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2021-06-16

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Wish Stock: Patient Investors Could Soon See $20 Again

2021-06-16

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The e-commerce platform initially went public in December at $20 per share before surging to an all-time high of $32 in February due to a momentum-driven rally. That said, shares have steadily plunged ever since, hitting an all-time low of just $7 in June, but are now recovering swiftly after increased interest from the retail trading sector. Here, the stock is favored due to its high volatility, short interest, and enormous upside potential.</p>\n<p>In this context, I believe that the high short interest has increasingly pushed shares below fair value and that patient investors could soon see $20 or more again as the company is working through logistic challenges and will soon return to economies of scale. In this regard, the e-commerce platform has a unique value proposition and is well-positioned to gain market share in a $6 trillion e-commerce industry.</p>\n<p><b>The Digital Dollar Tree</b></p>\n<p>Wish has been criticized heavily as an e-commerce platform, and I would almost argue that its image of being a third-party 'dropshipping' site for Chinese merchants has kept investors away from the stock so far. However, this may only be partially true. Essentially, Wish has inverted Amazon's(NASDAQ:AMZN)business model through low-priced (low-quality) products and sluggish delivery times that may lead to week-long delivery times. This is because Wish does not handle shipping itself, which is why it can offer these ultra-low prices of offering a hoodie for $2 plus $2 shipping.</p>\n<p>Frankly, Wish is still dependent on Chinese merchants, accounting for most of its product catalogs. This is unsurprising, considering that most goods are produced in China as the production costs are among the lowest in the world. Most of the goods being sold on Amazon or eBay(NASDAQ:EBAY)were also produced in China, although they earn a higher perception due to one-day delivery shipping programs or higher prices.</p>\n<p><img src=\"https://static.tigerbbs.com/2bea733440e86851af57559c6a5fd6bd\" tg-width=\"640\" tg-height=\"363\" referrerpolicy=\"no-referrer\"></p>\n<p>Now, I view Wish as the digital dollar tree, where online shoppers discover items that they want, not need. In the process, customers have more patience for products and are willing to wait longer for them to arrive. Wish is working towards addressing both of these issues (quality and merchant diversification) as its platform is gaining popularity. Here, it has been investing in logistics to offer quicker delivery, demonstrated by a 275% YoY increase in logistics revenue. Since these revenues provide low margins, its overall gross margins have decreased in accordance. However, once it achieves economies of scale in the segment, margin growth should reverse and trail back towards 70%.</p>\n<p>It is also addressing the second issue by continuously growing its international merchant base. Here, U.S. merchants increased by over 400% YoY, and a similar trend is to be seen in other countries. Moreover, it is growing Wish Local, a service connecting local businesses to the platform, accounting for 7% of all Wish orders. Wish local is mostly (or exclusively) available in the United States and thus increasingly mixes with other products on the website.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/09eb88453d075db6b7b8edd21f981b4a\" tg-width=\"640\" tg-height=\"381\"><span>Source: Sensor Tower</span></p>\n<p>I also like Wish's strategy to engage and retain users by utilizing an AI matching system that optimizes platform growth, user experience, and merchant return on investment. The strategy to create an interactive mobile shopping experience appears to be working well: Impressively, Wish gets over500,000reviews per day from users, surpassing even Amazon and other shopping sites in this regard, demonstrating just about how engaging the platform is. Around 80% of first-time shoppersreturnto buy again.</p>\n<p>Wish is, therefore, able to establish itself in the highly competitive E-commerce market that offers a tremendous runway for growth. Currently, around 40% of the E-commerce market share is owned just by Amazon. Compared to Amazon, its TAM may be limited as it concentrates on its lower-income niche, which is how it became popular in the first place. Still, this represents a +$3 trillion market opportunity for Wish to tap into. It is also worth noting that according toreports, Amazon tried to acquire Wish for $10 billion, yet Wish rejected, believing growing the business to $100 billion in annual sales, at which point it would be valued significantly higher.</p>\n<p><b>Negative Sentiment Baked In</b></p>\n<p>Wish's first two quarters have been slightly disappointing. While the company handily beat revenue estimates, the company burned through over $300 million in cash in order to invest in logistics. More importantly, however, is the fact that MAUs have dropped steadily, which the company blames on de-de-emphasizing advertising and customer acquisition as the company worked through logistics challenges it faced earlier in the year.</p>\n<table>\n <tbody>\n  <tr>\n   <td>Year</td>\n   <td>2020</td>\n   <td>2019</td>\n   <td>2018</td>\n  </tr>\n  <tr>\n   <td>Revenue</td>\n   <td>$2.54B</td>\n   <td>$1.9B</td>\n   <td>$1.73B</td>\n  </tr>\n  <tr>\n   <td>Gross Profit</td>\n   <td>$1.59B</td>\n   <td>$1.46B</td>\n   <td>$1.45B</td>\n  </tr>\n  <tr>\n   <td><b>Sales and Marketing</b></td>\n   <td><b>$1.71B (+17%)</b></td>\n   <td><b>$1.46B (-7%)</b></td>\n   <td><b>$1.57B</b></td>\n  </tr>\n  <tr>\n   <td>MAUs</td>\n   <td>107M (+19%)</td>\n   <td><p>90M (+10%)</p></td>\n   <td>82M</td>\n  </tr>\n  <tr>\n   <td><b>Active Buyers</b></td>\n   <td><b>64M (+3%)</b></td>\n   <td><b>62M (-3%)</b></td>\n   <td><b>64M</b></td>\n  </tr>\n </tbody>\n</table>\n<p>*Growth (Year-over-Year)</p>\n<p>The largest bear argument against Wish is its high marketing expenses, which account for 60% of its total revenues and over 100% of its gross profits. This is totally fine unless it grows its active buyers through marketing, which unfortunately has not been the case. This is a red flag and questions the long-term sustainability of Wish's business model. However, the company has been close to being cash flow positive, and it stated it already would be profitable if it weren't for its extensive marketing expense. That said, as long as Wish acquires new MAUs and increases value through logistic services, its marketing expenses pay off in the long run. Moreover, as a percentage of total revenues, Wish's marketing expenses have dropped to 60%, down from 67% in the year prior.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3e18c23728274ee708d896923820b282\" tg-width=\"635\" tg-height=\"278\"><span>Source: Wish IR</span></p>\n<p>In terms of the outlook, this is what the company is essentially stressing. It believes marketing expenses can decrease to 40-45%, leading to EBITDA margins of 25% at the midpoint range. If it achieves these ambitious goals (which is very well possible), its profitability margins would be similar to those of eBay or MercadoLibre(NASDAQ:MELI). In either way, Wish's business model is not perfect, but all these concerns are more than baked in its current valuation, IMO (In My Opinion).</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/54029f94c37f301d26e93a11636280e7\" tg-width=\"635\" tg-height=\"470\"><span>Data byYCharts</span></p>\n<p>Even after the latest +50% rise, shares are still trailing far behind peers such as Poshmark(NASDAQ:POSH), eBay, Amazon, and (Shopify(NYSE:SHOP)). At over $3 billion estimated revenues, Wish is trading at just 1.8x Price to Sales, just half of eBay's current valuation and much lower than Poshmark. Current estimates are calling for over $6 billion in revenues by 2025 and $1 billion in free cash flow, meaning that Wish trades at just 7x free cash flow estimates, or 1 times sales. In early 2021, its P/S ratio stood closer to 5x, so there is potential for a valuation expansion.</p>\n<p><b>What about the Lawsuits?</b></p>\n<p>Perhaps you've seen the news (especially on Yahoo Finance) regarding the class actionlawsuits. These lawsuits are extensively posted to remind investors of recovering incurred losses after its share price dropped in recent months. Such lawsuits are not unusual when stocks drop sharply in a short period of time and are likely of no concern to investors. These lawsuits have also included companies such asCloverHealth(NASDAQ:CLOV), Skillz(NYSE:SKLZ), Array Technologies(NASDAQ:ARRY), etc.</p>\n<p>Short Interest - Still High</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/875b3fdaf74f1ef639b51d77a3aac01f\" tg-width=\"640\" tg-height=\"360\"><span>Source: Fintel</span></p>\n<p>Wish has gained significant attraction from retail investors, as investors were looking for the next big short squeeze. Since most of Wish's shares have still been locked up, its exact short ratio was difficult to estimate. According to Seeking Alpha, the current short ratio stands at just 7%, but the figure is likely higher. Last week, its short interest as a percent of its equity float stood at roughly 48%, according to Bloomberg Terminal data. Other sources such as Fintel pin the current short volume at 20-30%. Now, it's difficult to give an exact estimate, but generally speaking, it's probably somewhere within this range, and many short calls are still to be covered. In the long term, the high-short interest could be an advantage, leading to a quicker acceleration if the stock begins trending upwards.</p>\n<p><b>The Bottom Line</b></p>\n<p>I believe that Wish remains one of the most underappreciated assets within e-commerce, boasting over 100 million monthly users on its platform and connecting thousands of merchants from all over the world. The mobile shopping app continues to be one of the top downloaded shopping apps in the space and has a unique value proposition, which is smarter than it appears at first sight. Moreover, its latestpartnershipwith PrestaShop will give over 300,000 merchants free access to a direct integration that connects them directly to Wish's merchant dashboard, further driving growth. While there are risks to Wish's imperfect business model, such as lagging profitability, patient investors could be rewarded mightily.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Wish Stock: Patient Investors Could Soon See $20 Again</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWish Stock: Patient Investors Could Soon See $20 Again\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-16 13:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4434950-wish-stock-patient-investors-could-soon-see-20-again><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nWish (ContextLogic) remains one of the most underappreciated assets within e-commerce trading at just 1.3x forward EV to Sales.