Today's big stories

Carmaker BMW reported a worse-than-expected second quarter
Apple's stock split might impact your investments more than you realize – Read Now
Virgin Atlantic filed for US bankruptcy protection

1/3

Red Alert

What’s Going On Here?

BMW doesn’t want to alarm anyone, but the German automaker reported a weaker-than-expected second quarter on Wednesday – and its first quarterly loss in over ten years.

What Does This Mean?

BMW’s quarterly loss was almost inevitable: showrooms were forced to shut, consumers forced to stay home, and businesses forced to delay big purchases – like car fleets – in an effort to save what money they could. But that loss was still worse than investors had predicted, and came with more bad news: BMW admitted its profit this year would be significantly below last year’s total, and that its “free cash flow” – that is, the amount left over after making the necessary reinvestments into the business – would be zilch. That might explain why its stock fell 5% on Wednesday.

Why Should I Care?

For markets: It’s a carpool.
It’s not just BMW that’s been T-boned by coronavirus: Volkswagen, the world’s biggest carmaker, recently reported a loss of almost $3 billion and cut its dividend, while Mercedes-maker Daimler said it would need to cut 20,000 jobs. Even the excitement surrounding electric vehicles (EVs) might now be waning: EV-maker and stock market newbie Nikola saw its stock fall 20% after its earnings report this week – and backers of investor-favorite Tesla could be getting nervous too.

The bigger picture: Make that a convoy.
Continental – one of the world’s biggest suppliers of auto parts – also revealed a quarterly loss on Wednesday, going to show the knock-on effect of reduced car sales. The German company is expecting 20% less demand for parts this quarter versus a year ago, perhaps because of all the unsold cars sellers need to make their way through first (tweet this). And with that, Continental’s name was added to the ever-growing list of companies choosing not to forecast their future earnings…

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2/3 Premium

Make Like An Apple And…

What’s Going On Here?

When Apple splits its stock on August 28th, it’ll have a dramatic impact on one of America’s oldest market indexes – and potentially on your investments.

Get the full story with Finimize Premium

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3/3

Like A Virgin

What’s Going On Here?

Virgin Atlantic filed for US bankruptcy protection this week, and it was an awkward and disappointing experience for all involved.

What Does This Mean?

American companies that file for bankruptcy usually file for Chapter 11, which allows them to reorganize and make sure any money they owe gets repaid. But Virgin filed for Chapter 15 bankruptcy protection, which is designed for companies with significant non-US assets that are at risk of going under. And in Virgin’s case, that’s a real possibility: it’s seen an almost 90% drop in reservations this year, and is depending on a $1.6 billion rescue deal to keep it from running out of cash by the end of next month. And that’s after it cut 3,000 UK jobs and said goodbye to one of the country’s biggest airports…

Why Should I Care?

The bigger picture: Airlines need a break.
Airlines all over the world increased flight capacity last month as antsy globe-trotters started going on vacation again. But new coronavirus spikes in Asia and Europe have quickly put paid to hopes of a brisk recovery, and boosted the risk that more travel companies will – like Virgin Australia and four regional US carriers before them – go broke. And now that the International Air Transport Association predicts air traffic probably won’t go back to normal until 2024, demand-hungry and cost-heavy airlines are likely to keep burning through cash for the foreseeable future.

For markets: There’s nowhere to go.
French hotel company Accor reported a pandemic-driven loss for the first half of the year this week, and said it’d cut 1,000 jobs to save $240 million annually. And while investors sold its shares on Wednesday, they did buy travel-related stocks whose futures seemed a little more certain: British Airways owner IAG – which sold $3 billion worth of stock last week – saw its share price rise 10%, while low-cost carrier Easyjet – which has actually had to increase capacity to meet demand – saw its stock rise 6%.

Take action: The five sectors to avoid during this recession.

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💬 Quote of the day

“The greater good is achieved by not only telling people what they need to know, but also filling them with a sense of empathy and love.”

– Abigail Disney (an American documentary filmmaker, philanthropist, and social activist)

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🌎 Finimize Community

💰 The rise and fall of bitcoin

Tonight, we’re finding out why cryptocurrency’s suddenly got even more interesting this year. Tune in at 7pm South Africa Time to hear from two digital currency experts – and from Finimize host Nick, of course.

🇿🇦 South Africa: The Impact of COVID-19 on Cryptocurrency – 7pm South Africa Time, August 6th
🇬🇧 UK: The Power of ETFs – 12pm UK Time, August 8th
🇬🇧 UK: Retire with a Smile – 1pm UK Time, August 10th
🇭🇰 Hong Kong: Is Fashion Going Out Of Style? – 9pm Hong Kong Time, August 11th
🇺🇸 USA: Equity & The Racial Wealth Gap – 12pm New York Time, August 12th
🇬🇧 UK: The Pathway to Homeownership – 5.30pm UK Time, August 15th
🇬🇧 UK: Create your Financial Fitness Plan – 2.30pm UK Time, August 26th

📚 What we're reading

Dogs do understand us (Inverse)
Hamilton’s alternate vision (The Intercept)
Sourdough had our backs when we needed it most (The Cut)

Finimize - 💥 BMW crashes, burns

Today's big stories

Red Alert

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Make Like An Apple And…

💪 A card for crypto users

Like A Virgin

What’s Going On Here?

What Does This Mean?

Why Should I Care?

💰 The rise and fall of bitcoin

Older messages

😇 Google says don’t be evil

📱 Microsoft wants to buy TikTok

☠️ Oil is dead

😎 Shopify steals Amazon's business

😨 US investors fear China

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