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The world of investing has been lit in conflagration over the last few days by a previously little-known company called GameStop Corp (NYSE: GME). If you want to know why, just look at a 6-month chart of the GameStop stock price.

Six months ago, GameStop stock was worth around US$4.

A month ago, it was a US$19 stock.

Last Friday, GameStop shares were trading at a healthy US$42.50.

And last night, GameStop stock hit an all-time high of US$483 a share. That’s a return of more than 1,000% in just a week, almost 2,400% in a month, and… wait for it… 11,800% over six months.

So now you know.

According to reporting in the Australian Financial Review (AFR) today, here are four things you need to know about what has happened with this company.

1. GameStop rally was sparked by a short squeeze

A short squeeze occurs when short sellers have to close their short positions because of a rising share price. Normally, this all happens at once in a chain reaction and leads to a massive imbalance between buyers and sellers. And when an imbalance like that occurs, it can result in a rapid and enormous share price surge. We saw similar events occur with Tesla Inc (NASDAQ: TSLA) stock last year. But what’s happened with GameStop is a record-breaking one for the books.

2. ‘Amateur’ investors caused this one

This move is being put at the feet of the new generation of investors known as ‘Robinhood traders’, named after the popular United States free brokering service Robinhood. The growing clout of these traders, who are famously driven by a ravenous desire for quick, ‘casino-like’ wins over a long-term investing mindset, is proving to be a force to behold. This type of buying and selling often involves the trading of options, rather than shares themselves. Options can be used as a high-risk, high-reward bet on the potential movements of a share price.

3. Collective action proves powerful for GameStop

As we previously flagged, this wasn’t a move orchestrated on Wall Street. GameStop was targeted by a group of ‘Robinhood traders’ from the Reddit group WallStreetBets. These investors have figured out that if they move as a group, they have the power to manipulate the price of a company. GameStop was targeted because these investors noticed that a large number of this company’s shares were held in short positions.

Someone surmised (accurately as it turns out) that if there was enough buying pressure, it would cause a short-squeeze. And that’s exactly what happened. Then, add an army of other traders trying to jump on the bandwagon, and you can start to see how this incredible share price surge unfolded.

4. When does this end?

Like all ‘bubble’ events in history, this one is set to reward a few lucky investors handsomely at the expense of the many. The AFR report notes that Robinhood and other traders have now placed trading restrictions on GameStop and other stocks that have been targeted in a similar manner. The report also posits that these actions hurt the entire share market by introducing massive pricing distortions that affect the broad flow of capital.

GameStop stock closed at US$193.60 this morning (our time), already down ~60% from the highs we saw earlier in the trading day. But then again, it was up another 61% to US$312 in after-hours trading. Who knows when the madness will end!

More reading

• The Reddit-GameStop-Robinhood saga is heating up
• 53% share price jump lands GME Resources (ASX: GME) in trading halt
• What Is a Gamma Squeeze?
• Short squeezes: Everything you need to know about the recent investing movement
• GameStop trading ought to be halted for 30 days, one regulator says

Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends 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.

The post GameStop (NYSE:GME) stock insanity: Here are 4 things you need to know appeared first on The Motley Fool Australia.

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Our market is rebounding today but not all ASX stocks are joining the party as some got slugged by a broker downgrade.

The S&P/ASX 200 Index (Index:^AXJO) jumped 0.7% in late morning trade with most sectors trading higher.

There are exceptions though with leading brokers cutting their recommendations on three ASX stocks today.

Metal fatigue bending SGM share price

One that’s left out in the cold is the Sims Ltd (ASX: SGM) share price. Shares in the scrap metal trader fell 1.4% to $12.53 at the time of writing.

The weakness in the SGM share price coincided with a downgrade by Goldman Sachs, which lowered its recommendation to “sell” from “neutral”.

The broker believes that recent supply constrains that drove a surge in steel spreads have peaked, and that prices are poised to turn lower.

ASX steel shares downgraded by broker

“In recent weeks we have seen some improvement in supply, and a broad based retreat in both steel pricing, input commodities and spreads,” said Goldman.

“We expect that as CY21 progresses, market dynamics and pricing (and spreads) will normalise back to prior trading bands.”   

