Today is Thursday, April 7, 2022.
New to this newsletter? Sign up here.
New ETF Bets Against Bitcoin
If you’ve ever wanted to bet against the price of Bitcoin, there’s a proposal for a new exchange-traded fund (ETF) that aims to short (or bet against) the price of the popular cryptocurrency.
Details: On Tuesday, ProShares filed a proposal with the U.S. Securities and Exchange Commission (SEC) to launch the ProShares Short Bitcoin Strategy ETF, a derivative that corresponds to the inverse of the return of Bitcoin futures contracts for a single day.
Background: In October 2021, ProShares received SEC approval for the first Bitcoin futures ETF in the United States. The SEC has yet to accept an ETF that actually holds Bitcoin.
Outlook: If approved, it would be the first ETF to short Bitcoin in the United States. ProShares is aiming to launch the ETF in 75 days, but the SEC could delay its decision.
Bigger Picture: On Wednesday, the SEC approved another Bitcoin futures ETF, this time from trading company Teucrium.
Final Thoughts: There are other ways for investors to short Bitcoin, including margins and binary options, but this ETF could be useful.
Notable Earnings Today: Constellation Brands (NYSE: STZ), WD-40 (Nasdaq: WDFC), Conagra Brands (NYSE: CAG), AngioDynamics (Nasdaq: ANGO), Genfit (Nasdaq: GNF), Lamb Weston Holdings (NYSE: LW), Apogee Enterprises (Nasdaq: APOG), Northern Technologies International (Nasdaq: NTIC), Cazoo (), PriceSmart (Nasdaq: PSMT).
Notable IPOs Today: Genesis Unicorn Capital Corp. Class A Common Stock (Nasdaq: GENQ), Denali Capital Acquisition Corp. Unit (Nasdaq: DECAU).
Notable Equity Crowdfunding Campaigns Ending Today: Launchspace Technologies (Netcapital), Galexa (StartEngine), Global Cancer Technology (Netcapital), Apothio (Republic).
Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), Consumer Credit (3:00 p.m. ET).
Levi Strauss Grows Despite Supply Chain Constraints
Shares of Levi Strauss (NYSE: LEVI) jumped 2.99% in after-hours trading on Wednesday after the clothing company posted positive earnings.
Financials: Levi Strauss reported earnings of 46 cents per share and revenue of $1.59 billion; both were better than expected.
The Good: Revenue for direct-to-consumer increased 35%. The company experienced strong demand in the quarter. Levi Strauss also raised its prices to partially offset higher production costs.
The Bad: Supply chain constraints resulted in a loss of $60 million in revenue.
Numbers: Shares of Levi Strauss are down 26% in the past six months, but up nearly 8% in the past 30 days.
Final Thoughts: To mitigate supply chain challenges, Levi Strauss increased its inventories by 20%. Hopefully, this will pay off.
Disadvantages of a Stock Split
Here are some of the top drawbacks of having a stock split for a company.
They’re Meaningless: A stock split doesn’t really impact the direction of the company. If a business is struggling, that stock split won’t really help.
New Investors: While it’s good that stocks become more affordable, there is a concern that a stock split might attract too many investors - including those who have no business in that company.
Volatility: In the short term, a stock split usually results in volatility, which is bad for any stock.
Final Thoughts: Keep these disadvantages in mind when you hear about the next company announcing a stock split.
Trends to Watch
The Oracle of Omaha: Buffett's Berkshire reveals stake in HP; shares surge almost 10% (Reuters)
Cooling Inflation: Fed Signals Faster Pace of Rate Increases, Likely Bond Runoff (The Wall Street Journal)
Can’t Be Crypto: Meta is reportedly making ‘Zuck Bucks’ (The Verge)
Stop: SpaceX Permit Review for Texas Launch Site Halted by Army Corps (Bloomberg)
Thank you for reading!
Forward to a friend and tell them to sign up here.
Want more investing tips? Listen to the podcast.
Questions or comments? Hit reply to reach out.