Tag Archives: Retail/Wholesale

Business

U.S. Government Scientists Skeptical of One-Shot Regimen for Pfizer, Moderna Covid Vaccines

Leave a comment

WASHINGTON—U.S. government scientists are pushing back against calls for one-dose regimens for two Covid-19 vaccines designed to be administered with two shots, saying there isn’t enough evidence that a single dose provides long-term protection.

“It is essential that these vaccines be used as authorized by FDA in order to prevent Covid-19 and related hospitalizations and death,” Peter Marks, director of the Food and Drug Administration’s center that oversees vaccines, told The Wall Street Journal.

The FDA late last year approved a two-dose regimen for vaccines from

Moderna Inc.

and from a partnership of

Pfizer Inc.

and

BioNTech

SE. More recently it approved use of a one-dose regimen for a vaccine from

Johnson & Johnson.

Some scientists and lawmakers have called for shifting to a one-dose regimen for all the vaccines, citing preliminary studies showing one shot can be effective. They contend shifting to one shot will allow the U.S. to accelerate the pace of vaccinations.

In a March 2 letter to acting Health and Human Services Secretary

Norris Cochran,

seven physician members of Congress urged the department “to consider issuing a revised emergency use authorization as soon as possible” that might lead to single-dose use of the

Pfizer

and Moderna vaccines.

“Last week, the U.S. passed a sobering milestone of over 500,000 deaths related to COVID-19,” said the letter, signed by lawmakers including

Rep. Andy Harris

(R, Md.) and

Rep. Gregory F. Murphy,

(R., N.C.). “These are staggering statistics, and anything we can do to help prevent further tragedy—to further protect the public health and safety of the American people—should be fully employed.”

In interviews, senior government scientists at the FDA and the National Institutes of Health said such a shift isn’t warranted, saying the evidence used to approve the Pfizer and Moderna vaccines was based on two doses.

These scientists said one dose may offer short-term protection, but the longer-term protection is a question mark.

“You would be flying blind to just use one dose,” said one senior scientist and adviser to President

Biden.

“If you’re going to do something else other than follow the studies shown to the FDA, show me that this one-shot effect is durable.”

Another senior U.S. government doctor said the durability of the vaccination is especially important when more-resistant strains of Covid-19, including those from the U.K. and South Africa, are appearing in the U.S.

“We think it’s best to get people to as high a level of immunity as possible,” the doctor said.

The doctor added that the pace of vaccinations is accelerating with the recent decision by

Merck

& Co. to help produce the J&J vaccine.

“We’re going to have a good supply of vaccines very soon,” the doctor said.

Representatives of Pfizer and Moderna didn’t immediately respond to requests for comment Saturday. Pfizer has previously said it doesn’t have data regarding the single-dose approach, and Moderna has previously said it isn’t studying the issue.

Paul A. Offit

of the Children’s Hospital of Philadelphia, who served on the FDA advisory panel that recommended the use of the Pfizer and Moderna vaccines, said those clinical trials “found a level of neutralizing antibodies [with one dose] that was significantly less than what they got with two doses.”

The FDA advisory panel’s chairman,

Arnold Monto,

also said the two-shot regimen is best for the Pfizer and Moderna vaccines. Dr. Monto, a public-health doctor at the University of Michigan, stressed the need for two doses to counter the Covid-19 variants.

“We’ve got information on a two-dose strategy,” said Dr. Monto. “We need high antibody levels from those doses to deal with the variants.”

Others holding fast with similar views in the U.S. government are prominent infectious-disease doctor

Anthony Fauci

and

Andy Slavitt,

a senior White House adviser for Covid-19 response. Mr. Slavitt said it would be a mistake for the U.S. government to be persuaded by just one study.

University of Minnesota epidemiologist

Michael Osterholm

said in testimony Thursday before the Minnesota legislature that the U.S. should consider delaying second doses so more people can get first shots.

“We could get more of our over-65 group vaccinated,” he said. “I think the data will support that actually is a very effective way to go.”

Two weeks ago, researchers in Israel reported that one dose of the Pfizer vaccine was 85% effective in preventing symptomatic disease 15 to 28 days after inoculation.

In the U.K, the government has opted to stretch vaccine supplies by delaying a second dose by up to 12 weeks in a bid to reach more people.

British researchers released preliminary data in recent days saying that either of two vaccines—from Pfizer and from

AstraZeneca

PLC—reduced the risk of hospitalization among people older than 70 years old by 80%, compared with people of similar ages without vaccination.

AstraZeneca is still conducting a U.S. study of its vaccine, which hasn’t yet gained authorization from the FDA.

Write to Thomas M. Burton at tom.burton@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

Tanger Shares Take a Wild Ride

Leave a comment

Text size

A worker carries a broom past closed stores at the Tanger Outlets center in Atlantic City, N.J. Shares of Tanger surged on Thursday.


Angus Mordant/Bloomberg


Tanger Factory Outlet Centers

took a wild ride on Thursday, the latest hot potato stock caught in a short squeeze.

The mall operator has a high amount of short interest, currently more than 33% of its shares, according to FactSet. That makes it among the most heavily shorted stocks along with

GameStop

(30.2%),

Rocket Cos.

(39.7%), and

GoodRx Holdings

(27.6%), according to MarketWatch data.

Shares of Tanger (ticker: SKT) jumped 22% Thursday morning to hit a 52-week high before settling down. By midafternoon, they had lost steam completely and were down 5.4%. The stock is up 38% over the last year, compared with a 20% one-year gain in the

S&P 500.

Malls have been among the most downtrodden stocks during the pandemic, forced to temporarily close locations and restrict the number of shoppers while also juggling budget-strapped tenants facing the same challenges. 

Tanger has been a topic on a Reddit forum called WallStreetBets. One post from Wednesday said “SKT is about to reach its highest point since may 2019 and it’s the second most shorted stock after GME. You know what to do!”

“Lets make this explode,” the post says. “Help bring this stock to the spotlight and make it the new GME.”

A spokesman for Tanger wasn’t immediately available on Thursday.

