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 stock market fell on Tuesday, as investors started to react negatively to sustained inflationary pressure. By the close, the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) were modestly off their record levels, and the Dow Jones Industrial Average (DJINDICES: ^DJI) also gave back some ground.

Index	Percentage Change (Decline)	Point Change
Dow	(0.31%)	(107)
S&P 500	(0.35%)	(15)
Nasdaq Composite	(0.38%)	(56)

Data source: Yahoo! Finance.

For a long time, investors have followed the prospects of disruptive small companies seeking to take on some of the giants of their respective industries. Yet skeptics of those disruptors have long argued that it was only a matter of time before Big Business fought back. That happened today to Affirm Holdings (NASDAQ: AFRM), and it’ll be very interesting to see how things play out in a high-stakes battle for supremacy in a fast-growing area of fintech.

Apple takes on Affirm

Affirm offers an installment-payment service, known more colloquially as “buy now, pay later.” Affirm’s service allows customers to choose from multiple options about how they want to repay, with some short-term arrangements adding little or no cost to the transaction while some more-extended payment plans come with larger tack-on payments over and above the total cost of the item. Affirm’s service has been highly popular, especially as the company built partnerships with companies like e-commerce platform provider Shopify to give its merchant customers access to Affirm’s installment-plan payment program.

However, shares of Affirm fell more than 10% by the close today, plunging in the midafternoon once news surfaced that the company would likely face competition from a huge potential rival. Apple (NASDAQ: AAPL) is reportedly planning to come out with its own installment-payment service, using its existing Apple Card relationship with banking giant Goldman Sachs (NYSE: GS) and expanding it to make the new buy now, pay later feature work.

The move apparently stems from Apple’s current offerings for buyers of iPhones and other Apple products. Apple Card holders can buy iPhones in installments lasting two years, with payments getting coordinated with credit card minimum payments. Doing a broader installment service makes sense and is consistent with in-house solutions expanding to cover larger swaths of promising markets.

Get ready for more fighting

Affirm isn’t the only company that’s potentially vulnerable to existing industry giants fighting back against disruptors. Whole hosts of high-flying new companies will likely have to demonstrate their competitive advantages even against massive pressure.

For instance, Upstart Holdings (NASDAQ: UPST) uses alternatives to the credit scoring systems that FICO (NYSE: FICO) and others offer. Upstart has proprietary artificial-intelligence (AI) powered assessment tools to make better-informed decisions about extending credit to those who are underserved by traditional credit providers. But there’s nothing stopping FICO (also known as Fair Isaac) and other credit-score providers from teaming up with AI-savvy companies to make their own upgraded algorithms.

Many companies have the same first-mover advantage as Upstart but face similar competitive challenges in the long run. That doesn’t necessarily mean that the disruptors are doomed to failure, but it does mean that investors can’t just assume that massive mega-cap companies in key sectors will just roll over and give way to competition.

If indeed Apple is looking to go up against Affirm, it could prove to be just an early shot in a larger war between young new disruptive companies and the big businesses they’re trying to make obsolete.

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

The post As markets fall, big business fights back against disruptive growth stocks appeared first on The Motley Fool Australia.

More reading

• Why the Zip (ASX:Z1P) share price is down 10% on Wednesday
• Why the Afterpay (ASX:APT) share price is crashing 9% on Wednesday
• Afterpay and Zip shares on watch amid Apple Pay Later speculation
• ASX investors were buying Tesla and Apple shares last week
• Why Apple stock climbed to a new high on Wednesday

Dan Caplinger owns shares of Apple and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Affirm Holdings, Inc., Apple, and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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The Humm Group Ltd (ASX: HUM) share price is having a subdued day as it announces a partnership with Westpac Banking Corp’s (ASX: WBC) New Zealand division.

At the time of writing, shares in the buy now, pay later (BNPL) provider are trading for 99.5 cents – down 1.49%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.39% higher.

Let’s take a closer look at today’s news.

The Humm share price is falling

In a statement to the ASX, Humm Group declared it has “entered into a joint venture agreement with Red Bird Ventures Limited” – a subsidiary of Westpac NZ – to launch its BNPL product, bundll, to the New Zealand market.

