Forgot this.Intended for UBS clients but here it is.
Link..
https://drive.google.com/file/d/1RbS24lK1n3W41zc4PBo2dB5BN49yIKRA/view
Link..
https://drive.google.com/file/d/1RbS24lK1n3W41zc4PBo2dB5BN49yIKRA/view
| Welcome to Wall Street Brunch, our preview of stock market events for investors to watch during the upcoming week. You can also catch this article a day early by subscribing to the Stocks to Watch account for Saturday morning delivery. Podcast listener? Subscribe now to receive Wall Street Breakfast by 8:00 a.m. every trading day on Seeking Alpha, iTunes, Stitcher and Spotify (click the highlighted links). The earnings season ramps up next week with some tantalizing updates due out. What is the current cash burn rate at American Airlines (NASDAQ:AAL)? Is Chipotle's (NYSE:CMG) takeout/delivery business still sizzling? Will Microsoft (NASDAQ:MSFT) guide higher? Is a Q2 profit and S&P 500 inclusion in the cards for Tesla (NASDAQ:TSLA)? And what on earth will Twitter (NYSE:TWTR) say about its high-profile hacking episode?. In D.C., Senate Republicans are slated to release their plan for additional stimulus spending next week, which will restart the debate on what the government's financial response to the pandemic should look like. The economic calendar is fairly light with the initial jobless claims report appearing to have the most potential to rattle markets (see below), while the biggest conference event is the annual Farnborough International Airshow. Expect a quieter format this year as the global air show goes online instead of having roaring jets from Boeing (NYSE:BA), Airbus (OTCPK:EADSF) and Embraer (NYSE:ERJ) on display. Finally, there is gold (XAUUSD:CUR) to keep an eye on. Gold futures have stealthily notched six weeks in a row of gains on expectations for additional fiscal stimulus in Europe and the U.S. Earnings spotlight: Halliburton (NYSE:HAL) and IBM (NYSE:IBM) on July 20; Comerica (NYSE:CMA), Coca-Cola (NYSE:KO), Lockheed Martin (NYSE:LMT), Philip Morris International (NYSE:PM), Capital One (NYSE:COF), United Airlines (NASDAQ:UAL), Snap (NYSE:SNAP) and Texas Instruments (NASDAQ:TXN) on July 21; Microsoft (MSFT), Biogen (NASDAQ:BIIB), Canadian Pacific (NYSE:CP), Nasdaq (NASDAQ:NDAQ), Thermo Fischer Scientific (NYSE:TMO), Chipotle (CMG), Equifax (NYSE:EFX), Tesla (TSLA) and Whirlpool (NYSE:WHR) on July 22; Dow Inc. (NYSE:DOW), Hershey (NYSE:HSY), Kimberly-Clark (NYSE:KMB), American Airlines (AAL), Southwest Airlines (NYSE:LUV), AT&T (NYSE:T), Travelers (NYSE:TRV), Twitter (TWTR), Intel (NASDAQ:INTC), Scientific Games (NASDAQ:SGMS) and Verisign (NASDAQ:VRSN) on July 23; American Express (NYSE:AXP), Verizon (NYSE:VZ) and Travelers (TRV) on July 24. Go deeper: See Seeking Alpha's Catalyst Watch foe earnings plays IPO watch: Jamf Holdings (JAMF) is expected to price its IPO on July 22. The enterprise IT services provided is looking to raise $288M. Quiet period expiration expire next week on Albertsons (NYSE:ACI), Agora (NASDAQ:API), Fusion Pharma (NASDAQ:OTC:FUSN), PolyPid (NASDAQ:PYPD), Akouos (NASDAQ:AKUS) and Ebang (NASDAQ:EBON). Of those names, Agora has shown the biggest gain since debuting, while Albertsons is trading below its IPO pricing level. Go deeper: Catch up on all the latest IPO news. M&A tidbits: The tender offer on the Finjan Holdings (NASDAQ:FNJN) acquisition by affiliates of Fortress expires on July 22. There are more indications that the merger between Eldorado Resorts (NASDAQ:ERI) and Caesars Entertainment (NASDAQ:CZR) could close next week. EBay (NASDAQ:EBAY) is expected to enter exclusive talks with Prosus on the sale of its classified ads business. Companies with M&A talk swirling around them include Nutanix (NASDAQ:NTNX), Rosetta Stone (NYSE:RST) and Principia Biopharma (NASDAQ:PRNB). Projected dividend changes (quarterly): Hershey (HSY) to $0.812 from $0.773, Encompass Health (NYSE:EHC) to $0.29 from $0.28, J.M. Smucker (NYSE:SJM) to $0.91 from $0.88, Kellogg (NYSE:K) to $0.58 from $0.57 and Healthcare Services (NASDAQ:HCSG) to $0.2038 from $0.2025. Jobs, jobs, jobs: Initial jobless claims have steadily declined every week since the record high of 6.9M in late March, but Bank of America warns that the closed-watched release could turn higher in the weeks ahead. "Virus case counts have been rising in hotspots across the country forcing government officials to partially reverse some of the progress made towards reopening. Recent media reports have covered anecdotes of people being laid off after being rehired. This would suggest a second wave of initial applications as many states require people to file again if they had discontinued their weekly benefits from their first period of unemployment. Another consideration for claims is seasonality, previews BofA. The firm notes that July is a particularly volatile month for the seasonal factors, and in the upcoming week the seasonal factor is going to collapse by more than 16% adding some upside risk in the claims number and potentially rattling the market. Healthcare execs to DC: The Oversight and Investigations Subcommittee will hold a fully remote hearing on Tuesday, July 21, with officials from five drug manufacturers developing COVID-19 vaccine candidates. Officials from AstraZeneca (NYSE:AZN), Johnson & Johnson (NYSE:JNJ), Merck (NYSE:MRK), Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) will testify at the hearing. The hearing is being