UPDATE 1-U.S. eyes Tuesday deliveries of J&J vaccine; urges minorities to get shots - Yahoo Finance

(Adds quotes, details)

By Andrea Shalal and Julia Harte

WASHINGTON, Feb 28 (Reuters) - Initial deliveries of the newly approved Johnson & Johnson COVID-19 vaccine should start on Tuesday, senior Biden administration officials said on Sunday, saying they hoped to boost lagging vaccination rates among minorities. The officials acknowledged that vaccination rates among Black and brown Americans were "not where we ultimately want them to be", but said measures had been put in place to boost those numbers, and sought to assure minorities that the vaccines were safe. Federal officials were also closely monitoring distribution to ensure it was equitable, they said. "Even though we know the data are not complete, we do see these early patterns that suggest Black and brown Americans largely are getting vaccinated at rates lower than the representation in the general population," said one of the officials.

The officials gave no data on the disparities, but KFF, a health policy and research organization, has found that people of color are getting smaller shares of vaccinations as compared to their share of the population. In Alabama, for instance, Black people account for 27% of the population and 31% of the deaths from COVID-19, but only 17% of the vaccinations.

The U.S. officials said they respected the concerns raised by some Black Americans given a history of past disparities and "egregiously unethical conduct", including the Tuskegee study in Macon County, Alabama, in which federal health officials denied black men treatment to study syphilis from 1932 to 1972.

But they underscored the importance of everyone who was eligible to get vaccinated as soon as possible, to get control of the pandemic, and said great efforts had been made to ensure that Black and brown people were adequately represented at every stage of the vaccine process.

"It is critical for people to understand the safeguards that are in place around this clinical research, but also the diversity and representation at the level of the scientist, at the level of the policymakers and those who are reviewing these data, as well as the clinical trial participants," said one of the officials.

Up to 400 community vaccination centers were being put into areas with large minority population, and officials would use mobile units to reach more people, they said, adding that flexible hours of operation also would be critical.

"We have directed states to manage distribution of all (three) vaccines in a fair and equitable way, and we will continue to monitor that closely," a second official said.

The Johnson & Johnson vaccine involves only one shot, not two, and may be easier to distribute since it does not require a freezer, but federal officials said all three vaccines should be made available evenly across communities and the country. (Reporting by Andrea Shalal and Julia Harte; Editing by Daniel Wallis and Diane Craft)

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How Coinbase Going Public Is Reshaping Trust in Markets - CoinDesk - CoinDesk

Finally, what we’ve been waiting for: the U.S. Securities and Exchange Commisison has published Coinbase’s S-1, clearing the way for a direct listing on Nasdaq.

While some major details are still missing (most notably when they plan to list), we now have a glimpse into how a major crypto exchange works, what it’s worried about and just how much the market is growing.

The figures are indeed eye-opening: in the fourth quarter of 2020, the number of verified users on Coinbase’s platform reached 43 million after adding almost 45,000 new users a day. The average number of monthly transacting users grew by over 30% in the fourth quarter alone, to 2.8 million.

You’re reading Crypto Long & Short, a newsletter that looks closely at the forces driving cryptocurrency markets. Authored by CoinDesk’s head of research, Noelle Acheson, it goes out every Sunday and offers a recap of the week – with insights and analysis – from a professional investor’s point of view. You can subscribe here.

Also eye-opening is the inflow of institutional investors, something that we’ve talked about often in this column. Over the fourth quarter, institutional trading volume grew over 110% to $57 billion, while retail trading volume grew by almost 80%. The company services 7,000 institutional accounts.

The Coinbase filing gave everyone who works in this industry something to chew on. There was the bold vision, the numbers, the services overview, and some details on their recent acquisitions. There was even a nod to Bitcoin creator Satoshi Nakamoto, who was featured on the front page as a designated recipient of copies of the filing documents.

And for those interested in the future of work, the customary physical location of the filer was given as “Address not applicable,” with the footnote: “In May 2020, we became a remote-first company. Accordingly, we do not maintain a headquarters.”

