At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a strong gain. The benchmark index is currently up 1% to 7,384.8 points.

Here’s what has been happening on the market today:

Tech shares charge higher

Tech shares such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) are charging higher on Tuesday and playing a key role in the market’s gains. This follows a strong night of trade on the Nasdaq index, which saw the famous index rise 0.75% to a record high. The S&P/ASX All Technology Index (ASX: XTX) is up over 1% at the time of writing.

Bank of Queensland’s provision release

The Bank of Queensland Limited (ASX: BOQ) share price is pushing higher after announcing that its next update will include a decrease in its collective provision. Bank of Queensland revealed that it expects to reduce its collective provision by $75 million. This is being driven primarily by Australia’s improved economic outlook, leading to improvements in data quality relating to collateral.

Premier Investments hits record high

The Premier Investments Limited (ASX: PMV) share price has stormed to a new record high today. This appears to have been driven by a positive reaction from analysts at Macquarie to its recent trading update. Macquarie notes that the company’s guidance is ahead of its expectations. This led to the broker retaining its outperform rating and $31.00 price target on Premier Investments’ shares.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the A2 Milk Company Ltd (ASX: A2M) share price with a gain of almost 8%. Investors may have been expecting a2 Milk to have been dumped out of the ASX 100, but it survived by the skin of its teeth. The worst performer has been the De Grey Mining Limited (ASX: DEG) share price with a 6% decline amid weakness in the gold sector.

The post ASX 200 up 1%: Tech shares rise, Bank of Queensland’s provision update appeared first on The Motley Fool Australia.

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• Why ASX energy shares could outperform this morning
• Why the Bank of Queensland (ASX:BOQ) share price is pushing higher
• 2 top ASX 200 shares that might be buys today
• Why this leading broker rates the Premier Investments (ASX:PMV) share price as a sell
• ASX 200 Weekly Wrap: ASX edges even higher, led by tech rebound

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Premier Investments Limited. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

GameStop (NYSE: GME) has been one of the top-performing stocks of 2021. Shares of the meme stock skyrocketed in January, as bullish traders sparked an epic short squeeze.

Short interest has declined significantly since then. Nevertheless, interest from retail traders continues to buoy GameStop shares. Despite recent volatility — and a 27% post-earnings plunge — the stock is up more than tenfold year to date.

GameStop stock performance and short interest, data by YCharts.

However, the video game retailer’s underlying results don’t support this strong stock market performance. By any objective standard, GameStop’s core business is dying. The company’s first-quarter earnings report — released on Wednesday — highlighted its ongoing decline.

Another bad earnings report

GameStop tried to paint its Q1 performance in the best possible light. The company noted that sales increased 25% year over year to $1.28 billion, despite a 12% reduction in its store count and continued store closures in Europe. Meanwhile, GameStop’s adjusted net loss shrank by more than 80% year over year to $29.4 million ($0.45 per share), beating the average analyst estimate.

Yet GameStop clearly remains in a downward spiral. The year-ago period included the peak of pandemic-related store closures. Two years ago, GameStop earned a small profit on $1.55 billion of revenue during the first quarter — and that was considered a terrible performance. In the first quarter of fiscal 2018, GameStop posted adjusted EPS of $0.30 on $1.79 billion of revenue.

Thus, GameStop’s first-quarter revenue has plunged nearly 30% over the past three years, and the retailer has swung from being solidly profitable to solidly unprofitable.

GameStop Revenue (TTM), data by YCharts.

Blaming the pandemic would be overly simplistic. After all, Best Buy (NYSE: BBY) recently reported that sales surged 36% year over year last quarter. Best Buy’s first-quarter revenue has grown 27% over the past two years combined. Moreover, growth in the consumer electronics giant’s entertainment segment — which includes gaming hardware, software, and accessories — has significantly outpaced Best Buy’s overall growth over the past two years.

It gets worse

The deeper one digs, the worse GameStop’s Q1 performance looks. This year, GameStop is benefiting from the launch of new Sony PlayStation and Microsoft Xbox consoles, a tailwind that only occurs once every seven years or so. Those console launches helped GameStop grow its sales of hardware and accessories by 37% year over year last quarter.