promised as an opportunity for both Congress and the American people to hear directly from some of the manufacturers currently developing potential COVID-19 vaccines. Information is expected from the companies on their research and development efforts, safety and efficacy standards and their ongoing preparations to manufacture and distribute an eventual vaccine. While several vaccines are expected to be submitted for regulatory approval by the end of the year, the CEOs of Merck and Pfizer have tried to tamp down hype that a widely-distributed vaccine is likely until 2021. No fear in FAANG: Despite a soft week for the Nasdaq, Wedbush Securities remains firmly bullish on tech for the rest of the year with cloud and cyber security names front and center. "Apple (NASDAQ:AAPL) is on the cusp of an iPhone 12 5G super cycle with a services business that is thriving in this environment, its FAANG brethren Amazon (NASDAQ:AMZN) (massive e-commerce strength and AWS secular trend), Netflix (NASDAQ:NFLX) (streaming bonanza with consumers in lockdown mode), Facebook (NASDAQ:FB) (higher engagement with social media), and Alphabet (NASDAQ:GOOG) (advertising/search, GCP cloud strength) are all seeing relative tailwinds in the June quarter," updates analyst Dan Ives. He says the common theme of strength among many of these tech stalwarts in focus over the next few weeks is around the broader cloud theme for enterprises and consumers as this secular trend further accelerates in this environment with Microsoft and Amazon leading the way as the overall cloud stack remains the linchpin for WFH technology. Vaccine updates: Early-stage human trial data on a COVID-19 vaccine being developed by AstraZeneca (AZN) and Oxford University will be published on July 20. Last week, reports indicated that results from the Phase 1 clinical trial evaluating the vaccine candidate in healthy volunteers showed that it triggered a "double defense" immune response against the virus. Johnson & Johnson (JNJ) says it plans to enter Phase 1 human trials of its COVID-19 vaccine next week, while CanSino Biological (OTCPK:CASBF) and Beijing Institute of Biotechnology’s vaccine candidate has gone up to phase II of the trial. Moderna (MRNA) is prepping to enter the final stage of human trials for its vaccine on July 27. Meanwhile, Phase I/II trials are also running for vaccine candidates from Inovio Pharmaceuticals (NASDAQ:INO), Osaka University/ AnGes/Takara Bio (OTC:TKBIF), Cadila Healthcare (OTC:CDLYY), Wuhan Institute of Biological Products/Sinopharm (OTCPK:SHTDF), Bharat Biotech, Novavax (NASDAQ:NVAX) and BioNTech (NASDAQ:BNTX)/Fosun Pharma/Pfizer (PFE). Healthcare watch: The FDA action date for Jazz Pharmaceuticals' (NASDAQ:JAZZ) JZP-258 NDA for treatment of cataplexy or excessive daytime sleepiness in patients 7 years of age and older with narcolepsy is on July 22. The FDA action date for the relaunch of ANI Pharmaceuticals' (NASDAQ:ANIP) Purified Cortrophin Gel (repository corticotropin injection USP) 80U/mL arrives on July 23. If approved, the product will compete with Mallinckrodt's (NYSE:MNK) Acthar Gel (repository corticotropin injection). Data is expected to be released on (OTCQB:CYDY) Phase 2 trial of Leronlimab treatment for mild- to moderate symptoms of respiratory illness caused by COVID-19 and interim analysis on the first 50 patients treated for two weeks from Phase 2b/3 trial in severe COVID-19 patients. Business updates: In the commodities sector, production reports are due out from BHP (NYSE:BHP), Vale S.A. (NYSE:VALE) and Newcrest Mining (OTCPK:NCMGF). Also of interest, the deadline for Cheniere Energy (NYSEMKT:LNG) to hear from LNG buyers on canceling cargoes for September is July 20. Charles Schwab (NYSE:SCHW) is hosting its Summer Business Update on July 21 for institutional investors on developments and management's strategic focus. XPO Logistics (NYSE:XPO) CEO Bradley Jacobs is the keynote speaker at the FreightWaves 2020 3PL Summit on July 21. Meanwhile, Airbnb (AIRB) CEO Brian Chesky is part of the Reuters Newsmaker event on July 22. Other companies with business updates scheduled include Anteris Technologies on July 20 with an update on its R&D program, Huami (NYSE:HMI) on July 21 with a strategy and operational review, Coretec (OTCPK:CRTG) and Nutanix (NTNX) on July 22 and Ingevity (NYSE:NGVT) on July 23 with a sustainability webinar. Conferences rundown: The biggest conference of the week is the virtual version of SEMICON West Conference, Keynote speakers include Internet patriarch Al Gore and Applied Materials (NASDAQ:AMAT) CEO Gary Dickerson, who will highlight the need for sustainable AI. Companies making a presentation include CyberOptics (NASDAQ:CYBE), Merck (MRK), Advantest (OTCPK:ATEYY) and Lam Research (NASDAQ:LRCX) with CEO Tim Archer on the agenda. The LD Micro "Zooming with LD event" runs from July 20 through July 30. Next week's presenters include Kindred Bio (NASDAQ:KIN) on July 20, electroCore (NASDAQ:ECOR) on July 21, Aspen (NASDAQ:OTC:ASPU) on July 22, Nephros (NASDAQ:OTC:NEPH) on July 23 and Recruiter.com (OTCQB:RCRT) on July 24. Short Squeeze candidates: S3 Partners is pointing at some short squeeze candidates to watch next week. The surge in Moderna (MRNA) has produced almost $1.5B of mark-to- market losses for short sellers this year is close to pushing some shorts with lower loss limits to exit the trade. "There is $2.4B of buy-to-cover