WSB on Reddit is the forum where stock trading enthusiasts share ideas. It’s also a big focus of those investigating the run-up in

GameStop

(GME),

AMC Entertainment Holdings

(AMC), and other stocks a few weeks ago in a trading frenzy described as retail investors going after professional short sellers.

The average rating of the six analysts who publish research on Tanger is Underweight, the equivalent of a Sell. Full-year 2020 revenue fell 10%, to $370 million, according to FactSet.

Write to liz.moyer@barrons.com

Read original article here

Health

Lessons From the U.K. About a More-Contagious Covid-19 Variant

Leave a comment

LONDON—The U.K. has become a testing ground for how a more-contagious and possibly deadlier coronavirus variant spreads through communities, displacing its less-transmissible ancestors and complicating vaccine rollouts and the lifting of lockdowns.

The variant has now been identified in more than 70 countries and 40 U.S. states, and its advance in Britain could help scientists understand its likely trajectory in the U.S. These charts show the spread of the variant around the U.K. and what British scientists are learning about it—including its higher transmissibility and lethality.

“Increasingly, since this version of the virus was discovered we’ve really been running two separate pandemics,” said

Jason Leitch,

national clinical director for Scotland. “That is a warning to other countries.”

Seven–day rolling rate of new Covid-19 cases in U.K.LondonLondonBirminghamBirminghamSheffieldSheffieldBelfastBelfastEdinburghEdinburghCardiffCardiff

Seven–day rolling rate of new cases

Per 100,000 population

100175250325

U.K. variant share of new cases in England

Sep. 3Oct. 1Nov. 5Dec.31Feb. 4050100%

Source: Public Health England (map); Second Generation Surveillance System (chart)

British scientists detected the new variant in November, and in early December traced its first appearance in the U.K. to the southern English county of Kent, in September. The country was in lockdown in November to suppress a deadly wave of infection that had been building since the fall. British public health officials were mystified by the virus’s ongoing spread in southern England despite those restrictions.

When scientists examined the variant’s genome, they found an unusually large number of mutations, some of which pointed to the possibility the new variant could spread more rapidly than pre-existing versions. Further sequencing—and a testing quirk that served as a reliable proxy for the variant’s presence—revealed how quickly the variant rose to dominance.

Total number of

contacts that

became cases

Percentage of all contacts that became cases, by region

Total number of

contacts that

became cases

Percentage of all contacts that became cases, by region

Total number of

contacts that

became cases

Percentage of all contacts that became cases, by region

Percentage of all contacts that became

cases, by region

Total number of

contacts that

became cases

When lockdown lifted in early December, the new variant went national. The overall case rate per 100,000 people increased fivefold in London, and the new variant was soon detected in almost every corner of the U.K. Another, stricter nationwide lockdown was imposed Jan. 4 to arrest its spread. Caseloads have since fallen back and the government has published plans for a staged reopening in the coming months.

Public-health officials began probing the contact patterns of people known to be infected with the new variant, now widely known as B.1.1.7. They found evidence that people infected with the variant went on to infect more people than those infected with the previously dominant strain. That finding reinforced the genetic analysis pointing to a more transmissible version of the pathogen.

“We haven’t seen anything quite like the U.K. variant in terms of its growth rate, in terms of its transmissibility,” said

Nick Loman,

a professor of microbial genomics and bioinformatics at the University of Birmingham.

More worrying still, when public-health officials and teams at U.K. universities began examining clinical data on those known to have been infected with B.1.1.7, they detected signs the variant might be associated with a higher risk of death.

Findings from various studies about the increased or decreased likelihood of dying from Covid-19 if

infected with the U.K. variant vs. previous variant

Findings from various studies about the increased or decreased likelihood of dying from

Covid-19 if infected with the U.K. variant vs. previous variant

Findings from various studies about the increased or decreased likelihood of

dying from Covid-19 if infected with the U.K. variant vs. previous variant

Findings from various studies about the

increased or decreased likelihood of dying

from Covid-19 if infected with the U.K.

variant vs. previous variant

One preliminary analysis, from Scotland, suggested infection with the variant could be 65% more likely to result in hospitalization and 37% more likely to end in death than contracting the older version of the virus. Scientists say these findings aren’t definitive, and some studies suggested the link with higher mortality was weak or the variant may even be associated with a lower risk of dying.

Still, the evidence was sufficient for a panel of scientists advising the U.K. government to say this month that it is likely B.1.1.7 carries a greater risk both of hospitalization and death than established versions.

Surveys of patients conducted by the U.K.’s Office for National Statistics between November and January made another finding: Infection with the B.1.1.7 can result in slightly different symptoms, which may help doctors spot possible cases.

Percentage of Covid-19 patients in England reporting each symptom, based on which variant they are

infected with

Percentage of Covid-19 patients in England reporting each symptom, based on which

variant they are infected with

Percentage of Covid-19 patients in England reporting each symptom, based on

which variant they are infected with

Percentage of Covid-19 patients in England

reporting each symptom, based on which

variant they are infected with

The classic symptoms of Covid-19—fever, cough and shortness of breath—were slightly more common among those with the new variant than the old. Patients reporting a loss of taste or smell were less common. And gastrointestinal complaints were more frequent in the case of the new variant.

One cold comfort for the U.K., according to public-health officials, is that the new variant is now so dominant and so transmissible that other variants of concern to epidemiologists, such as those identified in South Africa and Brazil, haven’t gained much traction. Another reason for optimism is that lab tests and some clinical studies—as well as real-world vaccination in the U.K.—suggest the variant can be neutralized by the current range of vaccines.

As highly transmissible coronavirus variants sweep across the world, scientists are racing to understand why these new versions of the virus are spreading faster, and what this could mean for vaccine efforts. New research says the key may be the spike protein, which gives the coronavirus its unmistakable shape. Illustration: Nick Collingwood/WSJ

Dr.

Philip Dormitzer,

Pfizer Inc.’s

chief scientific officer of viral vaccines, told U.K. lawmakers on Wednesday that the company was seeing protection against the U.K. variant in real-world data from Israel and from the U.K. “equivalent to the protection we saw in controlled trials before that variant was circulating.”

