Tag: Motley Fool

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.

The meteoric rise of GameStop (NYSE: GME) stock since late 2020 has drawn its share of detractors. The latest critic is the U.S. House of Representatives, whose Financial Services Committee believes regulators need to tighten rules on so-called “meme stock trading”.

It remains unclear if or how much this attention will affect the retail stock. However, GameStop continues to face more pressing challenges that have little to do with Congress or the meme stocks it seeks to target.

The committee and GameStop

Much of the Congressional committee’s focus was more directly tied to Robinhood than GameStop. It alleges that Robinhood’s platform promoted “game-like” features that encouraged more stock trading.

Still, the committee cited the behavior of GameStop stock as exhibiting this trait. In the case of GameStop, traders leveraged social media to band together to buy the stock and attempt to unwind bets against GameStop by some hedge funds.

Whether these findings will result in additional regulations is not yet clear. Moreover, this has likely become another example of the regulatory framework significantly lagging the behavior of stocks and traders. Hence, it may come too slowly to materially affect GameStop stock.

How GameStop stock has boosted the company

However, GameStop faces more serious challenges from internal forces. Its stock plummeted to penny stock levels in 2020 for business-related reasons. The games it once sold had increasingly moved online, making the existence of GameStop less necessary.

Nonetheless, the meme stock craze sent the stock to record highs. Though it has never returned to the peak of $483 per share in early 2021, its current price of around $130 per share is far above its one-time penny stock status. This has allowed the company to issue shares and raise cash to keep itself afloat.

With the new funding, GameStop worked to revive its business. It closed numerous stores and established an online marketplace to sell game downloads. This made it a one-stop shop for finding games from numerous companies.

Additionally, it has ventured more heavily into new business lines. For one, it entered the collectibles business, which has given it unique goods to sell. It has also made plans to launch an NFT marketplace, though it has released few specifics about the new offering.

The problem with GameStop

Unfortunately, GameStop has chosen to enter the NFT market at a time when interest is fading in NFTs, according to NonFungible, an industry website. This will probably dampen interest in its new offering. Moreover, segments like online games and collectibles do not give GameStop much of a competitive moat. Consumers have numerous choices in either case, and its competitive edge does not appear to extend beyond its name recognition.

Furthermore, the company’s financial picture continues to worsen. In Q1, its revenue rose 8% from a year ago to $1.4 billion. Also, faster growth in the cost of sales and selling, general, and administrative expenses dramatically widened operating losses. This took its net loss to $158 million, up from $67 million in the year-ago quarter.

Additionally, the pain will probably continue as video game sales saw a steep decline in May. Analysts are not expecting improvements; they predict 7% revenue growth for the year and widening net losses.

For now, GameStop holds just over $1 billion in liquidity. Still, with losses widening, it may have to return to the capital markets by next year if it cannot maintain its stock price. As its business continues to struggle, the prospects for its recovery appear increasingly uncertain.

Avoid GameStop stock

In the end, the House Financial Services Committee is the least of GameStop’s worries. The committee has not responded quickly to the meme stock craze, and any action will probably come too late to affect GameStop.

The more significant concern is the future state of GameStop when that committee acts. The higher stock price has enabled the company to raise more capital and stay afloat for now. Nonetheless, its continuing losses and moves into weak-moat business lines will likely not boost investor confidence.

Admittedly, GameStop has held on to its passionate supporters on social media. They have proven their influence and have made GameStop dangerous to short. But given the poor recovery prospects, investors should consider staying away.

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

The post GameStop is in trouble — and it’s not because of Congress appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Meme stocks are doomed (in the long run)

Will Healy 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 Scott Phillips.

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

from The Motley Fool Australia https://ift.tt/SgYsblF

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.

Despite tough odds, plenty of doubters, and regular criticism over its actions, Tesla (NASDAQ: TSLA) has developed into the leading manufacturer of electric vehicles globally. The automaker has grown rapidly, and so has its share price. This has led management to announce a 3-for-1 stock split sometime later this year to make its stock more accessible to retail investors. 

The decision to split the stock in 2022 comes not all that long after a 5-for-1 split in late August 2020, which reduced its price per share from around $2,300 to roughly $444. Like all stock splits, the increase in the number of shares and the resulting share price drop doesn’t actually change the intrinsic value of each share or of the company overall.

Since that last split, Tesla’s stock price has risen by about 64% to $725, thanks in part to the company’s strong operational performance. If the 3-for-1 split occurred today, each share would be further reduced to a new price of roughly $242.