By contrast, software sales fell by nearly 5% from last year’s already-depressed level, reaching $398 million. Over the past two years combined, GameStop’s software sales have plunged by 46%.

This shouldn’t be surprising. Consumer demand has steadily shifted toward digital downloads in recent years, disintermediating video game retailers like GameStop. Meanwhile, GameStop continues to lose share within this shrinking market to higher-traffic retailers (like Best Buy).

GameStop’s eroding software sales will make it extremely difficult to return to profitability. GameStop has traditionally generated more than half of its gross profit from software and less than 10% from new hardware, which sells at notoriously thin margins.

A new strategy?

Many GameStop bulls expect that a new strategy focused on e-commerce will turn things around for the ailing retailer. Indeed, GameStop announced last week that it has appointed two Amazon.com veterans as its new CEO and CFO. (Of course, since the CEO has primary responsibility for setting corporate strategy and the new CEO hasn’t even started yet, it’s a stretch to say that GameStop has any strategy at all.)

However, new management and a new strategy won’t change the fundamental realities weighing on GameStop’s business. Software sales will continue to shift to digital downloads. Sony and Microsoft don’t need GameStop’s help in that department. Hardware sales will be even less profitable in an e-commerce format, where GameStop will have to absorb higher credit card fees and shipping costs.

In any case, Amazon and Best Buy are light years ahead of GameStop in e-commerce. Both have massive resources at their disposal, giving GameStop little chance of catching up.

The meme stock rally is allowing GameStop to raise huge sums of cash by selling stock to gullible investors, which will allow it to stay in business for a long time even if it never returns to profitability. But a genuine turnaround for the business (as opposed to the stock) seems as far-fetched as ever.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post GameStop earnings: No sign of a turnaround appeared first on The Motley Fool Australia.

More reading

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• ASX investors were buying this US share over Tesla last week
• Why GameStop stock is still wildly overpriced

Adam Levine-Weinberg has no position in any of the stocks mentioned. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Microsoft. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In Part 2 of this edition, Anacacia Capital founder and managing director Jeremy Samuel explains how to manage risk with international shares. And 4 ASX shares that offer international exposure.

(You can find Part 1 of the interview here.)

MF: What returns are you targeting with your recently launched Global Fund?

JS: Our funds are typically targeting 10% plus annual returns.  It’s early days with the Anacacia Global Fund. We’re still holding a considerable cash balance that we’ll be deploying over the coming months.

So far, our positions are in positive territory and ahead of the key indices. However, we’ll measure our success over many years not months.

It’s a bit too early for us to disclose any specific positions from the Global Fund as we’re still building them up for our investors. We expect to do this over several months in a high conviction way. 

We’ve had success historically with Australian-based companies operating globally through our Australian focused funds with companies like Appen Ltd (ASX: APX), Nearmap Ltd (ASX: NEA) and Objective Corp Ltd (ASX: OCL).

Then there’s Cogstate Ltd (ASX: CGS). It’s a great Aussie business that is servicing international pharmaceutical businesses and recently saw a bump from Alzheimer’s research.

What are your views on Appen, Cogstate, Nearmap and Objective Corp going forward? Do you still own those shares?

Yes to different extents, within our Wattle Fund, which we discussed last time, which invests in Australian equities. At various times we have a different view as to what’s a fair price. But they are 4 interesting companies that at various stages we’ve had significant positions in.

These are good examples of companies listed on the Australian exchange but have significant overseas operations. Nearmap, for example, is operating in Australia and the US, and Canada as well. And Appen is very big in the US and Europe, with very little business in Australia. Objective Corp operates across Europe and the US and Australia as well. Cogstate has offices in Australia and the US.

That’s 1 way for ASX investors to get exposure to international markets through these sorts of shares.

Also, investors can access index funds or managed funds. Our Wattle Fund, where Tom Granger is doing an outstanding job as the portfolio manager, is only open to wholesale and sophisticated investors. That’s Anacacia’s main avenue to managing our views on ASX listed companies.

As discussed in part 1 of our interview, it’s early days yet for the Global Fund. But how are things looking after the first few months?

We’ve hired an exceptionally strong and internationally regarded portfolio manager, Oscar Hutchinson. He manages the Anacacia Global Fund day-to-day. Oscar is originally from the UK and has been in Australia for the last 3 years working with a credible large global fund manager. 