dry powder in this stock, once shorts begin to cover in size the buying pressure will jolt the stock price suddenly higher," says S3's Ihor Dusaniwsky. The story is different with Hanesbrands (NYSE:HBI) as shorts are still up +$113M in mark-to-market profits for the year, but have lost over half their yearly profits last week as HBI's rally cost shorts $139M in losses. "If HBI’s price strength continues shorts may begin to cover their positions in an attempt to realize some of the gains they earned in early 2020," notes Dusaniwsky. Go deeper: See Seeking Alpha's Catalyst Watch for other volatility plays Starry stuff: Keep an eye on Virgin Galactic (NYSE:SPCE) next week after the company shook things up in the C-suite. Morgan Stanley analyst Adam Jonas doesn't believe former CEO George Whitesides would take on his new role as Chief Space Officer if Virgin Galactic wasn't prepared to bring forward plans for Phase 3, which he thinks could arrive rather quickly. "The game clock of the space economy is accelerating and moving at the speed of rival SpaceX which continues to press ahead with its plans for deep space exploration, Starlink and Starship," he says. Product watch: Microsoft (MSFT) is hosting an Xbox Games Showcase on July 23. The company will unveil titles expected to launch right along with the Xbox Series X late in the year. Microsoft has been steadily acquiring game studios, and the company now has 15 Xbox Game Studios in total. The upcoming next-gen consoles from Microsoft and Sony (NYSE:SNE) are seen a tailwind for GPU makers AMD (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA), as well as videogame companies like Electronic Arts (NASDAQ:EA), Activision Blizzard (NASDAQ:ATVI) and Take-Two Interactive (NASDAQ:TTWO). Data reads: Colorado is expected to release sports betting data for June next week. In the first month of action after sports betting became legal, Colorado's sportsbooks generated in $25.6M in bets in May. As major sports slowly return, DraftKings (NASDAQ:DKNG) and Fanduel (OTCPK  DYPY) are expected to be the top brands in the state. Monthly RV data is due in from the RV Industry Association in a report of interest to Camping World Holdings (NYSE:CWH), Winnebago (NYSE:WGO), Thor Industries (NYSE:THO), LCI Industries (NYSE:LCII) and Patrick Industries (NASDAQ:PATK)DC watch: The House is set to consider the Great American Outdoors Act next week after it already passed through the Senate. The legislation is aimed at supporting recreation areas, outdoor-related industries, promoting conservation and revitalizing national parks. Some of the companies that signed a letter in support of the legislation include Airstream (THO), Bass Pro Shops, Malibu Boats (NASDAQ:MBUU), Vista Outdoors (NYSE:VSTO), Brunswick (NYSE:BC), Cabela's, REI, Columbia Sportswear (NASDAQ:COLM), Kampgrounds of America, Polaris (NYSE:PII), Pure Fishing, The North Face, VF Corporation (NYSE:VFC), Winnebago (WGO) and Yamaha. Comic-Con: The annual San Diego Comic-Con gathering has been canceled due to COVID-19 to be replaced by Comic-Con@Home, which will run in a virtual format from July 22-26. While major studios Paramount (NASDAQ:VIAC), Sony (SNE) and Universal (NASDAQ:CMCSA) are sitting out the convention due in part to the uncertainty of when theaters will open, Comic-Con@Home will still include online panels covering the Star Trek series on CBS All Access, HBO's (T) His Dark Materials and AMC Entertainment's (NASDAQ:AMCX) three Walking Dead shows. Marvel (NYSE:DIS) will also live-stream panels and presentations on upcoming comics, including X-Men, Spider-Man and Green Goblin. Other companies that will be getting into the spirit of Comic-Con include Amazon (AMZN) with a curated virtual event and Mattel (NASDAQ:MAT) with promotions for Star Wars, Halo, and Pizza Planet toys. Notable annual meetings: Constellation Brands (NYSE:STZ) on July 21, Exact Sciences (NASDAQ:EXAS) on July 23 and Caesars Entertainment (CZR) on July 24. Barron's mentions: Dollar General (NYSE:DG) and Dollar Tree (NASDAQ:DLTR) are said to have their place in retail during the pandemic, with the former looking like the better bet due to its product mix, higher estimated long-term profit growth rate of 11%, dividend payout and a return on equity of 28.7%. Both chains are adding stores at a time when brick-and-mortar retail is reeling. Goldman Sachs (NYSE:GS) gets a callout after its blowout quarter. The stock is still seen as reasonably priced at little more than 10X forward earnings and at tangible book value. MSCI (NYSE:MSCI) and S&P Global (NYSE:SPGI) are seen rallying further as new products and services translate into higher sales and profits, while Graham Holdings (NYSE:GHC) is called a low-profile, small-scale conglomerate that is a cheaper version of Berkshire Hathaway. The publication also takes a look at the trap in racing ahead too fast with a COVID-19 vaccine. There probably isn't time for the FDA to approve a vaccine before the election, but the agency could issue an emergency-use authorization, which gives doctors the go-ahead to use an unapproved drug. Former FDA officials warn a pressure campaign to approve a particular vaccine before the election would make it harder to convince the public that the inoculation is safe, potentially slowing the overall recovery. S |
Did you read that report Bruins? Or I should ask could you get the report from the link I posted?