\nWish's latest partnership with PrestaShop will further ...</p>\n\n<a href=\"https://seekingalpha.com/article/4434950-wish-stock-patient-investors-could-soon-see-20-again\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4434950-wish-stock-patient-investors-could-soon-see-20-again","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1148768572","content_text":"Summary\n\nWish (ContextLogic) remains one of the most underappreciated assets within e-commerce trading at just 1.3x forward EV to Sales.\nWish's latest partnership with PrestaShop will further accelerate international expansion and growth initiatives.\nWhile accurate data regarding its short interest is difficult to find as most of its float is still locked up, I estimate a short interest between 30-40%.\nI believe bear arguments including high marketing spend and stalling user numbers are already baked in the current share price.\n\nJuSun/iStock via Getty Images\nOverview\nContextLogic (WISH) has been a wild ride for shareholders, as high volatility continues to cause significant price movements in recent weeks. The e-commerce platform initially went public in December at $20 per share before surging to an all-time high of $32 in February due to a momentum-driven rally. That said, shares have steadily plunged ever since, hitting an all-time low of just $7 in June, but are now recovering swiftly after increased interest from the retail trading sector. Here, the stock is favored due to its high volatility, short interest, and enormous upside potential.\nIn this context, I believe that the high short interest has increasingly pushed shares below fair value and that patient investors could soon see $20 or more again as the company is working through logistic challenges and will soon return to economies of scale. In this regard, the e-commerce platform has a unique value proposition and is well-positioned to gain market share in a $6 trillion e-commerce industry.\nThe Digital Dollar Tree\nWish has been criticized heavily as an e-commerce platform, and I would almost argue that its image of being a third-party 'dropshipping' site for Chinese merchants has kept investors away from the stock so far. However, this may only be partially true. Essentially, Wish has inverted Amazon's(NASDAQ:AMZN)business model through low-priced (low-quality) products and sluggish delivery times that may lead to week-long delivery times. This is because Wish does not handle shipping itself, which is why it can offer these ultra-low prices of offering a hoodie for $2 plus $2 shipping.\nFrankly, Wish is still dependent on Chinese merchants, accounting for most of its product catalogs. This is unsurprising, considering that most goods are produced in China as the production costs are among the lowest in the world. Most of the goods being sold on Amazon or eBay(NASDAQ:EBAY)were also produced in China, although they earn a higher perception due to one-day delivery shipping programs or higher prices.\n\nNow, I view Wish as the digital dollar tree, where online shoppers discover items that they want, not need. In the process, customers have more patience for products and are willing to wait longer for them to arrive. Wish is working towards addressing both of these issues (quality and merchant diversification) as its platform is gaining popularity. Here, it has been investing in logistics to offer quicker delivery, demonstrated by a 275% YoY increase in logistics revenue. Since these revenues provide low margins, its overall gross margins have decreased in accordance. However, once it achieves economies of scale in the segment, margin growth should reverse and trail back towards 70%.\nIt is also addressing the second issue by continuously growing its international merchant base. Here, U.S. merchants increased by over 400% YoY, and a similar trend is to be seen in other countries. Moreover, it is growing Wish Local, a service connecting local businesses to the platform, accounting for 7% of all Wish orders. Wish local is mostly (or exclusively) available in the United States and thus increasingly mixes with other products on the website.\nSource: Sensor Tower\nI also like Wish's strategy to engage and retain users by utilizing an AI matching system that optimizes platform growth, user experience, and merchant return on investment. The strategy to create an interactive mobile shopping experience appears to be working well: Impressively, Wish gets over500,000reviews per day from users, surpassing even Amazon and other shopping sites in this regard, demonstrating just about how engaging the platform is. Around 80% of first-time shoppersreturnto buy again.\nWish is, therefore, able to establish itself in the highly competitive E-commerce market that offers a tremendous runway for growth. Currently, around 40% of the E-commerce market share is owned just by Amazon. Compared to Amazon, its TAM may be limited as it concentrates on its lower-income niche, which is how it became popular in the first place. Still, this represents a +$3 trillion market opportunity for Wish to tap into. It is also worth noting that according toreports, Amazon tried to acquire Wish for $10 billion, yet Wish rejected, believing growing the business to $100 billion in annual sales, at which point it would be valued significantly higher.\nNegative Sentiment Baked In\nWish's first two quarters have been slightly disappointing. While the company handily beat revenue estimates, the company burned through over $300 million in cash in order to invest in logistics. More importantly, however, is the fact that MAUs have dropped steadily, which the company blames on de-de-emphasizing advertising and customer acquisition as the company worked through logistics challenges it faced earlier in the year.\n\n\n\nYear\n2020\n2019\n2018\n\n\nRevenue\n$2.54B\n$1.9B\n$1.73B\n\n\nGross Profit\n$1.59B\n$1.46B\n$1.45B\n\n\nSales and Marketing\n$1.71B (+17%)\n$1.46B (-7%)\n$1.57B\n\n\nMAUs\n107M (+19%)\n90M (+10%)\n82M\n\n\nActive Buyers\n64M (+3%)\n62M (-3%)\n64M\n\n\n\n*Growth (Year-over-Year)\nThe largest bear argument against Wish is its high marketing expenses, which account for 60% of its total revenues and over 100% of its gross profits. This is totally fine unless it grows its active buyers through marketing, which unfortunately has not been the case. This is a red flag and questions the long-term sustainability of Wish's business model. However, the company has been close to being cash flow positive, and it stated it already would be profitable if it weren't for its extensive marketing expense. That said, as long as Wish acquires new MAUs and increases value through logistic services, its marketing expenses pay off in the long run. Moreover, as a percentage of total revenues, Wish's marketing expenses have dropped to 60%, down from 67% in the year prior.\nSource: Wish IR\nIn terms of the outlook, this is what the company is essentially stressing. It believes marketing expenses can decrease to 40-45%, leading to EBITDA margins of 25% at the midpoint range. If it achieves these ambitious goals (which is very well possible), its profitability margins would be similar to those of eBay or MercadoLibre(NASDAQ:MELI). In either way, Wish's business model is not perfect, but all these concerns are more than baked in its current valuation, IMO (In My Opinion).\nData byYCharts\nEven after the latest +50% rise, shares are still trailing far behind peers such as Poshmark(NASDAQ:POSH), eBay, Amazon, and (Shopify(NYSE:SHOP)). At over $3 billion estimated revenues, Wish is trading at just 1.8x Price to Sales, just half of eBay's current valuation and much lower than Poshmark. Current estimates are calling for over $6 billion in revenues by 2025 and $1 billion in free cash flow, meaning that Wish trades at just 7x free cash flow estimates, or 1 times sales. In early 2021, its P/S ratio stood closer to 5x, so there is potential for a valuation expansion.\nWhat about the Lawsuits?\nPerhaps you've seen the news (especially on Yahoo Finance) regarding the class actionlawsuits. These lawsuits are extensively posted to remind investors of recovering incurred losses after its share price dropped in recent months. Such lawsuits are not unusual when stocks drop sharply in a short period of time and are likely of no concern to investors. These lawsuits have also included companies such asCloverHealth(NASDAQ:CLOV), Skillz(NYSE:SKLZ), Array Technologies(NASDAQ:ARRY), etc.\nShort Interest - Still High\nSource: Fintel\nWish has gained significant attraction from retail investors, as investors were looking for the next big short squeeze. Since most of Wish's shares have still been locked up, its exact short ratio was difficult to estimate. According to Seeking Alpha, the current short ratio stands at just 7%, but the figure is likely higher. Last week, its short interest as a percent of its equity float stood at roughly 48%, according to Bloomberg Terminal data. Other sources such as Fintel pin the current short volume at 20-30%. Now, it's difficult to give an exact estimate, but generally speaking, it's probably somewhere within this range, and many short calls are still to be covered. In the long term, the high-short interest could be an advantage, leading to a quicker acceleration if the stock begins trending upwards.\nThe Bottom Line\nI believe that Wish remains one of the most underappreciated assets within e-commerce, boasting over 100 million monthly users on its platform and connecting thousands of merchants from all over the world. The mobile shopping app continues to be one of the top downloaded shopping apps in the space and has a unique value proposition, which is smarter than it appears at first sight. Moreover, its latestpartnershipwith PrestaShop will give over 300,000 merchants free access to a direct integration that connects them directly to Wish's merchant dashboard, further driving growth. While there are risks to Wish's imperfect business model, such as lagging profitability, patient investors could be rewarded mightily.","news_type":1},"isVote":1,"tweetType":1,"viewCount":462,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":169158354,"gmtCreate":1623823306278,"gmtModify":1634027526558,"author":{"id":"3569391399214787","authorId":"3569391399214787","name":"tengkianen","avatar":"https://static.tigerbbs.com/9afe68af4a29c83cb96c1939bb5ab192","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3569391399214787","authorIdStr":"3569391399214787"},"themes":[],"htmlText":"nice","listText":"nice","text":"nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/169158354","repostId":"1182329477","repostType":4,"repost":{"id":"1182329477","kind":"news","pubTimestamp":1623821481,"share":"https://www.laohu8.com/m/news/1182329477?lang=&edition=full","pubTime":"2021-06-16 13:31","market":"us","language":"en","title":"Canopy Growth Is a Big Cannabis Company With Big Issues","url":"https://stock-news.laohu8.com/highlight/detail?id=1182329477","media":"InvestorPlace","summary":"CGC stock needs profits and value-added product revenue\nA cursory glance at Canopy Growth’s (NASDAQ:","content":"<p>CGC stock needs profits and value-added product revenue</p>\n<p>A cursory glance at&nbsp;<b>Canopy Growth’s</b>&nbsp;(NASDAQ:<b><u>CGC</u></b>) year-to-date price chart suggests now may be time to pick up inexpensive shares of the stock. After all, just a few months prior shares were double their current $25 price.