The broker warns that the earnings before interest, tax, depreciation and amortisation (EBITDA) multiples for the sector will compress by around 15%.

As an aside, Goldman also downgraded its rating on BlueScope Steel Limited (ASX: BSL) share price to “neutral” from “buy” at the same time, but that was just before BlueScope issued a profit upgrade.

Goldman’s 12-month price target on the SGM share price is $11.38 a share.

Valuation concerns triggers downgrade

Another stock that’s lost favour with investors is the Orocobre Limited (ASX: ORE) share price. The lithium miner slumped 5.7% to $5.42 as more than one broker downgraded their rating on the ORE share price after it posted its quarterly update.

The issue isn’t so much its latest quarterly production report but its valuation. If anything, the production figures were the third-highest on record, aided by record brine concentration 8000-9000ppm, according to Credit Suisse.

But the broker thinks the recent share price rally is overdone and changed its recommendation to “underweight” from “neutral” with a 12-month price target of $5 a share.

Citigroup is another that downgraded the ORE share price. It cut its rating to “neutral” from “buy”. This was despite the fact that ORE’s quarterly figures came in ahead of the broker’s expectations.

But Citi also thinks the stock has run up too quickly. It’s price target on ORE is $6.75 a share.

QAN share price running low on fuel

Taking about reaching full valuation, the Qantas Airways Limited (ASX: QAN) may also struggle to ascend further.

Macquarie Group Ltd (ASX: MQG) lowered its recommendation on the Flying Kangaroo to “neutral” from “outperform”.

Unpredictable and sudden border closures due to COVID-19 is impacting on Qantas’ earnings recovery flight path.

The stock’s recent rally also means it’s only trading at a modest 10% discount to its long-run trading multiples, added the broker.

Macquarie’s 12-month price target on the QAN share price is $5.05 a share.

More reading

• ASX 200 up 0.6%: ResMed Q2 update, Kogan sinks, NAB acquires 86 400
• Why the Novonix (ASX:NVX) share price is down 10% today
• The BlueScope (ASX:BSL) share price surges on a profit upgrade today
• Here’s why the Origin Energy (ASX:ORG) share price is climbing today
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Brendon Lau owns shares of BlueScope Steel Limited and Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The latest ASX stocks to be hit by broker downgrades appeared first on The Motley Fool Australia.

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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.

Volatility is perfectly normal in the stock market. Long-term investors should acknowledge it, accept it, and (mostly) ignore it. However, the volatility we’ve seen over the last several days will likely be talked about by investors and analysts for years to come – the story behind the GameStop (NYSE: GME) short squeeze is truly historic. 

How should investors prepare for a short squeeze? This question is particularly relevant to me at the moment. That’s because I own three stocks that could be next on the short-squeeze list: insurance company Lemonade Inc (NYSE: LMND), plant-based meat company Beyond Meat Inc (NASDAQ: BYND), and home-cleaning robot manufacturer iRobot Corporation (NASDAQ: IRBT).

Here’s what’s going on in the market, why these three stocks could be next, and what I plan to do about it.

How did this even get started?

By now, I’ll assume you’ve heard about the epic short squeeze of GameStop stock. Shares of the video game company were the most shorted on the market, with over 100% of the available shares being sold short.

Then members of a Reddit stock investing discussion group put their heads together and realised they could squeeze out these shorts if they cooperated on their trading actions. And what they did is working. Things are changing fast, but as of this writing, GameStop’s stock price was up over 1,700% just this month.

It’s likely that millions of GameStop shares are still being sold short (just at a different level from the initial sellers). So the stock could keep rising while more and more shorts get squeezed out.

That said, the music will end someday. And when that happens, as in a game of musical chairs, chaos could ensue and someone will be left without a seat (and plenty of stock price losses). GameStop’s stock price will likely go back down, closer to where it was before.

It’s what happened after the famous short squeeze of Volkswagen in 2008. Shares of Volkswagen are still down over 80% from those all-time highs, more than a decade later.

Why my stocks are next

Call the GameStop short squeeze a proof of concept. The Redditors’ plan is working, which puts any stock with a lot of short-seller interest in their crosshairs if they intend to target new shorts. And three of my holdings make that list.