While there is much to enjoy in the filing, and no doubt much to continue to pick apart over the next few days, let’s take a step back and look at what this document is really about, and what it says about the future of capital markets. Deep down, it’s about the reshaping of trust.

Opening the books

One of the big steps forward for the industry is greater transparency as to the inner workings of a key infrastructure company.

With greater transparency comes greater trust. This is not the same as trust that Coinbase’s value will go up and up. It’s trust that there is a real business opportunity here, for investors and builders.

We’ve all experienced the dismissal from mainstream economists and investors that crypto is anything but hot air. We’ve all seen how market innovations are dismissed as trivial or even irritating. Yet with this hefty document, even the most skeptical of market observers will look at the numbers and realize that this business is substantial, and that crypto assets move significant amounts of money. What’s more, the market is attracting a growing user base that is generating meaningful profit margins.

With this filing, more traditional businesses will start to trust that crypto assets are here to stay, and are a market force to be reckoned with.  

Sharing concerns

The filing also lists in detail the potential risks to Coinbase and to the industry as a whole. Any therapist will tell you that sharing your worries helps to diminish them. In finance, disclosing every risk you can think of makes good regulatory sense; it also helps them to seem more containable.

The risks listed by Coinbase include the usual caveats about the sensitivity of Coinbase’s income to the volatile nature of crypto markets, the possibility of cyber attacks and the threat of adverse regulation. It also includes some less talked-about risks such as the possibility of class action lawsuits, the loss of banking relationships and the reemergence of Satoshi Nakamoto in person.

Airing in public everything we think could go wrong in our industry will assuage mainstream concern that we’re blind to the dangers of untested technologies, new financial instruments and the lure of the quick profit. It broadcasts that we know, and yet we still believe that these markets are necessary.

It boosts trust in our industry and in the overall integrity of the main market participants.

Market power

The reshaping of trust is also obvious in Coinbase’s decision to use the direct listing approach. This bypasses much of the IPO rigmarole, in that the company lists by selling already existing shares on the market. This means that there is no need for a roadshow to drum up institutional interest, no expensive fees to underwriters, no shareholder dilution.

It is also appropriate for a company steeped in a decentralized ethos, even if it runs a centralized business. In an IPO, the initial trading price is decided on by a group of investment bankers who balance declared institutional interest with the company’s desire to get the highest price possible (and the advisers’ fondness for higher fees). In a direct listing, the market decides.

It is almost a pity, though, that Coinbase chose to forgo the crypto education opportunity that a roadshow to institutions would have offered. Just imagine the investment committees of mutual funds, pension funds, etc., getting a masterclass in crypto assets and their markets.

A further effect of Coinbase’s direct listing decision is the message it sends to other businesses in the industry also contemplating taking advantage of soaring prices and volumes. Investment banks are no doubt already fielding a flood of incoming requests for meetings, and the next few months will most likely see other well-known crypto companies, and probably even some more obscure ones, follow a similar path.

More companies making public their accounts will lead to even greater industry understanding, which enhances trust.

Phase 2

Zooming out even further, the Coinbase move delineates where we are in the arc of crypto impact on capital markets.

Those of us that work in the crypto industry have been saying for some time that crypto markets will influence traditional markets more than most currently realize.

What’s becoming clearer now is that it will happen in phases. Right now, we’re in the assets phase, where the value propositions and price potential of cryptocurrencies and tokens dominate the mindshare of traditional market participants. Companies that help investors onboard and manage their crypto holdings have center stage. We will also see traditional players tiptoe into the crypto pool to harness some of the attention-grabbing action for their clients.

This first phase is about the assets themselves, and facilitating access to them.

The next phase will be how assets move.

Coinbase hints at this in the S-1 document when it discusses traditional assets that move on blockchains. Included in the outlines growth strategy is: “Tokenize new assets.” The section goes on: “We will invest in infrastructure and regulatory clarity to pave a path for the digitization of more traditional financial assets to help pave the path for new assets to be represented as crypto assets.”

It is worth remembering that Coinbase has participated in the funding rounds of several start-ups building security token infrastructure.