Here are three reasons why that share price is likely to continue moving higher once the split is done.

1. More factories equals more vehicle deliveries

Tesla has faced challenges meeting the demand for its vehicles in the past because of production constraints. In fact, despite the company’s incredible growth, a lack of manufacturing capacity has actually slowed it down. However, that might be about to change with the opening of two brand new gigafactories — one near Austin, Texas, and the other in Berlin, Germany.

The new additions will take Tesla’s manufacturing capacity to 2 million vehicles per year from 1.05 million previously. Unfortunately, the company still has to contend with supply chain issues for raw materials and components like semiconductors, which is a problem all car makers are currently facing. But once that resolves (and it will), the below chart should continue to show a strong ramp-up.

2. More deliveries equals a higher gross margin

A gross profit margin is simply a company’s revenue (sales) minus its cost of goods. In Tesla’s case, its automotive gross margin would factor in the price of the car, less the direct cost of making the car. It would include costs such as the raw materials required to build each vehicle, but it wouldn’t count marketing or money spent on research and development — those are operating expenses.

As Tesla builds more cars, its gross margin increases. Why? Because of a phenomenon known as “scale.” If Tesla builds a factory that can manufacture 500,000 cars, but it only produces 50,000, it would lose money because it’s absorbing the costs of that extra capacity without actually using it. When it produces all 500,000 cars, its fixed costs are at the smallest possible percentage of its revenue, which leads to a higher gross margin.

Since Tesla has been delivering a record number of vehicles, its gross margin has consistently climbed higher, and it’s now sitting at the best level in the company’s history.

3. A higher gross margin equals a higher net income

Net income is a metric most investors watch closely. Put simply, it’s the company’s bottom line, or profit. It’s also important because when it’s divided by the number of shares in circulation, it becomes earnings per share.

Many pundits predicted Tesla would never reach profitability because making cars is difficult and expensive. Even some of the best car makers, like Ford Motor Company (NYSE: F), can only muster a gross profit margin of around 15%, but Tesla has developed industry-leading processes for producing electric vehicles, and the quality of the finished product allows for premium pricing.

Tesla’s gross margin of 32.9% leaves far more room for operating investments like the design of new products and the development of innovative new software technologies like autonomous driving, which can help keep the company ahead of its competitors. But more importantly, the high margin results in more money flowing to the bottom line, and in the first quarter of 2022 alone, Tesla generated over $3.3 billion in net income.

To be clear, Tesla doesn’t need its upcoming stock split in order to create more value for investors. At most, it might broaden the shareholder base by inviting new, smaller investors into the fold, thanks to the more affordable price per share. The company’s rapid expansion of manufacturing capacity and consistent profitability are the items that will continue driving its stock higher both before and after the split.

But for investors wondering when the stock split might take effect, it’s likely to happen after Tesla’s annual shareholder meeting in August, where the move will be voted on. 

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

The post 3 reasons Tesla could soar after its stock split appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Better stock-split buy: Alphabet or Tesla?
• 3 top stock splits to watch in 2022
• Should You Buy Tesla Stock Right Now?
• Here’s what moved Tesla shares today
• Why Tesla shares popped then dropped today

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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 Scott Phillips.

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

from The Motley Fool Australia https://ift.tt/G4hdtxZ

The Ethereum (CRYPTO: ETH) price is down 4% over the past 24 hours, currently trading for US$1,145 (AU$1,655).

The overnight decline puts the world’s number two crypto by market cap down 70% since 1 January.

And it comes as news emerges that the hackers who stole US$100 million in cryptos from the Horizon blockchain bridge last week have begun to launder their ill-gotten virtual gains.

How the hack unfolded

Last Thursday, Harmony (the company behind Horizon) reported the brazen theft from its bridge. At the time the Ethereum price was around 2% higher than current levels.

If you’re not familiar with the term, in the digital world bridges enable you to transfer cryptos between different blockchains. And last week’s theft isn’t the first time hackers have exploited weaknesses in bridges’ security protocols to swipe millions of dollars’ worth of cryptos.

In a tweet last Thursday Harmony said:

The Harmony team has identified a theft occurring this morning on the Horizon bridge amounting to approx. $100MM. We have begun working with national authorities and forensic specialists to identify the culprit and retrieve the stolen funds.

The company also offered a hefty reward, later tweeting, “We commit to a $1M bounty for the return of Horizon bridge funds and sharing exploit information.”

