FOMO is stronger than ever given social media, the 24-hour news cycle and various fintech apps that facilitate equity trading. FOMO ("Fear Of Missing Out"), is stronger than ever, especially among the retail trading community. Retail traders are flush with cash coming off of 2020's Federal Government issued checks and enhanced unemployment benefits. Technology has … Continue reading FOMO Is Stronger Than Ever
YouTube is virtually the same size as Netflix from a Revenue standpoint. Netflix will finish 2020 with Revenue of approximately $25 billion. YouTube will finish 2020 with combined Ad Revenue and Subscription Revenue of approximately $22-23 billion. The two operations share similar revenue growth rates. Thus, if Netflix is worth $227 billion, what is YouTube … Continue reading YouTube vs. Netflix
Weening the market and Americans off of easy fiscal and monetary policy will be no easy task. The Biden Administration's proposed $1.9 Trillion COVID relief package is the first of two multi-Trillion debt-funded "stimulus" tranches to come in 2021. Between zero interest rate policy, debt-funded fiscal stimulus ($1,400 in direct payments to Americans plus extended … Continue reading It Will Be Difficult To Ween The Market Off Of Easy Money
We caution investors to not get ahead of themselves by anticipating a return to "normal", 2019 revenue growth rates in 2021. Most Software companies have a significant Subscription revenue component. Given that Subscription bookings activity slowed for most every Enterprise Software company in 2020, this will translate to slower reported Subscription revenue growth over the … Continue reading Software Revenue Growth Will Be Muted for Many in 2021
From Bubble valuations to zombie companies to Cleantech, 2021 is likely to deliver more of the excesses of 2020. Barring a negative event out of left field, it will take a meaningful interest rate hike and/or corporate tax increase to derail the asset bubble of 2020 that bled into equities, fixed income, home values, lumber, … Continue reading 2021 Outlook: The Froth Will Continue
Whether one measures EV/Revenue multiples, EV/EBITDA multiples, Stock Market P/E multiples or various other measures there is no doubt the market is frothy and that certain sectors are firmly in bubble territory. Two trends are troublesome. The first is that the Market Cap to GDP ratio (measured by the Wilshire 5000 index to Nominal GDP) … Continue reading Stocks Are at A High. Labor Participation Is at A Low.
Given inflated Technology company valuations and a weakening U.S. Dollar, we expect for stock swap M&A transactions to continue - especially as it relates to cross-border M&A. The DXY Index continues to drop as the USD falls relative to the currency basket (click chart below). The U.S. economy remains soft. Companies continue to cut headcount. … Continue reading Stock Swap Transactions Are Likely To Continue
If state election commissions and state legislatures would have adopted voting technology platforms that mimic the Trade Order Management/ Execution Management financial technology systems available on the market today, much of the drama around the 2020 General Election could have been avoided. Many electronic voting systems lack full auditability and therefore leave themselves exposed to … Continue reading A “FinTech” Approach To Election Technology
The capital markets would likely experience volatility in the coming weeks should the U.S. Supreme Court take up the Trump campaign's case regarding General Election results in the state of Pennsylvania. We expect the SCOTUS to do so. On Wednesday Pennsylvania judge Patricia McCullough (R) halted further vote certification until her evidentiary hearing Friday morning … Continue reading Pennsylvania Is Getting Interesting. Market Volatility Ahead?
The U.S. is similar to a legacy Technology company whose best days are in the rear view mirror. A telltale sign of this reality is that fact that the Federal Reserve is the largest buyer of U.S. Treasuries. There was a time when Japan and China were the largest holders of U.S. Treasury securities. Today, … Continue reading When You Are Your Biggest Customer