Tag: Motley Fool

The Nickel Mines Ltd (ASX: NIC) share price is back in focus today after the company announced it is withdrawing its share purchase plan.

In early trade, shares in the mining company are up 3.69% to $1.26. However, this is still a considerable distance away from its recent $1.60 level — a price that Nickel Mines was hovering around prior to the nickel mania.

Handing back $57 million to shareholders

To set the scene, back in February Nickel Mines revealed its intentions to raise capital to fund its stake in the Oracle Nickel Project (ONI). The plan was to raise US$225 million to put towards an initial 30% position in the project.

As part of the capital raise, a share purchase plan was launched to allow ASX shareholders to participate. Importantly, the plan outlined an issue price of A$1.37 per share. This was roughly in line with the Nickel Mines share price at the time.

Initially, around A$18 million was targeted for this portion of the funding. However, Nickel Mines has said the applications received reached A$57 million.

Since then, the nickel company has suffered a hefty blow despite nickel futures flying to record highs of more than US$100,000 per tonne. Unfortunately, one of Nickel Mines’ largest shareholders held a sizeable short position during this time.

The outcome was widespread concern among shareholders over what the implications could be for the Nickel Mines share price. As a result, the market swiftly sold off the ASX mining giant over the past two days of trading.

Now, shares are below $1.30, putting any share purchase plan participants at an immediate 7% deficit from the raising price. As such, the board has made the decision to return the A$57 million to shareholders and cancel the plan.

Nickel Mines managing director Justin Werner stated:

[…] given market volatility and the retraction in the Company’s share price in recent days the Board of Directors have agreed that it is in the best interests of shareholders to cancel the SPP effective immediately and return all applications in full. The proceeds of the SPP are not required for the acquisition of the 70% equity interest in the Oracle Nickel Project.

Nickel Mines on the ASX recap

The Nickel Mines share price gained ongoing traction in October last year as ASX investors began tuning in to rising commodity prices.

Between October 2021 and January 2022, shares in the nickel producer rallied a solid 83%. However, the recent tarnishing has taken the Nickel Mines share price into the negative on a year-to-date basis. Since the beginning of the year, it has retreated 13.5%.

The company is currently trading on a price-to-earnings (P/E) ratio of around 15 times.

The post Nickel Mines (ASX:NIC) has just withdrawn its share purchase plan. What’s going on? appeared first on The Motley Fool Australia.

More reading

• Nickel Mines (ASX:NIC) share price tumbles again, down 25% this week
• These 3 ASX 200 shares are topping the volume charts on Thursday
• Why Newcrest, Nickel Mines, Rio Tinto, and Woodside shares are dropping today
• ASX 200 (ASX:XJO) midday update: Rio Tinto goes ex-div, tech and travel shares rebound
• Is the Nickel Mines (ASX:NIC) share price chaos a buying opportunity?

Motley Fool contributor Mitchell Lawler 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.

from The Motley Fool Australia https://ift.tt/3w91XV0

The Woolworths Group Ltd (ASX: WOW) share price is currently having a subdued finish to the week.

In morning trade, the retail giant’s shares are trading flat at $35.76.

Where next for the Woolworths share price?

One leading broker that believes the Woolworths share price could be heading higher from here is Citi.

According to a recent note, the broker has a buy rating and $40.30 price target on the retailer’s shares.

Based on the current Woolworths share price, this implies potential upside of almost 13% over the next 12 months.

And with Citi forecasting a fully franked 2.7% dividend yield in FY 2022 and then 3% in FY 2023, the total potential return on offer over the next 12 months is over 15%.

What did the broker say?

Citi was pleased with Woolworths’ performance during the first half, noting that its earnings were in line with expectations.

It commented: “Woolworths reported 1H22 EBIT of $1,382 million, consistent with guidance and inline with Citi and Visible Alpha consensus. Momentum in Australian Food improved following the mid-December trading update with EBIT at the top end of guidance and total sales growth of 3.6% in December.”

In addition to this, its analysts have named three reasons to be positive on the company’s outlook.

The broker explained: “We see an improving outlook given 1) eased restrictions and declining cases enabling a reduction in COVID costs and better operational efficiency; 2) food inflation lifting with shelf prices up ~2-3% in 2H22e to date; and 3) margin benefits as some online customers return to stores. We make small upward revisions to EBIT of ~1%.“

All in all, this could make the Woolworths share price one to consider if you’re looking for blue chip options this month.