And they upped their bridge security:

We have migrated the Ethereum side of the Horizon bridge to a 4-of-5 multisig since the incident. We will continue taking steps to further harden our operations and infrastructure security.

That means every transaction will require four out of five (or all five) private keys before authorisation.

Ethereum price slips as virtual laundering begins

In the latest news, Decrypt reports that the hackers have begun to launder their virtual loot.

Cyber security company PeckShield revealed that the thieves sent three transactions from the same address used in last week’s hack to Tornado Cash, a crypto mixing service. By pooling large amounts of tokens together, services like Tornado enable people to mask the origins of their cryptos.

In total, they sent some 30,000 ether, approximately US$34.4 million at the current Ethereum price. That’s about a third of their total take.

In last week’s hack, the cyber criminals stole a range of altcoins from the bridge before swapping them for Ethereum.

If the Ethereum price were trading at November’s all-time highs, the 90,000 stolen tokens would be more than US$440 million.

The post Ethereum price falls after hackers begin laundering $100 million bridge exploit appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• What one tech guru thinks of the current crypto market
• Why Bitcoin, Ethereum, and Dogecoin are down today
• The ATO is collecting crypto taxes. Here are 5 handy expert tips come tax time
• These 3 cryptos are feeling the Elon Musk effect today
• Can Ethereum reach $5,000?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia has positions in and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/kIrRWoC

The Collins Foods Ltd (ASX: CKF) share price is edging higher on Wednesday despite market weakness.

In morning trade, the quick service restaurant operator’s shares are up 0.5% to $10.01.

Why is the Collins Foods share price pushing higher?

Investors have been bidding the Collins Foods share price higher after a number of brokers responded positively to the company’s full-year results.

Notes out of Macquarie, Morgans, and Wilsons reveal that their analysts have put the equivalent of buy ratings on the KFC restaurant operator’s shares.

What are brokers saying?

The team at Macquarie has retained its outperform rating with an $11.50 price target.

The broker was pleased with Collins Foods’ performance in FY 2022 and particularly its European operations. And while it acknowledges that costs will increase in the short term due to inflationary pressures, it remains positive.

It’s a similar story over at Morgans, where the broker upgraded Collins Foods’ shares to an add rating with an $11.50 price target.

Its analysts believe the Collins Foods share price is good value at the current level. Particularly given the company’s defensive qualities. Morgans is expecting demand for KFC to be resilient in the current environment. The broker also sees opportunities for the company to pass on higher costs through price increases.

Wilsons tip tasty upside for Collins Foods’ shares

The most bullish of the three brokers is Wilsons, which sees tasty upside for Collins Foods’ shares over the next 12 months.

According to the note, the broker has a buy rating and $12.10 price target on the company’s shares. Based on the current Collins Food share price, this implies potential upside of over 20% for investors.

Wilsons is also forecasting a fully franked dividend of 28 cents per share in FY 2023. This equates to a 2.8% yield, which stretches the total return to over 23%.

The post Top broker backs a tasty 20% upside for the Collins Foods share price appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why BlueBet, Collins Foods, Northern Star, and Tassal shares are charging higher
• ASX 200 midday update: Tech shares tumble, Collins Foods jumps
• Collins Foods share price jumps 11% on FY22 results
• 5 things to watch on the ASX 200 on Tuesday
• 2 ASX shares the Aussie lifestyle can’t do without

Motley Fool contributor James Mickleboro has positions in Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Collins Foods Limited. The Motley Fool Australia has recommended Collins Foods Limited and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/O9yG4P8

Shares of biotech Immutep Ltd (ASX: IMM) have had a hard time this year to date, down 35% since trading resumed in January.

At the time of writing, investors are paying 30.5 cents apiece for the Immutep share price.

Earlier this month, Immutep released the slide deck of its presentation at the American Society of Clinical Oncology (ASCO) 2022 Special Edition. Let’s take a closer look.

Immutep’s biotech assets on full display

ASCO is the world’s biggest clinical cancer research conference, Immutep says. This year the company announced clinical results from Part A of its Phase II TACTI-002 trial.

The trial is investigating Immutep’s lead drug candidate, eftilagimod alpha â€“ also known as efti – when given in combination with pembrolizumab, known as Keytruda.

“Importantly, the trial met its primary objective, delivering promising efficacy in this large indication and warranting late-stage clinical development of efti in this indication,” Immutep posted in its slide deck.

