SPACs Aren’t All Fun
By Fri, Mar 19, 2021
Hey Scoopers,
Just one day after the Fed’s optimistic meeting on Wednesday, the stock market’s bullish sentiment vanished. — More on that in the “Overall Market” section.
Beyond the overall market, one social media stock continued to do well in China. On the other hand, a tech company’s new notes offering announcement still bothers investors. — More on that in the “What’s Up?” and “What’s Down?” sections.
By the way, it seems SPACs are not all fun, primarily if you work for Goldman Sachs. — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: All the three indices closed in the red on Thursday. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin‘s price retread back to under $56K per coin.
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The Enthusiasm Is Over
The stock market ended in the red zone on Thursday.
Along with Powell’s statement that the central bank will tolerate higher inflation, the Department of Labor released a worst-than-expected jobless claims report. After the release, the Dow Jones index erased its earlier daily gains to close in the red. The unemployment report also impacted the S&P 500 index, pushing it 1.45% down. Following the Fed’s announcement, the 10-Year Treasury bond yield reached 1.71%. It led the Nasdaq index to its worst day in three weeks as it plunged more than 3%.
Against Analysts’ Expectations
So, what happened?
Shares of Weibo (Ticker: WB) were up by almost 5% on Thursday. The Chinese microblogging announced a robust fourth-quarter report and disclosed a 9.7% year-over-year increase in the fourth quarter. Weibo’s management now expects a 28% sales growth in 2021’s first quarter. However, the analysts’ consensus estimates a smaller increase.
Time will tell, but microblogging and social media continue to benefit from the COVID-19 pandemic and its potentially long-lasting impact on people’s behavior.
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Still Annoying
So what happened?
Shares of Fastly (Ticker: FSLY) were down by almost 7% on Thursday. The earlier-announced convertible note offering continues to drag down the edge cloud technology company’s stock price. The CFO Andriel Lares stated that he stays confident in Fastly’s plans to invest in revenue growth, network utilization, and expansion. Fastly expects to raise more than $825 million in fresh capital, but the news still bothers investors.
SPACs Are Not All Fun
So what happened?
Recently, Goldman Sachs (Ticker: GS) employees conducted a survey to analyze the bank workers’ mental health. Results revealed junior bankers worked for more than 100 hours per week. Consecutively, the media started to criticize the bank for pushing analysts to inhumane conditions. Junior analysts included sleep deprivation, physical stress, and senior bankers’ horrible treatment among the abusive workload. Furthermore, the employees pointed to the SPAC-fueled boom as the main reason for the extensive working hours. As a response, Goldman stated that it is “listening to their concerns and taking multiple steps to address them.”
It seems SPACs are not all that fun if you work for Goldman Sachs.
If you have any questions, or suggestions let us know by emailing us at members@tradestocks.com. We look forward to hearing from you.
Disclosure: Authors of this Scoop own shares of Fastly (Ticker: FSLY).
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
