Tag: Motley Fool

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Why Aurelia Metals, Elders, GQG, and Telix shares are storming higher today
• Why is the ASX 200 ending the week with a whimper?
• Bell Potter names the best ASX 200 shares to buy in April
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen 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 Telix Pharmaceuticals. The Motley Fool Australia has recommended Elders and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Rio Tinto Ltd (ASX: RIO) share price is down 1.30% to $120.23 amid a fresh round of environmental questions being lobbed at management during the miner’s UK annual general meeting (AGM).

Held in London last night, Rio Tinto chair Dominic Barton indicated the company would set nature and biodiversity preservation targets for projects in developing nations.

Investors and eco-advocates questioned Rio about the Simandou iron ore project in Guinea and its plans to ensure good environmental, social, and corporate governance (ESG).

The project sits in a forest that is home to the endangered Western chimpanzee.

According to the Australian Financial Review (AFR), Barton told shareholders that civil society groups wanted Simandou sustainably developed.

He said:

We’ve been encouraged to forge ahead on establishing nature and biodiversity targets. We are recognised as being able to bring international standards with us – wherever we work.

ESG questions from investors and advocates

During the post-AGM investor call, Jonathan Kaufman from Advocates for Community Alternatives in West Africa spoke up.

He told Rio, “We’ve heard no credible plan for ensuring that high environmental and social standards … will be respected” at Simandou.

Another attendee was acting on behalf of EQ Investors, a specialist sustainable investment wealth manager. They asked Rio to provide “greater detailed articulation of its strategy towards future-facing commodities”.

Doug McMurdo, chair of a pension fund forum, pressed Rio Tinto for a commitment to independent water impact assessments.

He said Rio “still has some work to do” in establishing a social license since the Juukan Gorge incident.

“Independent assessments are the only way I can see at this point to establish this social license,” McMurdo said.

Barton addressed ESG concerns by saying:

As we prepare for the future, we are working very hard to embed our commitment to ESG and deepen our social license in all aspects of our decision-making.

I and other Board members have had the chance to visit 15 Rio Tinto sites in the last 12 months. And we’ve been encouraged to see how this commitment extends throughout the mining life cycle, from exploration right through to closure.

Major shareholder considering divestment

The UK investors’ questions last night come amid the threat of Rio Tinto losing one of its largest shareholders on ethical grounds.

The Government Pension Fund of Norway is the world’s largest sovereign wealth fund. It’s held by Norges Bank Investment Management and owns the fifth largest institutional position in Rio Tinto shares.

The position is worth $3.2 billion and accounts for 1.9% of Rio Tinto shares.

The pension fund has strict ethical criteria.

According to The Wall Street Journal, Norway’s Council of Ethics, which advises the investment fund, is examining Rio Tinto’s ESG credentials.

Reportedly, the council has raised environmental damage in the Brazilian Amazon with the miner. This relates to Rio Tinto’s partial ownership of Brazil’s largest bauxite producer, Mineração Rio do Norte (MRN). 

The pension fund has kicked Rio Tinto out before. Back in 2008, the fund didn’t like Rio’s Grasberg mine in Indonesia and the risk of severe environmental damage it posed.

Rio Tinto agreed to sell its stake in 2019 and was readmitted into the fund.

Rio Tinto share price snapshot

The Rio Tinto share price is down 12.1% in the year to date.

It is up 2.95% over the past 12 months.

Rio Tinto will hold its Australian AGM on 2 May.

The post Rio Tinto share price slips amid an unrelenting ESG grilling appeared first on The Motley Fool Australia.

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More reading

• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices
• 5 things to watch on the ASX 200 on Friday
• Why is everyone talking about Rio Tinto stock on Thursday?
• How this unexpected development in China could boost ASX 200 mining stocks
• Should I buy BHP or Rio Tinto shares in April?

Motley Fool contributor Bronwyn Allen 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.

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A little while ago, I started an occasional series I’ve called ‘Friday Fundamentals’… taking investing back to first principles to help new investors understand — and remind experienced investors of — the simple truths of investing.

Today, I’m going to share some bullet points I’ve pulled together that I’m calling ‘Investing advice for my younger self’ — I hope it helps!

—–

When I started investing, I wanted to know the answers to all of the questions.

