The Battle of Prime
By Wed, Jul 8, 2020
Hey Scoopers,
After a few green days, it was time for the market to stop its winning streak. — More on that in the “Overall Market” section.
Beyond the overall market, one digital healthcare stock jumped up, while a darling of the restaurant industry disappointed. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, the battle of Prime continued.— 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: The indices ended Tuesday in the red. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price is in the same range as it was before. However, the options data shows some investors are betting the $50K per coin price tag.
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Stocks Don’t Always Go Up
All three stock market indices finished Tuesday in the red. It’s good for the market to go down every now and then. It reminds investors that it doesn’t have to keep going up. The Energy and Financial Services sectors led the fall, and almost all other sectors followed suit and finished the day in the red.
Virtual Healthcare On the Rise
So, what happened?
Shares of Livongo Health (Ticker: LVGO) were up more than 20% on Tuesday. The company is a provider of a technology platform for the detection and prevention of diabetes in the United States. The company’s solution expands into other medical conditions, such as weight management. The company announced a preliminary second-quarter report, and revenue is exceeding everyone’s expectations. Livongo is not profitable but has more than a 70% gross margin. With no debt on its balance sheet, it continues to fund its growth without worrying about cash. The COVID-19 pandemic has helped the company grow even faster, and more employers are looking for digital ways to help their employees manage their health. This is a watchlist-worthy stock for investors looking at the future of healthcare.
Silicon Valley Visionary: “This Will Be the No. 1 Tech Stock of 2020.”
Jeff Brown is a tech investor known for his incredible success rate.
In fact, he’s invested in 111 different tech startups… and made money on 95.3% of them. Like Intabio, which developed a groundbreaking system to test biopharmaceuticals.
Jeff’s stake is up 900%. Or ShapeShift, which Jeff got into very early…
As of today, he estimates his investment is up 25,000%. He made 743% in three days on InfoSpace! And now, he’s just released the details on his number one tech stock for 2020.
Click here to watch this valuable presentation.
Nothing Left To Like
So, what happened?
Shares of Shake Shack (Ticker: SHAK) lost more than 6% on Tuesday. The company provided a business update, and apparently, same-store (ahem, same-shack) sales are down between 39% & 64% from April to July 2020. The company attributed the decline to the COVID-19 pandemic and street riots that reduced foot traffic, orders, and operating hours.
Despite the revenue drop, the company has resumed opening new shacks and has paid $50 million in revolving credit it has withdrawn before. It has nearly $200 million in cash and marketable securities and burns through $200K per week. That means there is enough cash to support the company for quite a while. While the stock is far from its hype days of 105 per share, it’s likely that there are opportunities to resume growth in the future.
The Fight of Titans
So what happened?
The fight between Amazon (Ticker: AMZN) and Walmart (Ticker: WMT) is stuff for a movie, mostly because Walmart wants to take back its rein in the world of retail. The latest battle is the battle of Prime. The role of Prime membership in creating loyalty to Amazon is no surprise to anyone. And, now, Walmart wants to replicate that success by introducing its own version of Prime, called Walmart+. Whether Walmart succeeds to fend off Amazon’s control over the online retail is a question we would need a crystal ball to answer. But the battle is pretty exciting to watch.
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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
