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Some of the ASX’s biggest gold shares are tumbling lower in today’s trading after news of an imminent COVID-19 vaccine hit the market during United States trading hours. Biopharmaceutical company, Pfizer Inc (NYSE: PFE), announced overnight that its vaccine was 90% effective after undergoing Phase-3 testing. 

Gold bullion and gold mining companies have been on the rise this year after the pandemic struck – affirming the theory that gold is often sought by investors as a safe haven during market volatility. After the vaccine news overnight however, investors appear to have turned bullish, putting gold shares under pressure.

In US trading, the price of gold bullion itself had dropped almost US$100 to US$1,855 per ounce before settling to US$1,872 at the time of writing.

Here are three ASX gold shares that have been hit hard in today’s trading after the vaccine news was released.

3 ASX gold shares falling lower today

Northern Star Resources Ltd (ASX: NST)

Northern Star is a gold production company with a resource base located in the gold regions of Western Australia and Alaska. The Northern Star share price has been enjoying a good year, rising by over 50% prior to today’s decline. In October, the company provided an upbeat first-quarter FY21 update in which it announced an increase in its gold production by 40%.

At the time of writing, the Northern Star share price has declined by 11.55%  to $14.86, giving the company a market capitalisation of $12.3 billion.

Saracen Mineral Holdings Limited (ASX: SAR)

Saracen is a gold mining company having two operations in Western Australia – the Carosue Dam operation and the Thunderbox operation. The company has done particularly well during the pandemic with the Saracen share price rising by over 90% year to date (YTD) prior to today’s decline. The company announced a solid September quarter and was on track to achieve its key FY21 guidance targets for production. 

For its FY21 guidance, Saracen released a strong guidance of 600–640koz at an all in sustaining cost (AISC) of $1300–$1400 per ounce, based on prevailing gold prices at the time.

So far in today’s trade, the Saracen share price has fallen by 11.32% to $5.56, giving the company a market cap of $6.9 billion.

Evolution Mining Ltd (ASX: EVN)

Evolution is an ASX gold share that owns five gold and silver mines across Queensland and Western Australia.

Its share price has also gone through the roof this year, gaining around 70% YTD. According to its latest performance update released in October, Evolution Mining’s gold production came in at 170,021 ounces, a decrease of 22% on the prior quarter’s production. The company did not provide any FY21 guidance at the time.

At the time of writing, the Evolution share price has declined by 10.23%  to $5.79, giving the company a market cap of $10.7 billion.

More reading

• Why Coles, Incitec Pivot, Kogan, & Northern Star shares are crashing lower
• The 5 best-performing ASX 200 shares so far this year
• 5 things to watch on the ASX 200 on Tuesday
• Here’s why ASX gold shares are surging today
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Last week, the Macquarie Group Ltd (ASX: MQG) posted its weakest first-half profits in more than six years as the financial services and investment bank navigates the profound impacts of COVID-19.

Macquarie reported its net profit fell 32% to $985 million in the first half of FY21, weighed down by the notable $477 million credit and other impairment charges due to the impact of the pandemic. This is marginally better than the 35% decline the company had forecast in September. 

Despite this, the Macquarie share price shrugged off weak earnings to push higher.

Macquarie share price rally

The S&P/ASX 200 Index (ASX: XJO) and All Ordinaries Index (ASX: XAO) have hit 9-month highs following record low interest rates of 0.10% and the results of the US election. The bullish sentiment from the general market could continue to fuel a rally for equities, more broadly speaking. 

The Macquarie share price rallied almost 2% on the day of its interim results announcement. Since then, its share price has continued to climb and is currently trading for $142 per share, up 4% today alone. This puts it within around 6% of its previous record-all time high of $152. 

Broker updates 

Here’s what big brokers are thinking in light of the results and Macquarie’s share price rally. 

Credit Suisse raised its Macquarie share price target from $107.50 to $128.00 and retains a neutral rating. The investment bank is concerned about the worsening outlook as pandemic impacts continue to be felt in key markets such as Europe. 

Morgan Stanley lowered its Macquarie share price target from $152.00 to $148.00 and retains an overweight rating. It anticipates that the first half results may have set the low point of the company’s current earnings downturn. However, it expects the recovery to be slow as the pandemic continues to drag on key markets and segments. 

UBS raised its Macquarie share price target from $125.00 to $135.00 and retains a neutral rating. It addressed both the positives and negatives in the half-year results including strong loan growth rates offset by lower margins, cost pressures and performance fees. The investment bank remains cautious but could see some upside to Macquarie’s operating metrics. 