“By benchmarking our TACTI-002 results against other approved treatments, the efti and pembrolizumab combination compares favourably,” it added.

Additionally, due to the positive data from efti presented at ASCO and other conferences, Immutep has been approached for potential new investigator-initiated trials as well as other potential collaborations for efti in various indications and combinations which we are currently assessing.

Furthermore, the Phase II TACTI-002 trial has been selected for readouts at the IASLC 2022 World Conference on Lung Cancer (WCLC 2022).

The conference is taking place both in-person and online from 6-9 August 2022 in Vienna, Austria.

Despite continued updates with its etfi label, Immutep shares have tumbled more than 40% into the red these past 12 months.

The post Own Immutep shares? Here are 3 takeaways from the company’s investor update appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• What’s driving the Immutep share price in June?
• Why has the Immutep share price rocketed 24% in a month?

Motley Fool contributor Zach Bristow 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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/jMEn3FC

WiseTech Global Ltd (ASX: WTC) is a favourite among S&P/ASX 200 Index (ASX: XJO) tech shares.

In fact, the stock was part of the WAAAX group of shares. The group was arguably disbanded upon Afterpay’s removal from the ASX.

At the time of writing, the WiseTech share price is $39.06. That’s approximately flat with its highest point of 2019 and around 35% lower than its highest point ever, reached late last year.

So, what does the ASX tech giant actually do? Read on to find out.

But first, what is WiseTech?

S&P/ASX 200 Information Technology Index (ASX: XIJ) favourite WiseTech develops and provides software solutions to support companies working in global supply chains.

According to the company, its software solutions are renowned for their productivity, functionality, integration, compliance capabilities, and global reach.

The company’s flagship platform, CargoWise, provides customers with an end-to-end global logistics solution, executing more than 72 billion data transactions each year.

WiseTech calls more than 18,000 logistics companies its customers. They span more than 165 countries and include 42 of the top 50 global third-party logistics providers and 24 of the 25 largest global freight forwarders on the planet.

The company has a market capitalisation of around $12.7 billion, according to the ASX.

It joined the ASX in 2016 after offering its shares for $3.35 apiece under its initial public offering (IPO).

At the end of the first half of this financial year, WiseTech had $380 million in cash and no debt. It’s also currently trading with a 0.22% dividend yield.

What’s weighed on the WiseTech share price in 2022?

This year looks to have been a good one for WiseTech on paper. The company released seemingly strong half-year earnings and upgraded its guidance in February.

However, the market appears to have turned on the former favourite. The WiseTech share price has slumped close to 35% year to date.

But it’s worth noting the company hasn’t suffered alone. The ASX 200 info tech sector has tumbled 36% in 2022, meaning WiseTech is performing in line with most of its peers.

As my Fool colleague Sebastian recently reported, rising inflation and interest rate hikes have likely dampened sentiment for ASX tech shares this year.

The post Behind the ASX share: What makes WiseTech tick? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why are ASX tech shares struggling today?
• Here are the top 10 ASX shares today
• Why ASX 200 tech shares are outperforming the market on Friday
• Down 17% in June, is the WiseTech share price a wise move for ASX bargain hunters?
• Why are ASX 200 tech shares getting hit hardest today?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/9Um8FRD

You might be wondering why the Goodman Group (ASX: GMG) share price is backtracking almost 4% today.

The S&P/ASX 200 Index (ASX: XJO) is also down by 1.06% to 6,692.2 points following losses overnight on Wall Street.

Nonetheless, the integrated commercial and industrial property group shares are down 3.79% to $18.27 at the time of writing.

Let’s take a look at why Goodman shares are heading south during early morning trade.

Shareholders set eyes on Goodman dividend

Investors are offloading Goodman shares as they set to trade without rights (ex-dividend) today.

Listed one business day before the record date, the ex-dividend date is when investors must have purchased shares. If you did not buy Goodman shares before this date, the dividend will be paid to the seller.

For those eligible for Goodman’s interim dividend, shareholders will receive a payment of 15 cents per stapled security on 25 August.

The dividend is unfranked which means there are no tax credits attached to this.

In case you weren’t aware, the company’s dividend reinvestment plan (DRP) remains suspended with no indication as to when it will return.

Goodman’s policy is to distribute in the low 50% range of operating earnings and taxable income for the full year. This is reviewed by its board each financial year in light of operating performance and current market conditions.