Still, the variant’s rapid advance and unusual characteristics mean it remains a worry, say disease experts, especially if vaccine rollouts don’t keep pace.

Cumulative number of U.S. Covid-19 samples testing positive for the U.K. variant

Cumulative number of U.S. Covid-19 samples testing positive for the U.K. variant

Cumulative number of U.S. Covid-19 samples testing positive for the U.K. variant

Cumulative number of U.S. Covid-19 samples

testing positive for the U.K. variant

“It’s a new beast,” said

Eric Topol,

professor of molecular medicine at Scripps Research in California. He said he didn’t think it was widely appreciated that the new variant could create a new pandemic, one “driven by a tougher virus to combat.”

—Jason French, Andrew Levinson, Max Rust, Josh Ulick, Dov Friedman, and Randy Yeip contributed to this article.

SHARE YOUR THOUGHTS

How should we prepare for new coronavirus strains? Join the conversation below.

Write to Jason Douglas at jason.douglas@wsj.com and Joanna Sugden at joanna.sugden@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

GameStop Investors Who Bet Big—and Lost Big

Leave a comment

Salvador Vergara was so enthusiastic about

GameStop Corp.

GME 2.54%

in late January that he took out a $20,000 personal loan and used it to purchase shares. Then the buzzy stock plunged nearly 80%.

GameStop’s volatile ride is hitting the portfolios of individual investors like Mr. Vergara who purchased the stock in a social-media-fueled frenzy. These casual traders say GameStop was their “YOLO,” or “you only live once,” trade. They bought around its late January peak, betting it would continue its astronomical climb. While some cashed out before it crashed, others who hung onto their shares are in the red.

‘I thought it could go up to $1,000. I really believed in that hype, which was an awful thing to do,’ Mr. Vergara says.



Photo:

Farrah Skeiky for the Wall Street Journal

Mr. Vergara, a 25-year-old security guard in Virginia, started investing four years ago after deciding he wanted to retire young. To save money, he drives a 1998 Honda Civic, eats a lot of rice and lives with his dad. He stashed his savings mostly in diversified index funds, which are now valued at about $50,000. Then Mr. Vergara, a longtime reader of the WallStreetBets page on Reddit, saw others posting about buying GameStop shares and the stock’s colossal rise.

He didn’t want to touch his index-fund investments, so instead he got a personal loan with an 11.19% interest rate from a credit union and used it to fund most of his GameStop purchase. He bought shares at $234 each.

Price return, year to date, 30-minute intervals

Source: FactSet

GameStop shares started the year around $19, zoomed to nearly $350 (and almost hit $500 in intraday trading) in late January, and then began to spiral back to earth. The shares closed Friday at $52.40, down 85% from the peak close.

“I thought it could go up to $1,000. I really believed in that hype, which was an awful thing to do,” Mr. Vergara said.

He plans to hold on to the shares because he believes in the company’s turnaround, he said, and use his paycheck to cover the monthly payments on the personal loan. Once the pandemic is over, he hopes to move back to his native Philippines, live off savings and start a charity. The GameStop loss set those plans back about six months, he said.

One of the artworks by Tony Moy, whose bet on GameStop stock has lost much of its value, is inspired by ‘diamond hands,’ a phrase used to describe hanging onto your position, no matter what.



Photo:

Matt Moy

Free trading and simple-to-use apps have made it much easier for regular investors to pour money into stocks like GameStop. In a world without international travel, live entertainment and other usual pastimes, brokerage apps such as Robinhood Markets Inc. are drawing hordes of new users looking for both a diversion and a jackpot.

Before the pandemic, Patrick Wesolowski checked his portfolio once a week. Then the clients of his Chicago-area dog-walking business stopped taking vacations and started working from home, crimping his income and leaving him with lots of free time.

SHARE YOUR THOUGHTS

Do you trade individual stocks? Has your trading been influenced by conversations on Reddit or other social media sites? Join the conversation below.

With business sluggish, the 31-year-old started spending more time researching stocks to include in his $15,000 portfolio. He “lurked” on WallStreetBets, reading about other investors’ wild bets but not posting much himself. “It’s like reading ‘Florida Man’ news headlines with a Wall Street twist,” he said.

In recent months, Mr. Wesolowski found himself picking up his smartphone to check his Fidelity Investments brokerage-account balance more often. He followed the frenzy around GameStop, and when shares were approaching $300 decided to put in $3,000. Afterward, he checked his portfolio on his phone every 10 minutes. At first, watching the stock drop made him feel queasy, but then he got used to it.

“If I lose it, I lose it. I’m OK. It’s like going to Vegas,” Mr. Wesolowski said. If he still had that money, he said, he might have put it toward a personal splurge like a vacation.

Patrick Wesolowski spent more time researching stocks after the pandemic hurt his dog-walking business and bought $3,000 of GameStop shares.



Photo:

Ola Wazny

For many, GameStop represented more than just an investment. When Tony Moy bought about $1,200 of the shares, two at $379 and two more a few days later at $228, “I knew it was, intrinsically, the wrong move,” he said.

Mr. Moy wasn’t surprised when the stock quickly lost much of its value. A casual reader of WallStreetBets, he was mostly excited about the push to stick hedge funds with losses. Some hedge funds that shorted the stock—betting the price would fall—suffered big losses, though others managed to make money during the turmoil.

The trade was an outlet for Mr. Moy’s frustrations after an abysmal year, a “virtual protest” of sorts, he said. In 2020, after the pandemic shut down large gatherings, the Chicago-based artist lost most of his income from selling his work at comic conventions. He also came down with a bad case of Covid-19 that left him coughing for months. He said his more successful investing endeavors have helped him get by financially.

One of Mr. Moy’s most recent works of art is inspired by “diamond hands,” a phrase used on Reddit to describe hanging onto your position, no matter what. He is keeping his GameStop shares as a memento. “It’s going to be a little reminder to me,” he said, “of how 2020 was the year when hedge funds had a great year and everyone else was struggling.”

