Author: therawinformant

On Friday, Rosenblatt analysts led by Mark Zgutowicz raised their price target on shares of Spotify from $190 to $275 while keeping their ‘buy’ rating, as the firm sees ‘attractive monetization potential’ from recent exclusive deals. These include The Ringer, The Joe Rogan Experience, and most recently, Kim Kardashian West’s The Innocence Project and Warner Bros./DC Entertainment. The Final Round panel discusses.

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Katie Nixon, CIO at Northern Trust Wealth Management, joined Yahoo Finance’s The Final Round to discuss her outlook for the market and investor sentiment.

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Teladoc Health is closing in quickly on a 203.95 buy point

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As markets begin to regain confidence, some companies that have taken some lumps from the coronavirus have started to recover. Managing Partner at Polaris Greystone Financial Group Jeff Powell joins The Final Round panel to break down why investors should shift to value stocks and move away from growth stocks

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Teladoc Health is closing in quickly on a 203.95 buy point

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The market’s helter-skelter tone is largely reflective of the competing impulses of a nationwide rise in COVID-19 diagnoses and expectations for an economic revival. 

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Stocks lost altitude on news Apple plans to shutter stores in COVID hotspot states.

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(Bloomberg) — Just a month ago, the chief executive officer of Wirecard AG boasted on Twitter that the future would still be bright for the digital payments company when “all the noise and dust settles.”At the time, Markus Braun was a paper billionaire. But over the course of a couple of days, the fintech veteran has been forced to step-down as CEO and seen the value of his stake dwindle after a two-day stock rout.Braun’s position at the German payments company became untenable after revelations on Thursday that about 1.9 billion euros ($2.1 billion) — two-thirds of 2019 revenue and about a quarter of the firm’s consolidated balance sheet — had gone missing. Two Asian banks that were supposed to be holding the money it denied any business relationship with Wirecard, raising fresh questions about the embattled company.After years of allegations of wrongdoing, Bruan was at the center of the controversy, with repeated assurances that Wirecard’s accounts were above the board, despite Wirecard headquarters being searched in early June by German prosecutors as part of a criminal probe involving the company’s senior management.The executive, who’s also the company’s largest shareholder, will now be replaced on an interim basis by James Freis, who was originally appointed in May to take the new role of chief compliance officer.Freis is stepping into an almost unprecedented situation. The interim CEO wasn’t supposed to join until July, when he was going to be responsible for a newly created department called “Integrity, Legal and Compliance.”Previously head of compliance at Deutsche Boerse AG, Fries held the position of director of the U.S. Treasury Department’s Financial Crimes Enforcement Network, where he was responsible for the regulation of financial institutions.He will need to act fast to restore trust and reassure creditors. Failure to publish audited results on Friday triggers the potential termination of up to 2 billion euros in loans. Wirecard said it is in “constructive” talks with its banks to continue credit lines and the further business relationship.“A change in management was warranted for some time and following yesterday’s events and the further decline in Wirecard shares today, we are not surprised that the CEO is stepping down,” said Sanjay Sakhrani, an analyst with Keefe, Bruyette & Woods. “There may be no quick fix.”The story of Wirecard’s woes trace back to Braun, who may have been too invested in the company, making him either unwilling or unable to see issues and take corrective measures.When Braun joined Wirecard in 2002, the payments company had a few dozen employees and in its early years serviced mainly clients active in online gambling and porn. The Austrian national since engineered a growth story by acquiring companies in the U.S. and Asia. Today, customers include Germany’s most successful soccer club Bayern Munich, French mobile phone carrier Orange SA and Swedish furniture giant Ikea.In September 2018, Wirecard replaced Commerzbank AG in Germany’s elite DAX index, making Braun a star of the country’s digital ambitions.“Markus Braun’s resignation was overdue,” said Danyal Bayaz, a lawmaker with Germany’s Greens. “Wirecard is not a small fintech, but a DAX member.”Unlike U.S. tech billionaires, Braun usually sports a suit instead of a hoodie, but generally shuns wearing a tie. He got a degree in computer science from the Technical University of Vienna and a doctorate in social and economic sciences. He worked as a management consultant at KPMG before joining Wirecard.Even after winning SoftBank Group Corp. as an investor in April last year, Braun had been unable to re-establish trust following a series of articles in early 2019 by the Financial Times about potential fraud. Despite aggressive denials and allegations of market manipulation leveled at the reporter, the company acknowledged irregularities following an independent investigation that had access only to limited information.Braun’s response to the latest crisis followed a similar pattern: downplay or dismiss the allegations, paint the company as a victim and attempt to switch over to business as usual.At 8:19 a.m. on Thursday — a time when investors were nervously awaiting delayed 2019 financial results — Wirecard posted on Twitter about how Chinese shopping trends were favoring its business model, sparking enraged comments as the stock collapse took shape hours later.The company was well aware of the issue at the time of the feel-good tweet. Chief Operating Officer Jan Marsalek, who has been temporarily suspended, had tried to get in touch with the two Asian banks and trustees over the past two days to recover the missing money, according to a person familiar with the matter.In the direct aftermath, Braun pointed the finger at everyone but himself.