More reading

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• ASX 200 Weekly Wrap: US election special
• ASX 200 rises again on Friday
• Macquarie (ASX:MQG) share price under pressure after 32% profit drop

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Incitec Pivot Ltd (ASX: IPL) share price has slipped 4.40% today, following the release of its full year earnings for FY20 this morning. The Incitec Pivot share price is trading at $2.06 at the time of writing, despite some positive news in the financial results. 

Incitec Pivot manufactures and distributes industrial explosives, chemicals and fertilisers to the agriculture and mining industries.

What were the results?

The company reported revenue of $3.942 billion for FY20, up around 1% higher than the prior year. Revenue was $3.918 billion in FY19. 

Incitec Pivot recorded an earnings before interest, tax, depreciation and amortisation (EBITDA) of $375 million for FY20, up 23% on the prior year. This result excludes individually material items (IMI). These were worth an additional $88 million separately. The company attributed 94% of EBITDA to the explosives business, with 6% attributable to the fertiliser business.

Operating cash flow is up 31% on the previous year at $545 million. Net profit after tax is $188 million, an increase of 23% on previous year. Debt has been reduced, and the FY20 ratio (net debt/EBITDA) is reported to be 1.4x, a improvement from the FY19 result of 2.8x.

Incitec Pivot described its financial results as “resilient”, underpinned by technology and manufacturing performance. 

The company advised its brand, Dyno Nobel, was delivering explosive products extensively. In addition it had a competitive advantage with “the best premium technology” in the market today.

Incitec also reported that the technology was ideally suited for growth markets/sectors. Furthermore, company assets were strategically located close to quality customers.

Financial framework

Incitec Pivot has listed three key areas of focus within its ‘financial framework’. These include focus on balance sheet strength, free cash flow generation and targeting higher returns.

A focus on the balance sheet strength saw a reduction and maintenance of lower net debt through improved free cash flow. It also noted a commitment to maintaining an investment grade credit profile (S&P: FY19 BBB Stable, FY20 BBB Stable). It also noted that it was looking to simplify some hedging structures by 2022 for risk management purposes.

On the free cash flow side of things, manufacturing excellence was a pursuit. This was to drive plant reliability and capital spend efficiency.

A target here is higher returns. Capital light projects and those that returned cash faster drew a bias. The company stated that the technology progress it had made in Fy20 had positioned its business well for the future.

Quality customers and markets

The explosives business has diversified category exposure. Incitec said the company had exposure to some of the best mining markets in the world. Base and precious metals, quarry and construction and coal are on the list.

Incitec Pivot clients are some of the biggest names in the mining industry. These include BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).

Future focus

Incitec Pivot said it was strongly focussed on the future, along with a commitment to safety through Zero Harm goals and projects. 

The company flagged potential significant upside in earnings over the next 3-5 years. This was outlined through a 5-step process.

1. Resilient end markets: Resilient demand for product, despite COVID-19 interruptions
2. Response plan: $60 million of EBIT uplift per annum expected by Fy22 as a result of cost cutting initiatives
3. Explosives growth: Targeting technology-driven earnings growth of 10% by FY22
4. Manufacturing excellence: The company has identified opportunities valued at $40 million to $50 million per annum that could potentially be achieved by FY22
5. Fertiliser recovery: Noting a large distribution footprint and flagging a possible commodity price recovery, the company has recorded a 14% growth in domestic fertiliser sales volume. Additionally, it had flagged positive outlooks for future years.

Incitec Pivot share price

The Incitec Pivot share price has ranged between $1.84 and $2.23 for most of 2020, and has a long way to go to recover to pre-COVID levels. Toward the end of 2019, the Incitec Pivot share price reached heights of $3.68.

More reading

• Why Coles, Incitec Pivot, Kogan, & Northern Star shares are crashing lower
• ASX 200 hits 8-month high. Here’s why we could go higher from here
• ASX 200 jumps 1.75% on Monday
• Why Alcidion, Avita, BHP, & REA Group shares are storming higher
• ASX 200 jumps 1.7%: REA Group surges to record high, bank shares push higher

Motley Fool contributor Glenn Leese has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is storming higher yet again. At the time of writing, the benchmark index is up an impressive 1.6% to 6,397 points.

Here’s what is happening on the market today:

Pfizer COVID-19 vaccine send market hurtling higher.