The recent run-up in GameStop and other stocks involved investors in opposing camps: traditional Wall Street firms and small investors bucking the system. WSJ asked the same questions to one of each about the role of WallStreetBets in the trading frenzy. Photo Illustration: Carlos Waters

Write to Rachel Louise Ensign at rachel.ensign@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

AstraZeneca Covid-19 Vaccine Effective Against U.K. Variant in Trial

Leave a comment

LONDON—A Covid-19 vaccine developed by the University of Oxford and

AstraZeneca

PLC is effective against a variant of coronavirus that is spreading rapidly in the U.S. and around the world, according to a new study, a reassuring sign for governments banking on mass vaccination to bring the pandemic to an end.

The preliminary findings, published in a study online Friday that hasn’t yet been formally reviewed by other scientists, follow similarly positive results from other manufacturers.

Preliminary studies from

Pfizer Inc.

and

Moderna Inc.

found their Covid-19 shots continued to offer protection against new virus variants that have contributed to a fresh surge in cases in the U.K., Europe, South Africa and elsewhere.

Vaccine makers are nevertheless readying new shots that zero in on the new variants more precisely, underlining how mutations in the virus risk morphing the year-old pandemic into a long-running cat-and-mouse game between scientists and a shifting enemy. The virus behind Covid-19 has so far been linked to almost 2.3 million deaths worldwide and more than 100 million cases.

The study published Friday looked at the AstraZeneca vaccine’s effectiveness against a new variant of coronavirus first identified in the U.K. last year.

As new coronavirus variants sweep across the world, scientists are racing to understand how dangerous they could be. WSJ explains. Illustration: Alex Kuzoian/WSJ

The variant has now displaced older strains to become the dominant version of the coronavirus in Britain and is spreading in many other countries, including the U.S., where public-health officials have said it could become the dominant version of the virus.

Preliminary estimates suggest the variant from the U.K. is 50%–70% more transmissible than earlier versions of the virus. U.K. scientists said recently that early data suggested it could also be deadlier.

Researchers examined blood samples from around 256 participants in an ongoing clinical trial of the vaccine in the U.K. who tested positive for Covid-19.

Genetic sequencing allowed them to identify which participants were infected with the new variant and which had an older version. A little under a third had the new variant.

By testing antibody levels and other markers of immune system activity against the virus, the researchers found the vaccine triggered an effective immune response against the new variant in 75% of cases that showed symptoms of infection, and in around two-thirds of cases if those that didn’t show symptoms were also included.

The U.K. Coronavirus Variant

The small-scale study showed the vaccine works slightly better against older, more established versions of the virus. For those with the older strain, the vaccine was effective in 84% of symptomatic cases and 81% of all cases.

The researchers reported sharply differing antibody responses among the two groups, saying certain types of antibodies induced by the vaccine were up to nine times less effective at neutralizing the new variant than the old. Overall protection was similar, however, suggesting other parts of the immune system are playing a key role.

Andrew Pollard,

director of the Oxford Vaccine Group at the University of Oxford, said it isn’t entirely clear which biological mechanisms are most important. It might be infection-fighting T-cells or other types of antibodies, he said.

“We don’t know the answer,” he said.

Almost 120 million doses of vaccine have been administered worldwide, according to figures compiled by the University of Oxford’s Our World in Data project. Roll-outs have been patchy, with some countries such as Israel and the U.K. moving rapidly to inoculate their most at-risk citizens and others, including in Europe, lagging behind due to supply and other issues. The U.S. has so far given at least one dose of vaccine to 35 million people, around 10% of its population.

Vaccine makers say the technology behind Covid-19 vaccines should allow them to swiftly retool their production lines to produce shots targeted more precisely at new and emerging variants.

Some studies have suggested a variant first identified in South Africa might be less susceptible to existing vaccines than the U.K. variant. Companies including Moderna, Pfizer and its partner

BioNTech

SE,

Johnson & Johnson

and

Novavax Inc.

are designing new vaccines to specifically target the South African variant.

Babak Javid,

associate professor of infectious diseases at the University of California, San Francisco, said small differences in how vaccines perform against new variants compared with established versions isn’t a major concern provided those vaccinated are protected against severe illness and hospitalization. That will be critical to determining when countries relax lockdowns and other public health restrictions, he said.

Write to Jason Douglas at jason.douglas@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

GameStop’s meteoric gains have almost entirely disappeared — here’s advice for those who didn’t get out in time

Leave a comment

The author of the Cracked Market blog, Jani Ziedins, last week warned the traders piling into the videogames retailer GameStop not to get greedy — or more specifically, not to be a pig.

Well.

As the chart shows, that short squeeze worked until it didn’t. Momentum fizzled after Robinhood and other brokerages limited access to trading in GameStop
GME,
-42.11%
and other securities that were surging in popularity. As to why, there will be Congressional hearings to find out the culprit — hedge funds or good-old-fashioned margin requirements — but the end result is the same.

GameStop may still have its moments. “As for what comes next, GME will be insanely volatile for weeks and even months. That means 50% and 100% moves in both directions. But at this point, a 50% bounce only gets us back to $75. Maybe we get back to $100 or even $125, but waiting for anything higher is just wishful thinking,” Ziedins says.

Here’s Ziedins’ advice now. “For those that still have money left in the market, there is no reason to ride this all the way into the dirt. Cash in what you have left, learn from this lesson, and come back to the market better prepared next time,” says the Cracked Market blogger.

Cue, Frank Sinatra.

And those traders are inexperienced. Cardify, a consumer-data firm, did a survey of 1,600 self-directed investors in GameStop and cinema chain AMC Entertainment
AMC,
-20.96%
and found that most were inexperienced investors — 44% having less than 12 months of experience, and another quarter with one to two years’ experience. Nearly half made their biggest-ever do-it-yourself trading investment in the last four weeks, according to the survey that ended on Monday.

Why? Of these overwhelmingly young and male investors, 45% said for quick financial profits. Nearly 20% said it was part of a long-term investing strategy, and 16% said to spite big hedge funds and institutional investors, according to Cardify.