The post Top broker tips Woolworths (ASX:WOW) share price to rise 13% appeared first on The Motley Fool Australia.

More reading

• The Coles (ASX:COL) dividend beats Woolworths. Does that make it a better income share?
• 4 reasons why top broker says Woolworths (ASX:WOW) shares are a buy right now
• ASX 200 dives to 4-day low following Ukraine nuclear power plant crisis
• Why Infomedia, Newcrest, Piedmont Lithium, and Woolworths shares are rising today
• Here’s why the Woolworths (ASX:WOW) share price is sliding today

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.

from The Motley Fool Australia https://ift.tt/HFY7kSg

Amazon.com Inc (NASDAQ: AMZN) is a company most Aussies would be familiar with. The US tech giant’s flagship online marketplace has been active in Australia for years now. And Amazon’s dominating presence in cloud computing has also turned investors’ heads in recent years. Not to mention the space-hopping antics of its famous founder Jeff Bezos more recently.

But Amazon might also be famous for its stock price. Amazon shares are among the most expensive on the US markets. Just one will set an investor back US$2,936.35 on the latest pricing. And that’s after a major pullback. The company’s 52-week (and all-time) high remains at a whopping US$3,773.08. That works out to be $5,162.94 in our dollars at current exchange rates.

This aspect of Amazon’s reputation looks set to be shaken up. According to our Fool colleagues over in the US, the company has reportedly just announced a stock split, its first in more than 20 years.

Amazon to join the stock-split club

A stock split is when a company issues more shares of stock in order to lower the price of its individual shares. It has become quite a popular exercise in recent years among some of the US’s largest tech companies. Since 2020, we have seen companies ranging from Apple Inc (NASDAQ: AAPL) and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) to NVIDIA Corporation (NASDAQ: NVDA) and Tesla Inc (NASDAQ: TSLA) announce stock-split plans of their own.

But Amazon is now the latest to join the club.

The company will reportedly be undertaking a 20-for-1 stock split later this year, subject to investor approval at the annual general meeting in May. That means that if an investor owns one share of Amazon today, they will own 20 shares instead come the split. Each will be worth approximately one-20th of what that stock will be priced at just before the split. The company also announced an expanded share buyback program, to be worth US$10 billion.

Of course, a stock split does nothing in theory to change a company’s value. It can be thought of as ‘recutting the pizza’. If Amazon is the pizza, whether it has eight slices or 16 doesn’t change the overall size of the meal.

Recutting the pizza…

But for a few possible reasons, stock splits tend to be popular with investors regardless. That might be why we saw Amazon shares gain an impressive 5.41% to US$2,936.35 last night during US trading. For one, a stock split usually increases the ownership potential for the company’s shares. In Amazon’s case, it will be a lot easier to buy Amazon shares if they are priced at US$146.82 than $2,936.35. More shares at a lower price usually boost liquidity too.

Here’s how eToro’s Josh Gilbert described the effects of a stock split for retail investors:

Stock splits change nothing about the fundamentals of a stock. The splits are simply a psychological factor for retail investors buying assets. A stock that is priced at USD$100 compared to USD$2,500 is more attractive to retail investors.

Fractional share trading is now an important part of investing, but the price of a stock can still play an important factor. Investors will often feel that a stock with a lower share price has more growth potential than one with a higher price.

At Amazon stock’s last closing price, the US tech giant has a market capitalisation of US$1.49 trillion.

The post Amazon (NASDAQ:AMZN) announces US$10b share buyback and 20-for-1 split appeared first on The Motley Fool Australia.

More reading

• Why Rivian tanked ahead of earnings after the bell
• 3 stocks that could be worth more than Apple by 2035

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns Alphabet (A shares), Amazon, Apple, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), Amazon, Apple, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares) and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/OI3Kbi1

The Breville Group Ltd (ASX: BRG) share price is trading lower on Friday.

In morning trade, the appliance manufacturer’s shares are down 2% to $26.43.

This is despite Breville announcing a key acquisition this morning.

What did Breville announce?

This morning Breville announced that it has entered into an agreement to acquire 100% of the Italian-based prosumer specialty coffee group, Lelit. The transaction is expected to complete by early July 2022 following a pre-acquisition restructure of the Lelit Group.

According to the release, Lelit was founded in Castegnato, Italy in 1985. It designs, manufactures, and markets premium prosumer home coffee equipment in Europe and throughout the world.