Long term this looks like a nice retirement nut some day.
With that it is China..thing I worry about most is the political angle.
Holding this through (connect) entry is a winner.
Here's the status of BABA and China Connect right now.
The Big-News-That-Isn't for Alibaba
By Brian Tycangco
THURSDAY, MARCH 5, 2020
"Big" news came out for Chinese e-commerce giant Alibaba (BABA) last month.
It caught a lot of investors by surprise, and even made many of them worry... But it shouldn't have.
The reality is that this "big news" wasn't news at all. And while it seems to be a major problem for Alibaba – and companies like it – the truth is quite different.
Let me explain...
The report from Bloomberg started with this headline: "Alibaba Blocked From Hong Kong Stock Link to China."
The article went on to say, "China's largest e-commerce company... can't be included in the stock connect program linking the Asian financial hub with Chinese investors at present."
Why is this "big" news? Well, it goes against a major theme I've been writing about in our China letter in recent months.
I've told readers how Alibaba's secondary listing in Hong Kong – which happened last November – paves the way for its eventual inclusion in China's Stock Connect program.
The Stock Connect program is simply a way for investors to trade shares across China's different stock exchanges. It links the markets in Shanghai and Shenzhen with Hong Kong and the outside world.
Before the new listing, Alibaba only traded in the U.S. Now, it trades in Hong Kong as well. And if Alibaba is added to the Stock Connect program, it will allow mainland Chinese investors to buy shares of this popular company for the first time.
We could see hundreds of thousands of Chinese investors rushing to buy shares. That's one of the reasons folks are excited about owning Alibaba. The stock is up roughly 18% since its Hong Kong listing.
So any news saying that we won't see a trading link with China is going to be met with disappointment... and a sell-off. Indeed, the stock fell as much as 2% immediately after this news came out.
But here's the thing... This "big" news isn't really new news.
No company like Alibaba has been included in the Stock Connect program to date. (That is, a company with a secondary listing in Hong Kong that also has dual-class shares.)
Alibaba is the first of its kind to try. So rules haven't yet been established to cover cross-border trading of such listed stocks.
But this won't last forever. In August 2019, China and Hong Kong securities regulators already agreed similar companies could be included in the Stock Connect program – companies with dual-class shares trading only in Hong Kong.
These include consumer-electronics giant Xiaomi and food-delivery company Meituan-Dianping... And their shares have done spectacularly well.
So there's only a half-step separating Alibaba's Hong Kong-listed shares from millions of eager mainland Chinese investors.
Importantly, there's a six-month cooling-off period before a newly listed Hong Kong stock can even be considered for the Stock Connect program. So Alibaba won't get a real decision until the end of May (at the earliest) or potentially even June. And I expect it to be a green light.
But even if it doesn't happen by this summer, it will happen eventually.
As China's largest company by market capitalization, Alibaba is a must-own for Chinese investors. That includes the country's pension funds, which are now allowed to invest in the stock market.
They simply can't afford to miss out on a big-name tech giant that's already returned an average of 20.2% per year over the last five years. It would be like being unable to invest your 401(k) in shares of Apple.
The Bloomberg article got it right when it said that "Alibaba is not among the current batch of companies to be included in the stock connect." But that doesn't mean it won't be included in the future.
All this means is that we have even more time to cash in on Alibaba's eventual inclusion.
Good investing,
Brian Tycangco
Further Reading
In a rational market, a situation like this would never exist... But thanks to one of the craziest anomalies in finance, we have a rare opportunity to buy the top Chinese companies at a massive discount. Learn more here: The Craziest Anomaly in Finance.
Things have been changing in China's markets for years. Thanks to a huge decision from Beijing, billions of dollars have started flowing into Chinese stocks. And investors all over the world are starting to pay attention... Get the full story here: This Changes Everything.
nice...fed talking stimulus again..I think it's going to be a good market week...
I'm going short T bills on a long contract before friday of next week.
I can't free up some money till after LLNW reports Monday after the bell....think I'm selling half tomorrow if it pops and I'll hold the second half for a post earnings shot on goal.
Then I'm out on LLNW for a bit.
I like everything I read in that report about BABA...I'll hold some JD but BABA and "connect status" looks promising so I'm shifting my percentage weighted toward BABA over JD moving forward... I do think BABA will move forward sharply after "connect" entry I can't stress what a + "connect" will be short term.
Good luck pal.
absolutely ..Powell saying the rate will be low is one thing to consider ..given the fact I do think inflation or stagflation is on the horizon keeping rates low is going to be hard fundamentally without the FED providing more liquidity to institutions.
You can fight the FED.TLT trades will get more attractive as the rates near zero. I'm going to stay on the sideline and watch until the FED exhausts itself. Right now they're buying the treasury debt up and down the curve, mortgages, corporate debt (never been done) but I will be standing aside for now reluctantly..I cant figure out what's going to happen but it kept me up in the middle of the night last night.