</p>\n<p>However, that narrative would only be valid if the company were moving in a positive direction. Recent earnings and other news indicate that it is stagnating, and that the company is one to avoid at present.</p>\n<p><b>CGC Stock Earnings</b></p>\n<p>I’m a big proponent of the idea that broad fundamental metrics are among the most valuable indicators of a stock’s buy worthiness. That’s why it might be surprising that I suggest investors avoid it even though Canopy Growth reported a 37% increase in revenues this fiscal year.</p>\n<p>Of course, revenues are only the top line of a financial statement and costs associated with that revenue can tell a drastically different story. There’s a lot that can go wrong that can turn revenues into losses instead of profits.</p>\n<p>And there were a few issues which hurt CGC stock in that respect. First, Canopy did worse than Wall Street anticipated it would. Revenues were slightly lower than anticipated and analysts Bill Kirk of MKM Partners noted that there were&nbsp;real disappointments, including an “adjusted gross margin of 14%, compared to 26% in 3Q and 42% in the year prior.”</p>\n<p>Then there’s another problem which continues to plague the wider cannabis industry. That is the issue of profitability. Investors in the sector have grown weary at the lack of profitability from cannabis companies as Canada nears its three-year anniversary of legalization.</p>\n<p>Canopy Growth CFO Mike Lee stated that the company expects profitability sometime in the second half of 2022. That expectation is based on an EBITDA measurement which stood at a 94 million CAD loss in this most recent quarter. Canopy Growth’s net loss, which factors in interest, taxes, depreciation, and amortization, hit 616.7 million CAD this quarter.</p>\n<p>The cannabis industry is continuing to disappoint, and Canopy Growth is continuing to disappoint.</p>\n<p><b>Transition Toward Value Added Goods</b></p>\n<p>Investors who dive into Canopy Growth’s revenue sources will have a better understanding of where the company is and where it wants to go.</p>\n<p>The issue is fairly straightforward: Canopy Growth is trying to pivot toward a greater percentage of sales from value-added products. Value added products carry higher margins, so if a company can sell them, it will.</p>\n<p>But doing so isn’t as easy as simply willing it into existence.</p>\n<p>The problem for Canopy Growth is that it derives a significant portion of its revenues from dry bud. In its 2020 fiscal year the company received&nbsp;275.5 million CAD of sales&nbsp;from dry bud, and in the 2021 fiscal year, 278.5 million CAD. It is clearly trying to get away from selling dry bud as it accounted for&nbsp; 73.5% of revenues in fiscal year 2021, down from 93.4% of total revenues in 2020.</p>\n<p>That means that Canopy Growth is moving toward a greater percentage of sales from higher margin oils, soft gels, edibles, and beverages.</p>\n<p>Dry bud is essentially a commodity. Canopy Growth probably doesn’t want to be a commodity producer. But the problem with the higher margin products mentioned above is that smaller, more focused companies have already established themselves in those niches. The other issue is that well-heeled alcohol companies are buying their way into the space.</p>\n<p>That leaves Canopy Growth between a rock and a hard place scrambling to find profitability perhaps sometime next year. And it also makes CGC stock less than attractive for some time to come.</p>","source":"lsy1606302653667","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Canopy Growth Is a Big Cannabis Company With Big Issues</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCanopy Growth Is a Big Cannabis Company With Big Issues\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-16 13:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/2021/06/cgc-stock-big-cannabis-company-with-big-issues/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>CGC stock needs profits and value-added product revenue\nA cursory glance at Canopy Growth’s (NASDAQ:CGC) year-to-date price chart suggests now may be time to pick up inexpensive shares of the stock. ...</p>\n\n<a href=\"https://investorplace.com/2021/06/cgc-stock-big-cannabis-company-with-big-issues/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"CGC":"Canopy Growth Corporation"},"source_url":"https://investorplace.com/2021/06/cgc-stock-big-cannabis-company-with-big-issues/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1182329477","content_text":"CGC stock needs profits and value-added product revenue\nA cursory glance at Canopy Growth’s (NASDAQ:CGC) year-to-date price chart suggests now may be time to pick up inexpensive shares of the stock. After all, just a few months prior shares were double their current $25 price.\nHowever, that narrative would only be valid if the company were moving in a positive direction. Recent earnings and other news indicate that it is stagnating, and that the company is one to avoid at present.\nCGC Stock Earnings\nI’m a big proponent of the idea that broad fundamental metrics are among the most valuable indicators of a stock’s buy worthiness. That’s why it might be surprising that I suggest investors avoid it even though Canopy Growth reported a 37% increase in revenues this fiscal year.\nOf course, revenues are only the top line of a financial statement and costs associated with that revenue can tell a drastically different story. There’s a lot that can go wrong that can turn revenues into losses instead of profits.\nAnd there were a few issues which hurt CGC stock in that respect. First, Canopy did worse than Wall Street anticipated it would. Revenues were slightly lower than anticipated and analysts Bill Kirk of MKM Partners noted that there were real disappointments, including an “adjusted gross margin of 14%, compared to 26% in 3Q and 42% in the year prior.”\nThen there’s another problem which continues to plague the wider cannabis industry. That is the issue of profitability. Investors in the sector have grown weary at the lack of profitability from cannabis companies as Canada nears its three-year anniversary of legalization.\nCanopy Growth CFO Mike Lee stated that the company expects profitability sometime in the second half of 2022. That expectation is based on an EBITDA measurement which stood at a 94 million CAD loss in this most recent quarter. Canopy Growth’s net loss, which factors in interest, taxes, depreciation, and amortization, hit 616.7 million CAD this quarter.\nThe cannabis industry is continuing to disappoint, and Canopy Growth is continuing to disappoint.\nTransition Toward Value Added Goods\nInvestors who dive into Canopy Growth’s revenue sources will have a better understanding of where the company is and where it wants to go.\nThe issue is fairly straightforward: Canopy Growth is trying to pivot toward a greater percentage of sales from value-added products. Value added products carry higher margins, so if a company can sell them, it will.\nBut doing so isn’t as easy as simply willing it into existence.\nThe problem for Canopy Growth is that it derives a significant portion of its revenues from dry bud. In its 2020 fiscal year the company received 275.5 million CAD of sales from dry bud, and in the 2021 fiscal year, 278.5 million CAD. It is clearly trying to get away from selling dry bud as it accounted for  73.5% of revenues in fiscal year 2021, down from 93.4% of total revenues in 2020.\nThat means that Canopy Growth is moving toward a greater percentage of sales from higher margin oils, soft gels, edibles, and beverages.\nDry bud is essentially a commodity. Canopy Growth probably doesn’t want to be a commodity producer. But the problem with the higher margin products mentioned above is that smaller, more focused companies have already established themselves in those niches. The other issue is that well-heeled alcohol companies are buying their way into the space.\nThat leaves Canopy Growth between a rock and a hard place scrambling to find profitability perhaps sometime next year. And it also makes CGC stock less than attractive for some time to come.","news_type":1},"isVote":1,"tweetType":1,"viewCount":176,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":169151609,"gmtCreate":1623823258601,"gmtModify":1634027527297,"author":{"id":"3569391399214787","authorId":"3569391399214787","name":"tengkianen","avatar":"https://static.tigerbbs.com/9afe68af4a29c83cb96c1939bb5ab192","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3569391399214787","authorIdStr":"3569391399214787"},"themes":[],"htmlText":"hank you","listText":"hank you","text":"hank you","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/169151609","repostId":"2143428757","repostType":4,"repost":{"id":"2143428757","kind":"highlight","pubTimestamp":1623822661,"share":"https://www.laohu8.com/m/news/2143428757?lang=&edition=full","pubTime":"2021-06-16 13:51","market":"us","language":"en","title":"Want to Keep Your Money? Avoid Cannabis Stocks With These 3 Traits","url":"https://stock-news.laohu8.com/highlight/detail?id=2143428757","media":"Motley Fool","summary":"Inefficiency and poor positioning often go hand in hand.","content":"<p>The first step to making money by investing in stocks is to keep the money you already have. That's particularly true when it comes to the marijuana sector, where -- regrettably -- there's an abundance of bad options from which to choose.</p>\n<p>Thankfully, the cannabis industry is maturing, but there are already a few common traits among the weakest performers. Aside from general red flags like indebtedness and unprofitability, be sure to pay attention to these three calling cards for cannabis stocks that'll hurt your portfolio's value.</p>\n<p class=\"t-img-caption\"><img src=\"https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F630672%2Ftwo-investors-consider-a-stock-with-laptop.jpg&amp;w=700&amp;op=resize\" tg-width=\"700\" tg-height=\"467\"><span>Image source: Getty Images.</span></p>\n<h2>1. Overbuilt cultivation and manufacturing capacity</h2>\n<p>When cannabis businesses work to get bigger, it's obvious that they need to have enough marijuana to meet demand. But <a href=\"https://laohu8.com/S/AONE\">one</a> of the industry's most common stumbling points is to anticipate more demand than actually exists in the market.</p>\n<p>Time and time again, companies have made massive investments in greenhouses or other cultivation facilities to increase production capacity in anticipation of revenue that never seems to materialize. Then, when the overhead costs become too great a drag on the bottom line for too long, management dolefully announces that the extra capacity needs to be turned off, like when <b>Aurora Cannabis </b>(NASDAQ:ACB) closed <a href=\"https://laohu8.com/S/AONE.U\">one</a> of its facilities and reduced the output of another by 75% late last year.