I chair the Global Fund investment committee and beyond our formal weekly meetings, we chat most days like I do with Tom and also our private equity team. We’ll be hiring a new investment analyst in the coming months also to work on the global fund. It’s quite a specialised skill set. 

There’s also excellent sharing of insight both ways with our other funds, including the Wattle Fund.

We like to keep our funds small and focused on the mid-market segment. The Anacacia Global Fund is no exception. We’ve seeded it with $30 million from investors including the investment team, and we expect it will grow modestly over time like our other funds. The Wattle Fund started with $30 million and has now grown to over $200 million.

The Global Fund seeks to target returns north of 10% per annum over the long term. No guarantees, of course. These are target returns.

There’s plenty of chatter about resurgent inflation and potentially rising interest rates. How important are these kinds of considerations in your investing strategy?

We are interested in what’s happening in these macro themes. But we really try to look from the bottom up for each individual stock. As we’re looking at the business we do try to work out how that might be impacted by inflation and exchange rates, and things like trade tensions.

Is the risk management you use in your international portfolio notably different from your ASX portfolio?

We have a similar approach to risk management as we do with our ASX portfolio. We’re not trying to hug an index but rather back a portfolio of outstanding businesses. We look at this from the bottom up. However, we also add a screen to ensure we’re not overly weighted towards certain factors.

Currency is an additional factor with international shares. Most of our investors are from Australia. They recognise that there’s currency risk investing in international shares but they also realise that they’re typically very exposed to the Australian dollar in their other investments. Rather than spending funds on hedging, we look for natural hedges within the portfolio by having a mix of businesses with exposures to different economies and currencies.

Are there any particular international shares you think our readers should consider adding to their portfolios? 

Each investor will be different. However, for most investors, it probably makes sense to have a mix of Australian and international shares. For international shares, readers can access these directly by owning individual stocks, or through large or index fund managers, or through boutique managers like Anacacia.

For a smaller retail investor, accessing the larger international stocks directly or indirectly often makes most sense. Our expertise is not trying to work out if Amazon is better than Facebook or Walmart is better than Johnson & Johnson. They are each great companies.

It’s too early to tell if our smaller companies will be the next large company. Ask me in a few years’ time!

How can people invest into the Anacacia Global Fund?  

The Anacacia Global Fund is only available to wholesale or sophisticated investors committing at least $500,000. It’s available directly or through advisors on the Netwealth platform. The fund takes new subscriptions each month and redemptions quarterly, but it’s really suited for investors with a longer horizon of at least 3-5 years as part of a balanced portfolio.

We’re not chasing funds and have no business development team or placement agents. Rather we have put a material part of our own wealth into our funds and enable other sophisticated investors to come along with us if they’re comfortable with the risks and return potential of the long term horizon we take.

I have to ask…what are your thoughts on Bitcoin and other cryptos?

It’s not a focus of ours at all. Are they going to be our generation’s tulips? I’m not sure.

I do think some of the cryptocurrencies will end up being sustainable. But I think it’s a very risky asset class to invest in at this very early stage. There’s a lot of speculation. There is some very interesting technology there. But it’s got a long way to go before there are many real user cases and to justify the valuations.

So for now, we’re steering clear of that market.

The post 4 ASX shares to gain exposure to international market growth: fund manager appeared first on The Motley Fool Australia.

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• Quarterly rebalance: Appen kicked out of ASX 100, Uniti added to ASX 200
• 5 things to watch on the ASX 200 on Tuesday

Bernd Struben does not own any of the shares mentioned in this article. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon, Appen Ltd, Bitcoin, Facebook, Nearmap Ltd., and Objective Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia owns shares of and has recommended Appen Ltd and Nearmap Ltd. The Motley Fool Australia has recommended Amazon and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The REA Group Limited (ASX: REA) share price is treading slightly lower during mid-morning trade. This comes after the property listings business announced it has invested in software provider, Simpology.

At the time of writing, REA shares are down 0.35% to $166.12. In comparison, the S&P/ASX 200 Index(ASX: XJO) is up 0.7% to 7,362 points.

REA accelerates financial services strategy

Investors appear unfazed by the company’s latest update to the ASX, sending REA shares into negative territory.