News that Pfizer has had positive early results from its COVID-19 vaccine trial has given the share market a huge boost on Tuesday. According to its announcement, the vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis.

Travel shares shoot higher.

The COVID-19 vaccine news has gone down incredibly well in the travel sector on Tuesday. The likes of Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), and Sydney Airport Holdings Pty Ltd (ASX: SYD) have all made double-digit gains today. With an effective vaccine potentially ready to be rolled out before the end of the year, the travel sector could make a much quicker than expected to recovery.

Bank shares jump.

The vaccine news has also gone down well with bank investors, who may believe a swifter recovery from the pandemic could limit the damage done to the economy. All the big four banks are trading notably higher today. The best performer in the big four has been the National Australia Bank Ltd (ASX: NAB) share price with a 7% gain.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Tuesday has been the Unibail-Rodamco-Westfield CDI (ASX: URW) share price with a 23% gain. The shopping centre operator has been impacted greatly by the pandemic, so a vaccine would certainly be welcome news. The worst performer has been the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price with a 12% decline. Investors have been selling COVID-winners today and rotating into underperformers like travel shares and Unibail-Rodamco-Westfield.

More reading

• ASX stock of the day: Nine (ASX:NEC) share price surges on sporting venture
• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• Flight Centre (ASX:FLT) and Webjet (ASX:WEB) shares surge higher on vaccine news
• Markets volatile on US presidential election results
• The 5 best-performing ASX 200 shares so far this year

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Nine Entertainment Co Holdings Ltd (ASX: NEC) share price is on form today. Nine shares hit a new 52-week high of $2.42 a share in early trade, before pulling back slightly to $2.38 per share at the time of writing, up 1.50%. The S&P/ASX 200 Index (ASX: XJO) is also up 1.50% today.

The Nine share price has risen nearly 22% over the past month, and 10% over the past week alone. It’s been an interesting year for this diversified media company. Nine shares are up nearly 33% year to date, and up close to 200% since the lows we saw back in March.

Who is Nine?

We would probably all be familiar with Nine’s flagship asset – the Channel 9 television network. But these days, the company is a lot more diversified than just a television network. It owns the 9Now on-demand video platform, a stable of radio stations, including the popular 2GB channel in Sydney, and a stake in property classified company Domain Holdings Australia Ltd (ASX: DHG).

And as of 2018, it also owns the old Fairfax newspapers, including The Sydney Morning Herald, The Age, and the Australian Financial Review. But perhaps the jewel in Nine’s crown is the streaming service Stan.

Yesterday, we reported that Stan had just signed a $100 million deal with Rugby Australia (Rugby Union) for 3 years. The deal will allow Stan (and Nine) the rights for broadcasting both Super Rugby matches as well as the national Wallabies Test matches. The rights were previously held by Foxtel for more than 2 decades.

Alongside this announcement was an interesting view into the company’s plans for the Stan platform, with the launch of ‘Stan Sport’. Nine told investors in an ASX release yesterday that Stan Sport will be a “live and on-demand premium sports package to be offered as a bundle to Stan’s streaming customers from 2021.”

A new sports platform

What it said next was even more indicative:

The launch of Stan Sports will enable Nine to adopt a total television approach to sports as it offers extensive live and on-demand coverage, available to subscribers to Stan Sports, as well as some select premium events on Nine’s FTA television channels. Further to Rugby Union, Nine is progressing opportunities to invest in additional exclusive sports rights, to be distributed on either a pay or cross-platform basis, focusing on driving its long term subscriber growth and profitability objectives

And we seem to know more about these “additional exclusive sports rights” today. The Australian Financial Review (AFR) is reporting that Stan Sports has its eyes set on another lucrative sporting deal. The AFR alleges that Nine/Stan is “expected to lock in broadcast rights for the French Open and Wimbledon tennis tournaments as part of the media company’s new sports strategy.”

The French Open and Wimbledon are 2 of the 4 annual tennis ‘grand slam’ tournaments. The other 2 are the US Open and our own Australian Open.

The AFR goes on to say that “sources with an understanding of Stan Sport’s plans said Nine and Stan were looking to become the home of grand slam tennis.”

According to the AFR, Nine already owns the rights to the Australian Open as well, having acquired them in 2018 from Seven West Media Ltd (ASX: SWM). However, the rights to the US Open reportedly remain under the control of Walt Disney Co (NYSE: DIS)’s  ESPN network for now.

Why is this significant?