</p>\n<p>As an investor, it's difficult to judge whether a company's plans to build out new cultivation space are going to be fruitful. Thankfully, you can easily screen out the businesses that have already stumbled by expanding beyond what's supported by demand. If an unprofitable company's cost of goods sold (COGS) eats up a stubbornly high percentage of quarterly revenue, it's a sign there's inefficiency afoot. For example, in the third fiscal quarter of 2021, Aurora Cannabis had a cost of sales of $127.54 million and total net revenue of only $55.16 million. Management attributed this to the detrimental effect of unused capacity.</p>\n<h2>2. Targeting the least lucrative product segments</h2>\n<p>Raw materials and simple products sell for less per unit than more complex products that require substantial processing. In the cannabis industry, that means products like vaporizers, oils, edibles, skin creams, and beverages have more attractive margins than bulk dried marijuana flower.</p>\n<p>Furthermore, these complex items are less likely to experience competition from illegal products, as they tend to require specialized industrial equipment to make. That doesn't necessarily mean that it's <i>always </i>easier to make a profit on sales of each unit, but it does ensure that competitors will need to spend more up front to purchase the right hardware before they can start to compete for market share.</p>\n<p>So, it makes sense to avoid companies that focus on selling cannabis flower <i>unless they have proven that they can consistently do so profitably at scale</i>. Be aware that unprofitable companies like Aurora Cannabis and <b>Cronos Group</b> can compete in lucrative segments and still fall victim to low average selling prices. There's a difference between competing in a product segment and deriving a large proportion of total revenue from it.</p>\n<h2>3. Habitual accounting concessions</h2>\n<p>I'm of the general opinion that the stronger a company's earnings are, the less explanation its financial results need to wow investors. Many cannabis companies are not profitable -- sometimes for reasons management can't control, like changes in the price of bulk cannabis. That means they can't report positive values for their earnings before interest, taxes, depreciation, and amortization (EBITDA), but they still want to report <i>some</i> financial metric that is trending in the right direction. Thus, the concept of \"adjusted\" EBITDA was born (or so I imagine).</p>\n<p>In short, many marijuana cultivators like Aurora Cannabis and Cronos Group recalculate their EBITDA to account for fluctuations in the market price of cannabis and one-off expenditures, then report the resulting value as adjusted EBITDA.</p>\n<p>There's nothing wrong with providing alternative metrics for investors to use to evaluate a stock. On the other hand, the healthiest cannabis companies don't need to repackage their earnings results to look appealing, so it's probably good to tread carefully around the ones that do.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Want to Keep Your Money? Avoid Cannabis Stocks With These 3 Traits</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWant to Keep Your Money? Avoid Cannabis Stocks With These 3 Traits\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-16 13:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/06/15/want-to-keep-your-money-avoid-cannabis-stocks-with/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The first step to making money by investing in stocks is to keep the money you already have. That's particularly true when it comes to the marijuana sector, where -- regrettably -- there's an ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/06/15/want-to-keep-your-money-avoid-cannabis-stocks-with/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"ACB":"奥罗拉大麻公司"},"source_url":"https://www.fool.com/investing/2021/06/15/want-to-keep-your-money-avoid-cannabis-stocks-with/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2143428757","content_text":"The first step to making money by investing in stocks is to keep the money you already have. That's particularly true when it comes to the marijuana sector, where -- regrettably -- there's an abundance of bad options from which to choose.\nThankfully, the cannabis industry is maturing, but there are already a few common traits among the weakest performers. Aside from general red flags like indebtedness and unprofitability, be sure to pay attention to these three calling cards for cannabis stocks that'll hurt your portfolio's value.\nImage source: Getty Images.\n1. Overbuilt cultivation and manufacturing capacity\nWhen cannabis businesses work to get bigger, it's obvious that they need to have enough marijuana to meet demand. But one of the industry's most common stumbling points is to anticipate more demand than actually exists in the market.\nTime and time again, companies have made massive investments in greenhouses or other cultivation facilities to increase production capacity in anticipation of revenue that never seems to materialize. Then, when the overhead costs become too great a drag on the bottom line for too long, management dolefully announces that the extra capacity needs to be turned off, like when Aurora Cannabis (NASDAQ:ACB) closed one of its facilities and reduced the output of another by 75% late last year.\nAs an investor, it's difficult to judge whether a company's plans to build out new cultivation space are going to be fruitful. Thankfully, you can easily screen out the businesses that have already stumbled by expanding beyond what's supported by demand. If an unprofitable company's cost of goods sold (COGS) eats up a stubbornly high percentage of quarterly revenue, it's a sign there's inefficiency afoot. For example, in the third fiscal quarter of 2021, Aurora Cannabis had a cost of sales of $127.54 million and total net revenue of only $55.16 million. Management attributed this to the detrimental effect of unused capacity.\n2. Targeting the least lucrative product segments\nRaw materials and simple products sell for less per unit than more complex products that require substantial processing. In the cannabis industry, that means products like vaporizers, oils, edibles, skin creams, and beverages have more attractive margins than bulk dried marijuana flower.\nFurthermore, these complex items are less likely to experience competition from illegal products, as they tend to require specialized industrial equipment to make. That doesn't necessarily mean that it's always easier to make a profit on sales of each unit, but it does ensure that competitors will need to spend more up front to purchase the right hardware before they can start to compete for market share.\nSo, it makes sense to avoid companies that focus on selling cannabis flower unless they have proven that they can consistently do so profitably at scale. Be aware that unprofitable companies like Aurora Cannabis and Cronos Group can compete in lucrative segments and still fall victim to low average selling prices. There's a difference between competing in a product segment and deriving a large proportion of total revenue from it.\n3. Habitual accounting concessions\nI'm of the general opinion that the stronger a company's earnings are, the less explanation its financial results need to wow investors. Many cannabis companies are not profitable -- sometimes for reasons management can't control, like changes in the price of bulk cannabis. That means they can't report positive values for their earnings before interest, taxes, depreciation, and amortization (EBITDA), but they still want to report some financial metric that is trending in the right direction. Thus, the concept of \"adjusted\" EBITDA was born (or so I imagine).\nIn short, many marijuana cultivators like Aurora Cannabis and Cronos Group recalculate their EBITDA to account for fluctuations in the market price of cannabis and one-off expenditures, then report the resulting value as adjusted EBITDA.\nThere's nothing wrong with providing alternative metrics for investors to use to evaluate a stock. On the other hand, the healthiest cannabis companies don't need to repackage their earnings results to look appealing, so it's probably good to tread carefully around the ones that do.","news_type":1},"isVote":1,"tweetType":1,"viewCount":275,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":169153588,"gmtCreate":1623823220444,"gmtModify":1634027528135,"author":{"id":"3569391399214787","authorId":"3569391399214787","name":"tengkianen","avatar":"https://static.tigerbbs.com/9afe68af4a29c83cb96c1939bb5ab192","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3569391399214787","authorIdStr":"3569391399214787"},"themes":[],"htmlText":"nice insight","listText":"nice insight","text":"nice insight","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/169153588","repostId":"1182315358","repostType":4,"repost":{"id":"1182315358","kind":"news","pubTimestamp":1623814338,"share":"https://www.laohu8.com/m/news/1182315358?lang=&edition=full","pubTime":"2021-06-16 11:32","market":"us","language":"en","title":"It’s time to be smart like Soros in the ‘blow-off’ stage of the bull market in stocks","url":"https://stock-news.laohu8.com/highlight/detail?id=1182315358","media":"MarketWatch","summary":"If you’re an investor, you need to be flexible, neither a bull nor a bear.\nIt takes brains and brawn","content":"<p>If you’re an investor, you need to be flexible, neither a bull nor a bear.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/724d1ea0bb18bddb367c79abf08c1af9\" tg-width=\"1260\" tg-height=\"841\"><span>It takes brains and brawn to be an investor these days. (Photo by Isaac Lawrence/AFP via Getty Images)</span></p>\n<p>I don’t know when what I call the Blow-Off Top of the Bubble-Blowing Bull Market will end.</p>\n<p>After 12 years being long and strong and having diamond hands without even knowing that term existed, maybe I’m wrong to turn more cautious.</p>\n<p>Maybe the economy will reopen and rejuvenate the country in such a strong manner that corporate earnings in 2022 and 2023 will make today’s prices seem like bargains.</p>\n<p>But I simply don’t think that’s the most likely outcome.</p>\n<p>And if I’m right that we’re in the throes of the Blow-Off Top of the Bubble-Blowing Bull Market, I do not want to be overly long and on the wrong side of the great unwind when it does start.</p>\n<p>I’m not calling for a near-term crash. I am saying that it’s likely going to be hard for the bulls to make as much money this year as they did last year.</p>\n<p>Trading and investing are tough. There’s always someone on the other side of every trade you make. Always think about who that is and why they are willing to take the other side of your transaction. When you buy, why are they selling it to you at that price? When you sell, who is buying it from you and what are their motivations? Remember, I’ve talked before about how&nbsp;good analysis starts with empathy.