The buzz

The U.S. added 49,000 nonfarm payrolls jobs in January while the unemployment rate fell to 6.3%, according to the Labor Department.

The U.S. Senate in the early hours of the morning approved a budget resolution that will allow for a fast tracking of the $1.9 trillion coronavirus relief plan proposed by the Biden administration to be approved without Republican support. Vice President Kamala Harris cast the tiebreaking vote. Johnson & Johnson
JNJ,
+0.93%
meanwhile submitted its coronavirus vaccine for Food and Drug Administration approval.

Pinterest
PINS,
+0.91%
shares jumped 11% in premarket trade, as the art-sharing social-media service reported forecast-beating earnings on a 76% jump in revenue during the fourth quarter. Another social-media service, Snap
SNAP,
-1.60%,
also beat expectations. Besides using social media, people stuck at home were playing videogames, as Activision Blizzard
ATVI,
-0.10%
gained 8% after it reported stronger earnings and bookings than expected, increased its dividend by 15%, and authorized a $4 billion share buyback plan.

Ford Motor Co.
F,
+1.52%
reported a surprise profit and topped expectations.

Exercise-bike maker Peloton Interactive
PTON,
+7.04%
slumped 7% as it did beat on earnings but flagged a rise in shipping and other costs. T-Mobile US
TMUS,
+0.95%,
the mobile service operator, also beat earnings expectations but guided to a softer 2021 than expected.

Luckin Coffee, the U.S.-listed Chinese coffee retailer, filed for bankruptcy protection, less than a year after an accounting scandal.

The market

After the S&P 500
SPX,
+1.09%
ended Thursday at a record for the sixth time in 2021, U.S. stock futures
ES00,
+0.37%

NQ00,
+0.20%
pointed to another day of gains.

The yield on the 10-year Treasury
TMUBMUSD10Y,
1.158%
moved up to 1.16%, after ending Thursday at its highest in 11 months.

The chart

The more things change, the more they stay the same. Today’s technology giants are following a similar trajectory to the radio makers of the 1920s, as well as the dot-com era around the turn of the century. “So the point is that you can be a firm believer in tech’s ability to transform our lives but still think valuations might be in a bubble,” said Jim Reid, strategist at Deutsche Bank.

Random reads

This local government meeting over Zoom
ZM,
+2.50%
turned into a chaotic, internet sensation.

Chocolate sales were 40% to 50% higher in areas with an increased number of COVID-19 cases, according to confectioner Hershey
HSY,
+0.44%.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch

Read original article here

Business

GameStop Day Traders Are Moving Into SPACs

Leave a comment

Special-purpose acquisition companies—shell companies planning to merge with private firms to take them public—are rising more than 6% on average on their first day of trading in 2021, up from last year’s figure of 1.6%, according to University of Florida finance professor

Jay Ritter.

Before 2020, trading in SPACs was muted when they made their debut on public markets.

Now, shares of blank-check companies almost always go up. The last 140 SPACs to go public have either logged gains or ended flat on their opening day of trading, per a Dow Jones Market Data analysis of trading in blank-check companies through Thursday. One hundred and seventeen in a row have risen in their first week. The gains tend to continue, on average generating bigger returns going out to a few months.

The gains in companies that don’t yet have any underlying business underscore the wave of speculation in today’s markets. Merging with a SPAC has become a popular way for startups in buzzy sectors to go public and take advantage of investor enthusiasm for futuristic themes.

But lately, day traders are even putting money into SPACs before they have revealed what company they are buying. At that stage, they are pools of cash, so investors are wagering that the company will eventually complete an attractive deal.

Despite the risks, many are embracing the trade, underscoring how online investing platforms and social-media groups now send individuals flocking to new corners of markets, including shares of unprofitable companies such as GameStop and

AMC Entertainment Holdings Inc.

AMC 53.65%

That trend also is playing out in everything from shares of silver miners to SPACs, which were relatively rare before last year but are suddenly ubiquitous in finance.

“I would just have a bad case of FOMO if I wasn’t in SPACs,” said

Marco Prieto,

a 23-year-old real-estate agent living in Tucson, Ariz., referring to the fear of missing out that is driving many individuals to put money into markets.

He has a roughly $50,000 portfolio and about 60% of his holdings tied to blank-check companies. Some of his positions are early on in shell firms such as

Social Capital Hedosophia Holdings Corp. VI,

while others are based on rumors tied to possible deals by companies including

Churchill Capital Corp. IV.

Share-price performance of existing SPACs without deals announced*

Amount of cash

held by SPAC:

Biotechnology/Life science/Health care

Share-price performance of existing SPACs without deals announced*

Amount of cash

held by SPAC:

Biotechnology/Life science/Health care

Share-price performance of existing SPACs without deals announced*

Amount of cash

held by SPAC:

Biotechnology/Life science/Health care

Share-price performance of existing SPACs without deals announced*

Amount of cash

held by SPAC:

Biotechnology/Life science/Health care

Shares of that company have more than doubled since Bloomberg News reported on Jan. 11 that it is in talks to combine with electric-car firm Lucid Motors Inc. Trading got so frenzied that the SPAC put out a statement a week later saying it wouldn’t comment on the report and that it is always evaluating a number of possible deals. The stock has still been gyrating in the days since.

Investors betting on SPACs even before such reports is extraordinary because the underlying value of a blank-check firm before it pursues a deal is the amount of money it raises for a public listing. That figure is typically pegged at $10 a share. Still, it has become common for investors to buy at higher prices such as $11 or $12 to back big-name SPAC founders such as venture capitalist

Chamath Palihapitiya

and former Citigroup Inc. deal maker

Michael Klein.

In another sign blank-check firms are now frequently traded by individuals, several SPACs and companies that have merged with them recently joined GameStop and AMC on a list of stocks that had position limits on Robinhood Markets Inc., a popular brokerage for day traders. Those restricted included Mr. Klein’s Churchill Capital IV and a few of Mr. Palihapitiya’s SPACs in the

Social Capital Hedosophia

SPCE 2.74%

franchise.