Until now, Nine’s Stan platform did not offer any sporting content, instead mirroring its US rival Netflix Inc (NASDAQ: NFLX) in providing mostly television shows and movies, as well as some Australian content. Thus, this week’s announcements mark something of a shift in strategy.

Nine will no doubt be hoping this pays off (and judging by the Nine share price today, investors are betting it will). Stan has been a top performer for the company in recent years. The platform was one of the biggest contributors to the company’s FY2020 earnings report.

Back in August, Nine told the markets that Stan managed to grow revenues by 54% year on year to $242.1 million, up from $157.1 million in FY2019. In the same report, the company reported that the combined contribution from Stan and 9Now, as well as the digital components of Domain and Publishing, grew by 40%. They now make up roughly 48% of the company’s total earnings (EBITDA).

More reading

• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• Markets volatile on US presidential election results
• The 5 best-performing ASX 200 shares so far this year
• ASX 200 hits 8-month high. Here’s why we could go higher from here
• ASX 200 to surge higher after Pfizer COVID-19 vaccine success

Sebastian Bowen owns shares of Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney and short January 2021 $135 calls on Walt Disney. The Motley Fool Australia has recommended Netflix and Walt Disney. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Global Health Limited (ASX: GLH) share price is on the rise today after the company released a positive announcement regarding a significant contract win. In early morning trade, shares in the digital health company were down 6.5% to 35.5 cents before the Global Health share price rallied to its current level of 40 cents at the time of writing. In comparison, the All Ordinaries Index (ASX: XAO) is up 1.16% to 6,586.30 points.

What’s moving the Global Health share price?

The Global Health share price is on the move today after the company reported it has signed an important contract with Butterfly Residential Care. The new deal will see both companies integrate a client management system that focuses on dealing with mental health issues.

Butterfly Foundation is the national organisation for people living with eating disorders and body image issues. The organisation’s mission is to change lives by providing evidence-based support services, as well as delivering prevention and early intervention programs.

Backed by the federal government, Butterfly established a subsidiary called Wandi Nerida which is operated by Butterfly Residential Care. Located on Queensland’s Sunshine Coast, Wandi Nerida is Australia’s first, community-based residential facility for eating disorders.

The state-of-the-art, purpose-built facility will house 13 beds and provide a phased treatment structure to address mental illness. Providing the company is able to secure enough funds, the clinic is expected to open in mid-2021.

The integrated client management contract is worth in excess of $122,000 to Global Health for the initial 12 months. The agreement will feature a portfolio of Global Health products such as its MasterCare services, ReferralNet program, and HotHealth Virtual Care platform.

What did management say?

Wandi Nerida Executive Director, Ms Jodie Ashworth, spoke about the new partnership. She said:

Butterfly Foundation has partnered with Global Health to provide an EMR and PAS solution for Wandi Nerida, Australia’s first residential eating disorder facility. Global Health maintained a high focus on customer service and adaptability throughout the selection process. Their experience with ICT solutions for mental health services made them a clear choice for developing innovative solutions for leading edge health providers.

Adding to Ms Ashworth’s comments, Global Health Managing Director, Mr Matthew Cherian said:

Our team acutely understand what is happening in the mental health space in Australia, having developed the IT services to assist and recognise the importance of this initiative. We are strongly committed to supporting the Wandi Nerida facility to become the benchmark and ultimately viewed as the best practice model in dealing with the specific needs of people living with an eating disorder.

More reading

• Global Health (ASX:GLH) rockets 20% higher on business update
• Global Health (ASX:GLH) share price catches a rocket, up 74%

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 very positive day of trade for the S&P/ASX 200 Index (ASX: XJO) on Tuesday. In late morning trade, positive vaccine news has helped drive the benchmark index 1.35% higher to 6,377.9 points.

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

Coles Group Ltd (ASX: COL)

The Coles share price is down almost 5% to $17.81. Investors have been selling the supermarket giant’s shares today amid news that there could be an effective COVID-19 vaccine released before the end of the year. While this is good news for the global economy, life getting back to normal would likely lead to the softening of supermarket sales.

Incitec Pivot Ltd (ASX: IPL)

The Incitec Pivot share price has fallen 4% to $2.07 following the release of its full year results. In FY 2020, the agricultural chemicals company posted a 19% decline in net profit after tax to $123.4 million. However, this was driven by individually material items (IMIs) of $65 million. These relate to the write down of obsolete technology and the implementation costs for its Response Plan. Excluding these IMIs, Incitec Pivot’s profit would have been up 23% year on year.