Some had hoped that Coinbase would set an example and come to market via a security token. Progress is being made, but the security token market is still too illiquid and immature to support such an ambitious step. Interest is building, however, supported by recent market events that have laid bare the inefficiencies of current capital market plumbing.

And Coinbase did bury deep in the S-1 text a hint that it might consider issuing blockchain tokens in the future, with the following statement: “We may issue shares of capital stock, including in the form of blockchain tokens, to our customers in connection with customer reward or loyalty programs.”

This is yet another way in which the Coinbase listing is about trust. The eventual migration of capital markets to blockchain-based systems, nudged along by the issuance of new security-like assets as well as tokenized securities, could push trust in capital markets back to a healthy level.

With its S-1 filing, Coinbase is not just pushing for a new type of trust in crypto markets. It is possibly also setting the stage for a new type of trust in capital markets more broadly. This is a mammoth ambition, but one that both crypto market practitioners and capital markets observers can get behind.

CHAIN LINKS

Payments giant Square has purchased an additional 3,318 BTC for $170 million, bringing its holding up to 8,027 BTC. It also revealed that its allocation of 4,709 BTC to its treasury holdings in October 2020 cost approximately $50 million. That holding is now worth over $250 million. TAKEAWAY: This highlights the complex issues surrounding treasury allocations to bitcoin, a growing trend among innovative companies worried about the impact of fiat debasement. Should treasury holdings be a speculative bet? What happens when the value appreciation exceeds the company’s revenue? How should this be reflected in accounting? Interesting to note that RBC increased its price target for Square for 2021, in part due to a 69% jump in 2021 bitcoin revenue.  

Square wasn’t the only company adding to its BTC holdings this week. MicroStrategy revealed the purchase of another 19,452 BTC for $1.026 billion in bitcoin. TAKEAWAY: Funds for this purchase came from a $1.05 billion convertible debt offering, and have leverage the firm even more to the BTC price.

Asset manager CoinShares has launched a physically backed Ethereum ETP on the Swiss SIX exchange with the ticker “ETHE.” TAKEAWAY: Following on the heels of CoinShares’ bitcoin ETP launch in January, this underscores the growing investor interest in ETH.

Crypto asset manager CoinShares also released the CoinShares Gold and Cryptoassets Index Lite (CGI), a decentralized finance (DeFi) token designed for institutional investors. The token’s value is based on two equally weighted “wrapped” crypto assets – wrapped bitcoin (WBTC) and wrapped ether (WETH) – and the firm’s wrapped gold token, wDGLD. TAKEAWAY: If you read last week’s newsletter, you’ll know that I think institutional interest in DeFi is worth watching. This token makes that even easier, not only because it can be tracked, but also because it provides a relatively convenient on-ramp for investors considering exposure. This is not really tracking “hard core” DeFi innovation, but it’s a start.

CI Global Asset Management, a subsidiary of a firm overseeing more than $230 billion in assets, filed a preliminary prospectus for CI Galaxy Bitcoin ETF (BTCX), which, if approved, would be Canada’s third bitcoin ETF. TAKEAWAY: Given the strong demand for the Purpose Bitcoin ETF in its early days of trading (when the BTC price wasn’t falling), this is possibly just the beginning of a stream of ETFs listed on Canadian stock exchanges. As the bitcoin ETF market starts to get populated in Canada, we could also start to see some more diverse approaches, such as offering investors exposure to a basket of assets.

A February survey of 30,000 people over the age of 18 conducted by Piplsay, a global consumer research platform, found that 25% of Americans surveyed hold crypto assets, with a further 27% saying that they plan to invest this year. TAKEAWAY: These results are in line with similar surveys carried out recently by Grayscale Investments (a subsidiary of DCG, also parent of CoinDesk) and Bitwise, and underscore the receding likelihood that the U.S. government would attempt to ban bitcoin. Rather, the more extensive the mainstream interest in bitcoin, the more regulated services will step in to service this market, and the more comfortable regulators will get with pending issues.

During the market sell-off on Monday, ETH traded as low as $700 (a more than 50% drop) on crypto exchange Kraken. TAKEAWAY: This highlights that, even though market liquidity has improved dramatically over the years, there could still be issues of order books drying up in the face of high volume and uncertainty.