Management believes that as a rapidly growing disruptor in the premium Italian-made espresso machine and grinder market, Lelit strategically complements Breville’s award-winning coffee portfolio. It also notes that it brings together two iconic companies in the design and distribution of preeminent home coffee equipment.

Breville Group’s CEO, Jim Clayton, commented: “The acquisition of Lelit brings together the two great coffee cultures of the world: Italy and Australia. Both companies have a shared passion for using product innovation to improve our customers’ coffee experience at home, and we look forward to working alongside LELIT and its existing partners to further accelerate its growth and product innovation, while preserving the values that underpin its Italian identity.”

What’s the cost?

The release notes that Breville will acquire 100% of Lelit from the founders and current owners on a cash and debt free basis for a total consideration of approximately 113 million euros, subject to customary settlement adjustments.

This will comprise half in cash and half by the issue of fully paid ordinary shares in Breville priced at $27.64 per share. The latter will be subject to a five-year trading lock post completion. The cash portion will be funded from existing cash reserves and debt facilities.

Strangely, no details have been provided on Lelit’s sales or profits, nor whether the deal is expected to be earnings accretive. As a result, this makes it impossible to know if this deal is good value or not.

In light of this, it isn’t a surprise to see the Breville share price trading lower on the news.

The post Breville (ASX:BRG) share price falls despite 113m euros coffee acquisition appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• 3 fantastic ASX growth shares analysts rate as buys
• 2 top growth shares analysts rate as buys after the market meltdown
• Breville (ASX:BRG) share price pops after 25% profit surge
• 3 excellent ASX growth shares to buy before it’s too late

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.

from The Motley Fool Australia https://ift.tt/6hdgeAB

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

Up one day, down the next: Electric vehicle leader Tesla (NASDAQ: TSLA) stock is falling again Thursday, down by 5% as of 12:46 p.m. ET.

And you can blame the analysts at Piper Sandler for that.

So what

The news around Tesla Thursday has been broadly positive, after all. Analysts at megabank Citigroup announced that based on data from Citi’s proprietary “EV mind-share tracker,” Tesla’s electric cars “dominate the broader EV market.” This is despite rising competition from the EV offerings of legacy automakers such as Kia, Hyundai, Ford Motor Co., and General Motors, reports StreetInsider.com.

Citi also reported that interest in once-red-hot rival EV upstart Rivian has slumped since that company’s price-hike fiasco earlier this month. The bank says Tesla leads the pack with 45% “mind share,” with Ford, Kia, and GM its closest (yet not even close) rivals.

All of the above, of course, should have been good news for Tesla and its stock, but for one thing: According to analysts at Piper Sandler, Tesla’s high profile brings with it unique geopolitical risks — particularly in China — that could damage its stock price.

Now what

As Piper Sandler explains, there are pluses and minuses to Tesla’s China business. On the plus side, its Shanghai factory is going great guns, producing 56,515 cars in February, of which nearly 60% got exported. With production accelerating, Piper Sandler foresees Tesla producing perhaps 70,000 cars in China in March — and as many as 193,000 or more in all of Q1.  

That’s the good news. Now here’s the bad.

The bigger Tesla’s business in China gets, the more of a potential liability it becomes in the event of continued “deteriorating US-China relations.” As Piper explains, “If American companies are eventually used as pawns in a wider geopolitical conflict, then Tesla shareholders would likely suffer.”

Granted, Piper’s only highlighting a potential problem here. China doesn’t seem to be using Tesla as a pawn right now. But the Chinese government has criticized Tesla in the past, has a history of promoting its domestic companies over foreign rivals, and — for that matter — hasn’t shied away from crushing entire industries within its own economy when that was deemed a reasonable way to pursue other policy goals.

Piper Sandler is right to highlight the risk — even if Tesla investors might not appreciate it right at the moment. 

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

The post Why Tesla stock tanked today appeared first on The Motley Fool Australia.

More reading

• Why Tesla stock fell on Thursday
• Giddy up: Core Lithium (ASX:CXO) share price races 11% higher on Tesla deal
• Why Tesla stock popped today
• Tesla, Coinbase help the Nasdaq hold its ground Monday
• ASX lithium shares or EV makers, what’s been the better bet?

Rich Smith has no position in any of the stocks mentioned. Citigroup is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns 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 Bruce Jackson.

