🍨 Daily Scoop: Les GAFA are in trouble

By Hoda Mehr Fri, Jul 12, 2019

What you need to know?

France’s Senate approved a 3% tax on digital services revenue earned in France by companies with more than $28 million in French revenue and $844 million in global revenue. This tax is retroactively applied to the revenue from January of 2019. The measure is specifically targeted on Google, Amazon, Facebook, and Apple also known as Les GAFA in France.

Are you wondering why you should care? Well, the U.S. government is looking to retaliate, and, we may be headed to another trade war. Now, we got your attention?

What does it mean for investors?

It’s very smart for the government in France to do this. By taxing the topline revenue of these companies, they don’t get caught in the accounting practices by most technology companies that lead to low profitability and no taxable income for most governments. Kudos to France’s Senate.

From an investor point of view, we are all familiar with what a trade war can do to our portfolios. Don’t we?

Regardless, this may be the start of awakening by governments all around the world to figure out a way to tax the big tech.

• U.S. markets: In continuation of Wednesday’s excitement around the high likelihood of an interest rate cute, the DOW and the S&P 500 indices finished Thursday in green. The Nasdaq wasn’t as excited and took the opposite direction. Scroll to the Overall Market section to read more about what happened. 
• Cryptocurrency: Bitcoin price was down to around $11,000 per coin on Thursday. And, other cryptocurrencies did not have much more luck. It’s been mostly red around the crypto markets.

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OMG, 27,000! 

What happened on Thursday?

The Dow rallied passed 27,000, and the s&p 500 followed suit. Some of the most well-known companies are considered as the main reason for the DOW’s new all-time high. Microsoft (Ticker: MSFT), Visa (Ticker: V)), and Cisco (Ticker: CSCO) are the top three high-performing stocks that helped the DOW to reach its new glory.

Now What?

People like to make a big deal out of round numbers. You know how most people celebrate their 30th, 40th, and 50th birthday a little bit more than other years. The Dow hitting 27,000 is the same. There is no difference between 27,000 and 27,001. But, we bet you that no one will celebrate 27,001.

Historically, the stock market goes up two out of three years. So, it is inevitable that we keep hitting such round numbers. It’s a reflection of the society and the overall economy’s growth. If it makes you feel a bit happier to celebrate 27,000, go ahead. No one’s judging you!

Ready, Set, Fight 

Shares of over-the-counter stock, Bandai Namco Holdings Inc (Ticker: NCBDF), were up more than 20% on Thursday. Remember, Mortal Kombat from your childhood? That’s one of the games developed by this Japanese video games and arcade games maker.

The stock is most likely up because some institutional investor was moving money around. Usually, there is less news coverage about over-the-counter stocks such as Bandai Namco Holdings Inc. In a few days, we will get a better sense as to what drove the stock on Thursday.

While the mere fact that TMobile is being included in the s&p 500 doesn’t change anything about the company’s operational strength or market size, but the inclusion means several ETFs and indices that somewhat mirror the s&p 500 must pick up TMobile’s shares. And, that will lead to higher demand for the company’s stock. Hence, the stock price got boosted on Wednesday.

At last, this stock is down. 

Shares of Illumina Inc (Ticker: ILMN) is down more than 18% in after-hours trading. Shares of the genome sequencing company seem to hit all-time highs most of the times. But, the decline on Thursday came after the company warned investors that its Q2 revenue is lower than expected.

Companies such as Illumina that are commonly traded in an overvalued range are prone to larger tumbles on bad news such as the one shares on Thursday.

How do I make snarky comments when Twitter is down? 

So, what happened? 

Early in the week, there was a little banner on Twitter promising new updates and changes coming soon. We were all rubbing our hands together, dreaming of an “edit” button. But, on Thursday, not only the update didn’t show up, the whole website and the app were down. The company said that the outage is due to some internal configuration issue.

What the what, Twitter! We’ve lined up ten snarky comments. They get old if we don’t tweet them today!

About the Author

The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card