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Crypto Long & Short: How Coinbase Going Public Is Reshaping Trust in Markets - Yahoo Finance

Finally, what we’ve been waiting for: the U.S. Securities and Exchange Commisison has published Coinbase’s S-1, clearing the way for a direct listing on Nasdaq.

While some major details are still missing (most notably when they plan to list), we now have a glimpse into how a major crypto exchange works, what it’s worried about and just how much the market is growing.

The figures are indeed eye-opening: in the fourth quarter of 2020, the number of verified users on Coinbase’s platform reached 43 million after adding almost 45,000 new users a day. The average number of monthly transacting users grew by over 30% in the fourth quarter alone, to 2.8 million.

Also eye-opening is the inflow of institutional investors, something that we’ve talked about often in this column. Over the fourth quarter, institutional trading volume grew over 110% to $57 billion, while retail trading volume grew by almost 80%. The company services 7,000 institutional accounts.

The Coinbase filing gave everyone who works in this industry something to chew on. There was the bold vision, the numbers, the services overview, and some details on their recent acquisitions. There was even a nod to Bitcoin creator Satoshi Nakamoto, who was featured on the front page as a designated recipient of copies of the filing documents.

And for those interested in the future of work, the customary physical location of the filer was given as “Address not applicable,” with the footnote: “In May 2020, we became a remote-first company. Accordingly, we do not maintain a headquarters.”

Related: Google Finance Adds Crypto Data Tab

While there is much to enjoy in the filing, and no doubt much to continue to pick apart over the next few days, let’s take a step back and look at what this document is really about, and what it says about the future of capital markets. Deep down, it’s about the reshaping of trust.

Opening the books

One of the big steps forward for the industry is greater transparency as to the inner workings of a key infrastructure company.

With greater transparency comes greater trust. This is not the same as trust that Coinbase’s value will go up and up. It’s trust that there is a real business opportunity here, for investors and builders.

We’ve all experienced the dismissal from mainstream economists and investors that crypto is anything but hot air. We’ve all seen how market innovations are dismissed as trivial or even irritating. Yet with this hefty document, even the most skeptical of market observers will look at the numbers and realize that this business is substantial, and that crypto assets move significant amounts of money. What’s more, the market is attracting a growing user base that is generating meaningful profit margins.

With this filing, more traditional businesses will start to trust that crypto assets are here to stay, and are a market force to be reckoned with.  

Sharing concerns

The filing also lists in detail the potential risks to Coinbase and to the industry as a whole. Any therapist will tell you that sharing your worries helps to diminish them. In finance, disclosing every risk you can think of makes good regulatory sense; it also helps them to seem more containable.

The risks listed by Coinbase include the usual caveats about the sensitivity of Coinbase’s income to the volatile nature of crypto markets, the possibility of cyber attacks and the threat of adverse regulation. It also includes some less talked-about risks such as the possibility of class action lawsuits, the loss of banking relationships and the reemergence of Satoshi Nakamoto in person.

Airing in public everything we think could go wrong in our industry will assuage mainstream concern that we’re blind to the dangers of untested technologies, new financial instruments and the lure of the quick profit. It broadcasts that we know, and yet we still believe that these markets are necessary.

It boosts trust in our industry and in the overall integrity of the main market participants.

Market power

The reshaping of trust is also obvious in Coinbase’s decision to use the direct listing approach. This bypasses much of the IPO rigmarole, in that the company lists by selling already existing shares on the market. This means that there is no need for a roadshow to drum up institutional interest, no expensive fees to underwriters, no shareholder dilution.

It is also appropriate for a company steeped in a decentralized ethos, even if it runs a centralized business. In an IPO, the initial trading price is decided on by a group of investment bankers who balance declared institutional interest with the company’s desire to get the highest price possible (and the advisers’ fondness for higher fees). In a direct listing, the market decides.

It is almost a pity, though, that Coinbase chose to forgo the crypto education opportunity that a roadshow to institutions would have offered. Just imagine the investment committees of mutual funds, pension funds, etc., getting a masterclass in crypto assets and their markets.