Goodman share price summary

Since the beginning of 2022, Goodman shares have lost more than 30% on the back of weakened investor sentiment. The benchmark ASX 200 Index is also down around 10% over the same timeframe.

Goodman shares reached a 52-week low of $16.80 this month, before rebounding in the following weeks.

Based on today’s price, Goodman commands a market capitalisation of roughly $34.5 billion, and has a dividend yield of 1.61%.

The post Here’s why the Goodman Group share price is sinking today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Are these blue chip ASX 200 shares in the buy zone?
• Time is running out to secure the Goodman Group dividend. Here’s what you need to do
• Here’s 3 popular ASX shares that are trading ex-dividend next week
• 5 things to watch on the ASX 200 on Wednesday
• Broker names 2 of the best ASX 200 shares to buy now

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 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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/WxiA8EO

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?

Shares of Meta Platforms (NASDAQ: META) fell 5.2% on Tuesday, even greater than the broader Nasdaq Composite, which was down near 3%.

It appears as though every day brings another negative headline for Meta. Yesterday, there were two. First, The Conference Board’s consumer confidence reading came in worse than expected, which doesn’t bode well for Meta’s ad revenue. Second, a Wall Street Journal article today highlighted a bill making its way through the California State Senate, which would potentially open Meta and other social media platforms to lawsuits over teen addiction.

So what?

On Tuesday, The Conference Board, a nonprofit business research group organization, showed consumer confidence dropping to the lowest reading since 2013, with a reading of 98.7, down from 103.2 in May and below expectations of 100. That worse-than-expected reading hit virtually all stocks that are sensitive to consumer spending. Although Meta doesn’t sell a lot of discretionary items, with the exception of its virtual reality headsets, it does get 99% of its revenue from advertising. So, lower consumer spending could lead advertisers to pull back on ad spending, which would affect Meta.

In addition, the Wall Street Journal highlighted a new bill making its way through the California state legislature, which could theoretically open Meta up to hundreds of millions in fines — although rivals TikTok and Snap would also be subject to the new law as well. The bill proposes that state, local, and city attorneys could sue social media companies, if these attorneys can prove the companies knowingly introduced features that would addict teens to their platforms. The bill is currently up for a vote in the state’s Senate Judiciary Committee, and if passed, would then go through to a full vote in the state Senate.

It’s unclear if the bill would pass, but social media companies are also working with California state lawmakers on features to prevent teen addiction, which they hope will be agreed on and implemented instead.

Now what?

Meta investors have faced a perfect storm of negativity ever since the whistleblower hearings on Capitol Hill last October. Since then, CEO Mark Zuckerberg introduced the company’s metaverse ambitions, which investors are unsure about. Meanwhile, iOS Identifier for Advertisers changes have made a dent in Meta’s ad growth, since those new privacy features have made Meta’s ads less targeted. Now, with the Federal Reserve tightening financial conditions, fears over a recession are in the air. Meanwhile, this California bill has the potential to open the company to more potential financial penalties.

These are all the reasons Meta, the world’s dominant social media platform, trades at a bargain basement 11.3 times earnings. I happen to think that’s too cheap if taking a longer-term view. However, there are certainly lots of headwinds facing Meta investors today.

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

The post Why Meta Platforms plunged on Tuesday appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• 2 oversold stocks to buy in the Nasdaq bear market
• Why Meta, Amazon, and Apple shares were falling today
• Better buy: Twitter vs. Meta Platforms
• 2 top Nasdaq stocks the world’s best investors were buying last quarter

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Billy Duberstein has positions in Meta Platforms, Inc. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Meta Platforms, Inc. The Motley Fool has a disclosure policy. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

from The Motley Fool Australia https://ift.tt/Jk3USBE

The Liontown Resources Limited (ASX: LTR) share price is defying the market weakness and racing higher.

In morning trade, the lithium developer’s shares are up 17% to $1.25.

Why is the Liontown share price racing higher?

Investors have been bidding the Liontown share price higher today after the company provided an update on an offtake agreement.

According to the release, the company has secured a third foundational offtake agreement with leading global automaker Ford.

The release explains that Ford and Liontown have executed a definitive binding full-form offtake agreement for the supply of up to 150,000 dry metric tonnes (dmt) of spodumene concentrate per annum for an initial term of five years. This will start from the commencement of commercial production in 2024.

Funding agreement and final investment decision

In addition to the offtake agreement, Ford and Liontown have executed a binding full-form funding facility agreement.

The two parties have agreed to $300 million debt facility that will be used for the development of the Kathleen Valley Lithium Project.

