It also eased travel recommendations on Pakistan from Level 4 to Level 3. (Representational)
The United States has improved the travel advisory for India, lowering it from the highest Level 4, which means no travel, to Level 3, which urges citizens to reconsider travel.
It also eased travel recommendations on Pakistan from Level 4 to Level 3.
The improvement of the travel advisories for India and Pakistan by the State Department on Monday comes in an acknowledgement of the COVID-19 pandemic situation in the region.
The Centers for Disease Control and Prevention (CDC) has issued a Level 3 Travel Health Notice for India due to COVID-19, indicating a high level of COVID-19 in the country, the State Department said on Monday.
“Your risk of contracting COVID-19 and developing severe symptoms may be lower if you are fully vaccinated with an FDA authorised vaccine. Before planning any international travel, please review the CDC”s specific recommendations for vaccinated and unvaccinated travellers,” it said.
The latest travel advisory replaces the one issued on May 5 that had placed India in the Level 4 category.
When the last month’s advisory was issued, India was struggling with a second wave of the pandemic with more than 3,00,000 daily new coronavirus cases being reported. Hospitals were reeling under a shortage of medical oxygen and beds.
While the CDC issued a Level 2 Travel Health Notice for Pakistan due to COVID-19, indicating a moderate level of the pandemic, the State Department maintained Level 3 risk for US citizens travelling to the country due to terrorism.
“Reconsider travel to Pakistan due to terrorism and sectarian violence. Exercise increased caution in Pakistan due to COVID-19. Some areas have increased risk. Read the entire Travel Advisory,” the State Department said.
Government has said that the expert panel formed for wage fixation will submit its report soon
The Government has clarified that there will not be any delay in fixation of minimum wages and national floor wages, as is being alluded in a section of media.
In a statement issued by the Ministry of Labour and Employment, it said that the expert group constituted to recommend fixation of minimum wages will submit its recommendations to the Government as early as possible.
The expert panel which is being led by economist Ajit Mishra, has been given a tenure of three years to give its recommendations on wage fixation. A section of the media had reported that owing to the long tenure, fixing of wages may take time.
“It is clarified that Government does not have any intention (to delay wage fixation) and the expert group will submit its recommendations as early as possible. The tenure of the expert group has been kept as three years so that even after the fixation of minimum wages and national floor wages, Government may seek technical inputs from it as and when required,” the ministry said.
It further informed that the first meeting of the group was held on June 14 and second meeting is scheduled for June 29, 2021.
Shares of Peloton are down 28% so far this year versus a 12% gain for the S&P. But if you think you have finally found an attractive entry point, you might want to douse yourself in some cold Gatorade.
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After a wild 434% run-up in its shares last year, Peloton’s Chief Executive
continued to stoke the fire, telling investors in September at the company’s analyst day he believed 100 million subscribers was a reasonable goal for the company, capturing half the number of gym goers world-wide.
The time horizon on that goal is a bit fuzzy. In a note this week, BMO Capital Markets analyst
points out that, in a presentation for the same investor day, Peloton pegged its own serviceable addressable market, or estimated number of households interested in purchasing current Peloton products at current prices, at just 15 million, something he feels Peloton’s most fervent fans have perhaps overlooked.
By Mr. Siegel’s math, Peloton’s current fully diluted market value implies investors already are giving the company credit today for capturing 16.5 million subscribers, or 110% of that addressable market size. Wall Street is forecasting Peloton will have roughly 2.3 million connected fitness subscribers as of June. But even at 5 million subscribers, to justify Peloton’s current market value investors are effectively betting those customers will be paying to sweat and bleed Peloton for the next 24 years, his estimates show.
Peloton fiends better pace themselves.
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slid as much as 12% on Tuesday after short seller Hindenburg Research said that the sports-betting firm’s gambling-technology subsidiary SBTech operates in countries where gambling is banned and said it is positioned for DraftKings shares to fall.
Hindenburg published a report early Tuesday that said DraftKings’ gambling-technology subsidiary SBTech makes about half of its revenue in countries where gambling is banned. According to the report, SBTech created a new entity for what Hindenburg says are its black-market operations ahead of last year’s merger with DraftKings and a blank-check company that took the combination public. DraftKings shares slid in early trading, then recovered. They were recently down about 5%.
“SBTech does not operate in any illegal markets,” a DraftKings spokesman said in a statement. “We conducted a thorough review of their business practices and we were comfortable with the findings.”
New York-based Hindenburg said it based its report on conversations with former employees, regulatory filings and assessments of illegal international gaming websites. It claimed SBTech poses a risk to DraftKings because SBTech accounted for roughly 25% of the firm’s overall sales at the time of the 2020 SPAC merger and brought its technology to the combined company.
The Wall Street Journal hasn’t been able to verify independently the accusations in Hindenburg’s report. DraftKings CEO
has said publicly that SBTech gives the company a technological advantage and provides better user experiences.