According to this morning’s release, REA advised it has acquired a 34% interest in Simpology for $15 million.

Founded in 2007, Simpology is a mortgage application and e-lodgement solutions business focused on enhancing the loan application process. The fintech company uses its Loanapp application tool to connect brokers and lenders in real-time for submitting home-loan applications seamlessly.

This further strengthens the REA’s financial services strategy following its proposed takeover of Mortgage Choice in March.

The Simpology transaction will be funded by REA tapping into its existing cash reserves. In addition, REA will hold two seats on Simpology’s board.

REA Group CEO, Owen Wilson commented:

REA’s investment in Simpology reinforces our commitment to delivering the best end-to-end mortgage application solution for consumers, our brokers and their clients.

Simpology has deep integrations into over 30 lenders and over 12,000 brokers. Our partnership will provide a step-change in the loan selection and digital application experience that REA can deliver to the 12 million Australians who visit realestate.com.au each month.

About the REA share price

Over the last 12 months, REA shares have surged higher, reflecting gains of more than 60% for shareholders. The company’s share price is within sights of breaking its all-time high of $169.92 reached last week.

On valuation grounds, REA commands a market capitalisation of roughly $21.85 billion, with approximately 132 million shares on its registry.

The post REA Group (ASX:REA) share price dips following acquisition news appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Service Stream Ltd (ASX: SSM) shares are charging higher in morning trade. At the time of writing, the Service Stream share price is trading 4.97% higher at 95 cents.

This will come as welcome news to shareholders, who’ve watched their shares tumble by around 50% over the past 12 months.

Let’s take a look at the ASX telecommunications and utilities company’s latest business update.

What was announced?

The Service Stream share price is gaining after the company confirmed its guidance, stating that its second-half earnings before interest, taxes, depreciation and amortisation (EBITDA) will be “in-line with” its first-half results. The company will provide more detailed results and outlook when it releases its full 2021 financial year results on 26 August.

Having received an increased number of enquiries from shareholders about the company’s growth outlook, and the recent performance of the Service Stream share price, the board opted to update the market prior to entering a blackout period, commencing today.

The board also stated it is “aware of an article that appeared in The Australian Financial Review on 10 June 2021 speculating about Service Stream’s potential involvement in a sale process in relation to the services division of Lendlease Corporation Limited”. The company reiterated that it considers external growth opportunities, but was not in a position to comment about speculation on specific businesses which might be under assessment.

Management wrote that it is “acutely aware of the fall” in the Service Stream share price, stating the company remains focused on its fundamental business model. That includes diversifying its revenues from the current bias towards telecommunications across broader essential infrastructure.

In an update on its utility business segment, the company stated it expects approximately 10% revenue growth from Comdain. That’s below the 15% growth it forecast at the half-year, largely due to floods and rain along the east coast delaying some project works. It said Comdain has a “strong backlog of secured work” heading into the new financial year.

Revenue from Service Stream’s telecommunications segment is down, following the completion of the national broadband network construction operations in the 2020 financial year.

Service Stream share price snapshot

Despite gaining strongly in morning trade, Service Stream shares remain down almost 50% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) has gained 31% in that same time.

Year to date, the Service Stream share price has remained under pressure, down 47% so far in 2021.

The post Why the Service Stream (ASX:SSM) share price is surging 5% today appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX dividend shares might be the way to grow income for investors who are looking to get more cashflow from their money. 

It’s the job of brokers to find businesses that might be opportunities on the share market. Some of those businesses currently pay a relatively high dividend yield.

Here are two that are liked by brokers:

Charter Hall Long WALE REIT (ASX: CLW)

This is one of the larger real estate investment trusts (REITs) on the ASX with a market capitalisation of just over $3 billion according to the ASX.

The aim of this REIT is to provide investors with stable and secure income, with the potential for both income and capital growth through an exposure to long weighted average lease expiry (WALE) properties.

The ASX dividend share is focused on owning assets that are predominately leased to tenants with strong covenants on long-term leases. This REIT is managed by Charter Hall Group (ASX: CHC).

Charter Hall Long WALE REIT recently had 458 properties, or 92% of the portfolio, independently valued for 30 June 2021. That resulted in a $373.4 million, or 7.6%, uplift on the prior book values. That saw the portfolio average capitalisation rate compress 38 basis points from 5.14% to 4.76%.