A further effect of Coinbase’s direct listing decision is the message it sends to other businesses in the industry also contemplating taking advantage of soaring prices and volumes. Investment banks are no doubt already fielding a flood of incoming requests for meetings, and the next few months will most likely see other well-known crypto companies, and probably even some more obscure ones, follow a similar path.

More companies making public their accounts will lead to even greater industry understanding, which enhances trust.

Phase 2

Zooming out even further, the Coinbase move delineates where we are in the arc of crypto impact on capital markets.

Those of us that work in the crypto industry have been saying for some time that crypto markets will influence traditional markets more than most currently realize.

What’s becoming clearer now is that it will happen in phases. Right now, we’re in the assets phase, where the value propositions and price potential of cryptocurrencies and tokens dominate the mindshare of traditional market participants. Companies that help investors onboard and manage their crypto holdings have center stage. We will also see traditional players tiptoe into the crypto pool to harness some of the attention-grabbing action for their clients.

This first phase is about the assets themselves, and facilitating access to them.

The next phase will be how assets move.

Coinbase hints at this in the S-1 document when it discusses traditional assets that move on blockchains. Included in the outlines growth strategy is: “Tokenize new assets.” The section goes on: “We will invest in infrastructure and regulatory clarity to pave a path for the digitization of more traditional financial assets to help pave the path for new assets to be represented as crypto assets.”

It is worth remembering that Coinbase has participated in the funding rounds of several start-ups building security token infrastructure.

Some had hoped that Coinbase would set an example and come to market via a security token. Progress is being made, but the security token market is still too illiquid and immature to support such an ambitious step. Interest is building, however, supported by recent market events that have laid bare the inefficiencies of current capital market plumbing.

And Coinbase did bury deep in the S-1 text a hint that it might consider issuing blockchain tokens in the future, with the following statement: “We may issue shares of capital stock, including in the form of blockchain tokens, to our customers in connection with customer reward or loyalty programs.”

This is yet another way in which the Coinbase listing is about trust. The eventual migration of capital markets to blockchain-based systems, nudged along by the issuance of new security-like assets as well as tokenized securities, could push trust in capital markets back to a healthy level.

With its S-1 filing, Coinbase is not just pushing for a new type of trust in crypto markets. It is possibly also setting the stage for a new type of trust in capital markets more broadly. This is a mammoth ambition, but one that both crypto market practitioners and capital markets observers can get behind.

CHAIN LINKS

Payments giant Square has purchased an additional 3,318 BTC for $170 million, bringing its holding up to 8,027 BTC. It also revealed that its allocation of 4,709 BTC to its treasury holdings in October 2020 cost approximately $50 million. That holding is now worth over $250 million. TAKEAWAY: This highlights the complex issues surrounding treasury allocations to bitcoin, a growing trend among innovative companies worried about the impact of fiat debasement. Should treasury holdings be a speculative bet? What happens when the value appreciation exceeds the company’s revenue? How should this be reflected in accounting? Interesting to note that RBC increased its price target for Square for 2021, in part due to a 69% jump in 2021 bitcoin revenue.  

Square wasn’t the only company adding to its BTC holdings this week. MicroStrategy revealed the purchase of another 19,452 BTC for $1.026 billion in bitcoin. TAKEAWAY: Funds for this purchase came from a $1.05 billion convertible debt offering, and have leverage the firm even more to the BTC price.

Asset manager CoinShares has launched a physically backed Ethereum ETP on the Swiss SIX exchange with the ticker “ETHE.” TAKEAWAY: Following on the heels of CoinShares’ bitcoin ETP launch in January, this underscores the growing investor interest in ETH.

Crypto asset manager CoinShares also released the CoinShares Gold and Cryptoassets Index Lite (CGI), a decentralized finance (DeFi) token designed for institutional investors. The token’s value is based on two equally weighted “wrapped” crypto assets – wrapped bitcoin (WBTC) and wrapped ether (WETH) – and the firm’s wrapped gold token, wDGLD. TAKEAWAY: If you read last week’s newsletter, you’ll know that I think institutional interest in DeFi is worth watching. This token makes that even easier, not only because it can be tracked, but also because it provides a relatively convenient on-ramp for investors considering exposure. This is not really tracking “hard core” DeFi innovation, but it’s a start.

