Today's big stories

Software company Palantir is planning to make its shares available to the public
Our analysts dig into why gold miners’ shares may be a better bet than the metal itself – Read Now
Some UK retailers reported unlikely coronavirus-induced sales boosts

1/3

IPO Of Sauron

What’s Going On Here?

Big data analytics firm Palantir has set out on a long-awaited mission to make its shares available to the good people of Middle Earth – leaving investors to decide whether buying in will have them feasting in Rivendell or trekking all the way to Mount Doom.

What Does This Mean?

Palantir – one of Silicon Valley’s oldest startups – filed preliminary documents for a share sale this week. The company has been tied up in a few controversies over the years as it analyzes complex data for customers including the Dark Lord Sauron US military and intelligence services. While this work helped it generate revenue of $750 million last year, the company’s still struggled to turn a profit – as is the case with many tech IPOs.

Nevertheless, Palantir – which has reportedly been valued at $20 billion privately – might receive a warm reception from public investors. With the US’s tech-heavy Nasdaq Composite index also hitting an all-time high this week, investors may welcome a new addition to the fray.

Why Should I Care?

For markets: Two Towers.
Palantir is reportedly considering a “direct listing” instead of a traditional initial public offering (IPO). Going direct’s cheaper because it saves the fees paid to investment banks for organizing an IPO – and it’ll allow employees to sell their shares whenever they want after listing. On the other hand, if investor demand is weak there’ll be no investment banks committed to buying the shares – and without that backstop, initial trading could be very volatile.

The bigger picture: Return of the King.
Despite some tech companies benefiting from the coronavirus pandemic, tech stocks have been rising even as analysts cut their profit projections – leading some to conclude that prices have departed from reality (tweet this). But while investors may struggle to justify current share prices using traditional valuation methods, some might be willing to overlook valuation if they believe tech companies will convert their leading positions into winner-takes-all dominance in the coming years.

Be prepared: Three ways you can tell if stocks are overpriced.

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2/3 Premium

It’s A Gold Mine

What’s Going On Here?

The price of gold may be on track to hit its highest in history – but the share prices of gold miners are shining even brighter in 2020. Our analysts dig into what might be making them so attractive right now.

Get the full story with Finimize Premium

Look Past The Numbers

Most people think that you need a degree in finance or a Warren Buffett-sized brain to find the next great stock investment. Numbers will only tell you half the story though.

That’s why MyWallSt looks at the entire picture – everything from cash flows to customer reviews – and does all of the heavy lifting to help their users actually understand a company: how they make money, why they’re a good investment, what you can expect in their future.

MyWallSt keeps it simple and straightforward. They’ve got investing education, insights, and advice down pat. Plus, every month they feature one single stock that they reckon is the crème de la crème to invest in right now – complete with all the pros and cons involved.

They’ve got a nifty app that gives you all the good stuff and lets you link a brokerage account so you can do everything in one place. Ah, technology.

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3/3

Kitted Out

What’s Going On Here?

Shoppers loading up on workout gear and bicycles during the coronavirus pandemic helped British retailers JD Sports and Halfords sound surprisingly upbeat on Tuesday.

What Does This Mean?

With gyms closed, you’d perhaps think sportswear would fall out of fashion. But JD Sports revealed that – despite coronavirus disruptions in the last three months – it’s hoping to see sales growth return now its stores have reopened. Even so, it wouldn’t be drawn into making predictions about this year’s earnings as a whole.

Car and bike equipment retailer Halfords, meanwhile, said sales of bicycles last quarter were 57% higher than the same time last year – thanks to cycling remaining one of the few permitted activities during Britain’s lockdown. Although people stormed Halfords’ stores to buy bikes, fewer car journeys contributed to an almost 50% drop in its auto parts revenue.

Why Should I Care?

For markets: Don’t get ahead of yourselves.
Parts of both companies’ updates may have been encouraging to investors but they didn’t exactly buy up either’s shares on Tuesday. Perhaps they were heeding advice from investment bank Citi that stocks globally probably won’t rise much further in the next 12 months. That echoes BlackRock’s strategists saying they favor European stocks over US ones at the moment, with the world’s largest investment manager arguing the Stateside rally can’t go on forever. That mightn’t help UK stocks, though: analysts at Man Group noted leading British stocks haven’t bounced back like others.

Zooming out: The gadget show.
Over in South Korea, electronics giant Samsung also reported a positive second-quarter update. Its profit was 23% higher than a year ago, thanks to rising global internet traffic fueling demand for its microchips. After all, when not riding our bikes from Halfords, we’ve all been stuck indoors, glued to our connected devices. It wasn’t all infrastructure sales, mind you: the company saw gadget sales on the rise too – a potentially encouraging sign for future discretionary spending globally.

Recommended: How to profit from consumer spending.

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💬 Quote of the day

“The art of being wise is the art of knowing what to overlook.”

– William James (an American philosopher and psychologist)

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🤔 Q&A · RE: Revolted

“How does Facebook have such a large impact on the US stock market?”

– Michelle in Malaysia

“The main US stock market index – the S&P 500 – is ‘market-cap-weighted’. In other words, the biggest companies have the biggest effect on its level, as opposed to all companies having an equal ability to drive the index higher or lower. Facebook is worth $685 billion, for example, so if its shares rose 10%, it’d pull up the value of the S&P 500 by more than, say, if Coca-Cola rose by the same amount. Coke’s obviously a massive company too, but it’s ‘only’ worth $195 billion so the incremental $20 billion of value adds less to the index than Facebook’s incremental $69 billion.”

🙋 Ask a question

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📚 What we're reading

Who’s going to Mars this month? (Futurism)
Build your own treehouse for the summer (Popular Mechanics)
Tech and surveillance capitalism (Electric Literature)

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Finimize - 🤫 Palantir's secrets revealed

Today's big stories

IPO Of Sauron

What’s Going On Here?

What Does This Mean?

Why Should I Care?

It’s A Gold Mine

Look Past The Numbers

Kitted Out

What’s Going On Here?

What Does This Mean?

Why Should I Care?

🎟 Events coming up

Older messages

🤨 Buffett bets on fossil fuels

👑 Hail Tesla, king of carmakers

😜 US stocks become US stonks

😫 Uber’s getting desperate

🎟 Newsletterest, Your Virtual Event Invite

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