I gathered data, computed ratios, dived deeper.

It gave me a solid foundation… but it’s not how I invest today.

What would I tell my younger self?

To still do that work, to give yourself a foundation. But move on quickly, thereafter.

To what? I’m glad you asked.

Do the simple stuff that puts you on the right track

Work hard. Save hard. Diversify. Add regularly.

Boring? Sure. But foundationally necessary? You bet!

Understand the big ideas

The truly big ideas help refine your investment universe really quickly: balance sheet strength, competitive advantage, growth runway, resilience. A few more, besides. But not many.

Apply the 80/20 rule

An extension of the above, really. Discard bad ideas quickly. Discard ‘I don’t know’ ideas just as quickly.

You don’t have to know all of the answers to all of the questions. You don’t need to have a view on every company.

And once you’ve answered the most important questions about a company, you’ve probably got 95% of the information you need to make an investment decision.

Focus on quality

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” — Warren Buffett

Why? Because a fair company doesn’t have the ability to grow profits at attractive rates for a long time.

A wonderful company does.

Be patient

You only get the benefits of compounding if you let it happen. Sounds obvious, but too many people just can’t leave well enough alone.

Stop rushing. Buy well, then let it happen.

Impatience is the enemy of successful investing.

Expect volatility… and long periods of underperformance

Amazon shares (I own) were lower in December 2022 than in April 2019. Then more than doubled in 16 months.

The ASX fell 38% when COVID hit, and is now near an all-time high

Don’t fight it… ride the wave.

Don’t go back to Square 1

Another one from Buffett. Betting the farm is dumb. Risking everything you’ve built up is dumb. This isn’t a computer game. You don’t get more lives, or to respawn at the last checkpoint.

Aesop was right. The tortoise wins.

—–

I hope that’s helpful. Have a great weekend!

Fool on!

The post I wish I’d known this decades ago appeared first on The Motley Fool Australia.

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More reading

• Why the Mesoblast share price can rise another 60%
• Brokers name 3 ASX shares to buy now
• 2 ASX dividend shares to beat inflation
• Own Telstra shares? Here’s why the ASX 200 telco just backed this AI startup
• APM share price freeze extended amid new takeover bid

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Scott Phillips has positions in Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in 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 Scott Phillips.

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The Mesoblast Ltd (ASX: MSB) share price is having a tough finish to the week.

In afternoon trade, the stem cell focused biotechnology company’s shares are down almost 4% to 86.5 cents.

While this is disappointing, shareholders won’t be too concerned.

After all, even after today’s decline, the Mesoblast share price is up approximately 190% since this time last month.

To put that into context, a $10,000 investment a month ago would now be worth around $29,000.

But if you thought the gains were over, think again. That’s because analysts at Bell Potter are tipping the company’s shares to continue their meteoric rise.

Mesoblast share price tipped to rise

According to a note out of the broker this afternoon, its analysts have retained their speculative buy rating and lifted their price target by 141% to $1.40 (from 58 cents).

Based on the current Mesoblast share price, this implies potential upside of 62% for investors over the next 12 months.

The broker made the move in response to feedback the company received from the US Food and Drug Administration (FDA) last month. It explains:

Using carefully chosen words, the FDA has informed MSB that the available clinical data from its Phase 3 study MSB-GvHD001 in children with steroid refractory acute graft versus host disease (SR a GvHD) appears sufficient to support resubmission of the Biological Licence Application (BLA) for Remestemcel.

It believes the timing of the correspondence is not a coincidence.

The timing of the correspondence coincides with refreshed leadership at the newly formed Office of Therapeutic Products (OTP) within CBER at the FDA and the release of draft industry guidance for demonstrating effectiveness in one adequate, well controlled clinical investigation with confirmatory evidence.

When could Remestemcel be approved?

While approval is by no means guaranteed, Bell Potter is feeling a lot more confident now.

Approval would be good for investors for a couple of reasons. One is that it means meaningful revenue generation may not be far away. The other is that it could open the door to further use cases in the near future. The broker concludes:

Our best estimate for approval of Remestemcel is mid August 2024. The planned adult study in GvHD has for the moment been postponed pending the outcome of the resubmitted BLA. Valuation is increased from $0.58 to $1.40 reflecting significant changes to revenue forecasts bought about by renewed confidence for a prospective approval for Remestemcel in Paediatric GvHD later this year. A first approval may represent a gateway to a series of label expansions in the ensuing period as reflected in the share price movement in recent days.

