What you need to know?
Scoopers, nothing goes better with your morning cup of joe than an update from the U.S. Department of Commerce about Huawei. That’s what drove the overall stock market up on Monday. It was a perfect day if you are an investor in Chinese stocks, and not much of a good day if you are into cybersecurity stocks. China, 1. Cybersecurity, 0.
Scroll down to the “Overall Market,” “What’s up?” and “What’s down?” sections to read those stories and more.
- U.S. markets: All major indices finished Monday higher than where they started the week. The Nasdaq led the pack by 1.35% gain. Scroll to the Overall Market section to learn more.
- Cryptocurrency: Bitcoin’s price continued hovering around $10,000 per coin. The rally in the overall stock market hasn’t trickled over the cryptocurrency market just yet.
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Are we back in safety?
What happened on Monday?
The stock market finished Monday in the green zone, and the Nasdaq was ahead of the pack. The higher one-day gain by the Nasdaq was partially fueled by a significant rally in the Technology sector. This sector mainly had a good Monday because of the good news that came from the U.S. Department of Commerce.
On Monday, other stock market investors and we smiled ear to ear. We got excited when we read about a 90-day extension to Temporary General License that allows U.S. companies to continue to sell to and buy from Huawei and its affiliated entities. This extension means, most semiconductor manufacturers and device makers can continue doing business with Huawei, for another 90 days.
What does that mean?
Come late November and early December; we have to brace for another round of frenzy in the stock market. The ban of trade with Huawei will become effective as Monday’s 90-day extension comes to an end. Moreover, the additional 10% tariff on Chinese imports are also due in mid-December. Thus, if you think we are back to normal just because the stock market has recovered slightly in the last few days, don’t be that optimistic. The same concerns that rattled the market last week will resurface in a few months, if not sooner.
These companies had a great Monday.
So, what happened?
Shares of Baidu (Ticker: BIDU), Weibo (Ticker: WB), SINA (Ticker: SINA) were among several other Chinese stocks that had a great start to their week. These three companies were up by 16.86%, 14.87%, and 14.0%, respectively. All three delighted investors, after announcing better than expected quarterly earnings.
These companies had a bad Monday.
Unlike quite a few Chinese stocks, shares of Cybersecurity companies did not have much luck on Monday. Shares of Zscaler (Ticker: ZS) and Palo Alto Networks (Ticker: PANW), two prominent cybersecurity stocks, wrapped up Monday in the red zone. Zscaler particularly suffered. Shares of the company fell more than 11% after analysts from OTR Global downgraded the stock. The research company explained that some of the Zscaler’s partners fell short of their sales goals. Thus, the company expects to see a reduction in Zscaler’s sales figures in the current quarter.
We elevate the world’s consciousness.
So, what happened?
Folks, nothing makes this editorial team happier than digging deep into S1 documents the aspiring public companies release before the debut on the stock market. But we have to tell you, we’ve never seen anything like WeWork’s S1 document.
Professor Galloway from NYU School of Management wrote a funny and snarky review of WeWork’s S1 that is worth reading. One thing that caught our eye was the number of times the company’s founder’s name was sighted in the document. Apparently, Prof. Galloway counted it, and the name “Adam” appeared 169 times in the document, vs. an average of 25 mentions of the founders or CEOs in the S1 document of other hot unicorns and IPOs. Two things are apparent from WeWork’s IPO:
- We are now living in an age that the perception of “coolness” is valued much higher than the strength of operations.
- Investors are getting tired of absurd valuations and lashing out against WeWork
Is this the end of frothy IPOs? Tell us what you think about WeWork’s IPO, by replying to this email. Your response may get featured in the Water Cooler section of the upcoming Scoops.