Bundll is a tap and go service on a customer’s phone. Using the Mastercard Inc (NYSE: MA) network, it allows the user to use BNPL anywhere and for any amount. Bundll will be available to all New Zealanders, but Westpac NZ customers will receive “preferential” benefits.

Red Bird has the option to buy equity in bundll New Zealand as part of the deal.

Investors are not rating today’s news, judging by the drop in the Humm share price.

Management commentary

Humm Group CEO, Rebecca James, said

We are delighted to be partnering with Westpac NZ to bring bundll to New Zealanders. BNPL is one of the fastest growing segments of the financial industry, and with this new arrangement Westpac NZ will reap the benefits of having an innovative and customer driven BNPL offering without having to build the product themselves.

This is our first deal under our strategic agreement with Mastercard and we are actively in discussions with a number of banks, loyalty programs and financial institutions about similar potential partnerships around the globe.

Division President of Mastercard Australasia Richard Wormald added:

With bundll, Humm group have developed a unique solution that easily allows banks, loyalty programs or larger retailers to offer a solution to their customers, without needing to undertake any IT development. We are excited about the potential this has globally.

Humm share price snapshot

Over the past 12 months, the Humm share price has declined 15.4%. In contrast, BNPL competitors Afterpay Ltd (ASX: APT) and Sezzle Inc (ASX: SZL) are 61% and 8% higher.

Humm Group has a market capitalisation of approximately $485 million.

The post Humm (ASX:HUM) share price dips despite deal with Westpac NZ appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Mastercard. The Motley Fool Australia has recommended Humm Group Limited and Mastercard. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bathurst Resources Ltd (ASX: BRL) share price has been an exceptionally strong performer on Wednesday.

In morning trade, the coal producer’s shares are up 63% to a 52-week high of 70 cents.

This gain means the Bathurst Resources share price is now up 84% since the start of the year.

Why is the Bathurst Resources share price rocketing higher?

The catalyst for the incredible rise in the Bathurst Resources share price on Wednesday has been a favourable outcome in the Supreme Court of New Zealand.

According to the release, the Supreme Court has upheld Bathurst Resources’ appeal against the case brought by L&M Coal.

What was the case?

Back in 2018, legal proceedings were brought against the company by L&M Coal in relation to a US$40 million performance payment. This stems from an agreement that Bathurst Resources signed when it bought the Escarpment mine on the Denniston Plateau.

That agreement was for an upfront payment of US$35 million and then US$40 million due when Bathurst had shipped 25,000 tonnes of coal and another US$40 million when one million tonnes of coal had been shipped.

However, although Bathurst Resources had produced 50,000 tonnes of coal from the mine, it claimed that this didn’t trigger the performance payment because it technically was not shipped overseas. Instead, the company had sold the coal to Westport’s Holcim cement plant.

According to today’s release, the Supreme Court did find that the US$40 million performance payment had been triggered.

However, the court also ruled, contrary to the prior court judgments, that Bathurst Resources can rely on the Royalty Deed which forms part of the original agreement. This means that for as long as the relevant royalty continues to be paid (even if that sum is zero), payment of the performance payment can be indefinitely deferred.

Furthermore, the Supreme Court also ruled that Bathurst’s Supreme Court legal costs must be reimbursed by the appellants, together with previous costs re-determined in the High Court and Court of Appeal in light of the judgement.

The post Why the Bathurst Resources (ASX:BRL) share price is rocketing 63% higher appeared first on The Motley Fool Australia.

More reading

• Humm (ASX:HUM) share price dips despite deal with Westpac NZ
• Could the Youfoodz (ASX: YFZ) takeover offer indicate a bubble?
• Why the Sezzle (ASX:SZL) share price is sinking 10% on Wednesday
• Why the Afterpay (ASX:APT) share price is crashing 9% on Wednesday
• Is the Appen (ASX:APX) share price an opportunity?

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

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It’s been roughly 16 months since the COVID-19 pandemic took hold in Australia, spurring the public to embrace new ways of living. And what takes hold in the public sphere generally makes it to the market.