Management notes that this funding facility, together with the proceeds from Liontown’s $463 million capital raise in December, paved the way for the project’s approval by the board today.

One slight negative, though, is that the capital cost of the project is expected to be greater than previously forecast.

Instead of $473 million, the cost is expected to be $545 million. Management advised that this increase is driven primarily by optimisation and expansion of the FEED scope across a range of areas and general cost escalation.

Though, this could still change. The release notes that this is the company’s current best estimate. Liontown continues to tender and award major construction, equipment, and operational packages of work.

‘A momentous milestone’

Liontown’s managing director and CEO, Tony Ottaviano, was delighted with the agreements. He commented:

The signing of our third and final foundational offtake agreement is a momentous milestone for Liontown and the Kathleen Valley project, with approximately 90% of Kathleen Valley’s start-up capacity now under secured long-term binding offtake agreements.

Our disciplined approach to our offtake strategy has enabled us to build a customer base of Tier-1, globally significant customers in the EV battery supply chain, validating Kathleen Valley’s status as a globally relevant lithium asset.

In addition to the offtake, the A$300 million funding facility from Ford, together with the capital raised last year, means that we have secured commitments for the funds required to support the full commercial development of Kathleen Valley through to first production.

Ford’s vice president of EV Industrialization, Lisa Drake, believes these agreements will help the automaker reach its bold electric vehicle goals. She commented:

Ford continues working to source more deeply into the battery supply chain to meet our goals of delivering more than 2 million EVs annually for our customers by 2026. This is one of several agreements we’re working on to help us secure raw materials to support our plan to deliver EVs for customers around the world and meet our environmental, social and governance commitments.

The post Liontown share price jumps 17% following ‘momentous milestone’ appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX shares today
• Liontown Resources share price rockets 9% amid broker’s positive lithium outlook
• Guess which sector is delivering the biggest gain across the ASX 200 today
• Here are the top 10 ASX shares today
• Could ASX lithium shares be set for a boost?

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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/GCW8gDv

ASX dividend shares are known for paying outsized income to investors.

But, there’s a significant difference between a dividend yield of 5% and something that pays more than 10%.

Sometimes yields can be mirages because they may be old yields that are about to be cut.

However, the two businesses below are predicted by experts to pay huge dividend yields in the next financial year.

So, let’s have a look at the two ASX dividend shares that could pay beastly income.

Best & Less Group Holdings Ltd (ASX: BST)

Best & Less is a retailer of apparel that aims to offer quality products at a good price. The company says that it has a vertical retail model, with 86% of sales from its own labels.

Best & Less suggests there is a market opportunity as customers migrate to ‘value’ products. Management believes the business is positioned to benefit from the current inflationary environment.

The ASX dividend share describes its baby products as a key driver of growth as it establishes long-term relationships based on “creditability and trust”. As children grow, Best & Less can offer more products, lengthening the connection with those customers.

The company wants to grow its market share of baby, kids, and women’s apparel. Best and Less is also aiming to increase its gross profit margin and store count.

According to Macquarie, the business could pay a grossed-up dividend yield of 18.7% in FY23.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is another ASX retail share that says it’s the market leader in a growth sector. It’s focused on premium products in DIY grooming, personal care, and hair and beauty appliances for men and women. It boasts that many key brands and products are exclusive to Shaver Shop. Exclusive products generate more than 50% of sales and 60% of gross profit.

The ASX dividend share has built a significant e-commerce presence. It says that around 35% of total sales are online, though it does have around 120 stores across Australia and New Zealand as well.

According to Shaver Shop, the Australia-New Zealand beauty and personal care market is expected to grow from approximately $10 billion to around $12 billion by 2026.

Hair cutting and men’s shaver sales have returned to growth in the second half of FY22. Total sales were up 5.7% to 31 May 2022. In FY22, it’s expecting to generate at least $16.25 million of net profit after tax (NPAT).

In terms of the dividend, Ord Minnett thinks that Shaver Shop is going to pay a grossed-up dividend yield of 14.7% in FY23 and that it’s valued at seven times FY23’s estimated earnings.

The post Dividend beasts: Here are 2 ASX dividend shares with expected yields over 10% appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Boss Energy, Crown, Magellan, and Shaver Shop shares are rising
• Could this ASX All Ords share be set to benefit from higher living costs?
• I think these 2 high-yield ASX dividend shares are buys in June

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/emgIaVz