Boston-based DraftKings, which is considered a leader in the sports betting industry, has partnerships with major sports leagues including the NFL, NBA and PGA Tour. As the market expands, operators like DraftKings and FanDuel are in heated competition for customers, spending big on advertising and technology.
Sports betting has boomed since the Supreme Court in 2018 cleared the way for states beyond Nevada to legalize wagers on sporting events. Now, 30 states and the District of Columbia have legalized sports gambling. Boston-based DraftKings had a market value of about $20 billion entering Tuesday’s trading session. It is unprofitable and had sales of about $615 million in 2020.
Tuesday’s share-price drop is the latest triggered by Hindenburg and founder Nathan Anderson. The firm publishes financial research and often bets against shares of companies it deems overvalued. DraftKings shares are down about 30% in the past three months.
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Hindenburg’s Mr. Anderson and a reporter for The Wall Street Journal are among the more than 20 defendants in a lawsuit brought by private-equity firm Catalyst Capital Group and Callidus Capital Corp. alleging a short selling conspiracy related to a 2017 article about Catalyst. A Journal representative has said the news organization is confident in the fairness and accuracy of its reporting. Mr. Anderson has said Hindenburg stands by its research.
DraftKings’ share decline comes a day after electric-truck startup
said its chief executive and chief financial officer resigned after a board committee found disclosures about preorders for its truck to be inaccurate, partially confirming claims from a March Hindenburg report. Lordstown’s CEO previously declined to comment to The Journal, and efforts to reach the CFO were unsuccessful.
Hindenburg has also targeted two other notable companies that have gone public by merging with special-purpose acquisition companies—electric-vehicle firm
Regulators are investigating both companies as well as Lordstown. Like Lordstown, Nikola also partially confirmed Hindenburg’s allegations after initially saying they were untrue. Clover has called the claims false. Hindenburg didn’t take a short position in Clover.
Also called a blank-check company, a SPAC is a shell company that lists on a stock exchange with the sole intent of merging with a private firm to take it public. The private company then gets the SPAC’s spot in the stock market. SPAC mergers let companies make projections about their business, which wouldn’t be allowed in a traditional initial public offering. They also often offer startups a quicker way to raise large sums from investors who are excited about future technologies.
Hindenburg’s latest report could also have implications for SPACs, which have become a popular way for startups to raise money and access public markets in the 2020 and 2021 in part due to the lofty valuations of companies like DraftKings. A SPAC backed by former film and media executives
took the company public. The SPAC team declined to comment. The executives have also taken mobile gaming firm
DraftKings and other popular companies linked to SPACs have become trendy with ordinary investors in recent months. Some professionals like Hindenburg, meanwhile, have been betting that shares of many companies that merged with blank-check firms will fall, putting the sector at the center of the recent tension between day traders and pros on Wall Street.
Some analysts say SPACs enrich their creators at the expense of other investors by giving the blank-check executives deeply discounted shares, a point that Hindenburg mentioned in its report.
Short sellers who bet against GameStop, Hertz and AMC—a group targeted by many smaller investors who have favored these stocks—have lost more than $8 billion this year, according to data provider S3 Partners.
“It feels great,” said Daniel Shin, a 35-year-old individual investor based in Edison, N.J., who bought shares of AMC in January and has added to his positions since. “It feels like us against them. Like retail against Wall Street.”
Meanwhile, hedge funds—the “smart money” of years past—have continued to make a lackluster showing. From January through April, a weighted index tracking the performance after fees of about 1,300 hedge funds climbed 8.7%, according to data provider HFR. That lagged behind the S&P 500, which rose 11% over the same period.
The market’s upside-down turn, featuring a sustained rally in smaller companies with shaky financials and easy fortunes made by some early buyers of these shares, doesn’t make everyone happy. Analysts and portfolio managers recall that the market meltdowns of 2000 and 2008 were preceded by roaring bull markets in speculative areas such as dot-com startups and mortgage finance. When those manias ended, the broader economy paid the price.
Millions of individual investors stampeded into the market last year, enticed by zero-commission brokerages and easy-to-use investing apps, and their interest helped fuel the post-pandemic rally. That, and the fervor with which many small investors have piled into market winners, have potentially set the stage for severe selloffs if spooked investors flee hot stocks en masse.
That is in part because they are riding one of the most powerful forces in markets over the past year: momentum investing, or buying assets simply because the price is rising. The rising prices of assets from dogecoin, a cryptocurrency created as a joke, to Hertz shares have attracted buyers, whose demand has driven prices even higher. That, in turn, has drawn even more buyers, in part because of a behavior dubbed FOMO—the fear of missing out.
Data from Vanda Research show individual investors tend to pour far more money into stocks with high momentum than low momentum.