Company	Short Interest (Percent of Float)	Days to Cover
Lemonade	25.8%	1.9
Beyond Meat	24.4%	3.2
iRobot	65.1%	20.3

Data source: Yahoo! Finance, Nasdaq.

Indeed, these short squeezes may have already started – all three stocks are crushing the market in January, as the chart below shows. It’s possible they could shoot higher still. But after that, all three stocks could possibly tank back down to levels more in line with business fundamentals.

LMND data by YCharts

What investors should do

If my investing goal were to maximize my returns, I’d be scared stupid right now. But because I’m playing a different game, I can relax and do nothing.

Wait. Isn’t making as much money as possible the point of investing? While that might seem like the goal, here’s why that’s a misguided idea. To truly maximize returns, you’d have to perfectly time the top for all your stocks, including during short squeezes. But data has shown time and again that that’s impossible.

I’m playing a very different game. My goal is to see my investments return 15% annually over the long haul. Why 15%? Because I’ve done the math. Given my age, my current retirement savings, and the new money I add to my IRA regularly, 15% per year will be a good enough return to exceed my expected retirement needs.

I’d encourage you to do the math for yourself. You’d be surprised how quickly even a 10% return can compound your wealth. For that reason, I actually get excited after my stocks have a big run. I’ve initiated positions in all three of these companies over the last 13 months. The worst performer of this group is up 100% for me.

The way I see it, each could fall significantly in the aftermath of a short squeeze, and I’d still be ahead of my investing goals.

Here’s the thing: I love the long-term investing thesis for each of these three stocks – it’s why I own them.

I believe Lemonade can build a sizable and loyal customer base thanks to its unique revenue structure with clear incentives. Beyond Meat is a top-of-mind brand name at the forefront of a societal shift toward more plant-based products. And iRobot is a leader in the smart-home trend with a strong balance sheet and optionality for new product lines in the future.

There’s no way I want to sell them now, even if there’s a realistic chance for downside volatility from a short squeeze.

My reasoning for buying Lemonade, Beyond Meat, and iRobot still applies, making it a bad move to sell in my opinion. To prepare for possible volatility in your own portfolio, I recommend you do what I’ve done: Remember your goals and review the reason you bought each of your stocks. If everything is good, sit back and enjoy the ride.

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

More reading

• Why Bubs, Kogan, Lake Resources, & Western Areas shares are sinking lower
• ASX 200 up 0.6%: ResMed Q2 update, Kogan sinks, NAB acquires 86 400
• Why the Novonix (ASX:NVX) share price is down 10% today
• The Reddit-GameStop-Robinhood saga is heating up
• Why the Lynas (ASX:LYC) share price is on the rise

Jon Quast owns shares of Beyond Meat, Inc., iRobot, Lemonade, Inc., and Nasdaq. The Motley Fool Australia’s parent compnay The Motley Fool owns shares of and recommends Beyond Meat, Inc., iRobot, and Lemonade, Inc. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.

The post I own these 3 potential short-squeeze stocks. Here’s what I’m doing appeared first on The Motley Fool Australia.

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

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. At the time of writing, the benchmark index is up 0.7% to 6,697.5 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are sinking lower:

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down 8% to 68.5 cents. This morning analysts at Citi responded to Bubs’ second quarter update by reiterating their sell rating and cutting their price target by 16% to 51 cents. Bubs fell short of its sales estimates and spent far more cash than it was forecasting. Citi appears concerned the third quarter could be another tough one for the company.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is down 5.5% to $18.57. Investors have been selling the ecommerce company’s shares following the release of its first half trading update. Kogan revealed a 96% increase in gross sales and a 140%+ jump in earnings before interest, tax, depreciation and amortisation (EBITDA). This represents a reasonably sharp slowdown in its growth since end of the first four months of FY 2021. At that point its sales were up 99.8% and its operating earnings were up 268.8% over the same period last year.

Lake Resources N.L. (ASX: LKE)

The Lake Resources share price is down 15% to 30.5 cents. This decline appears to have been driven by profit taking following some very strong gains this month. In fact, even after today’s decline, the lithium miner’s shares are up a whopping 280% since the start of 2021.