This update from the ASX dividend share saw the pro forma net tangible assets (NTA) per unit increase 12.8% from $4.65 to $5.24. It currently has a WALE of around 14 years.

Charter Hall Long WALE REIT is rated as a buy by the broker Citi because of its conservative guidance and strong rental income. The price target is $5.30. At the current share price, Citi thinks the dividend yield will be 6% for FY21 and 6.25% for FY22.

Waypoint REIT Ltd (ASX: WPR)

This is the largest REIT that gives pure exposure to fuel and convenience retail properties with a network across all Australian states and mainland territories.

Waypoint REIT’s stated objective is to maximise the long-term income and capital returns from its ownership of the portfolio for the benefit of all securityholders.

There is rental growth built into its contracts, predominately with tenant Viva Energy Group Ltd (ASX: VEA) and sub-tenant Coles Group Ltd (ASX: COL) with Coles Express.

It has an occupancy rate of 99.9%, a WALE of 10.8 years, with most of them (over 90%) having triple net leases.

The ASX dividend share is achieving attractive organic rental growth underpinned by a weighted average rent review of 2.9%. There is further growth potential through acquisitions and development.

It’s currently rated as a buy by Morgans, with a price target of $2.92. Morgans is expecting the FY21 and FY22 distributions to be 15.7 cents and 16.4 cents, equating to a distribution yield of 5.9% this financial year and 6.2% next financial year.

The post Brokers rate these 2 ASX dividend shares as buys appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Isentia Group Ltd (ASX: ISD) share price has been one of the best performers on the Australian share market on Tuesday.

In morning trade, the media intelligence services provider’s shares are up over 150% to 17.5 cents.

Why is the Isentia share price rocketing higher?

Investors have been bidding the Isentia share price higher today after it announced that it has entered into a binding scheme implementation deed with AIM-listed Access Intelligence.

Access Intelligence is an UK-based technology led company delivering SaaS products that address the fundamental business needs of customers in the public relations, marketing, and communications industries.

According to the release, under the terms of the scheme implementation deed, Access Intelligence will acquire 100% of the shares in Isentia that it does not already own by way of a scheme of arrangement. This scheme remains subject to shareholder and court approval but is being recommended by the Isentia board.

Access Intelligence has offered 17.5 cents per share in cash, which implies an enterprise value of $67 million for Isentia. This represents a 157% premium to its last close price and a 39% premium to the 12-month volume weighted average price of the Isentia share price.

“Compelling offer”

Isentia directors believe Access Intelligence has made a compelling offer for a number of reasons.

This includes an attractive premium, certainty of value, and limited conditionality. In respect to the latter, the company notes that the offer is subject only to customary conditions and not financing or due diligence.

Isentia Chairman, Doug Snedden, said: “The Scheme is an attractive transaction which provides an all-cash consideration for Isentia shareholders. The Isentia Board has unanimously concluded that the Scheme is in the best interests of shareholders. The price represents a significant premium to the current trading price.”

“Access Intelligence’s offer provides Isentia shareholders with certainty of value and the opportunity to realise their investment in full for cash. Isentia’s operations will also benefit from Access Intelligence’s intention to repay senior debt.”

This sentiment was echoed by the company’s CEO, Ed Harrison. He said: “Access Intelligence has a strong track record in delivering successful products to PR and comms professionals, not least through their powerful social media platform, Pulsar.”

“Bringing the companies together will give Isentia’s customers access to a broader suite of products. Isentia will continue to invest in its existing portfolio of products including the upcoming launch of the new Isentia platform and completion of the move to real-time broadcast monitoring. For the Isentia team this represents the opportunity to be part of a wider global organisation,” he concluded.

The Isentia share price last traded above the offer price in October last year. Since then it has been on a downward trajectory, hitting a record low of 6.6 cents recently.

The post Why the Isentia (ASX:ISD) share price is rocketing 150% higher today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Nuix Ltd (ASX: NXL) share price is charging higher today after announcing major changes in its leadership.

At the time of writing, the investigative analytics and intelligence software provider’s shares are up 4% to $2.76.

Why is the Nuix share price rising?