The flood of money pouring in is a concern for skeptics who worry that everyday investors don’t understand the dangers of the trade. Even recent losses in a few hot companies such as electric-truck startup

Nikola Corp.

NKLA -0.39%

and health-care firm MultiPlan Inc. that merged with blank-check firms aren’t deterring investors because of the gains in other SPACs.

“It’s a tremendous amount of speculation,” said

Matt Simpson,

managing partner at Wealthspring Capital and a SPAC investor. His firm invests when SPACs go public or right after, then takes advantage when shares rise and typically sells before a deal is completed. He advertised an expected return from the strategy of 6% to clients, but last year it returned 20%.

Ninety-one SPACs have raised $25 billion so far this year, putting the market on track to shatter last year’s record of more than $80 billion, according to data provider SPAC Research.

Fast gains in the shares can result in big payoffs for their founders and the first investors in blank-check firms like Mr. Simpson. These earliest investors always have the right to withdraw their money before a deal goes through. The traders who get in later don’t have those same privileges, but that hasn’t been a deterring factor.

“If you don’t take a risk, there’s really no opportunity at all,” said

Chris Copeland,

a 36-year-old in upstate New York who started day trading on the platform Robinhood with his girlfriend last month. Roughly three-quarters of his portfolio is tied to SPACs such as

GS Acquisition Holdings Corp. II.

Mr. Prieto checks SPACs on his phone. ‘I would just have a bad case of FOMO if I wasn’t in SPACs,’ he says.



Photo:

Cassidy Araiza for The Wall Street Journal

Trading volumes in many popular blank-check firms have increased lately, an indication of investors’ heightened activity. That trend is even drawing attention from some SPAC founders.

“It worries me,” said veteran investor and SPAC creator

Bill Foley.

Trading volumes have surged in one of the SPACs founded by the owner of the Vegas Golden Knights hockey team, especially since it announced a $7.3 billion deal to take

Blackstone Group Inc.

BX 0.21%

-backed benefits provider Alight Solutions public last week.

One reason traders are getting into blank-check firms when they are just pools of cash is that the time it takes for a SPAC to unveil a deal has dwindled. Blank-check firms normally give themselves two years to acquire a private company, but many these days need only a few months.

SHARE YOUR THOUGHTS

Are you investing in SPACs? Why or why not? Join the conversation below.

It also doesn’t take long for investor speculation about a blank-check firm’s acquisition to build, particularly because SPACs can indicate the sector in which they hope to complete a deal.

Excitement can be triggered by a SPAC pioneer like Mr. Palihapitiya, who sometimes hints to his more than 1.2 million Twitter followers when activity is coming. The former Facebook Inc. executive took space-tourism firm

Virgin Galactic Holdings Inc.

public in 2019 and last month reached a deal with Social Finance Inc.

Even though he invests in a number of blank-check firms other than his own—often when SPACs need to raise more money to complete deals—shares of his own companies can climb following such tweets. One example came Jan. 21, when one of his blank-check firms rose about 4% after Mr. Palihapitiya started a tweet by saying “I’m finalizing an investment in ‘???.’”

The SPAC has since given back those gains after no news about an acquisition came out and it was revealed that Mr. Palihapitiya’s investments were in companies unrelated to his own. He declined to comment.

Mr. Palihapitiya also has thrown himself into the frenzy of activity around GameStop trading, publicizing an options trade last week in the stock and taking profits on it.

Reports about possible mergers like those surrounding the Churchill Capital IV SPAC and a possible combination with Lucid Motors also quickly attract hordes of buyers. That blank-check firm is now owned by many individuals, including Messrs. Prieto, Copeland and

Jack Oundjian,

a 40-year-old who lives in Montreal.

“I’m very excited that we have a chance to be able to participate in what could be future unicorn companies,” or startups valued at $1 billion or more, Mr. Oundjian said. He said he views SPACs as long-term investments rather than fast trades, and holdings tied to the sector make up about 30% of his roughly $1.2 million portfolio.

Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn’t worth the risk. Illustration: Zoë Soriano/WSJ

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8



Read original article here

US

Jan. 6 Rally Funded by Top Trump Donor, Helped by Alex Jones, Organizers Say

Leave a comment

The rally in Washington’s Ellipse that preceded the Jan. 6 riot at the U.S. Capitol was arranged and funded by a small group including a top Trump campaign fundraiser and donor facilitated by far-right show host

Alex Jones.

Mr. Jones personally pledged more than $50,000 in seed money for a planned Jan. 6 event in exchange for a guaranteed “top speaking slot of his choice,” according to a funding document outlining a deal between his company and an early organizer for the event.

Mr. Jones also helped arrange for

Julie Jenkins Fancelli,

a prominent donor to the Trump campaign and heiress to the Publix Super Markets Inc. chain, to commit about $300,000 through a top fundraising official for former President

Donald Trump’s

2020 campaign, according to organizers. Her money paid for the lion’s share of the roughly $500,000 rally at the Ellipse where Mr. Trump spoke.

Another far-right activist and leader of the “Stop the Steal” movement,

Ali Alexander,

helped coordinate planning with

Caroline Wren,

a fundraising official who was paid by the Trump campaign for much of 2020 and who was tapped by Ms. Fancelli to organize and fund an event on her behalf, organizers said. On social media, Mr. Alexander had targeted Jan. 6 as a key date for supporters to gather in Washington to contest the 2020-election certification results. The week of the rally, he tweeted a flyer for the event saying: “DC becomes FORT TRUMP starting tomorrow on my orders!”

Alex Jones addressed protesters on the Capitol grounds on Jan. 6.



Photo:

Jon Cherry/Getty Images

The Ellipse rally, at which President Trump urged supporters to march to the U.S. Capitol, was lawful and nonviolent. But it served as a jumping-off point for many supporters to head to the Capitol. Mr. Trump has been impeached by the Democrat-led House of Representatives, accused of inciting a mob to storm the Capitol with remarks urging supporters to “fight like hell.”

Few details about the funding and organization of the Ellipse event have previously been revealed. Mr. Jones claimed in a video that he paid for a portion of the event but didn’t offer details.