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/VKCHQ8c

The ASX share market continues to be volatile, which gives investors the opportunity to buy ASX growth shares at cheaper prices.

Businesses that are still growing revenue whilst the share price falls could be an idea for investors to look at. The experts have identified two ASX businesses that have loads of growth potential for the long-term.

After a heavy sell-off since the start of the year, these two ASX growth shares have been picked by analysts:

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is the leader of Australia’s online homewares and furniture retailing industry. It has a long-term goal of becoming the largest, online or offline.

It sells hundreds of thousands of products. Plenty of those are shipped directly by the supplier, which decreases inventory risk for the ASX growth shares and also allows it to offer customers a wider range on the website. Temple & Webster also has a growing private label range, which typically comes with a higher profit margin.

Despite all of the impacts of COVID-19 on the supply chain and other effects, Temple & Webster has managed to keep growing revenue very quickly. The FY22 first-half revenue was up 46% year on year. It was a 218% increase of revenue over two years.

The growing scale increases the operating leverage, allowing the company to accelerate investment in future growth and take market share. Some areas for re-investment include marketing, technology development, product range and the overall customer experience.

The increased scale provides cost advantages in product sourcing, logistics and marketing.

The ASX growth share is working on growing its presence in ‘trade and commercial’ as well as ‘home improvement’. The company says that the home improvement category adds another $16 billion to its addressable market.

Temple & Webster is currently rated as a buy by the broker UBS with a price target of $11.80.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara is a leading breast screening medical technology business. It is growing its focus and abilities with ‘risk’ for the patient to maximise the chance of finding breast cancer early.

It is utilising its 49 million images, which is one of the world’s biggest data sets of breast x-rays, to change from screening for detection to prevention.

The Volpara share price has fallen by a third since the start of the year. But the company continues to grow.

In the company’s FY22 half-year result its gross profit margin was 91.4%.

It has also made an initial investment into RevealDx, a lung AI company based in Seattle, and signed a collaboration agreement with Riverain Technologies, positioning Volpara for lung screening expansion.

The company’s average revenue per user (ARPU) continues to grow – it was US$1.46 in the first half of FY22 and increased to US$1.47 in its third quarter. The third quarter saw average ARPU deals of US$1.65.

The ASX growth share has a market share of 35% of US women being screened. Third quarter revenue was NZ$7 million, up 50% year on year. It’s on track to meet annual revenue guidance for the year of NZ$25 million. Annual recurring revenue has now reached NZ$30.4 million.

It’s currently rated as a buy by the broker Morgans, with a price target of $1.94.

The post 2 ASX growth shares to buy this month: experts appeared first on The Motley Fool Australia.

More reading

• Down 33% in 2022, is this ASX healthcare share a buy following the company’s latest trial result?
• 4 ASX healthcare shares at 52-week lows
• Leading brokers name 3 ASX shares to buy today
• What’s the outlook for ASX retail shares like Kogan (ASX:KGN)?
• Here are 4 ASX shares insiders are putting their money behind

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. owns and has recommended Temple & Webster Group Ltd and VOLPARA FPO NZ. The Motley Fool Australia owns and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/0URxeX5

The Commonwealth Bank of Australia (ASX: CBA) share price is down 0.26% in early trade.

CommBank closed yesterday at $99.74 and is currently trading at $99.48.

That puts the CBA share price up 6.5% since the closing bell on 28 February, handily outperforming the 1.1% gains posted by the S&P/ASX 200 Index (ASX: XJO) over that same period.

So, what’s driving the big bank’s outperformance?

$1.8 billion divestment kickstarts the month

The biggest news likely impacting the CBA share price came on the first of the month.

That’s when CommBank announced it had entered into a binding sale agreement to divest almost half its 10% shareholding in the Chinese Bank of Hangzhou Co Ltd.

CBA reported the deal to be worth some $1.8 million. The bank will retain approximately a 5.6% stake in the Bank of Hangzhou.

Atop the post-sale profit benefits, CommBank also said the sale should boost its capital buffer ratio (CET1) by 0.35% once the deal is finalised.

“The partial sale of our shareholding is consistent with our strategy to focus on our core banking business in Australia and New Zealand,” CBA CEO Matt Comyn said about the divestment.

The CBA share price also received some positive coverage in the first week of March from Bell Potter.

The broker’s analysts signalled a buy rating for CommBank with a $108 price target. That’s 8.5% higher than the current price.