The Mesoblast share price remains down 11% over the last 12 months despite its recent surge.

The post Why the Mesoblast share price can rise another 60% appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy now
• Why Mesoblast, Regis Resources, Westgold, and WiseTech shares are sinking today
• Mesoblast share price dumps 10% as excitement simmers on FDA submission
• Why Austal, Mesoblast, Novonix, and Paladin Energy shares are racing higher
• Blast off! Mesoblast share price surging 60%

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.

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It has been another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Electro Optic Systems Holdings Ltd (ASX: EOS)

According to a note out of Bell Potter, its analysts have retained their buy rating on this defence and space company’s shares with a trimmed price target of $2.20. The broker believes that the company’s equity raise and investment in long lead time critical supplies is a prudent decision from management. It also feels it is reflective of its strengthened financial position and improved visibility over near-term sales opportunities. The Electro Optic Systems share price is trading at $1.59 on Friday afternoon.

Mesoblast Ltd (ASX: MSB)

Another note out of Bell Potter reveals that its analysts have retained their speculative buy rating on this biotechnology company’s shares with a significantly improved price target of $1.40 (from 58 cents previously). Bell Potter notes that the FDA has used carefully chosen words to inform Mesoblast that the available clinical data from its Phase 3 study MSB-GvHD001 in children with steroid refractory acute graft versus host disease (SR a GvHD) appears sufficient to support a resubmission of the Biological Licence Application (BLA) for Remestemcel. It points out that the timing of the correspondence coincides with refreshed leadership at the newly formed Office of Therapeutic Products at the FDA. In light of this, the broker has renewed confidence for a prospective approval for Remestemcel later this year. It feels that a first approval may represent a gateway to a series of label expansions in the ensuing period. The Mesoblast share price is fetching 86.7 cents on Friday.

Suncorp Group Ltd (ASX: SUN)

Analysts at Morgan Stanley have retained their overweight rating and $17.05 price target on this insurance giant’s shares. This follows news that the company has signed an agreement to sell its New Zealand life insurance business to Resolution Life for approximately $375 million. The broker feels the selling price is fair and expects it to result in a simplified business structure. Combined with the Suncorp Bank sale to ANZ Group Holdings Ltd (ASX: ANZ), it believes there could be some big capital returns to come in the near future. The Suncorp share price is on course to end the week at $16.25.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Suncorp share price hits new 52-week high amid $375m asset sale
• Here are the top 10 ASX 200 shares today
• Here are the top five ASX 200 stocks in Macquarie’s model income portfolio
• Why Mesoblast, Regis Resources, Westgold, and WiseTech shares are sinking today
• Mesoblast share price dumps 10% as excitement simmers on FDA submission

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 positions in and has recommended Electro Optic Systems. 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.

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After a decade of dormancy, inflation reared its ugly head as a major economic issue investors had to confront and deal with over 2021 and 2022. Whilst the decades-high levels of price rises that we saw in 2022 are receding, inflation still remains uncomfortably elevated – which is the main reason why interest rates also remain at decade-highs today.

So how should ASX investors approach this conundrum? After all, inflation eats into our wealth and our wages, and certainly throws a spanner or two into the investing mix.

Well, I think a good solution remains to invest in ASX dividend shares. The share market gives us the best shot at overcoming any economic malady to build wealth, whether that be inflation or deflation.

But that’s only if you have the right shares of course. So today, let’s discuss two ASX dividend shares that I think offer some of the best inflation protections on the stock market.

2 ASX dividend shares to hedge against inflation

Coles Group Ltd (ASX: COL)

First up is ASX 200 supermarket stock Coles. High-quality shares in the consumer staples sector are always going to have inherent inflation resistance built into their business models, thanks to the essential nature of the goods and services that they sell. In other words, these companies can increase prices in line with inflation without fear of a significant loss of sales. This label, in my opinion, applies to Coles.

This company’s most recent earnings report was encouraging, showing Coles potentially snatching market share gains from its arch-rival Woolworths Group Ltd (ASX: WOW) over the second half of 2023.