CI Global Asset Management, a subsidiary of a firm overseeing more than $230 billion in assets, filed a preliminary prospectus for CI Galaxy Bitcoin ETF (BTCX), which, if approved, would be Canada’s third bitcoin ETF. TAKEAWAY: Given the strong demand for the Purpose Bitcoin ETF in its early days of trading (when the BTC price wasn’t falling), this is possibly just the beginning of a stream of ETFs listed on Canadian stock exchanges. As the bitcoin ETF market starts to get populated in Canada, we could also start to see some more diverse approaches, such as offering investors exposure to a basket of assets.

A February survey of 30,000 people over the age of 18 conducted by Piplsay, a global consumer research platform, found that 25% of Americans surveyed hold crypto assets, with a further 27% saying that they plan to invest this year. TAKEAWAY: These results are in line with similar surveys carried out recently by Grayscale Investments (a subsidiary of DCG, also parent of CoinDesk) and Bitwise, and underscore the receding likelihood that the U.S. government would attempt to ban bitcoin. Rather, the more extensive the mainstream interest in bitcoin, the more regulated services will step in to service this market, and the more comfortable regulators will get with pending issues.

During the market sell-off on Monday, ETH traded as low as $700 (a more than 50% drop) on crypto exchange Kraken. TAKEAWAY: This highlights that, even though market liquidity has improved dramatically over the years, there could still be issues of order books drying up in the face of high volume and uncertainty.

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Johnson & Johnson vaccine Doses Set To Ship Monday | NBC Nightly News - NBC News

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Bonds Rebound; Asia Stocks, U.S. Equity Futures Up: Markets Wrap - Yahoo Finance

