The World’s Biggest Drug Deal

Tale of the Tape

Good evening, folks. Happy hump day! 🐪

The S&P 500 rallied for the third straight day while the Nasdaq Composite was the only major index to close in negative territory. 

Energy flew 4%. Communications carried 1.34% while $XLC closed only $0.08 away from its all-time high. ⚡

Ethereum ticked an all-time high— the crypto crossed 1,650 for the first time ever. Bitcoin bounced 4%. Will $BTC.X break back to 40K? Place your bets… 

Google gapped up and gained 7.4% after last night’s earnings. Microsoft marched 1.46% and closed at a new all-time high. 

Virgin Galactic has been volatile af. 🌊 $SPCE soared 17% today, but in the last 6 sessions the stock has bounced between $40 and $60. 

The MemeStocks were today’s most active streams on Stocktwits. $AMC advanced 14.71% and $GME gained 2.68%.

eBay and PayPal both popped after posting earnings after the close. See the Earnings Round-Up below. 

Here are the closing prints: 

S&P 5003,830+0.10%
Russell 20002,159+0.38%
Dow Jones30,723+0.12%

Earnings Round-Up

Spotify reported Q4 2020 results that beat on subscriber and total user targets. 🎶 The report’s EPS and future outlook disappointed, though. 

Here are the numbers:

EPS: ($0.79) vs ($0.69) est.
Revenue: $2.58B, +26% YoY
Monthly Active Users: 345M, +27% YoY
Premium Subscribers: 155M, +24% YoY

Here’s the daily chart:

$SPOT sank 8%. 

Sony smashed earnings expectations and the company announced that it will change its ticker to $SONY, effective April 1, 2021. (Please note, this is not an April Fools joke… 🤣) 

Here are the stats:

EPS: $2.64 vs $0.80 est.
Revenue: $25.82B, +9% YoY

$SNE soared 12% and closed at its highest price since September 22, 2000. 👀

Paypal posted record numbers after the close and expects growth to continue in 2021. 

Here are the numbers:

EPS: $1.08 vs $1.01 est.
Revenue: $6.12B, +23% YoY

$PYPL popped 6.7% after hours. 

EBay topped earnings estimates after the close as revenue grew 28%.

Here are the details:

EPS: $0.86 vs $0.83 est.
Revenue: $2.9B, +28% YoY

$EBAY jumped 10% after hours to an all-time high. 

Digital Turbine blew out earnings, again. Accelerating platform momentum led Q3 revenue growth, up 146% YoY.

Here are the numbers:

EPS: $0.21 vs $0.17 est.
Revenue: $88.6M, +146% YoY

Bill Stone, CEO of Digital Turbine, said:

We once again set all-time quarterly records for revenue, profitability and free cash flow.  Total revenue grew 146% year-over-year, as we saw strong demand for both our Application Media and Content Media service offerings. The amount of time and money spent by consumers within applications continues to rise, as consumers increasingly grow accustomed to consuming more content and spending greater share of their wallets using the applications on their mobile devices.

$APPS ascended 14% after hours to an all-time high.

The World’s Biggest Drug Deal

Today, Jazz Pharmaceuticals announced the beginnings of its GW Pharmaceuticals acquisition— GW’s best known for its production of the first epilepsy drug to utilize marijuana.

GW Pharmaceuticals sold $510M worth of the drug last year, which helped finance other ventures in marijuana medicine. Currently, the company is testing drugs to treat autism, schizophrenia, and other health conditions.

Jazz Pharma CEO Bruce Conzadd described the deal:

We saw an opportunity to add near-term what we think is a blockbuster product in Epidiolex, as well as bring in a pipeline engineered around cannabinoids in neuroscience.

Pot stocks popped on the news. $MSOS, the US Cannabis ETF, closed at an all-time high today. 🙌

Ethereum Futures 

Ethereum broke above $1,600 today and is on its way to $1,700 as we speak. The all time-high precedes the Chicago Mercantile Exchange’s launch of Ethereum futures next week. 

JPMorgan strategists commented on the potential of CME’s futures:

The listing of ethereum futures on a regulated exchange should serve to enhance the crypto market structure by allowing investors to gain exposure to the second most important cryptocurrency as a diversifier to bitcoin, or for simply hedging existing ethereum exposures.   

Yesterday, Ethereum broke out of a ~4-week base. Will the crypto crack 2K next? Place your bets… 

Uh oh, Where’d The Chips Go… 😬

Today, GM announced plans to tighten production at several of its factories this month due to the semiconductor chip shortage that’s tanking global car manufacturing. 

GM will reduce production at 4 of its plants to sustain the company’s factories making best-selling trucks and SUVs.  Volkswagen, Ford, Nissan, and other companies have mentioned similar plans. 

Auto manufacturing requires tons of semiconductors, making the industry a huge purchaser of chips. But with China’s chip shortage still lingering from last year, it’s looking like global car manufacturing will take the hit. 

GM’ll release weekly production updates and more details about the shortage after its Feb. 10 earnings report. Here’s the WSJ with more info. 

Don’t Spoil the Oil

After a long and tenuous policy meeting today, OPEC+ announced that it will be maintaining its current oil output levels. The decision comes as the price of crude is at its highest point since late February, 2020.

In a draft statement, OPEC+ declared that it’s “Optimistic for a year of recovery in 2021.”

Currently, the benchmark price of Brent Crude is at $57.59. Remember when the price of oil was negative… lol. 🛢️👎

Energy stocks were strong as $XLE had its best day since January 5, 2021. 🔋

Earnings This Week

Be sure to know when your stocks report earnings. Here’s the earnings calendar

Links That Don’t Suck

🚏 All Roads Lead to Rome

🏆 Wall Street is Undefeated Since 1792

💰 Coin Metrics’ State of the Network: Issue 88

🤭 An Amazonian Transition

🎶 Talking Heads – Stop Making Sense (1984)

📚 Jason Zweig – Psychology, History & Writing

🍎 The Irritable Steve Jobs and Apple Enterprise?