Western Areas Ltd (ASX: WSA)

The Western Areas share price has fallen 4.5% to $2.35. This decline also appears to have been driven by a broker note out of Citi this morning. Its analysts have downgraded the nickel producer’s shares to a neutral rating with a $2.60 price target. This follows a softer than expected quarterly update. According to the note, Western Area fell short of Citi’s expectations on both production and costs.

More reading

• ASX 200 up 0.6%: ResMed Q2 update, Kogan sinks, NAB acquires 86 400
• Here’s why the Kogan (ASX:KGN) share price is sinking 5% lower
• 3 reasons why the Bubs (ASX:BUB) share price could be a buy
• ASX 200 drops 2%, IOOF and Afterpay shares sink, Bubs jumps
• Here’s why the Western Areas (ASX: WSA) share price crashed 16% today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO and Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why Bubs, Kogan, Lake Resources, & Western Areas shares are sinking lower appeared first on The Motley Fool Australia.

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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) has returned to form and is pushing higher. The benchmark index is up 0.6% to 6,689.7 points.

Here’s what is happening on the market today:

ResMed delivers more growth

The ResMed Inc (ASX: RMD) share price is pushing higher on Friday after delivering a stronger than expected second quarter update. According to the release, ResMed reported a 9% increase in quarterly revenue to US$800 million and a 17% increase in net profit to US$206.4 million. This was ahead of the market consensus estimate for both revenue and earnings. Management advised that its growth was driven by a solid performance across the business.

Kogan shares slide following update

The Kogan.com Ltd (ASX: KGN) share price is dropping lower today following the release of its half year trading update. For the six months ended 31 December, Kogan’s gross sales (including the Mighty Ape acquisition) increased 96% over the prior corresponding period. And thanks to margin expansion, its gross profit grew over 120% and its earnings before interest, tax, depreciation and amortisation (EBITDA) jumped over 140%. On the negative side, the company revealed charges totalling $3.4 million. It also advised that it recorded an unspecified but significant unrealised foreign exchange loss due to the rise in the Australian dollar.

NAB acquires 86 400

The National Australia Bank Ltd (ASX: NAB) share price is trading lower today despite announcing a scheme implementation agreement that will see it acquire 100% of neobank 86 400 for $220 million. As at 15 January 2021, 86 400 had more than 85,000 customers and $375 million of deposits. The Aussie neobank also has $270 million in approved residential mortgages and 2,500 accredited brokers.

Best and worst ASX 200 performers

The best performer on the ASX 200 today has been the Service Stream Limited (ASX: SSM) share price with an 8% gain. This follows the announcement of a multi-year agreement with telco giant Telstra Corporation Ltd (ASX: TLS). The worst performer has been the Kogan share price with a 6% decline following its update. After which, the Western Areas Ltd (ASX: WSA) share price is the next worst performer with a 4% decline. This morning analysts at Citi downgraded the nickel producer’s shares to a neutral rating with a $2.60 price target.

More reading

• Why the Novonix (ASX:NVX) share price is down 10% today
• Why Lynas, Mesoblast, ResMed, & Service Stream shares are pushing higher
• The BlueScope (ASX:BSL) share price surges on a profit upgrade today
• Here’s why the Kogan (ASX:KGN) share price is sinking 5% lower
• Here’s why the Origin Energy (ASX:ORG) share price is climbing today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Telstra Limited. The Motley Fool Australia has recommended ResMed Inc. and Service Stream Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 up 0.6%: ResMed Q2 update, Kogan sinks, NAB acquires 86 400 appeared first on The Motley Fool Australia.

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The Novonix Ltd (ASX: NVX) share price has slumped 10% in early trade to follow up yesterday’s 6.9% slump.

Why is the Novonix share price under pressure?

Novonix is a battery materials and technology company focused on the electric vehicles and grid energy storage. Shares in the Aussie company hit a record high of $4.23 in early trade yesterday before slumping lower through to the afternoon.

That trend has continued this morning with the Novonix share price sliding more than 12% lower in morning trade. It’s currently trading at $2.79, down 10%. Today’s share price fall has occurred despite no new announcements by Novonix following its quarterly update on 21 January.

In that release, Novonix advised its wholly owned US-based subsidiary, PUREgraphite, has been selected to receive a ~US$5.6 million grant by the US Department of Energy (DOE) for new technology development.