Kogan.com Ltd (ASX: KGN)

The Kogan share price has crashed 10% lower to $21.48. Investors have been rotating out of COVID-winners and into shares which have underperformed during the pandemic. This has led to significant weakness in the tech sector and particularly with ecommerce companies.  

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price has sunk 12% lower to $14.83. This follows a sharp pullback in the gold price overnight due to the COVID-19 vaccine news. It isn’t just Northern Star that is under pressure today. The S&P/ASX All Ordinaries Gold index is down a massive 8.5% at the time of writing. Safe haven assets have suddenly lost their allure with investors as risk appetite increases.

More reading

• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• The 5 best-performing ASX 200 shares so far this year
• 5 things to watch on the ASX 200 on Tuesday
• Here’s why ASX gold shares are surging today
• Why big brokers are bullish about the Woolworths (ASX: WOW) share price 

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 Kogan.com ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool Australia has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 is extremely difficult to predict when the next stock market crash will occur. However, history suggests that it is only a matter of time before investor sentiment declines and equity markets come under pressure.

Of course, stock market declines can provide buying opportunities. By taking a long-term view and purchasing a diverse range of companies with wide economic moats, it may be possible to capitalise on a likely recovery.

Taking a long-term view during a stock market crash

While a stock market crash is very likely to take place at some point in future, it is also equally likely to ultimately give way to a bull market. After all, indexes such as the FTSE 100 Index (FTSE: UKX) and S&P 500 Index (INDEXSP: .INX) have always experienced bull markets following their various bear markets.

As such, it may be beneficial for an investor to take a long-term view of a market decline. In other words, falling share prices are very unlikely to last in perpetuity. Therefore, there could be buying opportunities on offer that deliver impressive returns in the long run.

Clearly, looking beyond the short term is difficult during a stock market crash. Many investors panic. This could lead them to sell holdings and, in doing so, influence their peers to do likewise. However, by ignoring the views of other investors and instead focusing on the long-term recovery potential for stocks, an investor may be able to more successfully navigate a market decline.

Buying companies with wide economic moats

Of course, some companies may not recover from a stock market crash. For example, they may have weak balance sheets that cause financial difficulties in a period of more challenging economic performance. Similarly, companies that lack a competitive advantage may struggle to deliver impressive profit growth compared to their sector peers.

Therefore, buying companies with wide economic moats could be a shrewd move. They may feel the negative impacts of a period of economic weakness to a lesser extent than their peers. This may be due to lower costs, brand loyalty or a unique product, for example. Those same attributes may also lead to stronger financial performance in the long run that translates into a relatively sound share price outlook.

Diversifying in a market downturn

Buying a wide range of companies in a stock market crash could help to reduce overall risks. After all, it is unclear which sectors and regions will recover at the fastest pace.

By having a broad spread of companies within a portfolio, an investor can reduce their reliance on a small number of holdings for their returns. They may also be able to access a broader range of growth opportunities than would be possible in a concentrated portfolio. This may improve their growth prospects as the stock market recovers.

More reading

• Why the Redbubble (ASX:RBL) share price has crashed 20% lower today
• Oyster supplier East 33 (ASX:E33) sets out to make a splash on ASX debut
• The OFX (ASX:OFX) share price slumps with ASX tech stocks after posting its results
• Why the LiveTiles (ASX:LVT) share price is jumping 6% higher today
• AUB Group (ASX:AUB) share price higher after upgrade for FY21

Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 market may be flying higher on Tuesday but the same cannot be said for the Redbubble Ltd (ASX: RBL) share price.

In morning trade the ecommerce company’s shares are down a massive 20% to $3.95.

Why is the Redbubble share price crashing lower?

On Tuesday investors have been selling the shares of companies that have been COVID-winners and switching into COVID-losers following the announcement of a potentially effective COVID-19 vaccine by Pfizer.

Overnight Pfizer announced the first set of results from its phase 3 COVID-19 vaccine trial, which provided the first evidence of its vaccine’s ability to prevent COVID-19 infections.

According to the release, the vaccine candidate was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis.

This is significantly better than expected and could mean a return to normality sooner than hoped.

“Today is a great day for science and humanity,” said Dr. Albert Bourla, Pfizer Chairman and CEO. I’m sure most readers would agree with this statement.

What else is happening?

It isn’t just Redbubble that is under pressure. Fellow ecommerce companies Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW) have also fallen very heavily during morning trade.