</p>\n<p><b>If I’m selling, who’s buying — and why?</b></p>\n<p>So let’s answer this question right now. Who is buying stocks and cryptos from me when I’ve trimmed and sold for the past month or so? Sure, there are banks and institutions and hedge funds and family offices investing and trading, just as always. On the other hand, remember two years ago when I got back from a hedge fund investment conference&nbsp;in Abu Dhabi and everybody was desperate for returns:</p>\n<p>Amid low interest rates and other investors’ focus on options, credit and currencies, “the lack of focus on traditional stocks and funds that invest in publicly traded stocks makes me think that there is probably more opportunity in such assets than people realize. I certainly see some very compelling long ideas in Revolutionary companies like WORK and TWTR and TSLA.”</p>\n<p>Since that post, back a year and a half ago, Slack&nbsp;went from $21 to being bought out at $45, Twitter&nbsp;went from $27 to $61, and Tesla&nbsp;went from $81 to $616. And funds that were looking everywhere but in the stock market for big gains are … well, pretty much in the markets now and long a bunch of stocks and even long a few cryptos.</p>\n<p>And now that those stocks and cryptos and most other assets have gone parabolic in the past year — coming on top of the 10-year bull market — the billion-dollar fund managers are joined by&nbsp;23-year-old TikTok influencers&nbsp;doing bitcoin&nbsp;trading astrology.</p>\n<p>Yes, for real, and she’s very popular. She’s even been right about some of bitcoin’s action in the past few months! If you’re selling cryptos and fintech stocks right now, you’re selling to her and her followers. And also to my friend’s son, who just graduated from a tiny, rural school and whose unemployed uncle gave him $500 to “buy some cryptos. And make sure you get some fintech. I don’t know the symbol, but just look it up and you’ll do fine over the long run.”&nbsp;Bearish anecdotes everywhere I look, as I wrote recently.</p>\n<p><b>Mr. Market</b></p>\n<p>The other thing to remember about who’s on the other side of your trade is always to remember that there are smart, cutthroat traders and investors who went to the best schools and have access to more research and real-time data and instant trading access to all kinds of derivatives to layer into their bets. And the only thing they do all day, every day, is figure out how to take your money in mostly legal ways. They’re not playing around. They have no sympathy for you, even if they might empathize with you to better understand your motivations to better take your money.</p>\n<p>Mr. Market is mean. He’s not nice. He can be cruel. He can force liquidations that create other liquidations. He can shut off access to capital. He can take down 200-year-old banks in a day. In one day.</p>\n<p>Sometimes the markets lead the economy and not the other way around. Ironically, when we were young, we were taught that the Great Depression started when the stock market crashed on Black Friday in 1929. But then when we get older, we were taught that it wasn’t actually the crash that created the Great Depression, rather the economy was already crashing and the stock market just didn’t realize it as it continued on its merry way toward a terrible Blow-Off Top of a nine-year Bubble-Blowing Bull Market that culminated with the Dow Jones Industrial Average&nbsp;up 400% from the 1921 lows to the 1929 highs.</p>\n<p><img src=\"https://static.tigerbbs.com/3a6516337aacc614d83584ea90e174f2\" tg-width=\"1260\" tg-height=\"870\"></p>\n<p><b>Learning from Soros</b></p>\n<p>But looking back, it’s clear that both theories are equally right and wrong — the market crashed because the economy wasn’t as good as the market thought it was,<i>and</i>the economy crashed because the markets shut down access to capital for investment and growth.</p>\n<p>It was “reflexive,” to borrow a term from the great hedge fund manager&nbsp;George Soros.</p>\n<p>He wrote, and the concept is important to understand:</p>\n<p>“I continued to consider myself a failed philosopher. All this changed as a result of the financial crisis of 2008. My conceptual framework enabled me both to anticipate the crisis and to deal with it when it finally struck…</p>\n<p>“I can state the core idea in two relatively simple propositions. One is that in situations that have thinking participants, the participants’ view of the world is always partial and distorted. That is the principle of fallibility. The other is that these distorted views can influence the situation to which they relate because false views lead to inappropriate actions. That is the principle of reflexivity…</p>\n<p>“Recognizing reflexivity has been sacrificed to the vain pursuit of certainty in human affairs, most notably in economics, and yet, uncertainty is the key feature of human affairs. Economic theory is built on the concept of equilibrium, and that concept is in direct contradiction with the concept of reflexivity…</p>\n<p>“A positive feedback process is self-reinforcing. It cannot go on forever because eventually the participants’ views would become so far removed from objective reality that the participants would have to recognize them as unrealistic. Nor can the iterative process occur without any change in the actual state of affairs, because it is in the nature of positive feedback that it reinforces whatever tendency prevails in the real world. Instead of equilibrium, we are faced with a dynamic disequilibrium or what may be described as far-from-equilibrium conditions. Usually in far-from-equilibrium situations the divergence between perceptions and reality leads to a climax which sets in motion a positive feedback process in the opposite direction. Such initially self-reinforcing but eventually self-defeating boom-bust processes or bubbles are characteristic of financial markets, but they can also be found in other spheres. There, I call them fertile fallacies—interpretations of reality that are distorted, yet produce results which reinforce the distortion.”</p>\n<p>Stay flexible</p>\n<p>Far-from-equilibrium conditions was what we had in 2010-2013 when we loaded up on Revolutionary stocks and started buying cryptos like bitcoin. Far-from-equilibrium conditions might be what we have in front of us right now when I suggest getting cautious instead.</p>\n<p>We don’t want to be permabulls. (You for sure don’t want to be a permabear!) We have to be flexible. We have to let our analysis and risk/reward scenarios dictate how much risk we’re taking and when. We have to pay attention to the cycles, the self-reinforcing cycles that drive economies and markets and valuations and earnings and societal interactions and bailouts and financial crises and bubbles and busts and, heaven forbid, just simple stagnation.</p>\n<p>It’s as if everybody forgets that markets can bubble and crash and stagnate. They forget that markets can grind for years on end without making new highs, or without even making higher highs. Do you not remember telling your money manager sometime in 2010-2012 that “If I’d just handled the Great Financial Crisis (and/or the Dot-Com Crash) a little better, I’d be in better shape.” I used to hear people say that to me all the time. I haven’t heard anybody say that lately. Everybody’s having fun in this market … at least for now.</p>\n<p>Most traders will tell you that they are “just trading the market that is in front of them.” Well, I don’t know when the bubble will pop, but I do know that I don’t want to be on the wrong side of this market when it does. And I do know that we won’t know the bubble has really popped until the self-reinforcing reflexive feedback loop has made it painful for the vast majority of people who are right now feeling wealthy, feeling secure, feeling like they’ve got this trading and investing thing all figured out.</p>\n<p>We are all fallible. Be careful while it’s fun. Be bold when it’s painful. That’s how I’ve done it for the last 25 years. We were boldly buying these assets when it was painful for others. I’m careful right now because everybody else is having fun.</p>\n<p>I spend a lot of time looking for new ideas and I won’t let my overall market outlook deter me from buying a new name or two. But I want to remain overall cautious and less aggressive than I have been for most of the last decade.</p>\n<p>As a matter of fact,&nbsp;I might have at least a couple Trade Alerts that I’ll be sending out this week, one long and one short idea. Being flexible, see?</p>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>It’s time to be smart like Soros in the ‘blow-off’ stage of the bull market in stocks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIt’s time to be smart like Soros in the ‘blow-off’ stage of the bull market in stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-16 11:32 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/its-time-to-be-smart-like-soros-in-the-blow-off-stage-of-the-bull-market-in-stocks-11623788897?siteid=yhoof2><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you’re an investor, you need to be flexible, neither a bull nor a bear.\nIt takes brains and brawn to be an investor these days. (Photo by Isaac Lawrence/AFP via Getty Images)\nI don’t know when what...</p>\n\n<a href=\"https://www.marketwatch.com/story/its-time-to-be-smart-like-soros-in-the-blow-off-stage-of-the-bull-market-in-stocks-11623788897?siteid=yhoof2\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite",".DJI":"道琼斯"},"source_url":"https://www.marketwatch.com/story/its-time-to-be-smart-like-soros-in-the-blow-off-stage-of-the-bull-market-in-stocks-11623788897?siteid=yhoof2","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1182315358","content_text":"If you’re an investor, you need to be flexible, neither a bull nor a bear.\nIt takes brains and brawn to be an investor these days. (Photo by Isaac Lawrence/AFP via Getty Images)\nI don’t know when what I call the Blow-Off Top of the Bubble-Blowing Bull Market will end.\nAfter 12 years being long and strong and having diamond hands without even knowing that term existed, maybe I’m wrong to turn more cautious.\nMaybe the economy will reopen and rejuvenate the country in such a strong manner that corporate earnings in 2022 and 2023 will make today’s prices seem like bargains.\nBut I simply don’t think that’s the most likely outcome.\nAnd if I’m right that we’re in the throes of the Blow-Off Top of the Bubble-Blowing Bull Market, I do not want to be overly long and on the wrong side of the great unwind when it does start.\nI’m not calling for a near-term crash. I am saying that it’s likely going to be hard for the bulls to make as much money this year as they did last year.