The Fight
By Fri, Jul 24, 2020
Hey Scoopers,
Worries of new unemployment claims forced the market to take a breather. — More on that in the “Overall Market” section.
Beyond the overall market, selling cybersecurity insurance to people proved hard, and securing a COVID-19 vaccine patent proved to be even harder. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, are you watching the fight? Which fight? The fight over the future of work. — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: All three indices agreed on the directions and finished the day in the red. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price passed the $9,500 level. The curse of sideways movements is broken now.
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Taking A Breather
The market slid deep into the red zone on Thursday. The problem was the higher than expected jobless claims report. More than 1.4 million people filed for unemployment, which is happening just before the extended unemployment stimulus is coming to an end. Therefore, the market is taking a breather.
Cybersecurity Is Hard
So, what happened?
Shares of NortonLifeLock (Ticker: NLOK) were up more than 2% on Thursday. We haven’t talked about this company before. It is a 12 billion dollar company that divested from its former parent Symantec. The company sells cybersecurity and identity protection to individuals like you and us. With the world’s transition to digital living, protecting your online identity and ensuring it from potential cybersecurity threats is a thing to worry about.
Despite the surge in the stock price in recent months, it is still undervalued. It generates profit but no free cash flow. The real bottleneck for the stock is a slow growth rate. Selling cybersecurity insurance and products to consumers is difficult, as most people don’t feel they need it. Unless the company finds a different revenue source that can accelerate as fast as some other consumer digital products, it is hard for NLOK to convince investors to jump on board.
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Patents Are All They Need
So, what happened?
Shares of Moderna (Ticker: MRNA) fell more than 12% on Thursday. Since its COVID-19 vaccine’s new human trial news, the stock has been sliding steadily. Thursday’s decline came after an analyst from SVB Leerink gave the stock a market perform rating, and explained the stock’s overvalued price is unjustified.
The company is also fighting a legal battle over patents, and analysts are worried that the patent protection it may need to make billions of dollars once the vaccine is ready may be threatened.
Are You Watching The Fight?
So what happened?
Which fight? The fight between Slack (Ticker: WORK) and Microsoft (Ticker: MSFT) over the future of work.
Shares of Slack are not doing too well, because it’s bigger competitors, Microsoft, is bundling its Slack competitors for free with its other software. It’s hard to compete with free even if you have a batter product. That’s why the company filed an antitrust lawsuit in the EU to fight the battle legally. This is a fight worth watching because whoever wins may have the legal support to reign supreme and control the future of work.
Are you on the Slack’s side or Microsoft’s?
Let us know your thoughts. Our email address is members@tradestocks.com. Also, feedback and questions are welcomed, as always.
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