The grant funding will support the development of high efficiency furnace technology for lithium-ion battery synthetic graphite material.

Novonix chief executive, Dr Chris Burns, was positive about the grant. Dr Burns said the new furnace technology will be “industry leading” and “state of the art” in energy efficiency, environmental impact and capital cost.

The Novonix share price initially jumped in early trade on Thursday before continuing to slide through to the market close. Today’s session has started as yesterday finished with Novonix’s market capitalisation falling below $1 billion.

What else is happening in the market?

Despite Novonix’s disappointing start to the day’s trade, the S&P/ASX 200 Index (ASX: XJO) has got off on the right foot.

The benchmark Aussie index has climbed higher this morning to pare back some of the losses from Thursday’s session. A slump in ASX tech shares saw the ASX 200 record its worst day of trade since September 2020.

Service Stream Limited (ASX: SSM) and Domain Holdings Australia Limited (ASX: DHG) shares are leading the way with both ASX 200 shares up more than 7% this morning.

More reading

• ASX 200 up 0.6%: ResMed Q2 update, Kogan sinks, NAB acquires 86 400
• Why Lynas, Mesoblast, ResMed, & Service Stream shares are pushing higher
• The BlueScope (ASX:BSL) share price surges on a profit upgrade today
• Here’s why the Origin Energy (ASX:ORG) share price is climbing today
• Why the Service Stream (ASX:SSM) share price is jumping 7% higher

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

The post Why the Novonix (ASX:NVX) share price is down 10% today appeared first on The Motley Fool Australia.

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Yesterday we talked a bit about the Reddit WallStreetBets group banding together over GameStop Corp (NYSE: GME) shares. The group is an alliance of novice traders who managed to jack the GameStop share price over 700% last week.

During yesterday’s NYSE trading day, word on the street (AKA Twitter) was that AMC Entertainment Holdings (NYSE: AMC) was the next target of WallStreetBets. BlackBerry Ltd. (NYSE: BB) have also been associated with the epic short squeeze action we’ve been witnessing.

GameStop crashes as Robinhood and other brokerages restrict trading

The Wall Street Journal reported earlier that Robinhood Markets Inc., along with a group of other brokerages, restricted GameStop and AMC trading.

Additionally, trading restrictions were set on Blackberry, Bed, Bath & Beyond Inc. (NASDAQ: BBBY), Express Inc. (NYSE: EXPR), Nokia Corp headphone maker Koss Corporation (NASDAQ: KOSS) and Naked Brand Group Ltd. (NYSE: NAKD).

Amidst these restrictions GameStop shares were down over 40% at one point.

Robinhooders go crazy, co-founders bend, GameStop surges

For those who aren’t familiar, Robinhood is a commission-free stock trading application. In this light, it attracts a particular demographic amongst its massive user base. This demographic passionately supports the idea of “free trading” and are happy to be outside of fees and restrictions that brokers can impose.

That is, until Robinhood starts imposing restrictions.

Needless to say, the Twitter frenzy happening around all of this as I’m writing is too quick to keep up with. So fast, in fact, that just as the rags start publishing about the restrictions, Robinhood co-founder Vladimir Tenev removed them.

Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and make adjustments as needed.

— VLAD (@vladtenev) January 28, 2021

https://platform.twitter.com/widgets.js

GameStop stock is currently up about 40% in after hours trading and AMC has soared 23%.

Does this mean that people are breaking laws?

Part of what’s gassing up the GameStop-ignited inferno we’re inside of is that, technically, no one has broken any laws.

For example, inside trading is illegal in the finance industry. This is a widely known fact. However, there isn’t any US law that says you can’t make investing decisions with your friends.

It just so happens that during this day and age, you can address all of your friends at once. Say, by chatting with them in a WallStreetBets thread, for example.

Meanwhile, a trading platform banning users from making trades is a new one. This is a big part of why Twitter is out of control at the moment with chatter over this unprecedented move, which essentially blocks free trade.

Perhaps this is why Robinhood users filed a class action lawsuit against the company’s decision to restrict the transactions of individual investors but allow hedge funds to keep trading.

Foolish takeaway

The soap opera of events set off by GameStop is spreading rapidly — what that will mean for the markets is hard to say. 