While some of us were stuck at home, several Initial Public Offerings (IPOs) hit the market ready to take advantage of popular cultural shifts triggered by lockdowns. But, it seems, all trends must come to their natural end.

Does Youfoodz Holdings Ltd‘s (ASX: YFZ) takeover offer mark the end of the bubble of share price gains for commerce and consumer convenience companies?

Yesterday, Youfoodz recommended its shareholders accept a scheme implementation arrangement pitched by its competitor Hellofresh that would see those who bought into the company at its IPO lose 38% of their investment.

An analysis by the Australian Financial Review‘s Tom Richardson claims it’s a sign a pin is coming for the COVID-19 shares bubble.

Can COVID-19 IPOs stand the test of time?

In March 2020, when the door to the outside slammed shut, many Australians took to freshly propagandised trends.

Maybe you gained a solid appreciation of sourdough, whipped coffee, and at-home fitness programs. Or, perhaps, you spent hours on TikTok, splashed out on food delivery services, and perused the never-ending catalogue of online retail.

While the world was staring out the window, the ASX was awash with IPOs making the most of the boom in convenience services and e-commerce.

Ready-made meal provider Youfoodz debuted on the ASX in December, just months after e-commerce companies Adore Beauty Group Ltd and Mydeal.ComAu Pty Ltd did the same.

The Youfoodz share price’s journey

Youfoodz’ prospectus outlined that it had never raked in a profit. However, it aimed to list with a market capitalisation of around $201 million, selling its shares for $1.50 during its IPO.

But the Youfoodz share price never hit $1.50 on market. Its highest point saw its shares swapping hands for $1.32.

Youfoodz’ shares have fallen 13.8% since their first session on the ASX — when they closed at $1.05.

Now, its board has unanimously recommended shareholders accept Hellofresh’s offer of 93 cents per share.

That represents an 82% premium on the Youfoodz share price’s previous close but a 38% discount on its share price in its prospectus.

Other shares that debuted during COVID-19

As Richardson points out, online retailers Adore Beauty and Mydeal have also flopped dramatically from their IPO share price.

Adore Beauty placed a $6.75 price tag on its shares during its October IPO. The Adore Beauty share price soared to $6.92 on its first day on market but has since dropped 24.7%.

Mydeal also completed its IPO in October. Investors could buy Mydeal shares for $1.00 at that time. Despite hitting as much as $2.20 during its first session on the ASX, the Mydeal share price has since fallen 59.1%.

Richardson believes when vaccines came to fruition, the market began seeking stable, long-term investments, leaving the COVID-19 fads behind.

Whether the new downward trend will continue for companies like Youfoodz, Adore Beauty, and Mydeal is yet to be seen.

Youfoodz share price snapshot

Youfoodz’ time on the ASX has been a rollercoaster ride – its share price has fallen 13% since it listed.

The company has a market capitalisation of around $122 million, with approximately 134 million shares outstanding.

The post Could the Youfoodz (ASX: YFZ) takeover offer indicate a bubble? appeared first on The Motley Fool Australia.

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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 recommended Adore Beauty Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Sezzle Inc (ASX: SZL) share price has been among the worst performers on the Australian share market on Wednesday.

In morning trade, the buy now pay later (BNPL) provider’s shares are down 10% to $8.00.

Why is the Sezzle share price sinking?

The catalyst for the weakness in the Sezzle share price today has been reports that the BNPL market is about to get a major new competitor.

As I revealed here earlier, Bloomberg understands that tech giant Apple is planning to launch a new offering – Apple Pay Later.

The prospect of Apple entering the market isn’t just weighing heavily on the Sezzle share price, it has sent Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) shares deep into the red as well. Furthermore, overnight on Wall Street, fellow BNPL provider Affirm saw its shares crash 10% lower on the news.

What are Apple’s plans?

Apple declined to comment on the speculation, but Bloomberg understands that the new service will let consumers pay for any Apple Pay purchase in instalments via two options.

This will be through an interest-free Apple Pay in 4 option and a longer-term option with interest called Apple Pay Monthly Instalments. As with Afterpay, the Apple Pay in 4 offering gives consumers the opportunity to pay for items across four interest-free payments made every two weeks. Investment bank Goldman Sachs is understood to be acting as the lender for the instalment loans.