TipRanks

Billionaire Steven Cohen Picks Up These 3 “Strong Buy” Stocks

Last week, the NASDAQ slipped below 13,200, making the net loss from its all-time peak, reached earlier this month, 6.4%. If this trend keeps up, the index will slip into correction territory, a loss of 10% from its peak. So what exactly is going on? At bottom, it’s mixed signals. The COVID-19 pandemic is starting to fade and the economy is starting to reopen – strong positives that should boost markets. But an economic restart brings with it inflationary pressures: more people working means more consumers with money in their pockets, and the massive stimulus bills passed in recent months – and the bill working through Congress now, which totals $1.9 trillion – have put additional funds in people’s wallets and liquidity into the economy. There is pent-up demand out there, and people with money to spend, and both factors will work to push up prices. We can see one effect of all of this in the bond market, where the ten-year Treasury bond is yielding 1.4%, near a one-year high, and it has been trending upwards in recent weeks. This may be a case of jumping the gun, however, as Federal Reserve Chair Jerome Powell has said in testimony before the Senate that he is not considering a move to boost interest rates. In other words, these are confusing times. For those feeling lost in all of the stock market fog, investing gurus can offer a sense of clarity. No one more so than billionaire Steven Cohen. Cohen’s investment firm, Point72 Asset Management, relies on a strategy that involves investments in the stock market as well as a more macro approach. This very strategy has cemented Cohen’s status as a highly respected investing powerhouse, with the guru earning $1.4 billion in 2020 thanks to a 16% gain in Point72′s main hedge fund. Bearing this in mind, our focus shifted to Point72's most recent 13F filing, which discloses the stocks the fund snapped up in the fourth quarter. Locking in on three tickers in particular, TipRanks’ database revealed that each has earned a “Strong Buy” analyst consensus and boasts significant upside potential. Array Technologies (ARRY) The first new position is in Array Technologies, a ‘green tech’ company providing tracking technology for large-scale solar energy projects. It’s not enough just to deploy enough photovoltaic solar collection panels to power an energy utility; the panels have to track the sun across the sky, and account for seasonal differences in its path. Array delivers solutions to these problems with its DuraTrack and SmarTrack products. Array boasts that its tracking systems will improve the lifetime efficiency of solar array projects, and that its SmarTrack system can boost energy production by 5% overall. The company clearly has impressed its customers, as it has installations in 30 countries, in more than 900 utility-scale projects. President Biden is expected to take executive actions to boost green economic policy at the expense of the fossil fuel industry, and Array could potentially benefit from this political environment. This company’s stock is new to the markets, having held its IPO in October of last year. The event was described as the ‘first big solar IPO’ in the US for 2020, and it was successful. Shares opened at $22, and closed the day at $36. The company sold 7 million shares, raising $154 million, while another 40.5 million shares were put on the market by Oaktree Capital. Oaktree is the investment manager that had held a majority stake in the company since 2016. Among Array's fans is Steven Cohen. Scooping up 531,589 shares in Q4, Point72's new ARRY position is worth over $19.7 million at current valuation. Guggenheim analyst Shahriar Pourreza also seems to be confident about the company's growth prospects, noting that the stock appears undervalued. “Renewable energy companies have seen a large inflow of capital as a result of the ‘blue wave’ and the Democrats’ control of the White House and both chambers of Congress; however, ARRY continues to trade a significant discount to peers," the 5-star analyst noted. Pourreza added, "We continue to be bullish on ARRY’s growth prospects driven by 1) tracker market share gains over fixed-tilt systems, 2) ARRY market share gains within the tracker industry, 3) ARRY’s large opportunity in the less-penetrated international market, 4) the opportunity to monetize their existing customer base over the longer-term through extended warranties, software upgrades, etc., which are highly margin accretive.” In line with these bullish comments, Pourreza rates ARRY shares a Buy, and his $59 price target implies a 59% upside from current levels. (To watch Pourreza’s track record, click here) New stocks in growth industries tend to attract notice from Wall Street’s pros, and Array has 8 reviews on record since it went public. Of these, 6 are Buys and 2 are Holds, making the consensus rating on the stock a Strong Buy. The average price target, at $53.75, suggests room for ~45% upside in the next 12 months. (See ARRY stock analysis on TipRanks) Paya Holdings (PAYA) The second Cohen pick we're looking at is Paya Holdings, a North American payment processing service. The company offers integrated payment solutions for B2B operations in the education, government, healthcare, non-profit, and utility sectors. Paya boasts over $30 billion in payments processed annually, for over 100,000 customers. In mid-October of last year, Paya completed its move to the public market via a SPAC (special acquisition company) merger with FinTech Acquisition Corporation III. Cohen is standing squarely with the bulls on this one. During Q4, Point72 snapped up 3,288,843 shares, bringing the size of the holding to 4,489,443 shares. After this 365% boost, the value of the position is now ~$54 million. Mark Palmer, 5-star analyst with BTIG, is impressed with Paya’s prospects into the mid-term, writing, “We expect PAYA to generate revenue growth in the high-teens during the next few years, with Integrated Solutions poised to grow in the mid-20s and Payment Services set to grow in the mid-single digits. At the same time, the company’s operating expenses should grow in the 5% context, in our view. As such, we believe PAYA’s adjusted EBITDA growth will be north of 20% during the next few years, and that its adjusted EBITDA margins will expand to 28% by YE21 from 25% in 2019.” Palmer puts an $18 price target on PAYA shares, indicating his confidence in 49% growth for the year ahead, and rates the shares as a Buy. (To watch Palmer’s track record, click here) PAYA’s Strong Buy analyst consensus rating is unanimous, based on 4 Buy-side reviews set in recent weeks. The shares have an average price target of $16, which suggests ~33% upside potential from the current share price of $12.06. (See PAYA stock analysis on TipRanks) Dicerna Pharma (DRNA) Last but not least is Dicerna Pharma, a clinical stage biotech company with a focus on the discovery, research and development of treatments based on its RNA interference (RNAi) technology platform. The company has 4 drug candidates in various stages of clinical trials and another 6 in pre-clinical studies. The company's pipeline clearly got Steven Cohen’s attention – to the tune of taking a new stake totaling 2.366 million shares. This holding is worth $63.8 million at current values. The drug candidate farthest along Dicerna’s pipeline is nedosiran (DCR-PHXC), which is being investigated as a treatment for PH, or primary hyperoxaluria – a group of several genetic disorders that cause life-threatening kidney disorders through overproduction of oxalate. Nedosiran inhibits the enzyme that causes this overproduction, and is in a Phase 3 trial. Top-line results are expected in mid-’21 and, if everything goes as planned, an NDA filing for nedosiran is anticipate near the end of 3Q21. Covering the stock for Leerink, analyst Mani Foroohar sees nedosiran as the key to the company’s near-term future. “We expect nedosiran could see approval in mid-2022, placing the drug roughly a year and a half behind competitor Oxlumo (ALNY, MP) in PH1... A successful outcome will transform DRNA into a commercial rare disease company in an attractive duopoly market with best-in-class breadth of label," Foroohar noted. To this end, Foroohar rates DRNA an Outperform (i.e. Buy), and his price target of $45 suggests a one-year upside potential of 66%. (To watch Foroohar’s track record, click here) All in all, Dicerna Pharma has 4 Buy reviews on record, making the Strong Buy unanimous. DRNA shares are trading for $26.98, and their $38 average price target puts the upside at ~41% over the next 12 months. (See DRNA stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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Japan's Nikkei 225 jumps 2%; data show China factory activity growth slowed in February - CNBC