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Paktra Som, a 35-year-old pilot based in Los Angeles, said he jumped into the market for dogecoin in 2019 and has since kept buying, looking to ride its continued ascent. Dogecoin has skyrocketed more than 6700% this year despite a recent pullback.
“If there is a large increase in volume in something and there is a clear trend of direction that it is going…the result is typically rewarding as long as you know when to sell,” Mr. Som said. “Dogecoin had no solid fundamentals to [base] my investing strategy on. But the volume of buyers was always there.”
Other investors aren’t tracking trading volumes or momentum. Rather, they are relying on their gut.
“God told me to put money into Hertz,” said Damien Roscoe, a 42-year-old electronic technician in Glenwood, Ill. “I know it sounds crazy.”
Mr. Roscoe says he made about $8,000 in profits from buying Hertz shares this spring.
The car-rental company has become one of the most unlikely success stories. Hertz declared bankruptcy last year as coronavirus lockdowns and travel restrictions devastated its business. Financial professionals fretted as individual investors snapped up the shares, warning that stock in insolvent companies usually ends up worthless.
“Everyone was, ‘Y’all are stupid for buying stock in a bankrupt company,’” Mr. Roscoe said. “But driving around…I just believed in it.”
In one sign of how powerful the run for meme stocks like Hertz has been, investors who didn’t hold GameStop shares this year would have lagged behind the Russell 2000 value index by almost 1 percentage point even if they held every other stock in the gauge, according to Ted Aronson, a longtime value investor and founding partner of AJOvista, his new investment firm. Value investors seek to buy shares at a discount to their net worth, essentially sifting through out-of-favor assets for bargains.
He compared the recent run in meme stocks and other speculative bets to the internet craze in the late 1990s.
“You just have the herd mentality bidding stuff up based on rumor or Reddit or TikTok,” Mr. Aronson said. “This is just payback for a long time when we had it relatively easy, when value investing worked really well and any monkey could do it.”
The number of publicly traded companies is rising after a two-decade slump, a shift that highlights how businesses are clamoring to capitalize on the buoyant investor sentiment that has carried everything from stocks to bitcoin to record highs.
Last year’s increase in the number of companies listed on U.S. exchanges was the largest since the late-1990s dot-com bubble. The total is expected to surge even more this year as hundreds of companies tap everyday investors, according to data compiled by University of Florida finance professor
have even garnered lofty valuations by going public through direct listings. Those let companies sell shares directly to the public without going through banks, but prevent them from raising new money.
Regardless of how they go public, many companies are finding that the process accelerates their growth in a way that it hasn’t in decades. That now offsets the stricter regulatory and transparency requirements that come with being a listed company, executives say.
Palantir’s market value has swelled from $15 billion to $45 billion in the five months since the company’s direct listing, as the once-private business became a darling for traders on social-media platforms such as Reddit. Two-hundred thirty companies have gone public so far this year and raised $78 billion, putting the IPO market on track to shatter last year’s record high of $168 billion, according to Dealogic.
And 120 companies valued at $1 billion or more have gone public through IPOs or SPACs since the end of June, nearly matching the total from the previous nine quarters, according to Mr. Ritter’s data. Many of those that have gone public in the past few years were so-called unicorn companies privately valued at $1 billion or more, such as ride-sharing company
“The public markets have really become much more receptive,” said
chief executive of digital payments company Payoneer Inc., which recently reached a $3.3 billion deal to go public later this year by merging with a SPAC.
Before the agreement, Payoneer had considered going public for multiple years but preferred staying private. The ability to raise a large sum and make forward-looking projections about its business—something that isn’t allowed in a traditional IPO—made this the right time to go public, Mr. Galit said.
To some market watchers, the booming IPO market is part of a bubble in hot assets that will eventually burst. Startups are still raising hefty sums through venture capital and private equity, but the froth in the stock market and popularity of SPACs are making public-market valuations attractive in a range of industries. That represents a tipping point that investors said for years would be key to increasing the number of companies available to amateur investors.
“We’re seeing that moment right now,” said
a SPAC creator and former co-head of private equity at
Competition among SPACs is another force inflating startup valuations in public markets, bankers say. There are now about 340 blank-check companies seeking private firms to take public in the next two years, according to data provider SPAC Research, and many of them are pursuing similar deals in buzzy sectors such as electric vehicles.
That is fueling a spree of SPAC mergers that turbocharges the increase in the number of publicly traded companies. Mr. Ritter’s analysis doesn’t include SPACs until they complete a merger to take a private company public.
CEO of employee benefits-provider Alight Solutions, said reaching a $7.3 billion deal in January to go public by combining with a SPAC will speed up the company’s business plan by several months, adding that many companies now need to raise large sums to adjust to the disruptions caused by the coronavirus pandemic.
“There’s just a huge pace of innovation and transformation coming forward,” Mr. Scholl said.