🍨 Daily Scoop: Your total is $700 million - Trade Stocks

🍨 Daily Scoop: Your total is $700 million

By Tue, Jul 23, 2019

Corporate crises, a more polite way of naming those situations that corporations really really mess up, are always much more costly than investors initially anticipate. Here is how much some of the most infamous corporate crises have costed their parent companies:

What does it mean for investors?

  • Equifax (Ticker: EFX) has agreed to pay up to $700 million in the settlement in the lawsuit associated to its data breach incident in 2017.
  • Boeing (Ticker: BA) is footing more than $8 billion in fines, customer damages, and lawsuit related to its 737 MAX product line.
  • Volkswagen (Ticker: VLKAVF) had to pay a $30 billion bill to put its diesel emissions scandal behind.
  • And, who can forget Wells Fargo (Ticker: WFC) who is still dealing with the growth cap the authorities have demanded to make sure the company cleans up its act. To add insult to the injury; the company can’t even find a CEO.

When you hear the stock of a big company is falling as the result of some kind of a corporate crisis, don’t jump in right away. The natural tendency is always to jump in and pick up a few shares while the stock is cheap. However, these crises tend to last much longer and cost much more than what’s initially anticipated. When the next corporate crisis happens, make sure to remind yourself of the above numbers, before you jump in.

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OVERALL MARKET

Ahhhh… no government shut down. 

What happened on Monday?

The stock market repeated its upward trend on Monday, similar to how it trended higher for a few days at the beginning of last week. The upbeat vibe of the market was partly because of a few positive corporate earnings reports. And, to no one’s surprise, it was also fueled by the excitement around the possibility of an interest rate cut by the end of July. More importantly, the White House and the Congress agreed on a 2-year budgetand spending ceiling and no government shut-down is on the horizon.

Now What?

More than 700 corporations re expected to announce their quarterly earnings and the market can sway in any direction this week. Stay vigilant out there and don’t let your emotions eat into your gains.

WHAT’S UP

So what happened?

We don’t know about you, but we are thrilled that we didn’t sell our Disney shares (Ticker: DIS) a few years ago when the stock was hovering around $100 per share. The stock price is now trading slightly higher than $140 per share, and such recognition by Wall Street is very well-deserved. In addition to everything that is going on with Disney Plus streaming service, the company’s movie studios are setting records. This weekend, Avengers Endgame, the pinnacle of all superhero movies, surpassed Avatar as the all-time highest-grossing box office.

This tweet by @RlZEGREYMON made us laugh during the editorial team’s morning coffee:

WHAT’S DOWN

Sometimes no news is bad news 

Shares of Boingo Wireless Inc (Ticker: WIFI) were down more than 6% on Monday. Aside from having a fantastic ticker name, WIFI (Get it? the company selling Wi-Fi connection on planes and stuff), nothing else was going well for the company on Monday. Why? It’s one of the situations that there is no apparent reason for the drop. The company is announcing its quarterly earnings report on Aug 1st. The chances are some high-profile funds or institutional investors are taking their gains off of the table in anticipation of the earnings report. Stay tuned!

WATER COOLER

Raised with tech? How about raised IN tech? So, what happened?

You don’t think technology when you hear Procter & Gamble Co (Ticker: PG). Do you? You may have to change your mind. The company partnered with Lumi, a digital sensor in babies’ diapers to track their sleep and you know what …

About the Author

Brought to you by Hoda Mehr, Editor at Trade Stocks, CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 8,000 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. Subscribe for free here: Stockcard.io