As my Fool colleague James Mickleboro explained on the day, “The broker’s price target is based on a composite valuation of discounted cash flow, dividend yield, return on equity (ROE), and sum-of-the-parts (SOTP) weighted equally.”

Bell Potter also lifted its price target because of the bank’s estimated $5.53 billion in surplus capital.

CBA share price snapshot

Over the past year, CBA shares have gained 15%, compared to a gain of 6% posted by the ASX 200.

Year-to-date the CBA share price is down 2.7%.

The post Why has the CBA (ASX:CBA) share price climbed 7% so far this month? appeared first on The Motley Fool Australia.

More reading

• Own CBA (ASX:CBA) shares? Here’s why the bank’s boss is ‘very optimistic’ for 2022
• Is the Westpac (ASX:WBC) share price the cheapest bank to buy right now?
• Record $36bn in dividends could help ASX share market recovery
• CBA (ASX:CBA) boss says this presents ‘a lot of opportunity’ for the bank
• ANZ has the largest ASX big four bank dividend yield right now. What?

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.

from The Motley Fool Australia https://ift.tt/0eCwuGX

The Zip Co Ltd (ASX: Z1P) share price is on course to end the week in a positive fashion.

In morning trade, the buy now pay later (BNPL) provider’s shares are up 2.5% to $1.75.

This follows the opening of the company’s share purchase plan on Friday.

Share purchase plan

This morning Zip revealed that its share purchase plan has now opened to eligible shareholders. To be eligible, you needed to be on the company register at the close of play on Friday, 25 February 2022.

Eligible shareholders now have the opportunity to subscribe for up to $30,000 worth of new Zip shares as part of its aim to raise $50 million.

However, whether demand will be there from shareholders is difficult to say. When Zip raised $148.7 million through a placement to institutional investors two weeks ago, it gave them a generous 14% discount.

Retail shareholders look likely to get a discount of just 2% unless there is a big recovery in the Zip share price in the coming weeks.

This is because the share purchase plan will see shares issued at the lesser of the placement price of $1.90 per new share or a 2% discount to the volume weighted average price of Zip’s shares during the five trading days up to and including Friday, 1 April 2022, rounded to the nearest cent.

With the Zip share price currently fetching $1.75, it seems more than likely that it will be the second option that dictates the price of the share purchase plan.

Why is Zip raising funds?

The proceeds raised under the placement and share purchase plan will be used to help Zip strengthen its balance sheet and position the company for sustainable growth.

This is by providing more capital runway to execute on the potential synergies from its proposed $491 million all-scrip acquisition of Sezzle Inc (ASX: SZL).

The post The Zip (ASX:Z1P) share purchase plan opens today. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Has the bottom been and gone? Zip (ASX:Z1P) share price lifts 9% in 2 days
• ASX 200 (ASX:XJO) midday update: Rio Tinto goes ex-div, tech and travel shares rebound
• Is the Zip (ASX:Z1P) share price heading on a one-way street to $1?
• WAM boss urges cashed-up ASX 200 companies to buy, invest or pay dividends

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. owns and has recommended ZIPCOLTD FPO. 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.

from The Motley Fool Australia https://ift.tt/9EZj8KM

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 world of cryptocurrency and blockchain has been the center of a great deal of controversy for some time now: Should it be regulated? How can it be regulated? All these questions have been tossed around without any solid answers from the U.S. government.

Some crypto investors have feared that it’ll be regulated into nothingness, so when President Biden announced he would be presenting an executive order regarding crypto, some investors were left holding their breath, including the owners of metaverse real estate and other items secured by non-fungible tokens (NFTs).

But instead of fear and contention, the executive order unveiled on March 9, 2022, seems promising and has many experts in the crypto world breathing a sigh of relief. Here are some pieces of good news coming out of this big day.

1. Crypto and related assets will finally have a uniform set of rules

Currently, much of the regulation of crypto and other assets like NFTs is done through enforcement by both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Unfortunately, having too many cooks in the kitchen is always a huge mess, even if you’re talking about an investment tool.

This executive order mandates that everyone get together and figure out how to be on the same page about blockchain-based investments and how best to regulate them. This brain trust includes the parties you’d expect, including representatives from the Federal Reserve, the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency, as well as other important folks like the Secretary of State, the Secretary of the Treasury, the Secretary of Defense, the attorney general, and many more.