Messrs. Jones and Alexander had been active in the weeks before the event, calling on supporters to oppose the election results and go to the U.S. Capitol on Jan. 6. Mr. Alexander, for instance, tweeted on Dec. 30 about the scheduled Jan. 6 count for lawmakers to certify the Electoral College vote at the Capitol, writing: “If they do this, everyone can guess what me and 500,000 others will do to that building.”

Julie Jenkins Fancelli, shown in 2019, donated more than $980,000 in the 2020 election cycle to a joint account for the Trump campaign and Republican Party, records show.



Photo:

Barry Friedman/LKLND NOW

A hodgepodge of different pro-Trump groups were planning various events on Jan. 6. Several of them, led by the pro-Trump Women for America First, helped coordinate the Ellipse event; another group splintered off to lead a rally the night before, at which Mr. Jones ended up speaking, and the group organized by Mr. Alexander planned a protest outside the Capitol building.

Mr. Jones, who has publicized discredited conspiracy theories, has hosted leaders of the Proud Boys and the Oath Keepers, two extremist groups prominent at the riot, on his popular radio and internet video shows.

Mr. Jones declined to respond to requests for comment. In a statement, Mr. Alexander said Stop the Steal’s motto is “peaceful but rowdy,” that the violence at the Capitol wasn’t planned by his group and said none of his rhetoric incited violence. Messrs. Alexander and Jones said on Mr. Jones’s show that they tried to prevent protesters from entering the Capitol and sought to de-escalate the riot. Neither has been accused of wrongdoing.

A spokesman for the Trump campaign said it had no role in financing or organizing the Ellipse event and didn’t direct former staffers to do so. A spokeswoman for Mr. Trump declined to comment. At least five former Trump campaign staffers besides Ms. Wren assisted on the logistics of the Jan. 6 rally, according to the permit and Federal Election Commission records.

Ali Alexander, activist and leader of the ‘Stop the Steal’ movement, helped coordinate planning of the Ellipse rally.



Photo:

carlos barria/Reuters

Starting in mid-December, Mr. Alexander began publicizing plans “to march and peacefully occupy DC with #StopTheSteal,” according to organizers and a message saved by

Devin Burghart,

who directs an organization that tracks extremist groups. Mr. Trump on Dec. 19 urged supporters through Twitter to come for Jan. 6 protests that he said would be “wild.”

Mr. Alexander created a website called WildProtest.com, writing: “We the People must take to the US Capitol lawn and steps and tell Congress #DoNotCertify on #JAN6!” He planned and publicized a rally to take place on the Capitol grounds that day. The website was taken offline after the riot.

A representative of Women for America First had applied for a permit to host a separate rally just after the inauguration in January, but the group rescheduled for Jan. 6 after the Dec. 19 Trump tweet, organizers said.

Women for America First’s permit for the Ellipse rally listed several names and positions, including Ms. Wren as “VIP coordinator.” In the 2020 election cycle, the Trump campaign and a joint GOP committee paid Ms. Wren and her fundraising consulting firm $730,000, according to FEC records.

The Ellipse rally, during which Donald Trump spoke, was lawful and nonviolent, but it served as a jumping-off point for his supporters to head to the Capitol.



Photo:

Shawn Thew/Bloomberg News

Ms. Wren had been tapped to handle funding by Ms. Fancelli, the major donor to the Ellipse event, according to organizers. Ms. Fancelli, who didn’t respond to several requests for comment, donated more than $980,000 in the 2020 election cycle to a joint account for the Trump campaign and Republican Party, records show.

Ms. Fancelli, daughter of the Publix Super Markets founder, contacted Mr. Jones and offered to contribute to a Jan. 6 event, organizers said. Mr. Jones connected her to an organizer through Ms. Wren, who handled the funding as she helped coordinate the logistics of a rally with Women for America First. A Publix spokeswoman said Ms. Fancelli isn’t involved in the company’s business operations and doesn’t “represent the company in any way.”

The Ellipse setup cost roughly $500,000, with a concert stage, a $100,000 grass covering and thousands of feet of security structures.

Ms. Wren played a central role in bringing together the disparate group of activists planning events on Jan. 6. She suggested to Mr. Alexander that he reschedule his Capitol rally to 1 p.m. and put into place a list of about 30 potential speakers, including Messrs. Alexander and Jones, who had been listed on websites as associated with the day’s events, according to organizers.

In a statement, Ms. Wren said her role for the event “was to assist many others in providing and arranging for a professionally produced event at the Ellipse.”

The involvement of Messrs. Jones and Alexander triggered debate among the organizers.

Amy Kremer,

chairwoman of Women for America First, said in a statement: “We were concerned because there was an aggressive push to have fringe participation in our event.”

In text messages Ms. Wren sent to another organizer and reviewed by the Journal, Ms. Wren defended Mr. Jones. “I promise he’s actually WAY nicer than he comes off…I’m hoping you’ll [sic] can become besties,” Ms. Wren wrote.

Ms. Wren’s spokesman said the message is “evidence of Ms. Wren assisting in executing an event while also having to diplomatically get people with different agendas on the same page.”

None of the groups obtained a march permit, though Women for America First called the event “March to Save America Rally” and Mr. Alexander’s Stop the Steal promoted a march to the Capitol online.

The Women for America First Ellipse permit said the group wouldn’t conduct a march but noted: “Some participants may leave to attend rallies at the United States Capitol to hear the results of Congressional certification of the Electoral College count.”

Kylie Kremer,

co-founder of Women for America First, said the group didn’t file for a march permit because it went against Covid-19 guidelines and a march wasn’t in its plans.

When Mr. Trump met on Jan. 4 with former campaign adviser

Katrina Pierson,

who had begun working with rally organizers, he said he wanted to be joined primarily by lawmakers assisting his efforts to block electoral votes from being counted and members of his own family, aides said.

Messrs. Alexander and Jones spoke instead at a Jan. 5 rally organized by the Eighty Percent Coalition, a group founded by

Cindy Chafian,

an early organizer of the Jan. 6 event who struck the initial deal with Mr. Jones.