This morning the embattled software company announced the exit of both its Chief Executive Officer (CEO) and its Chief Financial Officer (CFO).

Traditionally, such major changes at the top will lead to selling by investors. However, with Nuix performing so poorly since its IPO last year and downgrading its guidance multiple times, it appears as though the market is cheering on these changes on this occasion.

According to the release, CEO Rod Vawdrey has revealed that he intends to retire from the role. However, Mr Vawdrey will continue in the role while an international search is conducted for a new CEO to lead Nuix on the next phase of its journey and to allow for an orderly leadership transition.

Whereas the company’s CFO, Stephen Doyle, has had his employment terminated by mutual agreement with effect from 30 June. Nuix has revealed that Chad Barton will step in as interim CFO from Monday 21 June.

And while Mr Doyle retains no operational duties, he will be available in the coming weeks to work on an orderly handover of his responsibilities. A global search for a permanent CFO has been initiated by the company.

Management commentary

Commenting on the exit of Rod Vawdrey, Nuix Chair, Hon Jeff Bleich, said: “Rod’s decision reflects his deep commitment to Nuix and love for the company. Rod has agreed to remain at least through the announcement of end of year results, and throughout the process required to find the right replacement to ensure the smoothest possible transition.”

“Nuix is a great company with world leading technology, an extraordinary portfolio of clients, and an incredibly passionate and committed team of employees. We are confident that the pool of candidates will be a deep one and the Board is very focused on attracting the right individual to take on the role.”

Mr Vawdrey commented on the appointment of Chad Barton as interim CFO and appears to believe the company’s finances are in safe hands.

He said: “I am delighted that someone of Chad’s calibre and extensive listed company experience is joining Nuix as interim Chief Financial Officer. Chad brings deep capital market relationships and a strong understanding of financial reporting and systems. He will lead a committed and highly capable team of finance professionals.”

The Nuix share price is still down 68% since the start of the year.

The post Nuix (ASX:NXL) share price charges higher after announcing CEO and CFO exits appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia has recommended Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

The price of popular cryptocurrency Bitcoin (CRYPTO: BTC) has gone back over $40,000 per coin following a comment made by Elon Musk on social media. Musk is the founder and CEO of electric vehicle company Tesla (NASDAQ: TSLA) and said his company will once again start accepting Bitcoin as a form of payment once certain renewable-energy criteria are met. Considering some blame Musk for the current Bitcoin bear market, it seems only fitting that it’s getting a boost from him today.

Stocks tied to Bitcoin are also getting a boost today. As of 12:30 p.m. EDT, Riot Blockchain (NASDAQ: RIOT) stock is up 21%, Bit Digital (NASDAQ: BTBT) is up 25%, and Marathon Digital Holdings (NASDAQ: MARA) is up 18%. Finally, shares of cryptocurrency fund Grayscale Digital Large Cap Fund (OTC: GDLC) are up 12%.

So what

The price of Bitcoin crashed in May after Musk said Tesla would no longer accept Bitcoin as a form of payment, citing concerns over lack of sustainable energy used in the mining process. At its high in May, Bitcoin was around $58,000. Following Musk’s comments, it plummeted to around $35,000. But in a social media post yesterday, Musk said that Tesla isn’t banning Bitcoin payments forever. First, the company needs to confirm around half of Bitcoin’s electricity comes from green sources. Second, the mining process needs to be trending greener in general.

It’s unclear how Tesla will confirm Bitcoin’s energy sources exactly. By some estimates, the blockchain network already far surpasses Musk’s 50% benchmark. For example, according to a December 2019 study from CoinShares Research, 73% of Bitcoin’s energy comes from renewable sources. However, the exact percentage is hotly debated. After all, not all miners disclose where they get their electricity.

This uncertainty has some calling for more transparency among Bitcoin miners. Therefore, some companies have voluntarily coalesced to form the Bitcoin Mining Council. These companies met for the first time on May 23. MicroStrategy is a founding member of the council, and its CEO Michael Saylor said on social media that the council will “standardize energy reporting.”

