacy Raises $100 Million in Series B
Medly Pharmacy is a digital pharmacy that offers free same-day prescription delivery. It was founded in 2017 in New York. The startup just completed a $100 million Series B funding round, co-led by Volition Capital and Greycroft.

Over the past three years, Medly has gained business from 15,000 providers and 50,000 patients. It has delivered over 500,000 prescriptions. Analysts expect that the global e-pharmacy market will be worth $107.5 billion in five years, and Medly is well-positioned to capitalize on that growth.

 


Not-So-Breaking News

  • DraftKings (DKNG), a sports betting company, will now offer betting opportunities for lacrosse through a new partnership with the Premier Lacrosse League. The league is hosting a two-week quarantined tournament in Utah, beginning on July 25.

  • In its latest high-profile podcast deal, Spotify (SPOT) announced it will add an exclusive podcast by Michelle Obama to its offerings. Spotify’s CEO shared that podcast consumption on the platform has gone up by triple digits as it continues to expand its library.

  • California Resources Corp, (CRC) the largest oil driller in California, has filed for bankruptcy and plans to transfer ownership to lenders. Oil prices are hovering close to $40 per barrel, making it difficult for companies to support debt they took on when prices were higher.

  • Domino’s Pizza (DPZ) announced that its same-store quarterly sales were up 16%. The company’s quarterly revenue hit $920 million—about $9 million higher than expected.

  • China’s economy expanded by 3.2% during the second quarter of the year, compared to a year ago. The country’s GDP decreased by 6.8% during the year’s first quarter, the first quarterly decline since the records began in 1992.

  • Marriage can change your financial wellness, for better or for worse. Find out the financial risks of marriage and get some tips for how to handle this transition on the SoFi Blog.


Financial Planner Tip of the Day
“Curious about crypto? Since cryptocurrencies are volatile and involve a high degree of risk, it can be a good idea to do some research. SoFi’s Guide to Crypto has some great educational articles to help get you started.”
– Brian Walsh, CFP® at SoFi


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SoFi Daily News: Thursday Jul 16, 2020

EU’s General Court rules in favor of Apple and Irish government, Lemonade launches pet health insurance program, and trouble for the tree nut industry

Read more

Test 2





SoFi








America’s second-largest grocer will begin trading this week, Wirecard’s $2 billion balance sheet error, and gold prices climb amidst fears of a second wave of coronavirus.








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SoFi Daily News



Tuesday

JUN 23, 2020
 

 
     
  Market Recap  
 

Dow Jones
26,024.96
(+0.59%)


S&P 500
3,117.86
(+0.65%)


Nasdaq
10,056.48
(+1.11%)


Kroger
$32.05
-$0.19 (-0.59%)


Apple
$358.87
$9.15 (+2.62%)


Virgin Galactic
$17.35
$2.35 (+15.67%)
 
     
 

  Amid evolving news + uncertainty surrounding COVID-19, your financial needs are our top priority.
For more information on COVID-19 and your finances click here.
 


  TOP STORY  
  All Eyes on Albertsons’ Upcoming IPO  
     
  America’s Second-Largest Grocer Aims for a Public Debut  
  The grocery chain Albertsons is planning an IPO. Shares of the company are likely to begin trading publicly by the end of this week.

Albertsons is the second-largest grocery store chain in the US after Kroger (KR). In addition to operating its namesake stores, the Idaho-based company also owns Jewel Osco, Safeway, and Vons, as well as the meal-kit maker, Plated.

Albertsons aims to sell shares for between $18 and $20. This would give the company a valuation of over $10 billion. The company will trade on the New York Stock Exchange under the ticker ACI. Because the stock sale comes from existing shareholders, it will not yield proceeds for Albertsons. For example, it will give one of its backers, Cerberus Capital Management LP, a chance to cash out on its approximately 15-year investment.

 
  Past Attempts to IPO  
  In 2015, Albertsons also made an attempt to go public but did not go through with it because other retail stocks were performing poorly at the time, and investors were wary of Albertsons’ heavy debt load. The company also looked to IPO in 2018 when it attempted to acquire the drugstore, Rite Aid, but shareholders were not on board.

Times have changed for the company. Since the end of fiscal 2017, Albertsons has reduced its net debt by $3 billion. Additionally, like other grocers around the country, Albertsons saw a boom in sales during the pandemic as people stocked up on supplies and ate meals at home. Same-store sales for the company were up 47% in March and 21% in April.

 
  Investors Are Eating Up New IPOs  
  The IPO market is roaring back after stagnating during the start of the pandemic. After a period of almost no IPOs, several companies have had successful debuts recently including Warner Music Group (WMG), ZoomInfo Technologies (ZI), and Vroom (VRM).

Investors also have their eyes on other companies getting ready to IPO. For example, two weeks ago, the insurance start-up Lemonade announced it confidentially filed to go public. Airbnb said it may go public this year as well, despite suffering losses due to the pandemic. Albertsons’ public debut will be one of this year’s biggest IPOs yet, and investors will be watching it closely.

 
     
   


  What’s Going on With Wirecard?  
   