She said she was willing to work with Mr. Jones because “it’s unreasonable to expect to agree with everything a group or person does.”

Mr. Jones’s seed money in the end was used for that Jan. 5 rally, for which he ultimately paid about $96,000, an organizer said. In his speech at that event, Mr. Jones said: “I don’t know how all this is going to end but if they want to fight, they better believe they’ve got one.”

The next day, Ms. Wren personally escorted Mr. Jones and Mr. Alexander off the Ellipse grounds before the two men marched to the U.S. Capitol, according to organizers. She had provided them and many others VIP passes that morning for Mr. Trump’s speech.

Messrs. Alexander and Jones were at the Capitol grounds together on Jan. 6, and Mr. Jones supported protesters with a bullhorn, video footage shows. He urged them to be peaceful and proceed to the area on the Capitol grounds where Mr. Alexander had secured a demonstration permit, according to Mr. Alexander and the footage.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com, Alexandra Berzon at alexandra.berzon@wsj.com and Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Read original article here

Business

Amid the GameStop-led frenzy, Jefferies says ‘plenty of air’ to come out of riskier assets. Another strategist says wait to buy the dip

Leave a comment

Markets are buckled into the fighting chair as another day of the retail-led feeding frenzy on shorted stocks is about to come online.

In case you thought the trading mania was a limited battle between internet day traders and Wall Street hedge funds: videogame retailer GameStop was one of the most traded stocks by value in the U.S. on Wednesday. 

Amateur investors, many based on the Reddit group WallStreetBets, are jumping into heavily-shorted stocks, driving prices to astronomical levels and forcing hedge funds to sell bigger, safer bets to cover losses.

Selloff is creeping to other investments and spooking sentiment. Major indexes took a 2% to 3% ride down on Wednesday and are set to continue surfing.

A must-read: Tendies? Diamond hands? Your guide to the lingo on WallStreetBets, the Reddit forum fueling Gamestop’s wild rise

Our call of the day comes from the U.S. equity researchers at Jefferies, led by global equity strategist Sean Darby, with a bonus call from Sébastien Galy, a strategist at Nordea Asset Management.

The team at Jefferies is clear that the correction in share prices has little to do with fundamentals. Rather, what’s happening is a reflection of a “sentiment shift within some of the more overbought and speculative parts of the market.”

The group’s retail speculative index, measuring the deviation from trend of assets where value is hard to determine, is high at 4 standard deviations. “Hence, there is plenty of air to come out of the riskier financial assets,” the team said.

Darby’s team noted that the short-term worry is whether the “popping” of riskier parts of the market will create a domino effect, as mainstream equities are liquidated to stem losses.

Galy, of the Nordic asset manager Nordea, echoes Jefferies’ caution about a wider selloff. He also says it’s too early to buy the dip, because there’s more to come.

The big moves to cover shorts at a time of high leverage typically forces more deleveraging, Galy said. This is because the constraint on capital from the risk of losses on investments is ratcheting up.

“As a consequence, the cost of hedging downside risk has sharply increased,” Galy said. “This risk reduction could last a few days followed by a sharp liquidity driven rebound in U.S. and to a lesser extent European stocks.”

Galy said that even a dovish Federal Reserve meeting on Wednesday couldn’t turn around this market, which is another signal that it may last.

The buzz

Shares in GameStop
GME,
+134.84%
touched the $500 level in the premarket before pulling back. The stock was just $19 heading into 2021. Fashion brand Nakd
NAKD,
+252.31%
is another stock making a big leap in the premarket, up 130%.

In a Securities and Exchange Commission filing this morning, cinema-theater chain AMC
AMC,
+301.21%
revealed that holders of the company’s convertible bonds have chosen to convert the notes into stock, as shares in the company have rallied around 330% since Tuesday. 

Apple
AAPL,
-0.77%,
Facebook
FB,
-3.51%,
and Tesla
TSLA,
-2.14%
posted earnings after the close yesterday. Technology giant Apple topped $100 billion in quarterly revenue for the first time, crushing expectations, as social-media company Facebook also beat estimates, with sales soaring 156% from “other revenue” — like virtual-reality headsets and video-chat devices. Electric-car maker Tesla reported its sixth straight quarter of profit, but it was a miss on expectations.

But if you can peel your eyes away from the stock market, it is a big day on the economic front. Initial and continuing jobless claims are due at 8:30 a.m. EST, with around 875,000 people expected to have filed for unemployment last week. Gross domestic product figures for the fourth quarter of 2020 will come at the same time, before new home-sales figures for December are reported at 10 a.m.

After the Federal Open Market Committee decided to hold monetary policy steady yesterday, Fed Chair Jerome Powell gave dovish signals that the central bank wasn’t done restoring the COVID-19 pandemic-ravaged economy to health. “We have not won this yet,” he said.

The markets

It looks like another wild day on Wall Street. Yesterday’s tumult saw the Dow Jones Industrial Average
DJIA,
-2.05%
tumble more than 630 points, and stock market futures
YM00,
-0.07%

ES00,
-0.31%

NQ00,
-0.90%
are pointing down, set to continue the selloff. Asian markets
NIK,
-1.53%

HSI,
-2.55%

HSI,
-2.55%
fell across the board and European indexes
SXXP,
-0.76%

UKX,
-1.13%

DAX,
-0.86%

PX1,
-0.17%
are firmly in the red.

The chart

Our chart of the day, from Marshall Gittler at BDSwiss, shows how the S&P 500
SPX,
-2.57%
dropped by the most since October 2020, and the VIX index of expected volatility saw its biggest one-day rise since the COVID-19 pandemic hit in March 2020. 

The tweet

When the sharks root for the fish. Billionaire entrepreneur and investor Mark Cuban — of “Shark Tank” fame — is rooting for Reddit’s WallStreetBets traders.

Random reads

An Oklahoma lawmaker has proposed a ‘Bigfoot’ hunting season with a new bill.

Key West wants to ban people from feeding fat, feral, free-roaming chickens.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.

Read original article here