\nTrading and investing are tough. There’s always someone on the other side of every trade you make. Always think about who that is and why they are willing to take the other side of your transaction. When you buy, why are they selling it to you at that price? When you sell, who is buying it from you and what are their motivations? Remember, I’ve talked before about how good analysis starts with empathy.\nIf I’m selling, who’s buying — and why?\nSo let’s answer this question right now. Who is buying stocks and cryptos from me when I’ve trimmed and sold for the past month or so? Sure, there are banks and institutions and hedge funds and family offices investing and trading, just as always. On the other hand, remember two years ago when I got back from a hedge fund investment conference in Abu Dhabi and everybody was desperate for returns:\nAmid low interest rates and other investors’ focus on options, credit and currencies, “the lack of focus on traditional stocks and funds that invest in publicly traded stocks makes me think that there is probably more opportunity in such assets than people realize. I certainly see some very compelling long ideas in Revolutionary companies like WORK and TWTR and TSLA.”\nSince that post, back a year and a half ago, Slack went from $21 to being bought out at $45, Twitter went from $27 to $61, and Tesla went from $81 to $616. And funds that were looking everywhere but in the stock market for big gains are … well, pretty much in the markets now and long a bunch of stocks and even long a few cryptos.\nAnd now that those stocks and cryptos and most other assets have gone parabolic in the past year — coming on top of the 10-year bull market — the billion-dollar fund managers are joined by 23-year-old TikTok influencers doing bitcoin trading astrology.\nYes, for real, and she’s very popular. She’s even been right about some of bitcoin’s action in the past few months! If you’re selling cryptos and fintech stocks right now, you’re selling to her and her followers. And also to my friend’s son, who just graduated from a tiny, rural school and whose unemployed uncle gave him $500 to “buy some cryptos. And make sure you get some fintech. I don’t know the symbol, but just look it up and you’ll do fine over the long run.” Bearish anecdotes everywhere I look, as I wrote recently.\nMr. Market\nThe other thing to remember about who’s on the other side of your trade is always to remember that there are smart, cutthroat traders and investors who went to the best schools and have access to more research and real-time data and instant trading access to all kinds of derivatives to layer into their bets. And the only thing they do all day, every day, is figure out how to take your money in mostly legal ways. They’re not playing around. They have no sympathy for you, even if they might empathize with you to better understand your motivations to better take your money.\nMr. Market is mean. He’s not nice. He can be cruel. He can force liquidations that create other liquidations. He can shut off access to capital. He can take down 200-year-old banks in a day. In one day.\nSometimes the markets lead the economy and not the other way around. Ironically, when we were young, we were taught that the Great Depression started when the stock market crashed on Black Friday in 1929. But then when we get older, we were taught that it wasn’t actually the crash that created the Great Depression, rather the economy was already crashing and the stock market just didn’t realize it as it continued on its merry way toward a terrible Blow-Off Top of a nine-year Bubble-Blowing Bull Market that culminated with the Dow Jones Industrial Average up 400% from the 1921 lows to the 1929 highs.\n\nLearning from Soros\nBut looking back, it’s clear that both theories are equally right and wrong — the market crashed because the economy wasn’t as good as the market thought it was,andthe economy crashed because the markets shut down access to capital for investment and growth.\nIt was “reflexive,” to borrow a term from the great hedge fund manager George Soros.\nHe wrote, and the concept is important to understand:\n“I continued to consider myself a failed philosopher. All this changed as a result of the financial crisis of 2008. My conceptual framework enabled me both to anticipate the crisis and to deal with it when it finally struck…\n“I can state the core idea in two relatively simple propositions. One is that in situations that have thinking participants, the participants’ view of the world is always partial and distorted. That is the principle of fallibility. The other is that these distorted views can influence the situation to which they relate because false views lead to inappropriate actions. That is the principle of reflexivity…\n“Recognizing reflexivity has been sacrificed to the vain pursuit of certainty in human affairs, most notably in economics, and yet, uncertainty is the key feature of human affairs. Economic theory is built on the concept of equilibrium, and that concept is in direct contradiction with the concept of reflexivity…\n“A positive feedback process is self-reinforcing. It cannot go on forever because eventually the participants’ views would become so far removed from objective reality that the participants would have to recognize them as unrealistic. Nor can the iterative process occur without any change in the actual state of affairs, because it is in the nature of positive feedback that it reinforces whatever tendency prevails in the real world. Instead of equilibrium, we are faced with a dynamic disequilibrium or what may be described as far-from-equilibrium conditions. Usually in far-from-equilibrium situations the divergence between perceptions and reality leads to a climax which sets in motion a positive feedback process in the opposite direction. Such initially self-reinforcing but eventually self-defeating boom-bust processes or bubbles are characteristic of financial markets, but they can also be found in other spheres. There, I call them fertile fallacies—interpretations of reality that are distorted, yet produce results which reinforce the distortion.”\nStay flexible\nFar-from-equilibrium conditions was what we had in 2010-2013 when we loaded up on Revolutionary stocks and started buying cryptos like bitcoin. Far-from-equilibrium conditions might be what we have in front of us right now when I suggest getting cautious instead.\nWe don’t want to be permabulls. (You for sure don’t want to be a permabear!) We have to be flexible. We have to let our analysis and risk/reward scenarios dictate how much risk we’re taking and when. We have to pay attention to the cycles, the self-reinforcing cycles that drive economies and markets and valuations and earnings and societal interactions and bailouts and financial crises and bubbles and busts and, heaven forbid, just simple stagnation.\nIt’s as if everybody forgets that markets can bubble and crash and stagnate. They forget that markets can grind for years on end without making new highs, or without even making higher highs. Do you not remember telling your money manager sometime in 2010-2012 that “If I’d just handled the Great Financial Crisis (and/or the Dot-Com Crash) a little better, I’d be in better shape.” I used to hear people say that to me all the time. I haven’t heard anybody say that lately. Everybody’s having fun in this market … at least for now.\nMost traders will tell you that they are “just trading the market that is in front of them.” Well, I don’t know when the bubble will pop, but I do know that I don’t want to be on the wrong side of this market when it does. And I do know that we won’t know the bubble has really popped until the self-reinforcing reflexive feedback loop has made it painful for the vast majority of people who are right now feeling wealthy, feeling secure, feeling like they’ve got this trading and investing thing all figured out.\nWe are all fallible. Be careful while it’s fun. Be bold when it’s painful. That’s how I’ve done it for the last 25 years. We were boldly buying these assets when it was painful for others. I’m careful right now because everybody else is having fun.\nI spend a lot of time looking for new ideas and I won’t let my overall market outlook deter me from buying a new name or two. But I want to remain overall cautious and less aggressive than I have been for most of the last decade.\nAs a matter of fact, I might have at least a couple Trade Alerts that I’ll be sending out this week, one long and one short idea. Being flexible, see?","news_type":1},"isVote":1,"tweetType":1,"viewCount":223,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":169151609,"gmtCreate":1623823258601,"gmtModify":1634027527297,"author":{"id":"3569391399214787","authorId":"3569391399214787","name":"tengkianen","avatar":"https://static.tigerbbs.com/9afe68af4a29c83cb96c1939bb5ab192","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3569391399214787","authorIdStr":"3569391399214787"},"themes":[],"htmlText":"hank you","listText":"hank you","text":"hank you","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/169151609","repostId":"2143428757","repostType":4,"isVote":1,"tweetType":1,"viewCount":275,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":169158479,"gmtCreate":1623823326091,"gmtModify":1634027526064,"author":{"id":"3569391399214787","authorId":"3569391399214787","name":"tengkianen","avatar":"https://static.tigerbbs.com/9afe68af4a29c83cb96c1939bb5ab192","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3569391399214787","authorIdStr":"3569391399214787"},"themes":[],"htmlText":"i like","listText":"i like","text":"i like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/169158479","repostId":"1148768572","repostType":4,"repost":{"id":"1148768572","kind":"news","pubTimestamp":1623822306,"share":"https://www.laohu8.com/m/news/1148768572?lang=&edition=full","pubTime":"2021-06-16 13:45","market":"us","language":"en","title":"Wish Stock: Patient Investors Could Soon See $20 Again","url":"https://stock-news.laohu8.com/highlight/detail?id=1148768572","media":"seekingalpha","summary":"Summary\n\nWish (ContextLogic) remains one of the most underappreciated assets within e-commerce tradi","content":"<p><b>Summary</b></p>\n<ul>\n <li>Wish (ContextLogic) remains one of the most underappreciated assets within e-commerce trading at just 1.3x forward EV to Sales.</li>\n <li>Wish's latest partnership with PrestaShop will further accelerate international expansion and growth initiatives.</li>\n <li>While accurate data regarding its short interest is difficult to find as most of its float is still locked up, I estimate a short interest between 30-40%.</li>\n <li>I believe bear arguments including high marketing spend and stalling user numbers are already baked in the current share price.