At the time of writing, the Kogan share price is down 10% and the Temple & Webster share price is down 20%.

Other COVID-winners such as Afterpay Limited (ASX: APT), Ansell Limited (ASX: ANN), Domino’s Pizza Enterprises Ltd (ASX: DMP) and NEXTDC Ltd (ASX: NXT) are also tumbling notably lower on Tuesday.

COVID-losers rebound.

Money is piling into a large number of companies that have struggled through the pandemic, sending their shares hurtling higher today.

For example, COVID-losers such as Flight Centre Travel Group Ltd (ASX: FLT), Qantas Airways Limited (ASX: QAN), Scentre Group (ASX: SCG), and Sydney Airport Holdings Pty Ltd (ASX: SYD) have also recorded double digit gains today at the expense of Redbubble and co.

More reading

• The 5 best-performing ASX 200 shares so far this year
• 2 ASX shares that are growing profit very fast
• I plan to invest heavily in ASX shares next week
• 3 ASX shares you’ll regret not buying during this correction
• Why Redbubble, Kogan, Marley Spoon and 1 other ASX share are surging

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited, Flight Centre Travel Group Limited, Kogan.com ltd, and Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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East 33 Limited (ASX: E33) is an aquaculture company specialising in oyster production and supply. The company is aiming to get listed on the ASX (indicative date 3 December 2020) and opened its IPO on 23 October. It is setting out to raise $32 million through the issue of 160 million new shares at 20 cents per share.

A closer look at East 33

East 33 was formed to acquire and operate a portfolio of long-existing oyster farms and distributors, with the goal of creating Australia’s largest vertically integrated group of Sydney rock oyster producers, suppliers and exporters. According to East 33’s prospectus, it will control approximately 9% of Sydney rock oyster production and 25% of industry distribution.

There are two stages to East 33’s acquisition strategy. The first stage was completed in December 2019, with 4 assets acquired. The second stage is the acquisition of another 6 assets, which will be carried out as a condition to the company listing on the ASX.

A key feature of its acquisition model is the continued participation of the oysterfarm operators in the new company. Many of these operators are families that have been involved in the industry for generations.

It also aims to create an ‘iconic’ Australian export by taking the Sydney rock oyster to the world. In a press release announcing the IPO, East 33’s co-founder and executive chair James Garton said:

We are proud to be part of the transformation of the Sydney Rock Oyster industry. This unique oyster has been enjoyed in Australia for more than 150 years and we look forward to deploying the skills of our farmers to showcase it to the world. The Sydney Rock Oyster should be our native version of French Champagne or Beluga Caviar.

East 33’s financial performance

Let’s look at East 33’s profit as of June 2020: 

	FY18 Audited ($m)	Change in %	FY19 Audited ($m)	Change in %	FY20 Audited ($m)
Gross revenue	18.96	34.39%	25.48	5.18%	26.80
Cost of Sales	-10.40	34.52%	-13.99	-8.90%	-12.84
Gross Profit	8.56	34.23%	11.49	21.49%	13.96

Table: author’s own. Data Source: East 33 Prospectus

East 33’s cost of sales dropped 8.9% in 2020. Management attributes this cost reduction to the aggregation of oyster farms, which has reduced production and transportation costs.

At the same time, East 33 is looking to increase its sales. Amongst all sales channels, distributing to local restaurants and international exports (to Japan, China and Singapore) took up 15% of the company’s profit in 2020. The two segments also had the highest mark up price of 376% and 3.25%, respectively, compared to other parts of the value chain, according to the company’s prospectus.

East 33’s financing strategy

In conjunction with the equity raised, East 33 will receive debt financing to a value of $10 million. The company has advised the proceeds will be used for the following:

• $27.1 million to fund the cash component of the consideration for acquisitions
• $4.4 million to fund its growth capital expenditure
• $1.6 million to fund its marketing and branding activities
• $5.7 million to fund its administrative costs and working capital
• $3.2 million to pay costs and expenses arising in connection with the offer and the other related transaction costs

East 33 will use more than 60% of the funds raised to fund acquisitions of oyster farms and distributors.

In addition to the funding strategy, East 33 will appoint two directors who have international brand experience gained through luxury goods group LVMH and China’s largest privately-owned integrated aquatic port. The company expects these new hires to help increase East 33’s capability to penetrate the high-end consumer market in Asia. 

East 33’s IPO is due to close on 16 November, in view of a 3 December listing under the ticker E33.

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Motley Fool contributor MWUaus has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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