Given Coles’ ability to increase earnings over time, coupled with its fully-franked dividends, which have increased almost every year since 2018, I think this is a great stock to help protect a share portfolio against inflation.

Transurban Group (ASX: TCL)

It’s not too often that a company’s earnings are completely insulated from the corrosive effects of inflation. Yet we can say this about ASX 200 toll road operator and dividend share Transurban. Transurban has a huge portfolio of toll roads across North America, Brisbane, Melbourne and particularly Sydney. Most of these toll roads are arterial routes that are difficult to avoid for motorists.

The beauty of Transurban’s business model is that it has decades-long contracts on these roads, most of which allow Transurban to increase its tolls quarterly by at least the rate of inflation (and often by 4% per annum if inflation is lower).

This provides an incredible amount of certainty for Transurban investors. Barring a major catastrophe resulting in huge traffic volume falls (the pandemic for example), Transurban arguably has one of the most reliable earnings bases on the ASX. And thus, one of the most reliable dividends.

These are all ingredients that combine to make Transurban a highly effective inflation hedge, and a company you’d be happy to have in your portfolio if high inflation persists.

The post 2 ASX dividend shares to beat inflation appeared first on The Motley Fool Australia.

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More reading

• Bell Potter names the best ASX 200 shares to buy in April
• 3 lower-risk, high-yield ASX dividend shares to consider buying now
• Want an income boost? Buy ANZ Bank and these ASX dividend stocks
• If I invest $10,000 in Transurban shares, how much dividend income will I receive?
• 5 excellent ASX dividend stocks to buy in April

Motley Fool contributor Sebastian Bowen 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 Transurban Group. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Like many tech-oriented stocks, Telstra Group Ltd (ASX: TLS) shares are likely to enjoy some significant benefits from the rapid advances in artificial intelligence (AI).

So, it won’t come as a surprise that the S&P/ASX 200 Index (ASX: XJO) telco is looking to AI to improve efficiency and customer service, among other benefits.

Which brings us to Telstra Ventures, a venture capital firm that runs independently but collaborates closely with Telstra and its enterprise customers.

Here’s what’s happening.

Making AI more accessible

Telstra shares could get a lift down the road from United States-based data transformation startup Coalesce.

This comes as Coalesce announced that it has successfully raised US$50 million (AU$77 million) in Series B funding to “drive growth and platform innovation”. The funding was backed in part by Telstra Ventures.

Commenting on why Telstra Ventures participated in the fundraising, Saad Siddiqui, general partner at Telstra Ventures said, “The industry is moving from labour-intensive data engineering to automated, enterprise-grade solutions.”

He added, “Coalesce leads this shift, offering comprehensive extensibility for complex ETL/ELT [extract, load, transform] scenarios and an easy-to-use interface for a wider, less technical audience.”

Coalesce CEO Armon Petrossian highlighted the potential of the technology to improve efficiency, which could help boost Telstra shares if the telco rolls out the tech in Australia.

“During a challenging VC market period, we’ve successfully raised capital by demonstrating explosive growth and an innovative product that significantly enhances the efficiency of data teams,” Petrossian said.

Fanni Fan, principal at Industry Ventures which co-led the US$50 million funding round, added, “We’ve had a front-row seat to Coalesce’s success, seeing them consistently outperform targets.”

According to Fan:

Their customers regularly cite them as the most vital part of their data stack, and their mature partner ecosystem is impressive for their stage. Encouraged by this, we confidently led their Series B investment.

Coalesce launched in Australia and New Zealand in April 2023.

According to the company, it has “revolutionised data transformation within the ELT workflow on the Snowflake data cloud”.

Snowflake Ventures also participated in the fundraising.

“Snowflake Ventures invests in our ecosystem partners to accelerate innovation,” Harsha Kapre, director of Snowflake Ventures said.

“Coalesce is designed to complement the performance and scalability of Snowflake and is well positioned to harness the power of the data cloud,” Kapre added, offering some insight into why Telstra wants a solid foot in the door here.

How have Telstra shares been tracking?

Telstra shares came under selling pressure in early February. Despite a modest uptick since late March, shares in the ASX 200 telco are down 4% in 2024.

The post Own Telstra shares? Here’s why the ASX 200 telco just backed this AI startup appeared first on The Motley Fool Australia.