The report suggests that Apple is interested in entering the BNPL market to help drive Apple Pay adoption and convince more users to pay for items using their iPhone instead of traditional debit or credit cards.

With Apple receiving a percentage of transactions made with Apple Pay, the tech giant reportedly hopes that this will boost its US$50 billion per year services business.

Despite today’s decline, the Sezzle share price is still beating the market in 2021. Since the start of the year, the Sezzle share price is up a sizeable 27.5%.

The post Why the Sezzle (ASX:SZL) share price is sinking 10% on Wednesday appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best ASX fintech shares of the 2021 financial year
• The Sezzle (ASX:SZL) share price plummeted 8% today
• Got Sezzle (ASX:SZL) shares? What’s in store for FY22?
• Here are the top 3 performing ASX BNPL shares of FY21 – and they’re not Afterpay
• Sezzle (ASX:SZL) share price jumps 5.2% during intraday trade

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 shares of and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Afterpay Ltd (ASX: APT) share price is under pressure this morning, down 9.16% to $107.51 at the time of writing.

Afterpay shares might be following the lead of its US-listed rival, Affirm Inc (NASDAQ: AFRM), which tumbled 10.45% overnight.

What’s causing the Afterpay share price selloff?

According to Bloomberg, Apple has teamed up with Goldman Sachs to bring a new BNPL service to the market, internally known as “Apple pay Later”.

Bloomberg reported that Apple is eyeing the BNPL market as an opportunity to drive Apple Pay adoption and encourage more users to pay with their iPhones instead of traditional credit cards.

The new service is still in development but the report suggests it will incorporate classic BNPL features, including an option to pay across four interest-free instalments every fortnight or across several months with interest.

Afterpay has experienced explosive growth in North America, with its third quarter results highlighting a 112% year-on-year increase in active customers to 9.3 million.

But, by comparison, Apple Pay is a top mobile payments player in the United States, with 43.9 million users in 2021, according to Tech Crunch.

Competition continues to mount in the BNPL space

While Apple’s new service is still in development, this might add to the narrative of increasing competition within the BNPL space.

In March this year, the Commonwealth Bank of Australia (ASX: CBA) announced plans to roll out its own BNPL offering to eligible customers from mid-2021.

In the same month, PayPal (NASDAQ: PYPL) also announced plans to bring a BNPL service to the Australian market.

The payments giant said that its “Pay in 4” product will roll out to over 9 million Australian accounts by early June 2021.

Afterpay share price tumbles to negative year-to-date returns

The Afterpay share price was enjoying a bullish resurgence last month, rallying to a 4-month high of $132.40 on 24 June.

Unfortunately, today’s sharp selloff drags the Afterpay share price back into negative year-to-date territory.

Afterpay shares are now down 8% year-to-date.

The post Why the Afterpay (ASX:APT) share price is crashing 9% on Wednesday appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best ASX fintech shares of the 2021 financial year
• Afterpay and Zip shares on watch amid Apple Pay Later speculation
• 5 things to watch on the ASX 200 on Wednesday
• 3 ASX growth shares named as buys
• ASX investors were buying Tesla and Apple shares last week

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Affirm Holdings, Inc., Apple, and PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Apple and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Is the Appen Ltd (ASX: APX) share price an opportunity after the ASX tech share’s hefty decline in 2021 in the year to date?

Appen shares have dropped by around 50% since the start of this calendar year.

Over the last 12 months it has been one of the worst performers in the S&P/ASX 200 Index (ASX: XJO).

But with the artificial intelligence and machine learning business dropping so much, do analysts think the stock is good value?

What has it recently announced?

In the second half of FY20, Appen said that growth moderated due to the strong Australian dollar and COVID-19 impacts.

There were three things that Appen referred to with those COVID-19 impacts. There was the impact of lower digital advertising revenue and an uncertain outlook on consumer spending. Next, there was the deferral and reprioritisation of projects. The third thing was restricted face to face sales and customer engagement.

