Peloton’s Pandemic Boom Is Over

August 27, 2021

Today is Friday, August 27, 2021

Peloton’s Pandemic Boom Is Over

Shares of exercise machine company Peloton (Nasdaq: PTON) suffered a 6% price drop in after-hours trading Thursday after posting earnings and guidance that disappointed investors.

Numbers: Peloton reported a loss of $1.05 per share, worse than the projected losses of about $0.45 per share.

What Happened: After Peloton was forced to recall its treadmill products in the quarter and could no longer sell them, revenue growth dropped.

Flashback: Peloton was the darling stock of the stay-at-home trend during the pandemic. As sales grew, the stock price soared 395% in 2020.

Future: To add insult to injury, the company is experiencing higher costs and lowered its future guidance. It also slashed the prices of its exercise bike.

Look on the Bright Side: With lower prices, Peloton could attract more customers.

Final Thoughts: This won’t be the only stay-at-home stock that will have problems adapting to the reopening of the economy.

Notables

Notable Earnings Today: Big Lots (Big), Hibbett Sports (HIBB).

Notable IPOs Today: SeqLL Inc. Common stock (Nasdaq: SQL), Bragg Gaming Group Inc. Common Shares (Nasdaq: BRAG), Sono-Tek Corporation Common Stock (Nasdaq: SOTK), Nexters Inc. Ordinary Shares (Nasdaq: GDEV).

Notable Equity Crowdfunding Campaigns Ending Today: Blue Gold Works (Wefunder), ASK Education (NetCapital), Jetson (StartEngine)

Notable Economic Events Today: Personal Income and Personal Spending (8:30 a.m.), Fed Chair Jerome Powell speaks (10:00 a.m.), U.S. Baker Hughes Oil Rig Count (1:00 p.m.)

Altria Cranks Up Dividend

Tobacco company Altria Group (NYSE: MO) upped its quarterly dividend Thursday by 4.7% from $0.86 to $0.90 per share, resulting in an annual dividend rate of $3.60 per share, which is a yield of 7.4%.

Why it Happened: Altria raised its dividend to return more cash to its shareholders.

Numbers: After a terrible 2020, Altria’s stock has already soared over 19% in 2021.

Recent History: Last month, Altria beat profit and revenue expectations as net income reached $1.16 per share.

What Experts Say: A few weeks ago, an analyst from Morgan Stanley (NYSE: MS) suggested that Phillip Morris International (NYSE: PM) could buy Altria.

Final Thoughts: Altria also owns a stake in e-cigarette company Juul Labs, which has seen its valuation slip since last year.

Best SPAC Trading Strategies

Investing in a special-purpose acquisition company (SPAC), which is a shell company that takes acquires a private company and takes it public, can be beneficial but it carries some risk.

Here are some strategies to consider to get the best return possible.

Sell High: Since SPACs by their very nature undergo less scrutiny and transparency than those companies then went public via IPO, it might be worth trading the stock at a high price early before secrets of the company come out.

Be Patient: On the other hand, if a SPAC stock’s price is low, it might be worth being patient and sticking it out until the price soars again.

Go by Sector: Look at economic trends to see which sector of SPACs is the most likely to succeed.

ETFs: Having problems selecting the right SPAC to invest in? Fortunately, there are SPAC exchange-traded funds (ETFs) that invest in a bag of SPAC stocks.

Final Thoughts: Similar to other investments, it is critical to understanding trading basics such as reading charts in order to develop a good SPAC investing strategy.

Trends to Watch

An ETF for WallStreetBets: MEME ETF seeks to tap retail investor sentiment (Reuters)

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