“It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred,” he said in a statement on Thursday, adding that the company will file a complaint against unnamed persons. “It cannot be ruled out that Wirecard has been the victim in a substantial case of fraud,” he said later.Long-term investors criticized Braun for being too much of a “techie” — big on vision but short on management expertise. They’ve noted that he was very loyal to employees and resisted firing people. Those characteristics could have made him too trusting to delve into compliance issues as many in charge of those areas have long histories with the CEO.Center stage is not where Braun says he’s comfortable. The computer scientist steers Wirecard from a suburban office park, a world away from the glittering urban towers that house most financial powerhouses. He calls himself shy — his birthdate isn’t publicly known and the company only acknowledges him being born in Vienna in 1969 — but there’s more than a hint of false modesty.He aggressively pushed the company’s expansion, executing numerous takeovers of smaller and at times intransparent operators. And he wasn’t bashful about trumping up Wirecard’s success.“It can make you stronger and more robust if you focus on the positive and manage to make something positive from negative energy,” he told Bloomberg in an interview in September 2018 with the company at its peak. “Whenever you stick your head out, some people will like it and some won’t.”A year later at banking conference in Frankfurt, the bravado was still there despite months of turmoil over accounting concerns. Sitting on stage alongside, his counterpart at Deutsche Bank AG — a lynch pin of the German economy and a company will versed in crises — the moderator asked both men what it meant that Wirecard’s share price was above Deutsch Bank’s, Braun replied: “It means we are both undervalued.”(Updated with additional context.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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For years now, Aurora Cannabis (ACB) and Canopy Growth (CGC) have traded in near lockstep based on the global growth potential of cannabis. The latest quarterly results set Aurora Cannabis a step ahead of their prime competitor in Canada.Aurora Cannabis reported an exceptional turnaround quarter for March, but the stock has taken a hit following the weak Canopy Growth results at the end of May. Oddly, Aurora Cannabis now appears better positioned to thrive having already had to tighten their financial purse strings due to cash concerns.Value Brand ShiftCanopy Growth called out a prime reason for their failure to hit revenue targets in the March quarter due to the market shift to value brands. Aurora Cannabis made this move to shift production towards the value brand Daily Special in early Q1.For this reason, Aurora Cannabis saw recreational cannabis sales grow sequentially by C$8 million to C$42 million. Canopy Growth saw recreational cannabis slip by C$20 million to C$49 million. Canopy Growth was too busy focused on the struggling cannabis beverages startup and missed the recreational cannabis shift to more affordable products to compete against illegal weed.Aurora Cannabis has already shown an ability to shift quicker than Canopy Growth. The latter is still going through a complete leadership change with executives from the liquor sector possibly not as familiar with cannabis. Focus, Focus, FocusOne of my biggest complaints about the Canadian cannabis LPs was the focus on global operations. The companies were going after massive markets in Canada, the U.S. and in Europe, Latin America, Australia and even Africa. The vast operations made little sense for companies trying to build new markets. Building market share in recreational cannabis in Canada and CBD in the U.S. was more than complicated enough for executive leaders to not need further operations in Germany, Columbia or Australia.Aurora Cannabis made the decision in February to reduce operating costs by over 50% to below C$45 million per quarter. The company shifted out of most international locations with a focused shifted to Canada, U.S. and Germany.The Canadian company has a singular focus on profitable growth now while Canopy Growth still appears to be investing in money losing businesses for a payoff in out years. Aurora Cannabis now has the upper hand here with a path to EBITDA profits in the September quarter while Canopy Growth pulled guidance for the rest of the year while generating substantial EBITDA losses in the March quarter.C$27 Price TargetWhat would you tell someone if they were to ask you, “Should I buy Aurora Cannabis stock right now?” For Cantor analyst Pablo Zuanic the answer is quite clear — the analyst sees the stock as a plant that keeps blossoming. "ACB is a company with a credible turnaround plan, not going bust, and with little further dilution risk. ACB is a close 2 in Canada rec to Canopy Growth; it is 1 in Canada med with share north of 40%; and it has reconfigured its international business, but its opportunities are not less than those of peers," Zuanic noted. Wieser rates ACB a Buy along with a C$27 price target, which implies nearly 50% upside from current levels. TakeawayThe key investor takeaway is that the valuation equation for Aurora Cannabis is far more compelling here as the market has pushed the stock back down below $14. The stock has a far better valuation at $1.5 billion with FY21 sales estimates near $300 million while Canopy Growth trades at $6.3 billion with sales estimates near $400 million.Aurora Cannabis is a far better deal, if an investor can purchase the stock closer to my $10 target. Regardless, the company has leap frogged Canopy Growth as the better investment due to their improved financials.To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclosure: No position.

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