🚂 All aboard.
Good Evening. Welcome to Hype Train #008. This edition we gloss over some hype stock news, take a look at James’ watchlist and check out some US tech IPOs. We also perform analysis on what the latest presidential debate means for stocks (this can also be applied to Trump getting COVID-19 as well)!
💰 HYPE STOCK NEWS
🇦🇺Domestic:
👓Vection Technologies (VR1) has raised $6m for global expansion, as they also announce joining Facebook’s Oculus Quest development program. Very nice from Australia’s number 1 AR/VR stock. Up 40% on the news.
🚘The chairman of Automotive Internet of Things company Connexion (CXZ) has resigned due to personal reasons.
🖥️Family Zone (ASX: FZO) had a 250% revenue increase with 2.8k schools now on their remote learning program. The stock is up ~170% this year.
🌏International:
💊Trump is receiving an antibody cocktail on compassionate grounds as part of his treatment plan for COVID-19. The two companies responsible for these drugs are Regeneron (NASDAQ:REGN) and Gilead (NASDAQ:GILD).
📱Facebook responded to Netflix’s Social Dilemma documentary stating “creates a convenient scapegoat for what are difficult and complex societal problems”.
♻️Apple is suing a Canadian Recycling firm for reselling 100k devices instead of destroying them…
📈JAMES’ WATCHLIST
Today we take a quick look at some of the stocks co-editor James has on his watchlist.
🏦8common (ASX: 8CO)
What they do: Financial transaction processing for governments and enterprises
Why they’re on my watchlist: very solid government clients, decent YOY revenue growth, ability to easily upsell their existing clients + growth opportunities through their new CardHero product. A surprisingly nice-looking microcap stock.
🔋Novonix (ASX: NVX)
What they do: batteries for electric vehicles. We’ve written about these guys before.
Why they’re on my watchlist: They’ve dropped nearly 50% without any real meaningful change to their fundamentals. It probably is worth buying the dip…
🏘️Opendoor (NYSE: IPOB)
What they do: IPOB is a shell company that is going to acquire Opendoor. Opendoor is a hype US tech stock that is disrupting the property industry by buying houses from people real quick and fast using data.
My Take: Chamath is bullish on this one, and trust me, this guy is rarely wrong when it comes to picking 10x stocks. Opendoor has first-mover advantage and is positioning itself to become the Amazon of Property. Nice 5-10 year hold.
💻Upwork (NASDAQ: UPWK)
What they do: Upwork is a marketplace that connects contractors (freelancers) to clients (businesses or individuals)
My Take: COVID has accelerated the remote work trend and the creator’s economy. Fiverr is Upwork’s primary competitor, and they’re up 500% this year compared to Upwork only 27%. Comparatively undervalued in a growing market that could be the future of work.
👻Snap (NYSE: SNAP)
What they do: App for teens to communicate
My Take: Three things going for it (1) All the teenagers I speak to use this app a shit ton (2) they lead consumer augmented reality and (3) their founder is a gun. Oh and I also believe Snap is a long-term augmented reality hardware play (Snap Spectacles may evolve into glasses people where 24/7 that project holograms…)
👔Slack (NYSE: WORK)
What they do: Workplace communication software i.e. Facebook but for internal team communication at big companies.
My Take: From hipster startups to established corporations, every company that gives a shit about their employees uses this to communicate. COVID has proven how important Slack is and they’re only up 5% since the start of the year.
What they do: A new blockchain (cryptocurrency…) built for the next generation of apps, games, and the digital assets that power them.
My Take: Most cryptocurrencies are either straight up scams or overhyped. However, this blockchain is created by the founders of Cryptokitties (a hype crypto game from 2017) in response to the problems they had scaling. Flow has already partnered with the NBA (NBA TopShot), the UFC and Dr Seuss to bring to life digital collectible cardgames. They’re also funded by the best venture capital firms on Earth. Current valuation is 125m. Ethereum’s is ~50b. The upside is 400x (bull case) compared to a downside of like 50%. Not a bad asymmetrical bet.
🗳️WHAT THE US PRESIDENTIAL DEBATE MEANS FOR STOCKS
Jack initiates coverage into the US election…
🎆2020: THE YEAR OF THE HYPE TECH IPOS?
In the midst of a very chaotic time on the stock market, 2020 has been a great year for a timeless classic that everyone can enjoy, IPOs.
Its now been just over a week since the much anticipated IPO of the “SeCrEtIvE” company Palantir. I struggle to think of a more closely watched and interesting IPO since Snapchat went public in march of 2017. We had Uber last year, but that turned out to be rather underwhelming. Perhaps we had a slow start to the year for IPOs. Perhaps everyone loves speculating about a newly listed, non-profitable company. I’d say it's a bit of both, but either way you look at it, this was a great one to watch.
A good chunk of the fun comes from trying to value companies that are yet to actually make any money. Adding to this was the uncertainty surrounding the legality of Palantir's products, with Radical left U.S senator AOC demanding an inquiry into the company before they went public.
But while Palantir is a fun gamble with wacky product names like “Gotham”, my attention has already turned to what I think will be the most hype IPO of the year, Airbnb.
Airbnb has become a juggernaut in the travel industry, carving out a whole new market and radically disrupting the way people go on holidays. It also launches at an interesting time with the travel industry having taken such a hit this year. It raises the possibility of a potentially significantly undervalued IPO. Its extremely common for IPOs to go slightly undervalued at launch, and companies have strong incentives to do this. However, launching a travel company in a time when travel companies with strong balance sheets are potentially underpriced raises a lot of interesting questions about this one.
While Palantir's IPO was fascinating because, let's face it, even most people who work at the company don't know exactly how their products work; I feel Airbnb offers a much more interesting macroeconomic challenge.
Overall its always exciting when companies we use every day IPO and we get a chance to throw our savings in the ring and bet on products we know well.
Other upcoming IPOs to note:
DoorDash:
Operating in a very competitive industry but would have had a huge year with everyone being trapped inside.
Unity Software:
The foundation for many of the 3d games that we all know and love
Wish:
Who actually buys stuff on here????? How is this still a thing??? I have no idea but its going to the mooooooon
Bumble:
People are never going to stop being horny, and as we move away from lockdowns there’s going to be plenty of people on the prowl. Could be a good buy
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Thank you and have a great week.
Email us at thehypetrainaus@gmail.com if you have any hot tips for an article or just want someone to talk to.