Equity Crowdfunding's Hot New Look

Plus, a big day for Autodesk.

Steven Lerner
Steven Lerner

Today is Wednesday, September 1, 2021.

Secondary Markets Take Equity Crowdfunding by Storm

A number of equity crowdfunding platforms are starting to offer secondary markets where investors can trade away their equity in a startup, similar to trading shares on the stock market.

Current Situation: When an investor backs a startup on an equity crowdfunding platform, they usually have to wait several years to get a return via a liquidity event, such as new investors or an IPO.

Benefits: Buyers on these secondary platforms get access to shares of up-and-coming startups. Sellers can finally get liquidity, although it is usually less than what they originally paid.

Which Platforms: In the U.S., StartEngine introduced its secondary markets platform in 2020. Seedrs, which is based in the U.K., has a secondary market that has been around for a few years. Netcapital has partnered with a broker to offer a secondary market for investors.

Data: Research published by SSRN in January found that although the early days of the secondary market attracted more investors, the interest disappeared after the first 18 months because of the lack of liquidity.

Final Thoughts: If secondary markets catch on, more equity crowdfunding platforms might adopt it.


Notable Earnings Today: Campbell Soup (NYSE: CPB), Chewy (NYSE: CHWY), Five Below (Nasdaq: FIVE), Nutanix (Nasdaq: NTNX), Smith & Wesson Brands (Nasdaq: SWBI), Brown-Forman (NYSE: BF.B), Vera Bradley (Nasdaq: VRA), Veeva Systems (NYSE: VEEV), Okta (Nasdaq: OKTA).

Notable IPOs Today: n/a

Notable Equity Crowdfunding Campaigns Ending Today:  n/a

Notable Economic Events Today: ADP employment report (8:15 a.m. ET), Manufacturing Purchasing Managers Index (9:45 a.m. ET), ISM Manufacturing Index (10:00 a.m. ET), Construction Spending (10:00 a.m. ET).

How Crypto Impacts the Chip Shortage

Two of the biggest technology investment trends in 2021 are the rise of cryptocurrency adoption and the shortage of semiconductors. However, it turns out these two trends overlap.

Why This Matters: Semiconductors have many uses in the world, but they are critical for crypto because they are used in the computers that mine the coins.

Big Picture: The global shortage of semiconductors has impacted many industries, including crypto. In fact, the technology for mining might cost more in the future. This could hurt the prices of crypto.

Spotlight: The stock for NVIDIA (Nasdaq: NVDA) is up 72% this year. While the company created a line of chips just for crypto miners, it has also issued restrictions for mining capabilities on some products.

Final Thoughts: Given the recent shortage, it might be beneficial for long-term crypto investors to also have some semiconductor holdings in their portfolios.

Autodesk Gears Up for Digital Investor Day

Software company Autodesk will host its Digital Investor Day at 12:00 p.m. today.

Why it matters: Autodesk’s stock popped following the company’s two previous Digital Investor Days. Could it happen again?

Recent History: Last week, Autodesk posted its quarterly earnings of $1.21 per share. Although it beat the projection of $1.13, analysts and investors were not pleased with the sales numbers. Revenue matched expectations and the company’s outlook for free cash flow decreased. Shares of Autodesk are down 9% in the past five days.

Final Thoughts: Autodesk’s stock is up 6% so far this year. It is also up more than 120% since the pandemic started.

Here We Go Again: Americans Are Stocking Up on Toilet Paper Again (The Wall Street Journal)

September to Not Remember: 'Here comes the worst month of the year': Strategist (Yahoo! Finance)

New Sanctions: Regulators warn Wells Fargo of new possible sanctions (Reuters)

Keep Going Up: Solana Skyrockets To New High—Amassing Nearly $40 Billion In Market Value As Competition With Ethereum Heats Up (Forbes)

Falling: CrowdStrike Stock Dips As Investors Mull Earnings Beat, Revenue Outlook (Investor's Business Daily)

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