Happy flipping this week..I won't call this trading.
That report...i love the plan to acquire customers across the insane strata of economic level in China.
I had no idea they were so heavy in to retail...trust is huge in china with consumers sounds like and what better way to create trust than through ground level retail.
I also love Tencent...great low cost model for moving product to the consumer..JD became a little less attractive for me but I still have a a good amount of stock.
Thinking about Tencent OTC stock... looking for deep research now.
Call ... TCEHY
[h=2]Option Chain[/h]LLNW...Decent volume meaning liquidity on the 8 dollar calls..Open interest is not updated during trading hours unfortunately so this is only a look at the opening..Open interest is a shot of the open contracts at the end of a trading day..still a lot of risk waiting on the bell and results.
[/COLOR]
| [h=3]Calls: Aug 21, 2020[/h] | [h=3]Puts: Aug 21, 2020[/h] | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Strike Price | Last | Change | Bid | Ask | Volume | Open Interest | Strike Price | Last | Change | Bid | Ask | Volume | Open Interest | |
| 3.00 | 4.75 | [COLOR=#007900 !important]+0.85 |
| 4.60 | 4.90 | 2 | 12 | 3.00 | 0.00 | 0.00 | 0.00 | 0.05 | 0 | 2 | ||||
| 4.00 | 3.80 | [COLOR=#007900 !important]+0.62[/COLOR] | 3.60 | 3.90 | 3 | 16 | 4.00 | 0.05 | [COLOR=#AA0033 !important]-0.01[/COLOR] | 0.00 | 0.05 | 4 | 45 | |
| 5.00 | 2.95 | [COLOR=#007900 !important]+0.50[/COLOR] | 2.75 | 2.95 | 17 | 134 | 5.00 | 0.13 | [COLOR=#AA0033 !important]-0.07[/COLOR] | 0.10 | 0.20 | 37 | 148 | |
| 6.00 | 2.15 | [COLOR=#007900 !important]+0.50[/COLOR] | 2.00 | 2.15 | 68 | 546 | 6.00 | 0.33 | [COLOR=#AA0033 !important]-0.21[/COLOR] | 0.30 | 0.35 | 903 | 1,074 | |
| 7.00 | 1.50 | [COLOR=#007900 !important]+0.35[/COLOR] | 1.35 | 1.50 | 789 | 1,963 | 7.00 | 0.75 | [COLOR=#AA0033 !important]-0.25[/COLOR] | 0.65 | 0.75 | 1,164 | 437 | |
| Last Price: $7.64 | ||||||||||||||
| 8.00 | 1.00 | [COLOR=#007900 !important]+0.28[/COLOR] | 0.95 | 1.05 | 3,798 | 3,758 | 8.00 | 1.15 | [COLOR=#AA0033 !important]-0.45[/COLOR] | 1.20 | 1.35 | 1,049 | 86 | |
| 9.00 | 0.70 | [COLOR=#007900 !important]+0.25[/COLOR] | 0.65 | 0.75 | 2,581 | 5,059 | 9.00 | 1.95 | [COLOR=#AA0033 !important]-0.40[/COLOR] | 1.80 | 2.05 | 3 | 19 | |
| 10.00 | 0.48 | [COLOR=#007900 !important]+0.08[/COLOR] | 0.45 | 0.50 | 455 | 1,329 | 10.00 | 3.10 | 0.00 | 2.65 | 2.85 | 52 | 115 | |
| 11.00 | 0.35 | 0.00 | 0.25 | 0.40 | 265 | 1,338 | 11.00 | 3.70 | 0.00 | 3.50 | 3.70 | 23 | 0 | |
| In the money |
LLNW traded almost 1 mill shares in the last hour with a slight move up.
Bought a sold a bit today in a range.
LLNW earnings call link if anyone is following.
Have to register...
https://www.investornetwork.com
Bought a sold a bit today in a range.
LLNW earnings call link if anyone is following.
Have to register...
https://www.investornetwork.com
Beat earnings buy 1.5ish and the guidance is good but not insane
Limelight Networks Reports Strong Financial Results for the Second Quarter of 2020
Business Wire•July 20, 2020
Limelight reported a GAAP net loss of $1.7 million, or $(0.01) per basic share for the second quarter of 2020, compared to net loss of $7.2 million, or $(0.06) per basic share in the second quarter of 2019.
Non-GAAP net income was $3.5 million or $0.03 per basic share for the second quarter of 2020, compared to a non-GAAP net loss of $3.5 million, or $(0.03) per basic share in the second quarter of 2019.
EBITDA was $4.5 million for the second quarter of 2020, compared to negative $2.2 million for the second quarter of 2019. Adjusted EBITDA was $9.7 million for the second quarter of 2020 compared to $1.4 million for the second quarter of 2019.
Limelight ended the second quarter with 627 employees and employee equivalents, up from 616 at the end of the first quarter of 2020, and up from 594 at the end of the second quarter of 2019.
"This is our best ever second quarter financial performance. Our growth, including the over 400 basis point sequential improvement in gross margin, is due to strong execution of our 2020 strategy. Through our relentless focus on expanding capacity, optimizing proactive management of our network, placing more control in the hands of our customers and driving innovation, we are seeing strength across our business and are raising our revenue guidance for 2020," said Robert Lento, Chief Executive Officer.