Aside from share price volatility, the recent events draw attention to bigger issues like brokers policing trades and the essence of options trading in the first place.

Short selling isn’t anything new, and neither is the controversy. There are conflicting viewpoints that will continue to fuel the unfolding events. 

Even the richest man in world has weighed in, sharing the following thoughts amongst the unfolding drama.

u can’t sell houses u don’t own
u can’t sell cars u don’t own
but
u *can* sell stock u don’t own!?
this is bs – shorting is a scam
legal only for vestigial reasons

— Elon Musk (@elonmusk) January 28, 2021

https://platform.twitter.com/widgets.js

And the closing thoughts from Reddit?

You guys understand this is beyond a movement.. this is a new normal.

The market is not going anywhere.

We have shown that if we want a stock we will buy it & maximize the return.

Exact same things hedge funds do to make BILLIONS.

💯

— Reddit Trading 🚀 (@reddittrading) January 28, 2021

https://platform.twitter.com/widgets.js

More reading

• 53% share price jump lands GME Resources (ASX: GME) in trading halt
• What Is a Gamma Squeeze?
• Short squeezes: Everything you need to know about the recent investing movement
• GameStop trading ought to be halted for 30 days, one regulator says
• Gamestop on the ASX? Why GME Resources (ASX:GME) share price rocketed 28% today

Motley Fool contributor Gretchen Kennedy 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.

The post The Reddit-GameStop-Robinhood saga is heating up appeared first on The Motley Fool Australia.

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Lynas Rare Earths Ltd (ASX: LYC) shares are gaining today and reached as high as $5.27 in morning trade. At the time of writing, however, the Lynas share price has pulled back and is currently trading at $5.08, up 1.6%.

This comes following the release of the company’s quarterly report for the period ending 31 December.

What did Lynas announce?

The Lynas share price is pushing higher in morning trade after the rare earths producer reported sales revenues of $119.4 million for the December quarter. That’s up from $87.3 million in the previous quarter, and marks the company’s highest every quarterly sales result.

NdPr production of 1,367 tonnes was in line with the company’s guidance, and slightly higher than the 1,342 tonnes produced in the preceding quarter.

Lynas reported that, due to COVID-19 restrictions, cash conversion in the quarter was low. Shipping schedules were reduced and sailings delayed, skewing sales to late in the quarter. The company had a closing cash balance of $512.6 million.

Lynas said that progress at its Kalgoorlie project is continuing, which includes placing orders for process equipment.

Addressing the outlook for the rare earth market, Lynas CEO Amanda Lacaze wrote:

While we cannot yet make a full assessment of the pandemic’s impact on global demand, the Rare Earth market appears to have been less affected by the crisis compared to some markets. Demand for electric vehicles has accelerated in Europe and Asia, which has more than compensated for the overall decrease in the automotive market.

Developing strategically reliable Rare Earth supply chains remains important to governments and end users. As the world’s second larger producer of separated Rare Earths, and the only significant producer outside of China, Lynas is in an ideal position to support supply chain diversity.

Lynas Rare Earths share price and company snapshot

Lynas is a leading rare earths producer with a portfolio of aligned assets to explore, develop, mine and process rare earth minerals. Assets include its Mt Weld mine and Mt Weld Concentration Plant in Western Australia, and a manufacturing facility in Malaysia. The company’s Mt Weld resource is among the highest-grade rare earths mines in the world. Lynas is part of the S&P/ASX 200 Index (ASX: XJO).

With today’s gains taken aboard, the Lynas share price is up nearly 28% so far in 2021. Over the past full year, Lynas shares have gained 133%.

More reading

• Why Lynas, Mesoblast, ResMed, & Service Stream shares are pushing higher
• ASX 200 up 0.35%: Afterpay & Appen push higher, big four banks rising
• ASX 200 Weekly Wrap: Change in America spurs ASX 200 higher
• These were the best performing ASX 200 shares last week
• ASX 200 drops 0.3%

Motley Fool contributor Bernd Struben 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.

The post Why the Lynas (ASX:LYC) share price is on the rise appeared first on The Motley Fool Australia.

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The Dubber Corp Ltd (ASX: DUB) share price surged 3.07% early this morning before retreating close to its opening price of $1.64, up 0.61%, at the time of writing. 