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More reading

• 3 lower-risk, high-yield ASX dividend shares to consider buying now
• 2 ASX shares I’d buy to quickly add diversification
• These ASX 300 dividend shares offer yields of 5% to 8%
• Here are the top five ASX 200 stocks in Macquarie’s model income portfolio
• Should ASX investors buy the dip in Telstra stock?

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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The APM Human Services International Ltd (ASX: APM) share price will remain suspended until Monday after the company revealed it is expecting a fresh takeover offer from a new suitor this evening.

This follows last week’s revelations that CVC Asia Pacific was walking away from its revised takeover bid to acquire APM for a price of $2 per share.

The employment and health services provider had granted CVC a four-week exclusivity period until 27 March with the offer conditional on several factors including due diligence and debt financing.

The APM share price has been frozen at $1.63 since last Wednesday when the exclusivity period ended.

APM requested a trading halt and advised investors of “the receipt of a letter from CVC advising that they are unable to proceed to finalise a transaction on terms consistent with their non-binding Offer as disclosed to the ASX on 28 February 2024, and the ending of CVC’s exclusivity period”.

APM asked for the trading halt to remain in place until it released an update or until the commencement of trading on Tuesday this week.

A new suitor comes to the party…

Since then, a new potential buyer has surfaced.

On Tuesday, the company asked the ASX for a voluntary suspension of trading and advised it had “received approaches from parties to assess the potential for a transaction”.

APM said those discussions were continuing and a suspension was therefore appropriate until it could release an update, or until the start of trading today.

Before the market open this morning, APM asked the ASX to extend the suspension until Monday.

It explained that it had received a letter from United States private equity firm Madison Dearborn Capital Partners (MDP).

The letter states MDP’s intention to submit a non-binding indicative offer (NBIO) to acquire 100% of APM shares.

APM is expecting to receive MDP’s NBIO this evening and needs time to “consider the terms of the NBIO and disclose those terms to the ASX …”.

What’s next for the APM share price?

If things go to plan, we’ll find out at the commencement of trading on Monday.

Presumably by then, we will have an update from APM on the NBIO and the potential price on offer to buy up all its shares.

The APM share price has been on a rollercoaster this year.

Overall, it’s up 29.4%. But it’s been a bumpy ride.

On 18 January, APM stock plummeted by just over 40% to a new all-time low at the time of 79 cents after the company released its 1H FY24 trading update.

The price fell further to a new low of 68 cents on 23 January.

The next month, everything changed.

On 19 February, the APM share price leapt 48.2% after press speculation led to the company confirming it was in discussions with CVC. At the time, CVC was offering $1.60 per share.

The APM share price moved 13.5% higher on 28 February when CVC upped its offer to $2 per share.

That same day, APM released its 1H FY24 results.

APM reported a 31% lift in revenue to $1,116.8 million but a 12% decline in underlying EBITDA to $147.8 million. Its statutory net profit after tax and amortisation (NPATA) plummeted 41% to $43.6 million.

The company cited ongoing low unemployment and higher interest rates as drags on its business.

APM shares were listed in November 2021 at a share price of $3.55.

The post APM share price freeze extended amid new takeover bid appeared first on The Motley Fool Australia.

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More reading

• APM share price placed on ice as $1.8 billion deal goes dud

Motley Fool contributor Bronwyn Allen 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 APM Human Services International. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is having a tough session and is on course to end it deep in the red. At the time of writing, the benchmark index is up 0.9% to 7,748.5 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Arcadium Lithium (ASX: LTM)

The Arcadium Lithium share price is down 5% to $6.43. This follows a poor night for the lithium miner’s shares on the NYSE on Thursday. Given how lithium stocks are at the very high end of the risk scale, they often fall hardest when markets become volatility. In addition, there are concerns that interest rates will remain higher for longer. This could put pressure on spending and ultimately electric vehicle sales, which would not be good news for lithium demand in an already oversupplied market.

Block Inc (ASX: SQ2)

The Block share price is down almost 4% to $114.11. This has also been driven by a poor night of trade for the payments company’s shares on the NYSE on Thursday. In addition, the company has revealed some heavy insider selling this week. This includes from its CFO Ahuja Amrita. A change of ownership notice reveals that Amrita offloaded a total of 7,961 units at an average price of approximately US$78.63. This equates to a total consideration of approximately US$626,000 (A$950,000). And in other news, Morgan Stanley downgraded its US shares to an underweight rating with a US$62.00 price target.