As the world continues to navigate through these uncertain times, we play an important role in connecting people to information and entertainment. COVID-19 has created an increased global reliance on the Internet and content delivery, and we expect to emerge larger and financially stronger when the pandemic ends. The remarkable dedication of our people adapting to the challenging times, and the commitment to meeting increased demand with uncompromised quality for our customers is particularly noteworthy. We recognize many face challenges during these times and will continue our efforts to provide value and help overcome the consequential impact of the pandemic on our communities," Lento added.
Based on current conditions, our full-year 2020 guidance is updated as follows:
Financial Tables
Limelight Networks Reports Strong Financial Results for the Second Quarter of 2020
Business Wire•July 20, 2020
- Revenue of $58.5 million, up 28% year over year
- GAAP basic EPS of $(0.01) and Non-GAAP EPS of $0.03
- Adjusted EBITDA of $9.7 million
- Increased full year revenue guidance
Limelight reported a GAAP net loss of $1.7 million, or $(0.01) per basic share for the second quarter of 2020, compared to net loss of $7.2 million, or $(0.06) per basic share in the second quarter of 2019.
Non-GAAP net income was $3.5 million or $0.03 per basic share for the second quarter of 2020, compared to a non-GAAP net loss of $3.5 million, or $(0.03) per basic share in the second quarter of 2019.
EBITDA was $4.5 million for the second quarter of 2020, compared to negative $2.2 million for the second quarter of 2019. Adjusted EBITDA was $9.7 million for the second quarter of 2020 compared to $1.4 million for the second quarter of 2019.
Limelight ended the second quarter with 627 employees and employee equivalents, up from 616 at the end of the first quarter of 2020, and up from 594 at the end of the second quarter of 2019.
"This is our best ever second quarter financial performance. Our growth, including the over 400 basis point sequential improvement in gross margin, is due to strong execution of our 2020 strategy. Through our relentless focus on expanding capacity, optimizing proactive management of our network, placing more control in the hands of our customers and driving innovation, we are seeing strength across our business and are raising our revenue guidance for 2020," said Robert Lento, Chief Executive Officer.
As the world continues to navigate through these uncertain times, we play an important role in connecting people to information and entertainment. COVID-19 has created an increased global reliance on the Internet and content delivery, and we expect to emerge larger and financially stronger when the pandemic ends. The remarkable dedication of our people adapting to the challenging times, and the commitment to meeting increased demand with uncompromised quality for our customers is particularly noteworthy. We recognize many face challenges during these times and will continue our efforts to provide value and help overcome the consequential impact of the pandemic on our communities," Lento added.
Based on current conditions, our full-year 2020 guidance is updated as follows:
| Limelight Networks, Inc. | ||||||||
| 2020 Guidance | ||||||||
| July 2020 | April 2020 | December 2019 | Actual 2019 | |||||
| Revenue | $230 to $240 million | $225 to $235 million | $220 to $235 million | $200.6 million | ||||
| GAAP Basic EPS | $(0.10) to break-even | $(0.10) to break-even | $(0.10) to break-even | $(0.14) | ||||
| Non-GAAP EPS | Break-even to $0.10 | Break-even to $0.10 | Break-even to $0.10 | $(0.02) | ||||
| Adjusted EBITDA | $28 to $35 million | $25 to $35 million | $25 to $35 million | $18.1 million | ||||
| Capital expenditures | $25 to $30 million | $25 to $30 million | $25 to $30 million | $34.7 million |
Financial Tables
| LIMELIGHT NETWORKS, INC. | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (In thousands, except per share data) | ||||||||||||
| June 30, | March 31, | December 31, | ||||||||||
| 2020 | 2020 | 2019 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 18,200 | $ | 21,421 | $ | 18,335 | ||||||
| Accounts receivable, net | 45,246 | 34,603 | 34,476 | |||||||||
| Income taxes receivable | 68 | 76 | 82 | |||||||||
| Prepaid expenses and other current assets | 10,241 | 11,205 | 9,920 | |||||||||
| Total current assets | 73,755 | 67,305 | 62,813 | |||||||||
| Property and equipment, net | 48,908 | 46,636 | 46,136 | |||||||||
| Operating lease right of use assets | 11,449 | 12,084 | 12,842 | |||||||||
| Marketable securities, less current portion | 40 | 40 | 40 | |||||||||
| Deferred income taxes | 1,328 | 1,361 | 1,319 | |||||||||
| Goodwill | 77,113 | 76,867 | 77,102 | |||||||||
| Other assets | 7,915 | 8,721 | 9,117 | |||||||||
| Total assets | $ | 220,508 | $ | 213,014 | $ | 209,369 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 17,004 | $ | 14,297 | $ | 12,020 | ||||||
| Deferred revenue | 934 | 726 | 976 | |||||||||
| Operating lease liability obligations | 2,390 | 2,046 | 2,056 | |||||||||
| Income taxes payable | 169 | 170 | 178 | |||||||||