This share price movement continues the run of good form Dubber investors have enjoyed over the past few months. Dubber is now up more than 70% in value since early October, and up a healthy 321% since the lows we saw in March last year.

Dubber is a ‘Software-as-a-Service’ (SaaS) and telephony data company which aims to unlock “the potential of voice data from any call or conversation”.

So what’s going on today for Dubber?

Well, we can probably put today’s share price action down to an update for the quarter ending 31 December 2020 that Dubber released this morning.

Dubber delivers quarterly result

In this release, Dubber announced that quarterly revenue came in at $4.28 million, up 78% from the prior corresponding period. Quarter-on-quarter, this was a 31% increase. That equates to a $28.4 million figure for annualised recurring revenue, up 168% over the previous period. Dubber managed to add more than 300,000 subscribers (including from its recent Speik acquisition), which was up 145%.

Dubber also informed investors that, as a result of its Speik acquisition, the company now has “in excess of” $42 million in cash reserves.

Speaking of Speik, Dubber also gave investors an update into this acquisition (which was completed on 22 December).  Speik was a UK-based provider of mobile call recording and payment solutions. It was only founded in 2019, but is already profitable and growing, according to Dubber.

Here’s some of what Dubber CEO Steve McGovern had to say on the acquisition this morning:

Dubber’s acquisition of Speik is fundamentally accretive on all levels. Speik brings to Dubber a strong footprint in the leading UK-based mobile network provider, world-class technology resources, and a growing base of subscribers….

We believe that Dubber can substantially accelerate growth and adoption in that and other key UK-based relationships and use Speik’s PCI services to drive additional revenues into our service provider partners. As a part of Dubber, the Speik team is able to capitalise on opportunities, without restraint, using cloud technologies as well asexpand product sets across the Dubber partner network.

In other news, Dubber also told investors that its technology has become certified for use “as the first Unified Cloud Call Recording solution” with Microsoft Corporation‘s (NASDAQ: MSFT) workplace collaboration software Teams.

As a result, the company “expects to see significant traction through some of its larger carrier partners and, also via joint initiatives with Microsoft directly”.

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Dubber. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is bouncing back from yesterday’s heavy decline. At the time of writing, the benchmark index is up 0.7% to 6,694.5 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price is up 2.5% to $5.09. This follows the release of the rare earths producer’s quarterly update this morning. According to the release, Lynas delivered second production of 1367 tonnes, which was in line with its guidance. This led to the company posting record quarterly sales revenue of $119.4 million. This was up from $87.3 million in the first quarter.

Mesoblast limited (ASX: MSB)

The Mesoblast share price is up 3.5% to $2.40 following the release of its second quarter update. The biotech company reported revenues from royalties on TEMCELL HS Inj. sales of US$2.1 million. This was up slightly year on year from US$2 million in the second quarter of FY 2020. In addition to this, the company provided a comprehensive update on its activities, which appears to have gone down well with investors.

ResMed Inc (ASX: RMD)

The ResMed share price is up 2% to $27.94. Investors have been buying the medical device company’s shares following the release of its second quarter results. ResMed reported a 9% increase in quarterly revenue to US$800 million and a 17% increase in net profit to US$206.4 million. This was driven by a solid performance across the business.

Service Stream Limited (ASX: SSM)

The Service Stream share price has jumped almost 9% to $1.88. This follows the announcement of a multi-year agreement with telco giant Telstra Corporation Ltd (ASX: TLS). According to the release, under Telstra’s new commercial framework, Service Stream will be a key delivery partner responsible for performing design, construction, and maintenance activities associated with its wireless and fixed-line infrastructure networks. Previous similar work has generated significant revenues for Service Stream.

More reading

• Why the Mesoblast (ASX:MSB) share price is rising today
• The BlueScope (ASX:BSL) share price surges on a profit upgrade today
• Why the Service Stream (ASX:SSM) share price is jumping 7% higher
• ResMed (ASX:RMD) share price on watch after solid Q2 update
• 2 buy-rated ASX dividend shares for February

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

The post Why Lynas, Mesoblast, ResMed, & Service Stream shares are pushing higher appeared first on The Motley Fool Australia.

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