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/983667978a1675a8b256d7b0478a876c\" tg-width=\"1536\" tg-height=\"934\" referrerpolicy=\"no-referrer\"><span>JuSun/iStock via Getty Images</span></p>\n<p><b>Overview</b></p>\n<p>ContextLogic (WISH) has been a wild ride for shareholders, as high volatility continues to cause significant price movements in recent weeks. The e-commerce platform initially went public in December at $20 per share before surging to an all-time high of $32 in February due to a momentum-driven rally. That said, shares have steadily plunged ever since, hitting an all-time low of just $7 in June, but are now recovering swiftly after increased interest from the retail trading sector. Here, the stock is favored due to its high volatility, short interest, and enormous upside potential.</p>\n<p>In this context, I believe that the high short interest has increasingly pushed shares below fair value and that patient investors could soon see $20 or more again as the company is working through logistic challenges and will soon return to economies of scale. In this regard, the e-commerce platform has a unique value proposition and is well-positioned to gain market share in a $6 trillion e-commerce industry.</p>\n<p><b>The Digital Dollar Tree</b></p>\n<p>Wish has been criticized heavily as an e-commerce platform, and I would almost argue that its image of being a third-party 'dropshipping' site for Chinese merchants has kept investors away from the stock so far. However, this may only be partially true. Essentially, Wish has inverted Amazon's(NASDAQ:AMZN)business model through low-priced (low-quality) products and sluggish delivery times that may lead to week-long delivery times. This is because Wish does not handle shipping itself, which is why it can offer these ultra-low prices of offering a hoodie for $2 plus $2 shipping.</p>\n<p>Frankly, Wish is still dependent on Chinese merchants, accounting for most of its product catalogs. This is unsurprising, considering that most goods are produced in China as the production costs are among the lowest in the world. Most of the goods being sold on Amazon or eBay(NASDAQ:EBAY)were also produced in China, although they earn a higher perception due to one-day delivery shipping programs or higher prices.</p>\n<p><img src=\"https://static.tigerbbs.com/2bea733440e86851af57559c6a5fd6bd\" tg-width=\"640\" tg-height=\"363\" referrerpolicy=\"no-referrer\"></p>\n<p>Now, I view Wish as the digital dollar tree, where online shoppers discover items that they want, not need. In the process, customers have more patience for products and are willing to wait longer for them to arrive. Wish is working towards addressing both of these issues (quality and merchant diversification) as its platform is gaining popularity. Here, it has been investing in logistics to offer quicker delivery, demonstrated by a 275% YoY increase in logistics revenue. Since these revenues provide low margins, its overall gross margins have decreased in accordance. However, once it achieves economies of scale in the segment, margin growth should reverse and trail back towards 70%.</p>\n<p>It is also addressing the second issue by continuously growing its international merchant base. Here, U.S. merchants increased by over 400% YoY, and a similar trend is to be seen in other countries. Moreover, it is growing Wish Local, a service connecting local businesses to the platform, accounting for 7% of all Wish orders. Wish local is mostly (or exclusively) available in the United States and thus increasingly mixes with other products on the website.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/09eb88453d075db6b7b8edd21f981b4a\" tg-width=\"640\" tg-height=\"381\"><span>Source: Sensor Tower</span></p>\n<p>I also like Wish's strategy to engage and retain users by utilizing an AI matching system that optimizes platform growth, user experience, and merchant return on investment. The strategy to create an interactive mobile shopping experience appears to be working well: Impressively, Wish gets over500,000reviews per day from users, surpassing even Amazon and other shopping sites in this regard, demonstrating just about how engaging the platform is. Around 80% of first-time shoppersreturnto buy again.</p>\n<p>Wish is, therefore, able to establish itself in the highly competitive E-commerce market that offers a tremendous runway for growth. Currently, around 40% of the E-commerce market share is owned just by Amazon. Compared to Amazon, its TAM may be limited as it concentrates on its lower-income niche, which is how it became popular in the first place. Still, this represents a +$3 trillion market opportunity for Wish to tap into. It is also worth noting that according toreports, Amazon tried to acquire Wish for $10 billion, yet Wish rejected, believing growing the business to $100 billion in annual sales, at which point it would be valued significantly higher.</p>\n<p><b>Negative Sentiment Baked In</b></p>\n<p>Wish's first two quarters have been slightly disappointing. While the company handily beat revenue estimates, the company burned through over $300 million in cash in order to invest in logistics. More importantly, however, is the fact that MAUs have dropped steadily, which the company blames on de-de-emphasizing advertising and customer acquisition as the company worked through logistics challenges it faced earlier in the year.</p>\n<table>\n <tbody>\n  <tr>\n   <td>Year</td>\n   <td>2020</td>\n   <td>2019</td>\n   <td>2018</td>\n  </tr>\n  <tr>\n   <td>Revenue</td>\n   <td>$2.54B</td>\n   <td>$1.9B</td>\n   <td>$1.73B</td>\n  </tr>\n  <tr>\n   <td>Gross Profit</td>\n   <td>$1.59B</td>\n   <td>$1.46B</td>\n   <td>$1.45B</td>\n  </tr>\n  <tr>\n   <td><b>Sales and Marketing</b></td>\n   <td><b>$1.71B (+17%)</b></td>\n   <td><b>$1.46B (-7%)</b></td>\n   <td><b>$1.57B</b></td>\n  </tr>\n  <tr>\n   <td>MAUs</td>\n   <td>107M (+19%)</td>\n   <td><p>90M (+10%)</p></td>\n   <td>82M</td>\n  </tr>\n  <tr>\n   <td><b>Active Buyers</b></td>\n   <td><b>64M (+3%)</b></td>\n   <td><b>62M (-3%)</b></td>\n   <td><b>64M</b></td>\n  </tr>\n </tbody>\n</table>\n<p>*Growth (Year-over-Year)</p>\n<p>The largest bear argument against Wish is its high marketing expenses, which account for 60% of its total revenues and over 100% of its gross profits. This is totally fine unless it grows its active buyers through marketing, which unfortunately has not been the case. This is a red flag and questions the long-term sustainability of Wish's business model. However, the company has been close to being cash flow positive, and it stated it already would be profitable if it weren't for its extensive marketing expense. That said, as long as Wish acquires new MAUs and increases value through logistic services, its marketing expenses pay off in the long run. Moreover, as a percentage of total revenues, Wish's marketing expenses have dropped to 60%, down from 67% in the year prior.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3e18c23728274ee708d896923820b282\" tg-width=\"635\" tg-height=\"278\"><span>Source: Wish IR</span></p>\n<p>In terms of the outlook, this is what the company is essentially stressing. It believes marketing expenses can decrease to 40-45%, leading to EBITDA margins of 25% at the midpoint range. If it achieves these ambitious goals (which is very well possible), its profitability margins would be similar to those of eBay or MercadoLibre(NASDAQ:MELI). In either way, Wish's business model is not perfect, but all these concerns are more than baked in its current valuation, IMO (In My Opinion).</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/54029f94c37f301d26e93a11636280e7\" tg-width=\"635\" tg-height=\"470\"><span>Data byYCharts</span></p>\n<p>Even after the latest +50% rise, shares are still trailing far behind peers such as Poshmark(NASDAQ:POSH), eBay, Amazon, and (Shopify(NYSE:SHOP)). At over $3 billion estimated revenues, Wish is trading at just 1.8x Price to Sales, just half of eBay's current valuation and much lower than Poshmark. Current estimates are calling for over $6 billion in revenues by 2025 and $1 billion in free cash flow, meaning that Wish trades at just 7x free cash flow estimates, or 1 times sales. In early 2021, its P/S ratio stood closer to 5x, so there is potential for a valuation expansion.</p>\n<p><b>What about the Lawsuits?</b></p>\n<p>Perhaps you've seen the news (especially on Yahoo Finance) regarding the class actionlawsuits. These lawsuits are extensively posted to remind investors of recovering incurred losses after its share price dropped in recent months. Such lawsuits are not unusual when stocks drop sharply in a short period of time and are likely of no concern to investors. These lawsuits have also included companies such asCloverHealth(NASDAQ:CLOV), Skillz(NYSE:SKLZ), Array Technologies(NASDAQ:ARRY), etc.</p>\n<p>Short Interest - Still High</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/875b3fdaf74f1ef639b51d77a3aac01f\" tg-width=\"640\" tg-height=\"360\"><span>Source: Fintel</span></p>\n<p>Wish has gained significant attraction from retail investors, as investors were looking for the next big short squeeze. Since most of Wish's shares have still been locked up, its exact short ratio was difficult to estimate. According to Seeking Alpha, the current short ratio stands at just 7%, but the figure is likely higher. Last week, its short interest as a percent of its equity float stood at roughly 48%, according to Bloomberg Terminal data. Other sources such as Fintel pin the current short volume at 20-30%. Now, it's difficult to give an exact estimate, but generally speaking, it's probably somewhere within this range, and many short calls are still to be covered. In the long term, the high-short interest could be an advantage, leading to a quicker acceleration if the stock begins trending upwards.</p>\n<p><b>The Bottom Line</b></p>\n<p>I believe that Wish remains one of the most underappreciated assets within e-commerce, boasting over 100 million monthly users on its platform and connecting thousands of merchants from all over the world. The mobile shopping app continues to be one of the top downloaded shopping apps in the space and has a unique value proposition, which is smarter than it appears at first sight. Moreover, its latestpartnershipwith PrestaShop will give over 300,000 merchants free access to a direct integration that connects them directly to Wish's merchant dashboard, further driving growth. While there are risks to Wish's imperfect business model, such as lagging profitability, patient investors could be rewarded mightily.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Wish Stock: Patient Investors Could Soon See $20 Again</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWish Stock: Patient Investors Could Soon See $20 Again\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-16 13:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4434950-wish-stock-patient-investors-could-soon-see-20-again><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nWish (ContextLogic) remains one of the most underappreciated assets within e-commerce trading at just 1.3x forward EV to Sales.\nWish's latest partnership with PrestaShop will further ...