Appen is currently going through a restructuring that will focus on the needs of different customer groups and markets, and to enable the development of differentiated approaches to sales, customer experience and delivery models. A new leadership structure will come with profit and loss responsibility that will increase visibility of, and accountability for, performance across its business units.

There will be restructuring costs, but annualised gross savings are expected to be US$15 million from 2022.

In a May trading update, the company said its year to date revenue plus orders in hand for delivery in FY21 was approximately US$260 million at the end of April 2021.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ending 31 December 2021 is expected to be in the range of US$83 million to US$90 million.

Is the Appen share price an opportunity?

Both Macquarie Group Ltd (ASX: MQG) and Credit Suisse have neutral ratings on Appen. The Credit Suisse price target is $15 and the Macquarie price target is $14.70.

Both of the above brokers think that the market may too positive with earnings expectations.

One of those with a more positive outlook is Ord Minnett which has a price target on Appen of $24.75 which suggests the Appen share price could almost double over the next 12 months, if Ord Minnett is right. The broker thought the May trading update was reassuring and that the restructuring was a positive because of the expected lower costs.

On Ord Minnett’s numbers, the Appen share price is valued at 22x FY21’s estimated earnings.

But the broker Macquarie thinks that Appen shares are valued at 30x FY21’s estimated earnings.

The post Is the Appen (ASX:APX) share price an opportunity? appeared first on The Motley Fool Australia.

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

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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 biopharma Moderna (NASDAQ: MRNA) advanced 124.9% during the first half of this year, according to S&P Global Market Intelligence. The rally extends gains made since early 2020, when the company emerged as a COVID-19 vaccine contender, and then delivered on that promise later in the year.

So what

It’s a name that needs little in the way of an introduction. Moderna joins Johnson & Johnson (NYSE: JNJ), Novavax (NASDAQ: NVAX), and a partnership between Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) as the core suppliers of the vaccines aimed at curbing the coronavirus contagion. Moderna’s mRNA-1273 was approved by the FDA for emergency use in December of last year, though investors were willing to reward the company before and after that green light.

And well they should. Product revenue for the developmental company grew from essentially nothing a year earlier to $1.7 billion for the three-month stretch ending in March, with all of it consisting of COVID vaccine sales.

In the meantime, the company has continued to expand on the potential of mRNA-1273 as well as move forward with trials of other vaccine and treatment candidates. It also has other trials underway, such as testing of its mRNA technology as a means of treating cancer, autoimmune disease, and cardiovascular disease — though for the foreseeable future, evolving strains of COVID will keep the organization busy.

Now what

It’s tempting to step into (or stick with) one of the market’s hottest biotech stocks that’s performing well for all the right reasons. The pandemic could be with us for a while — perhaps permanently if new strains keep surfacing — and Moderna’s answer thus far appears to be the least problematic. J&J’s vaccine has been linked to the development of Guillain-Barre syndrome, while Pfizer’s might lead to heart inflammation in rare cases. Moderna’s mRNA solution can also cause the same myocarditis, although it’s highly effective, and if nothing else, it’s increasingly available in an environment where something is better than nothing.

With shares up nearly 900% since the coronavirus outbreak went worldwide last year, though, existing shareholders may want to start thinking about an exit plan.

While Moderna has provided a beacon of hope, its effort and potential are not only well publicized and fully priced into shares, but they might also be more than priced in. Even the usually aggressive analyst community agrees that shares are only worth on the order of $177 right now, while the stock is trading at a frothy $238.

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

The post Here’s why Moderna stock soared 125% during the first 6 months of 2021 appeared first on The Motley Fool Australia.

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• Does This Shocking CDC Statement Mean Trouble for Pfizer and Moderna?
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• Why Moderna shares surged 27% in June
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• Is this the secret ingredient that could make Moderna shareholders rich?

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

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

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The BlueBet Holdings Ltd (ASX: BBT) share price is charging higher on Wednesday.

In morning trade, the mobile-first sports betting company’s shares are up 8% to $1.77.

Today’s gain means the BlueBet share price is now up 55% from its 2 July IPO listing price of $1.14.

Why is the BlueBet share price charging higher?

Investors have been bidding the BlueBet share price higher today after it released a positive update on its US ambitions.