 
  German Fintech Giant Reels  
  Wirecard AG (WDI), a German digital payments company, announced yesterday that over $2 billion listed on its balance sheet probably never existed. This $2 billion is equivalent to the total net income Wirecard reported over the course of 10 years. The company has lost $12.5 billion in market value as its stock sank 85% in just three trading sessions.

Wirecard was once one of Germany’s leading fintech companies. It created payment software and partnered with IKEA, FedEx (FDX), Aldi, and other retailers. The company said its payment systems are still operating like normal. However, it is now reeling from the scandal and trying to retain credit lines, sell parts of its business, and reduce costs in order to stay viable.

 
  Some Short Sellers Win Big  
  Wirecard has faced skepticism from investors for some time. Certain people who bet the company’s stock would decline saw huge returns when share prices plummeted.

Short sellers are investors who borrow shares of a company, then sell them with the expectation that they will be able to buy them back for a lower price in the future. Companies that shorted Wirecard’s stock made hundreds of millions of dollars. For example, Slate Path Capital, a New York-based firm that had one of the biggest short positions, was up as much as $227 million on their bet thanks to Wirecard’s tumble at the end of last week.

Though some skeptics of the company have won big, many people who tried to short Wirecard over the past few years as its stock climbed steadily higher, lost money in the process.

 
  European Tech Investors May Be Wary Going Forward  
  Other investors who believed in Wirecard have lost huge amounts of money. Wirecard’s stock was high for several reasons. The COVID-19 pandemic raised investor interest in virtual payment systems significantly. The German establishment also stepped in to help the company flourish and even banned short sellers for a brief period last year.

Additionally, the ratio of tech investors to tech companies in Europe is skewed. Large numbers of investors have been chasing a relatively small amount of European companies for years. But as Wirecard unravels, this problem will get worse because even though investors are eager to back tech companies, they may begin to tread carefully after this scandal.

 
     
   


  Coronavirus Concerns Galvanize Gold  
   

 
  Investors Anxious About Economic Uncertainty  
  Gold prices are on the rise and could hit their highest levels since 2012. This is due to several factors.

COVID-19 cases are increasing in states like Texas and North Carolina as lockdown restrictions ease. Investors are fearful that an increase in cases could cause more business closures and economic instability.

Investors are also predicting that central banks around the world may pump more stimulus money into their economies if coronavirus cases continue to increase. This could cause global currencies to be devalued, making gold an attractive investment option. Gold is also popular when interest rates are low, as they are now.

 
  Gold Prices on Track to Break Records  
  On Monday, gold was trading at its highest level in almost eight years. Gold futures, contracts where a buyer agrees to purchase a specific quantity of gold on a specific date, are up 16% this year.

UBS (UBS) expects gold prices will reach $1,800 per ounce by the end of the year. According to Goldman Sachs (GS), the price of gold could even spike to a record $2,000 per ounce by the end of 2020.

 
  A Self-Fulfilling Prophecy  
  Some financial advisors may suggest that their high net worth clients invest in gold. Nine private banks handling about $6 trillion for the world’s ultra-rich responded to a survey by Reuters saying they have advised clients to do this already. If wealthy investors pile into gold, thinking its worth will increase, this demand could create a self-fulfilling prophecy and cause gold prices to skyrocket.

Investors will have their eyes on coronavirus cases as well as monetary policies from central banks, to see how these factors will impact the rising price of gold.

 
     


 
  Not-So-Breaking News  
 

  • Virgin Galactic (SPCE) signed a new Space Act Agreement with NASA. This means Richard Branson’s space tourism company will start coordinating private trips to the International Space Station. Shares of the company rocketed higher by nearly 16% on Monday.

  • China halted poultry imports from a Tyson Foods (TSN) facility in the United States after a coronavirus outbreak at the plant. PepsiCo (PEP) also shut down a factory in Beijing on Sunday after reporting a cluster of coronavirus cases.

  • Apple (AAPL) kicked off its Worldwide Developers Conference on Monday by introducing new operating systems for its iPhone and iPads. The tech giant also said it will start using its own processing chips, instead of Intel’s, in all Macbooks.

  • Ant Financial Services Group, an affiliate of Alibaba (BABA), received approval from China’s top regulator to change its name to Ant Technology Group. The move is meant to emphasize the technology component rather than the financial element of the business after earlier scrutiny from watch dogs.

  • Kweichow Moutai Co., a Chinese liquor giant, has surpassed Industrial & Commercial Bank of China Ltd. to become the biggest stock by market value in mainland China. The alcoholic beverage maker is now worth $256 billion and has seen its shares climb by roughly 1,350% over the past 10 years.

  • SoFi surveyed 1000 consumers to see how the coronavirus is still affecting their mood and their money. Find out how people are handling their finances during these uncertain times on the SoFi Blog.
 
 


  Financial Planner Tip of the Day  
  “Exchange-traded funds (ETFs) can help you save money on broker commissions, which can add up when you’re buying stocks one by one.”  
  – Brian Walsh, CFP® at SoFi  


 
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