Capricorn Metals Ltd (ASX: CMM)

The Capricorn Metals share price is down 4% to $5.27. This morning, this gold miner released its quarterly update and revealed a disappointing quarter on quarter production decline. According to the release, Capricorn’s Karlawinda Gold Project in Western Australia achieved 26,017 ounces of gold production for the March quarter. This is down 14.5% from 30,399 ounces in the December quarter. Management blamed this on the negative impacts of heavy rainfall. It highlights that there was in excess of 280mm of rain in the quarter impacting open pit mining activities.

Kogan.com Ltd (ASX: KGN)

The Kogan.com share price is down 2.5% to $7.71. After the market close on Thursday, this ecommerce company revealed that it plans to pay its CEO and CFO a big cash bonus in place of their executive retention options. It explains: “Given the Company’s strong Balance Sheet, ongoing on-market buyback and desire to avoid further dilution for Shareholders, the Board (excluding the Executive Directors) has exercised its discretion under the Company’s Equity Incentive Plan (Plan) to make a payment to the CEO and CFO in lieu of allocation of Shares upon exercise of the Options.”

The post Why Arcadium Lithium, Block, Capricorn, and Kogan shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Why is the Block share price getting pulped on Friday?
• Why is this ASX 200 mining share sinking 7% today?
• 4 ASX All Ords shares with ex-dividend dates next week
• Here are the top 10 ASX 200 shares today
• Why has the lithium price quietly risen 20% in 2024?

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 positions in and has recommended Block and Kogan.com. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool Australia has recommended Kogan.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Block Inc (ASX: SQ2) share price is getting pulped today.

Shares in the global S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock – which acquired Afterpay in January 2022 – closed yesterday trading for $118.46. In early afternoon trade on Friday, shares are swapping hands for $114.00 apiece, down 3.8%.

Unless there’s a remarkable late-day turnaround, this will mark the fourth consecutive day of losses for Block shareholders, with the stock currently down 11.5% since the closing bell on 28 March.

For some context, the ASX 200 is down 0.5% at this same time today and down 1.6% this week.

Here’s what’s happening.

Block share price catching headwinds

ASX 200 investors are following the lead of US investors in bidding down the Block share price today.

The BNPL company is dual-listed, both on the ASX and on the New York Stock Exchange (NYSE). The Block share price closed down a painful 6.2% in US markets overnight.

Today’s falls are part of a broader market sell-down fuelled in part by investor concerns over sticky inflation in the United States leading to fewer interest rate cuts from the Federal Reserve. And possibly delaying the first cuts until 2025.

Jittery investors sent the Nasdaq Composite Index (NASDAQ: .IXIC) down 1.4% overnight, while the S&P 500 Index (SP: .INX) closed down 1.2%.

This came following some sobering analysis from US Federal Reserve Bank of Minneapolis president Neel Kashkari, who said that the past few months of inflation data had been “a little bit concerning”.

The Fed’s inflation target is 2%, and officials are awaiting more hard data to ensure it’s on track to return to that target before they begin easing.

And as the past two years have shown, BNPL companies like Block have proven highly susceptible to higher interest rates.

“In March I had jotted down two rate cuts this year if inflation continues to fall back towards our 2% target,” Kashkari said.

“If we continue to see inflation moving sideways, then that would make me question whether we needed to do those rate cuts at all,” he added, likely helping fuel the sell-off.

How has the ASX 200 BNPL stock been tracking?

Despite the rough start to April, the Block share price has been a stellar performer in recent months, with the stock really lifting off at the end of October.

Since market close on 31 October, the ASX 200 BNPL stock is up 88%.

The post Why is the Block share price getting pulped on Friday? appeared first on The Motley Fool Australia.

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More reading

• Why Arcadium Lithium, Block, Capricorn, and Kogan shares are dropping today
• If I’d put $5,000 in Block shares 5 months ago, here’s what I’d have now
• Why are these ASX tech shares getting smashed today?
• 4 ASX growth shares I think will benefit from interest rate cuts in 2024
• Do Block shares come with a dividend in 2024?

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 Block. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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