According to the release, the company has signed a skin agreement with the operator of Q Casino, Dubuque Racing Association. The skin agreement will allow BlueBet to conduct its online sportsbook operations in Iowa as an extension of Dubuque’s existing casino licence. This remains subject to the completion of regulatory approval and licensing.

The two parties have signed an initial term of five years, which will automatically renew for a further five years unless BlueBet provides notice of non-renewal by January 2026. Furthermore, as part of the agreement, BlueBet will pay to Dubuque Racing Association a portion of the Net Gaming Revenues derived from the online sportsbook operations.

Management notes that while the US market is currently smaller than Australia, it has significant growth potential. It advised that US market revenue in 2025 is forecast to grow to as much as US$13.5 billion. And, as with Australia, the online channel is set to dominate sports betting in the country.

Significant milestone

BlueBet’s Chief Executive Officer, Bill Richmond, commented: “This is a significant milestone in BlueBet’s entry to the USA market. We are taking a very considered, staged approach to market entry in the USA, and we are tremendously excited to be announcing this agreement with the Dubuque Racing Association.”

“We are initially launching a B2C business to demonstrate both the capability of our technology and our team, both of which have been honed by years of successful operation in Australia, ahead of moving to our Sportsbook-as-a-solution offering in the USA. This strategy allows us to access the tremendous USA opportunity without large ongoing capital expenditure,” he added.

Mr Richmond notes that it has a big opportunity in the Iowa market, which could bode well for the BlueBet share price in the coming years.

He explained: “Iowa is a large wagering market with huge potential, and it perfectly fits our criteria. Since sports betting was approved by the Iowa legislature in August 2019 it has grown rapidly to a US$1bn+ market in FY21, 85% of which is now placed through mobile or online. We look forward to growing our online sports book in partnership with Dubuque and expect our mobile first online offering to resonate strongly with customers who have demonstrated a strong affinity for mobile wagering.”

The post Why the BlueBet (ASX:BBT) share price is jumping 8% on Wednesday appeared first on The Motley Fool Australia.

More reading

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

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The Praemium Ltd (ASX: PPS) share price is rocketing higher on Wednesday.

In morning trade, the investment platform provider’s shares are up 21% to a multi-year high of $1.18.

Why is the Praemium share price rocketing higher?

The catalyst for the rise in the Praemium share price on Wednesday has been the release of a couple of announcements.

According to the first announcement, Praemium has finalised the strategic review of its international operations. This review has recommended the divestment of the business through a formal sale process. The Praemium Board has met and supports this recommendation.

The release notes that the proposed divestment will allow Praemium to focus its financial and leadership resources on further accelerating its growth trajectory in the Australian platform market.

Praemium also revealed that it has received unsolicited, strong interest from potential buyers. Deloitte Corporate Finance has been appointed to manage the sale process.

Quarterly update

Also giving the Praemium share price a lift was its quarterly update which revealed further strong grow inflows.

According to the release, Praemium achieved record quarterly inflows of $1.2 billion for the quarter. This took its funds under administration (FUA) to a record of $41.7 billion.

This comprises Australian platform FUA of $18.4 billion (up 223% year on year), International platform FUA of $5 billion (up 55%), and VMAAS FUA of $18.3 billion (up 61%). The former was boosted by the acquisition of Powerwrap during the financial year.

Praemium’s Interim CEO, Anthony Wamsteker, was very pleased with the quarter.

He said: “We are delighted to report strong and continuing momentum in net flows this quarter. For the Australia business, it is pleasing to see a strong end to the financial year. Our platform inflows achieved a new record, with the combination of Praemium and Powerwrap platforms delivering strong results. Our noncustody solution (VMAAS) also reached a record level of FUA, as advice firms continue to seek outsourced administration for their off-platform assets.”

“The International business had a standout quarter, with record inflows and FUA exceeding $5 billion for the first time. We continue to execute on our on-boarding of new clients and opportunities,” he added.

The Praemium share price is up 97% since the start of the year following today’s gain.

The post Why the Praemium (ASX:PPS) share price is rocketing 21% higher today appeared first on The Motley Fool Australia.

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

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