| Other current liabilities | 17,028 | 18,188 | 13,398 | |||||||||
| Total current liabilities | 37,525 | 35,427 | 28,628 | |||||||||
| Operating lease liability obligations, less current portions | 12,316 | 12,983 | 13,488 | |||||||||
| Deferred income taxes | 283 | 262 | 239 | |||||||||
| Deferred revenue, less current portion | 265 | 161 | 161 | |||||||||
| Other long-term liabilities | 304 | 318 | 316 | |||||||||
| Total liabilities | 50,693 | 49,151 | 42,832 | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders' equity: | ||||||||||||
| Convertible preferred stock, $0.001 par value; 7,500 shares authorized; no shares issued and outstanding | - | - | - | |||||||||
| Common stock, $0.001 par value; 300,000 shares authorized; 121,692, 119,642 and 118,368 shares issued and | ||||||||||||
| outstanding at June 30, 2020, March 31, 2020 and December 31, 2019, respectively | 122 | 120 | 118 | |||||||||
| Additional paid-in capital | 541,363 | 534,205 | 530,285 | |||||||||
| Accumulated other comprehensive loss | (10,031 | ) | (10,549 | ) | (9,210 | ) | ||||||
| Accumulated deficit | (361,639 | ) | (359,913 | ) | (354,656 | ) | ||||||
| Total stockholders' equity | 169,815 | 163,863 | 166,537 | |||||||||
| Total liabilities and stockholders' equity | $ | 220,508 | $ | 213,014 | $ | 209,369 |
| LIMELIGHT NETWORKS, INC. | |||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
| June 30, | March 31, | Percent | June 30, | Percent | June 30, | June 30, | Percent | ||||||||||||||||||||||
| 2020 | 2020 | Change | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||
| Revenue | $ | 58,546 | $ | 57,012 | 3 | % | $ | 45,904 | 28 | % | $ | 115,558 | $ | 89,184 | 30 | % | |||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||
| Cost of services (1) | 29,389 | 31,113 | -6 | % | 22,769 | 29 | % | 60,502 | 45,710 | 32 | % | ||||||||||||||||||
| Depreciation - network | 5,360 | 5,150 | 4 | % | 4,628 | 16 | % | 10,510 | 8,944 | 18 | % | ||||||||||||||||||
| Total cost of revenue | 34,749 | 36,263 | -4 | % | 27,397 | 27 | % | 71,012 | 54,654 | 30 | % | ||||||||||||||||||
| Gross profit | 23,797 | 20,749 | 15 | % | 18,507 | 29 | % | 44,546 | 34,530 | 29 | % | ||||||||||||||||||
| Gross profit percentage | 40.6 | % | 36.4 | % | 40.3 | % | 38.5 | % | 38.7 | % | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| General and administrative (1) | 8,187 | 7,882 | 4 | % | 8,340 | -2 | % | 16,069 | 15,875 | 1 | % | ||||||||||||||||||
| Sales and marketing (1) | 10,929 | 11,894 | -8 | % | 10,994 | -1 | % | 22,823 | 21,966 | 4 | % | ||||||||||||||||||
| Research & development (1) | 5,572 | 5,618 | -1 | % | 6,013 | -7 | % | 11,189 | 11,915 | -6 | % | ||||||||||||||||||
| Depreciation and amortization | 323 | 341 | -5 | % | 127 | 154 | % | 665 | 372 | 79 | % | ||||||||||||||||||
| Total operating expenses | 25,011 | 25,735 | -3 | % | 25,474 | -2 | % | 50,746 | 50,128 | 1 | % | ||||||||||||||||||
| Operating loss | (1,214 | ) | (4,986 | ) | NM | (6,967 | ) | NM | (6,200 | ) | (15,598 | ) | NM | ||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||
| Interest expense | (71 | ) | (10 | ) | NM | (10 | ) | NM | (82 | ) | (20 | ) | NM | ||||||||||||||||
| Interest income | 6 | 25 | NM | 110 | NM | 31 | 321 | NM | |||||||||||||||||||||
| Other, net | (312 | ) | (110 | ) | NM | (70 | ) | NM | (421 | ) | (76 | ) | NM | ||||||||||||||||
| Total other (expense) income | (377 | ) | (95 | ) | NM | 30 | NM | (472 | ) | 225 | NM | ||||||||||||||||||
| Loss before income taxes | (1,591 | ) | (5,081 | ) | NM | (6,937 | ) | NM | (6,672 | ) | (15,373 | ) | NM | ||||||||||||||||
| Income tax expense | 136 | 176 | NM | 255 | NM | 311 | 378 | NM | |||||||||||||||||||||
| Net loss | $ | (1,727 | ) | $ | (5,257 | ) | NM | $ | (7,192 | ) | NM | $ | (6,983 | ) | $ | (15,751 | ) | NM | |||||||||||
| Net loss per share: | |||||||||||||||||||||||||||||
| Basic | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.06 | ) | $ | (0.14 | ) | ||||||||||||||
| Diluted | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.06 | ) | $ | (0.14 | ) | ||||||||||||||
| Weighted average shares used in per share calculation: | |||||||||||||||||||||||||||||
| Basic | 120,230 | 118,964 | 115,275 | 119,597 | 114,843 | ||||||||||||||||||||||||
| Diluted | 120,230 | 118,964 | 115,275 | 119,597 | 114,843 | ||||||||||||||||||||||||
(1) Includes share-based compensation (see supplemental table for figures) |
| LIMELIGHT NETWORKS, INC. | ||||||||||
| SUPPLEMENTAL FINANCIAL DATA | ||||||||||
| (In thousands) | ||||||||||
| (Unaudited) | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | ||||||
| 2020 | 2020 | ... |
I'll hold this for a bit....opening down today.
Traded it a few times yesterday..Last in first out trading so my share price is the same.
Sounds like Edge is developing nicely.
LIFO and FIFO. it's good to know what your setting is on your trading platform.. I almost always use Last in first out..I like it for long holds it protects long term profits/LT holds for tax reasons... FIFO.. First in first out...deals off the bottom of your stack of stock..selling the longest held securities in any given issue first.
