3 charts for you today exploring:
We're all aware by now of how a group of amateur traders have stuck it to a few of the Wall Street elite (catch up here if this is news to you) — but not many stories have focused on how this actually affects GameStop as a company.
We dug out the last 10 years of financial results for GameStop, and they tell the story we now all know — that being a brick-and-mortar video game retailer was a tough gig in an increasingly digital market. Modest profits for much of the last decade gave way to declining revenues and more than $1bn of losses in the last two fiscal years.
Is GameStop set to flourish?
Of course, somewhat ironically, the greatly increased share price of GME doesn't affect the day-to-day operations of the company in the slightest. Shareholders are a lot richer, but the business of selling video games and consoles is unchanged. Under more normal circumstances, a soaring share price could be cashed in — the company could issue new shares to meet the overwhelming demand and then use that cash to invest in the business. That's something Tesla has done 3 times since its stock took off last year.
The problem GameStop has is that this situation is anything but normal. Demand for its shares is likely to eventually disappear just as quickly as it arrived, and the entire point of the short squeeze is that it is predicated on a relatively thin supply of shares being available for sale in the market.
GameStop issuing a few million new shares could kill the momentum but at the current ~$300 price would raise a few billion of fresh capital, helping the company to survive and thrive long after this story ends.
In more "normal" situations an investment bank would often underwrite such an offering, guaranteeing a certain (usually slightly discounted) price for those new shares. The problem is we can't imagine many are willing to do so when GME is regularly up or down 50% over the space of a few hours or even minutes.
Seasonal influenza, usually rampant at this time of year, has almost disappeared. That is according to the latest data from the World Health Organization, which at the end of 2020 was recording a tiny fraction of the usual number of positive influenza samples. The global numbers are stunning, but perhaps unsurprising given that similar results were being found in Southern Hemisphere countries such as Australia in the middle of last year.
It's not hard to work out why flu season has been so much milder; social distancing, mask wearing, hand sanitizing and all of the other COVID prevention measures that we've adapted to in the last 12 months appear to be minimizing the spread of flu.
Although unlikely to take priority for a while, the key question scientists will need to unravel is: which of the measures have been most effective, and can we use all that we've learned from COVID to help minimize the impact of flu — which itself kills thousands every year — in the future.
Amidst all the GameStop drama on the stock market this week, Apple quietly posted its biggest ever quarter — reporting that they made $111bn of revenue in the 3-month period ending on December 26th, 2020.
The Services business, which includes Apple Music, the App Store, Apple Pay, Apple TV, iCloud and more, was a bright spot for Apple, growing 24% year-on-year, but it was actually sales in Greater China, which jumped 57%, that really helped Apple's revenue get over the 12-figure mark.
Great expectations
Perhaps counterintuitively Apple shares fell 2% on the news — a reminder of just how high investor expectations are for tech companies that have seen their share prices soar during the pandemic.
1) Bernie Sanders has now raised $1.8m for charity by selling merchandise with the viral photo of him wearing mittens during Biden's inauguration ceremony.
2) The Robin Hood Society, based in Nottingham in the UK, has gained 44,000+ new followers on Twitter as people confuse it with the stock trading platform of the same name.
3) A single-dose coronavirus vaccine developed by Janssen, a company owned by J&J, has been found to be 66% effective against COVID-19.
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5) Spotify has been granted a patent, that has taken almost 2 years to be approved, for a technology that aims to use recordings of user's speech and background noises to help recommend what music they might want to listen to.
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