In today’s briefing:
- Netflix 4Q21: Don’t Look Down
- Roblox ($RBLX) – Deep Dive
- Polestar Is The Dark Horse in the EV Race
- Silver: Initial Target Met, However..
- Intel: Well-Positioned To Compete But Hardly A Short-Term Play
- Falcon Minerals: High Quality Royalty Trust at a 30% Discount
- The Nightcap from SPAC Track
- Immersion: The Market Leader Of Haptic Technology Plunged By 33% In 6 Months
- COLL: Risks Abundant with No Guidance
- Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
Netflix 4Q21: Don’t Look Down
- Shockingly poor 1Q subscriber guidance implies 9M net adds for 2022, well below the ~25M level investors are accustomed to, implying saturation, competition, or both. (We think both)
- Operating Margin guidance cut blamed on FX, we think more likely the demand for heightened content spend due to competition.
- Netflix valuation always built on a long term DCF…very sensitive to downward revisions in subscribers and ARPU…we think Netflix settles around $400 until it can disprove bear thesis.
Roblox ($RBLX) – Deep Dive
- In order to understand the opportunity in front of Roblox it is important that we understand the scale of Gaming as a whole
- The three main components of the Roblox Platform are the Roblox Client, the Roblox Studio and Roblox Cloud
- Roblox has a fully functioning economy contained within its universe
Polestar Is The Dark Horse in the EV Race
- 2021 was the year of EV Stocks, with automakers raising large sums of money without any vehicle deliveries or revenues.
- Swedish EV Maker Polestar is the latest in a long list of EV makers to go public through a SPAC, but there’s more to this deal than first meets the eye
- Polestar is set to make its public debut at a critical juncture in the nascent EV Market where Tesla has captured a lion’s share and the competition is struggling to scale
Silver: Initial Target Met, However..
- The initial target on Silver was the 200 day moving average which has now been met
- This moving average limited the gains on the previous two occasions so a close above if seen would be another bullish sign
- What has also happened overnight however is that we have taken out a multi week & month trend resistance which suggests further gains
Intel: Well-Positioned To Compete But Hardly A Short-Term Play
- From a market point of view, Intel’s risk-reward profile appears more compelling than many of its high-flying peers.
- From a business perspective, the company will likely continue to suffer in the short-term, however, strategic positioning is still strong.
- What has historically been Intel’s weak spot could prove to be its key competitive advantage over the coming years.
Falcon Minerals: High Quality Royalty Trust at a 30% Discount
- Falcon Minerals (FLMN) is a royalty trust whos primary asset was the Karnes trough in the Eagle Ford shale
- This is one of the lowest breakeven oil reservoirs in the US with a 10+ year drilling inventory with high quality large operators
- It seems to have mostly traded at a discount to other royalty trusts. Probably because it has a much smaller asset base, and management with a spotty track record.
The Nightcap from SPAC Track
- Silver Spike Acquisition Corp II (SPKB: warrants -5.6%) & Eleusis
- SCVX Corp. (SCVX), a publicly traded Special Purpose Acquisition Company , has announced today that it has entered into a non-binding letter of intent (“LOI”) for a business combination
- Vistas Media Acquisition Company (VMAC) releases merger vote and redemption results for its previously approved merger with Anghami
Immersion: The Market Leader Of Haptic Technology Plunged By 33% In 6 Months
- The haptic technology industry is expected to grow at a CAGR of 14.5% from 2021 to 2027 according to PR Newswire.
- IMMR issues with management, investor relations management, and litigations is limiting the value of the stock.
- Immersion is putting less money into R&D, making some investors worried onto whether it will have a sustained strong future as market leader in haptic technology.
COLL: Risks Abundant with No Guidance
- COLL has yet to issue their annual revenue forecast after three consecutive years of providing such guidance, leading us to assume 2022 could be challenging than current consensus estimates imply
- XtampzaER revenue declined in third quarter 2021 with COLL facing difficulty in getting physicians to switch prescriptions. The slowdown in XtampzaER revenue has been the core of our investment thesis
- COLL has a balance sheet liability of $191.7 million related to rebates, returns, and discounts. This liability has grown faster than revenue
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
US equity markets dropped yet another day with the S&P and Nasdaq down 1.1% and 1.3% as risk-off sentiment continued to weigh on markets. Most sectors were in the red with Consumer Discretionary, Materials and IT down 1.3-1.9%. US 10Y Treasury yields eased 8bp to 1.77%. European markets closed mostly higher with the DAX and CAC up 0.7% and 0.3% while FTSE was down 0.1%. Brazil’s Bovespa closed 1% higher. In the Middle East, UAE’s ADX and Saudi TASI were up 0.8% and 0.3%. Asian markets have opened in the red – Shanghai, HSI, STI and Nikkei were down 0.8%, 0.6%, 0.1% and 1.4%. US IG CDS spreads were 1.6bp wider and HY CDS spreads were 7bp wider, EU Main CDS spreads were 0.1bp tighter and Crossover CDS spreads were 0.6bp tighter. Asia ex-Japan CDS spreads were 1.6bp wider.
Before it’s here, it’s on Smartkarma