Just a good thing to know that is sometimes over looked...LIFO and FIFO.
Full trangscript...
https://www.fool.com/earnings/call-...networks-llnw-q2-2020-earnings-call-tran.aspx
Edge Q and A below.
James Breen -- William Blair -- Analyst
Thanks for taking the question. Just first on the edge compute side. The motivation, as you're offering some of these things, is it coming from your customer base now that's asking you to put some of these things in place or these products in place, and so you'll see growth not just from your existing customer base but also from potential new customers? And then secondly, just on the live sports side, we've seen a few things come back here, golf and a few other things. Given that there's no fans at the events and there's probably some pent-up demand at the events that you have seen streamed, are you seeing an increase in usage just because of the environment rent? Thanks.
Bob Lento -- Chief Executive Officer
Well, I think we're seeing increased usage because people are starving for something to watch. And hopefully, that will continue. I mean, you think about the number of concurrent streams that are being streamed, whether there's fans in the stadium or not, whether there's 50,000 fans in the stadium for an NFL game or 100,000 for a Big Ten football game, really, that will obviously help the streaming numbers, but it's not that dramatic. I think that, obviously, the quality of the streaming has gotten better and is more available and more people are relying on -- think of cord-cutters relying on streaming services.
So I think all that bodes well for us in terms of the numbers going forward. Your first question again was?
Tim Horan -- Oppenheimer and Company Inc. -- Analyst
And can you maybe -- just on edge, how do you think your capabilities compare to your peers out there, who you're kind of competing with? And who would you say your primary competitor is for these edge products?
Bob Lento -- Chief Executive Officer
Well, the interesting thing is there isn't really that much out there. I know two of our competitors have said they're in beta with serverless compute, but if you look at it, it's really geared toward web developers and use cases around website acceleration. Clearly, some of the cloud providers like AWS has Lambda@Edge. But there are big differences between what we're offering and what they're offering.
And so I think it is just starting to settle out. There's one pretty good-sized deal that we are hoping to get the contract signed in the next 30 days. They're a large enough company with a large number of resources that they were able to test four or five of the alternatives out there and we outperformed. Just on a performance basis, we outperformed all of our competition.
So we were obviously delighted to hear that. Whether that holds up in every use case, I don't know. But that fills you with a lot of confidence when one of the larger opportunities that you're working on, those are some pretty extensive testing with some traditional and nontraditional competitors for us and comes back with the feedback that from a performance standpoint, we outperformed everybody. So we're pleased with that.
Traded it a few times yesterday..Last in first out trading so my share price is the same.
Sounds like Edge is developing nicely.
LIFO and FIFO. it's good to know what your setting is on your trading platform.. I almost always use Last in first out..I like it for long holds it protects long term profits/LT holds for tax reasons... FIFO.. First in first out...deals off the bottom of your stack of stock..selling the longest held securities in any given issue first.
Just a good thing to know that is sometimes over looked...LIFO and FIFO.
Full trangscript...
https://www.fool.com/earnings/call-...networks-llnw-q2-2020-earnings-call-tran.aspx
Edge Q and A below.
James Breen -- William Blair -- Analyst
Thanks for taking the question. Just first on the edge compute side. The motivation, as you're offering some of these things, is it coming from your customer base now that's asking you to put some of these things in place or these products in place, and so you'll see growth not just from your existing customer base but also from potential new customers? And then secondly, just on the live sports side, we've seen a few things come back here, golf and a few other things. Given that there's no fans at the events and there's probably some pent-up demand at the events that you have seen streamed, are you seeing an increase in usage just because of the environment rent? Thanks.
Bob Lento -- Chief Executive Officer
Well, I think we're seeing increased usage because people are starving for something to watch. And hopefully, that will continue. I mean, you think about the number of concurrent streams that are being streamed, whether there's fans in the stadium or not, whether there's 50,000 fans in the stadium for an NFL game or 100,000 for a Big Ten football game, really, that will obviously help the streaming numbers, but it's not that dramatic. I think that, obviously, the quality of the streaming has gotten better and is more available and more people are relying on -- think of cord-cutters relying on streaming services.
So I think all that bodes well for us in terms of the numbers going forward. Your first question again was?
Tim Horan -- Oppenheimer and Company Inc. -- Analyst
And can you maybe -- just on edge, how do you think your capabilities compare to your peers out there, who you're kind of competing with? And who would you say your primary competitor is for these edge products?
Bob Lento -- Chief Executive Officer
Well, the interesting thing is there isn't really that much out there. I know two of our competitors have said they're in beta with serverless compute, but if you look at it, it's really geared toward web developers and use cases around website acceleration. Clearly, some of the cloud providers like AWS has Lambda@Edge. But there are big differences between what we're offering and what they're offering.
And so I think it is just starting to settle out. There's one pretty good-sized deal that we are hoping to get the contract signed in the next 30 days. They're a large enough company with a large number of resources that they were able to test four or five of the alternatives out there and we outperformed. Just on a performance basis, we outperformed all of our competition.
So we were obviously delighted to hear that. Whether that holds up in every use case, I don't know. But that fills you with a lot of confidence when one of the larger opportunities that you're working on, those are some pretty extensive testing with some traditional and nontraditional competitors for us and comes back with the feedback that from a performance standpoint, we outperformed everybody. So we're pleased with that.