</p>\n\n<a href=\"https://seekingalpha.com/article/4434950-wish-stock-patient-investors-could-soon-see-20-again\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4434950-wish-stock-patient-investors-could-soon-see-20-again","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1148768572","content_text":"Summary\n\nWish (ContextLogic) remains one of the most underappreciated assets within e-commerce trading at just 1.3x forward EV to Sales.\nWish's latest partnership with PrestaShop will further accelerate international expansion and growth initiatives.\nWhile accurate data regarding its short interest is difficult to find as most of its float is still locked up, I estimate a short interest between 30-40%.\nI believe bear arguments including high marketing spend and stalling user numbers are already baked in the current share price.\n\nJuSun/iStock via Getty Images\nOverview\nContextLogic (WISH) has been a wild ride for shareholders, as high volatility continues to cause significant price movements in recent weeks. The e-commerce platform initially went public in December at $20 per share before surging to an all-time high of $32 in February due to a momentum-driven rally. That said, shares have steadily plunged ever since, hitting an all-time low of just $7 in June, but are now recovering swiftly after increased interest from the retail trading sector. Here, the stock is favored due to its high volatility, short interest, and enormous upside potential.\nIn this context, I believe that the high short interest has increasingly pushed shares below fair value and that patient investors could soon see $20 or more again as the company is working through logistic challenges and will soon return to economies of scale. In this regard, the e-commerce platform has a unique value proposition and is well-positioned to gain market share in a $6 trillion e-commerce industry.\nThe Digital Dollar Tree\nWish has been criticized heavily as an e-commerce platform, and I would almost argue that its image of being a third-party 'dropshipping' site for Chinese merchants has kept investors away from the stock so far. However, this may only be partially true. Essentially, Wish has inverted Amazon's(NASDAQ:AMZN)business model through low-priced (low-quality) products and sluggish delivery times that may lead to week-long delivery times. This is because Wish does not handle shipping itself, which is why it can offer these ultra-low prices of offering a hoodie for $2 plus $2 shipping.\nFrankly, Wish is still dependent on Chinese merchants, accounting for most of its product catalogs. This is unsurprising, considering that most goods are produced in China as the production costs are among the lowest in the world. Most of the goods being sold on Amazon or eBay(NASDAQ:EBAY)were also produced in China, although they earn a higher perception due to one-day delivery shipping programs or higher prices.\n\nNow, I view Wish as the digital dollar tree, where online shoppers discover items that they want, not need. In the process, customers have more patience for products and are willing to wait longer for them to arrive. Wish is working towards addressing both of these issues (quality and merchant diversification) as its platform is gaining popularity. Here, it has been investing in logistics to offer quicker delivery, demonstrated by a 275% YoY increase in logistics revenue. Since these revenues provide low margins, its overall gross margins have decreased in accordance. However, once it achieves economies of scale in the segment, margin growth should reverse and trail back towards 70%.\nIt is also addressing the second issue by continuously growing its international merchant base. Here, U.S. merchants increased by over 400% YoY, and a similar trend is to be seen in other countries. Moreover, it is growing Wish Local, a service connecting local businesses to the platform, accounting for 7% of all Wish orders. Wish local is mostly (or exclusively) available in the United States and thus increasingly mixes with other products on the website.\nSource: Sensor Tower\nI also like Wish's strategy to engage and retain users by utilizing an AI matching system that optimizes platform growth, user experience, and merchant return on investment. The strategy to create an interactive mobile shopping experience appears to be working well: Impressively, Wish gets over500,000reviews per day from users, surpassing even Amazon and other shopping sites in this regard, demonstrating just about how engaging the platform is. Around 80% of first-time shoppersreturnto buy again.\nWish is, therefore, able to establish itself in the highly competitive E-commerce market that offers a tremendous runway for growth. Currently, around 40% of the E-commerce market share is owned just by Amazon. Compared to Amazon, its TAM may be limited as it concentrates on its lower-income niche, which is how it became popular in the first place. Still, this represents a +$3 trillion market opportunity for Wish to tap into. It is also worth noting that according toreports, Amazon tried to acquire Wish for $10 billion, yet Wish rejected, believing growing the business to $100 billion in annual sales, at which point it would be valued significantly higher.\nNegative Sentiment Baked In\nWish's first two quarters have been slightly disappointing. While the company handily beat revenue estimates, the company burned through over $300 million in cash in order to invest in logistics. More importantly, however, is the fact that MAUs have dropped steadily, which the company blames on de-de-emphasizing advertising and customer acquisition as the company worked through logistics challenges it faced earlier in the year.\n\n\n\nYear\n2020\n2019\n2018\n\n\nRevenue\n$2.54B\n$1.9B\n$1.73B\n\n\nGross Profit\n$1.59B\n$1.46B\n$1.45B\n\n\nSales and Marketing\n$1.71B (+17%)\n$1.46B (-7%)\n$1.57B\n\n\nMAUs\n107M (+19%)\n90M (+10%)\n82M\n\n\nActive Buyers\n64M (+3%)\n62M (-3%)\n64M\n\n\n\n*Growth (Year-over-Year)\nThe largest bear argument against Wish is its high marketing expenses, which account for 60% of its total revenues and over 100% of its gross profits. This is totally fine unless it grows its active buyers through marketing, which unfortunately has not been the case. This is a red flag and questions the long-term sustainability of Wish's business model. However, the company has been close to being cash flow positive, and it stated it already would be profitable if it weren't for its extensive marketing expense. That said, as long as Wish acquires new MAUs and increases value through logistic services, its marketing expenses pay off in the long run. Moreover, as a percentage of total revenues, Wish's marketing expenses have dropped to 60%, down from 67% in the year prior.\nSource: Wish IR\nIn terms of the outlook, this is what the company is essentially stressing. It believes marketing expenses can decrease to 40-45%, leading to EBITDA margins of 25% at the midpoint range. If it achieves these ambitious goals (which is very well possible), its profitability margins would be similar to those of eBay or MercadoLibre(NASDAQ:MELI). In either way, Wish's business model is not perfect, but all these concerns are more than baked in its current valuation, IMO (In My Opinion).\nData byYCharts\nEven after the latest +50% rise, shares are still trailing far behind peers such as Poshmark(NASDAQ:POSH), eBay, Amazon, and (Shopify(NYSE:SHOP)). At over $3 billion estimated revenues, Wish is trading at just 1.8x Price to Sales, just half of eBay's current valuation and much lower than Poshmark. Current estimates are calling for over $6 billion in revenues by 2025 and $1 billion in free cash flow, meaning that Wish trades at just 7x free cash flow estimates, or 1 times sales. In early 2021, its P/S ratio stood closer to 5x, so there is potential for a valuation expansion.\nWhat about the Lawsuits?\nPerhaps you've seen the news (especially on Yahoo Finance) regarding the class actionlawsuits. These lawsuits are extensively posted to remind investors of recovering incurred losses after its share price dropped in recent months. Such lawsuits are not unusual when stocks drop sharply in a short period of time and are likely of no concern to investors. These lawsuits have also included companies such asCloverHealth(NASDAQ:CLOV), Skillz(NYSE:SKLZ), Array Technologies(NASDAQ:ARRY), etc.\nShort Interest - Still High\nSource: Fintel\nWish has gained significant attraction from retail investors, as investors were looking for the next big short squeeze. Since most of Wish's shares have still been locked up, its exact short ratio was difficult to estimate. According to Seeking Alpha, the current short ratio stands at just 7%, but the figure is likely higher. Last week, its short interest as a percent of its equity float stood at roughly 48%, according to Bloomberg Terminal data. Other sources such as Fintel pin the current short volume at 20-30%. Now, it's difficult to give an exact estimate, but generally speaking, it's probably somewhere within this range, and many short calls are still to be covered. In the long term, the high-short interest could be an advantage, leading to a quicker acceleration if the stock begins trending upwards.\nThe Bottom Line\nI believe that Wish remains one of the most underappreciated assets within e-commerce, boasting over 100 million monthly users on its platform and connecting thousands of merchants from all over the world. The mobile shopping app continues to be one of the top downloaded shopping apps in the space and has a unique value proposition, which is smarter than it appears at first sight. Moreover, its latestpartnershipwith PrestaShop will give over 300,000 merchants free access to a direct integration that connects them directly to Wish's merchant dashboard, further driving growth. While there are risks to Wish's imperfect business model, such as lagging profitability, patient investors could be rewarded mightily.","news_type":1},"isVote":1,"tweetType":1,"viewCount":462,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":169158354,"gmtCreate":1623823306278,"gmtModify":1634027526558,"author":{"id":"3569391399214787","authorId":"3569391399214787","name":"tengkianen","avatar":"https://static.tigerbbs.com/9afe68af4a29c83cb96c1939bb5ab192","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3569391399214787","authorIdStr":"3569391399214787"},"themes":[],"htmlText":"nice","listText":"nice","text":"nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/169158354","repostId":"1182329477","repostType":4,"isVote":1,"tweetType":1,"viewCount":176,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":169153588,"gmtCreate":1623823220444,"gmtModify":1634027528135,"author":{"id":"3569391399214787","authorId":"3569391399214787","name":"tengkianen","avatar":"https://static.tigerbbs.com/9afe68af4a29c83cb96c1939bb5ab192","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3569391399214787","authorIdStr":"3569391399214787"},"themes":[],"htmlText":"nice insight","listText":"nice insight","text":"nice insight","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/169153588","repostId":"1182315358","repostType":4,"isVote":1,"tweetType":1,"viewCount":223,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}