It may not sound like a big deal, but it’s actually critical that rules related to the cryptocurrencies you’re using to buy your metaverse properties are uniform across the entire government. It’ll help project the value of your investments by creating consistency in enforcement when there’s trouble, as well as consumer confidence and legitimacy from the simple act of being regulated.

2. The government seems willing to work with the crypto community

Not only is the US government interested in exploring Central Bank Digital Currencies (CBDCs), which are basically a digital form of the dollar, it’s looking for guidance from crypto community experts. This legislation will not have an overnight solution, and all agencies involved have been asked to conduct thorough research and submit well-considered reports on all sorts of crypto-related issues. 

Inevitably, this is going to mean coming into contact with and listening to the people who are currently involved with NFTs and cryptocurrencies. These are the experts who have the data that will be necessary to formulate a plan of action. Working on problems from within the government is always going to be the easier route for crypto enthusiasts, including owners of metaverse real estate.

The issue of the digital dollar is an interesting one and one that could potentially make purchasing land in the metaverse easier and more attractive to average people looking to take their first steps into metaverse investing. If a CBDC dollar is issued in a way that can easily interact with current crypto markets, exchanging digital dollars for MANA or SAND on the fly would eliminate a lot of barriers to purchase for a lot of potential metaverse investors.

Reducing the steps that are involved in getting into the world of crypto for a first-time investor, such as removing the need to convert fiat dollars into cryptocurrency in order to fund a digital wallet for metaverse buys, may make the entire metaverse a lot less intimidating.

Crypto and metaverse legislation isn’t set in stone – yet

Although this first step was a doozy, the executive order issued by President Biden primarily focuses on how to begin to approach regulations that should surround cryptocurrencies and other blockchain assets. It’s a big deal simply because it finally exists, after years of politicians simply kicking the rock down the road.

For holders of digital assets, changes are almost certainly coming, but they should be neither swift nor opaque, given the approach that’s being taken at the moment. Having experts from within the crypto community help with research will help protect the interests of investors while the very laws that will finally give crypto assets wider real-world integrity are being crafted.

I suspect that once people feel more secure about purchasing metaverse land backed by NFTs, since there will be laws and regulations in place to protect from the worst actors, they’ll become an even more important part of the crypto asset pool.

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

The post 2 pieces of good news about Biden’s crypto mandate for metaverse investors appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Thursday
• ASX 200 (ASX:XJO) midday update: Rio Tinto goes ex-div, tech and travel shares rebound
• Warning: Only 4 ASX shares just added to ASX 300 are profitable

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.

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/vogdYu7

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?

Investors have punished the stock of Rivian Automotive (NASDAQ: RIVN) this year, sending its shares down by more than 60%. The negative sentiment was still in evidence Thursday ahead of its fourth-quarter and full-year report, which is due out after the closing bell. Shares of the electric vehicle start-up were down almost 10% in early trading, and remained lower by 9% as of 1:12 p.m. ET.

So what?

In this next report to investors, the company will be forced to confront early missteps such as a lack of communication regarding the departure of its chief operating officer, its failure to hit internal production estimates for 2021, and a recent price increase it was forced to walk back. But investors will be more interested in what Rivian says about its prospects for ramping up its production volume, updated reservation data, and its plans for expansion. They will be particularly interested to hear about the status of its contract to sell up to 100,000 commercial delivery vans to Amazon.com Inc (NASDAQ: AMZN). 

Now what?

Supply chain problems are being reported by most automakers — large legacy names as well as start-up EV makers. Rivian has already made it clear that its materials costs are increasing. And after having to backtrack on its announced price increase for existing reservation holders, the company will now have to bear those added costs itself. Investors will want to hear more details about those higher expenses and how they will affect margins. 

While its 60% year-to-date share price decline may seem to create a tempting entry point, investors should keep in mind that the company still carries a lofty market cap of $36 billion. 

Any downward adjustments to its 2022 production estimates or suggestions that its path to profitability will take longer than previously forecast will likely knock the stock down even further. Those details are what investors should focus on in Rivian’s report when it arrives. 

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

The post Why Rivian tanked ahead of earnings after the bell appeared first on The Motley Fool Australia.

More reading

• 3 stocks that could be worth more than Apple by 2035
• Why Rivian stock keeps going down
• Yet another billionaire buys Rivian stock: Should you too?

Howard Smith owns Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Amazon. The Motley Fool Australia has recommended Amazon. 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.

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