Riot Blockchain, Bit Digital, and Marathon Digital are all companies that mine Bitcoin, and they know how important this renewable energy issue is becoming for Bitcoin. For example, on June 8, Bit Digital provided a transcript of CEO Bryan Bullett’s presentation at the LD Micro Conference. There Bullett said, “As of April 2021, we estimated that we used a majority carbon-free energy, on an annualized weighted average basis, accounting for these seasonal migrations.” By “seasonal migrations” Bullett is referring to Bit Digital’s strategy of moving miners to places that may have cheaper, renewable energy at certain times of year.

Now what

Today’s news about Tesla and Bitcoin may send the price of Bitcoin higher only in the short term — it doesn’t seem fundamental to a cryptocurrency-investing thesis. Consider that during the short time Tesla was theoretically allowing Bitcoin as a method of payment, it doesn’t seem like anyone actually did it. And in reality it’s hard to see what the advantage would be for a consumer anyway. Bitcoin investors believe the value will continue to rise over time. Therefore, it behooves them to hold Bitcoin rather than spend it.

Comments today from billionaire Paul Tudor Jones are more fundamental to a long-term Bitcoin thesis. Jones appeared on CNBC today and said he wants 5% of his investments in Bitcoin. Jones cited concerns over inflation of the U.S. dollar and high stock valuations, but the implications are far reaching. If more people, companies, and even countries buy and hold Bitcoin as Jones and others suggest, that could create a surge in demand that drives the price higher in the long term.

A higher price for Bitcoin would obviously be good for companies like Marathon Digital, Riot Blockchain, and Bit Digital that directly operate in this space and even hold bitcoins on their balance sheets in some cases. But it would also be good for funds like Grayscale Digital Large Cap Fund — a diversified cryptocurrency fund that’s 69% invested in Bitcoin. 

If you decide to take Jones’ advice regarding Bitcoin, be mentally prepared for volatility. Even though Bitcoin’s market capitalization is roughly $750 billion, a simple social media post from a celebrity still amazingly has the power to send coins moving by 10% or more with ease. Expect many more headline-grabbing endorsers and detractors in the coming weeks and months, making for one choppy ride. That may be more than most investors can mentally handle with 5% of their portfolios. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Bitcoin stocks soar following Elon Musk’s Tesla announcement appeared first on The Motley Fool Australia.

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Jon Quast owns shares of Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended MicroStrategy. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Crown Resorts Ltd (ASX: CWN) share price is trading lower on Tuesday despite the release of an announcement.

At the time of writing, the casino and resorts operator’s shares are down 1% to $12.12.

What is happening?

This morning Crown revealed that Oaktree Capital Management has come back with an improved offer.

This follows its unsolicited, preliminary, non-binding and indicative proposal in April to provide a funding commitment of up to ~$3 billion to Crown via a structured instrument. The proceeds were to be used by Crown to buy-back some or all of the Crown shares which are held by James Packer’s Consolidated Press Holdings on a selective basis.

Today, Crown revealed that Oaktree has now revised its proposal and is offering a $3.1 billion facility consisting of two tranches. This comprises a $2 billion private term loan and $1.1 billion loan convertible into new shares to be issued by Crown. Once again, it proposes that the proceeds would be used to fund a selective buy back of Consolidated Press Holdings’ shareholding in Crown.

What are the terms?

Crown notes that the term of the proposed facility is seven years with a coupon of 6% per annum for the first two years and then 6.5% per annum for the remainder of the term.

In respect to the convertible component of the facility, it would give Oaktree the ability to convert the $1.1 billion tranche into new shares in Crown at a strike price of $13.00 in specified circumstances. This includes at any time after the first anniversary of the facility provided that the Crown share price is above $13.00 based on a 30-day volume weighted average price.

Furthermore, the number of new Crown shares which would be issued to Oaktree upon conversion would be capped so that Oaktree would hold 9.99% of the total number of Crown shares on issue. The remaining part of the convertible component would be cash settled by Crown.

What now?

The release explains that the Crown Board has not yet formed a view on the merits of the revised Oaktree proposal.

As a result, it has advised shareholders that they do not need to take any action in relation to the proposal at this stage. It also warned that there is no certainty that the proposal will result in a transaction.

Crown is also still considering a merger proposal from rival Star Entertainment Group Ltd (ASX: SGR).

The post Crown (ASX:CWN) share price lower despite Oaktree proposal appeared first on The Motley Fool Australia.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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