Crypto doubts

One tweet was all it took to send Bitcoin tumble. On Wednesday evening, Tesla Inc. Chief Executive Officer Elon Musk reversed course, tweeting that his automaker would no longer accept the world’s largest cryptocurrency as payment for its electric vehicles, citing energy concerns. The price of the token fell on the news and briefly fell as much as 15% before making up for some of its losses.

Musk’s tweet dropped a number of Bitcoin-related assets on Thursday: Tesla itself, which bought the token worth more than $ 1 billion, fell 3.1%. The stock has fallen about 34% since the investment was announced in February. Coinbase Global Inc., the largest US crypto exchange, slumped up to 11%. Microstrategy Inc., which also holds Bitcoin, even fell 11.8%.

After a meteoric surge in late 2020, Bitcoin has seen a mix of rallies followed by quick corrections over the past three months. Concerns about the environmental impact, as well as underperforming alternative digital coins – including Ethereum, Litecoin, and Dogecoin – have fueled speculation that the currency’s best days may be behind.

What’s next? However, other crypto insiders believe it may not be time to give up. “This could be the sell-off that is preparing Bitcoin for new all-time highs,” said David Grider of Fundstrat Global Advisors LLC. “We think the news is over the top and wouldn’t be surprised if Tesla signals plans to make crypto ‘greener’.”

Falling behind

Bitcoin lagged alternative cryptocurrencies earlier in the year

Source: Bloomberg data

Alibaba setback

Thursday’s quarterly earnings report was another blow to Jack Mas Alibaba Group Holding Ltd.: The e-commerce company, China’s largest company, posted a net loss of 5.5 billion yuan ($ 852 million), its first since 2012 after the company fined $ 2.8 billion for monopoly behavior imposed by Beijing. U.S.-listed stocks were down 6% on Thursday, down about 35% from their October high.

The company now intends to focus on its business and put “all incremental profits” back into technology and hotly contested areas such as community commerce, CEO Daniel Zhang promised on Thursday.

What’s next? Better-than-expected sales in the coming quarters may not be enough to offset the impact of increased spending on the company’s bottom line. Profitability “may take a back seat as it bolsters investments in the coming fiscal year in an effort to drive market expansion and greater user gains and engagement,” said Bloomberg intelligence analyst Vey-Sern Ling.

Off-peak

Alibaba’s share price has continued to fall since its high in October

Source: Bloomberg data

Memestock encore

Day traders again increased the shares of AMC Entertainment Holdings Inc. after unleashing a 320% rally earlier this year. Earlier this month, the theater chain reported a loss of $ 567.2 million in the first quarter, which resulted in an eight-day slump. But the price rebounded after Reddit-inspired investors got involved, with stocks closing 24% on Thursday, extending a streak to five consecutive days of gains.

Cinemas were among the industries hardest hit by the pandemic as lockdowns forced cinemas across the country to close. In January, AMC raised over $ 900 million in funding to stave off a bankruptcy filing.

With almost all AMC US cinemas open and the Covid restrictions being gradually lifted, there is hope that cinema habits will return to normal sooner rather than later.

What’s next? Signs of an end to the pandemic are a welcome sign, however The company “still faces challenging fundamental trends as the industry may not recover significantly from the pandemic until 2022,” said Geetha Ranganathan, analyst with Bloomberg Intelligence. “The reopenings of theaters, particularly in New York and Los Angeles, are a bright spot, but we believe that box office sales could fall by more than 55% this year as films are delayed.”

Back to the moon?

The AMC share has risen sharply since the beginning of the year

IPO problems

Shares in Alphawave IP Group Plc disappointed investors when it went public. The Canadian semiconductor company was down as much as 24% on its first day of trading in London, fueling criticism for overvaluing its shares in the current environment.

The disappointing IPO came amid a wider sell-off in tech stocks, with tech-heavy Nasdaq down more than 5% so far in May as growing concerns about extreme valuations and the risk of inflation hurting future earnings sparked a global defeat throughout the sector.

What’s next? The timing deserves a large part of the blame for the lackluster debut. “As it turns out, Alphawave IP hits the market out of sheer bad luck in a volatile week,” said AJ Bell analyst Jenny Owen, citing unrest in the Middle East, fears of inflation and concerns about Covid outbreaks in India and Taiwan. Nonetheless, she adds, the stock “came at a high valuation so the company and its advisors may have to judge whether they asked too much, especially given current market conditions.”

Luxury discomfort

Not all post-lock restores are created equal: shares of Burberry Group Plc fell up to 10% on Thursday after sales fell below 2019 levels, showing that the company is lagging behind some of its competitors.

Demand for luxury goods should increase this year as consumers stayed home for most of 2020 to make up for lost time. Comparable store sales increased in the three months to March, but sales were still below the level of two years earlier. Now sold to competitors LVMH and Hermes International both topped 2019 levels in the final quarter.

Burberry announced an investment project as part of a catch-up plan. It will spend up to £ 190 million ($ 267 million) on store renovations, digital offerings and information technology.

What’s next? The brand’s new medium-term forecast implies a slower-than-expected improvement in profit margins, said Morgan Stanley analyst Elena Mariani. “Still, the optimistic tone about the Group’s next strategic chapter and the surge in organic sales growth is likely to go down well with investors.”

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