SINGAPORE — Stocks in Asia-Pacific traded higher on Monday, as data releases showed China's manufacturing activity growth slowing in February.

In Japan, the Nikkei 225 rose 2.18%, as the index attempted to recover from its nearly 4% plunge on Friday. The Topix index gained 1.64%.

Mainland Chinese stocks were higher, as the Shanghai composite gained 0.52% while the Shenzhen component jumped 1.605%.

Hong Kong's Hang Seng index advanced 1.2%. Shares of CNOOC listed in the city, however, dropped more than 3%. That came after the New York Stock Exchange announced Friday that it will commence delisting proceedings against CNOOC following an update to an executive order signed by former U.S. President Donald Trump in November.

Stocks in Australia edged higher as the S&P/ASX 200 gained 1.71%.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.03%.

South Korea's markets are closed on Monday for a holiday.

China manufacturing PMI

China's official manufacturing Purchasing Managers' Index (PMI) for February came in at 50.6 over the weekend, according to data released by the country's National Bureau of Statistics.

That was lower than January's reading of 51.3 but still above the 50 level that separates expansion from contraction.

A private survey released Monday also showed China's manufacturing activity in February growing at a slower pace.

The Caixin/Markit manufacturing Purchasing Managers' Index (PMI) came in at 50.9, a decline from January's reading of 51.5.

Levels above 50 in PMI readings represent expansion while those below that signify contraction. PMI readings are sequential and show on-month expansion or contraction.

Bond yields fall

The moves in Asia-Pacific markets came as bond yields fell.

The yield on the benchmark 10-year Treasury note declined to as low of 1.383%, last trading at 1.4032%. Prices move inversely to yields.

In Asia-Pacific, the yield on the Australian 10-year bond slipped to 1.661%, having seen levels above 1.8% last week. The 10-year Japanese government bond's yield also declined to 0.15%.

Oil prices jump

Oil prices were higher in the afternoon of Asia trading hours, with international benchmark Brent crude futures up 1.66% to $65.49 per barrel. U.S. crude futures gained 1.64% to $62.51 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 90.812 after recovering from levels below 90 in late February.

The Japanese yen traded at 106.55 per dollar, weaker than levels below 105.6 against the greenback seen last week. The Australian dollar changed hands at $0.7748, having slipped from levels above $0.792 last week.

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J&J Covid-19 vaccine distribution to begin immediately - NBC News

The first shots of Johnson & Johnson's coronavirus vaccine could be administered as early as Tuesday, senior Biden administration officials said Sunday.

The drugmaker, which got sign off over the weekend for emergency use of its vaccine from both the Food and Drug Administration and the Centers for Disease Control and Prevention, is expected to deliver 4 million shots this week.

Full coverage of the coronavirus outbreak

Officials said that after that, however, they expect deliveries to be "uneven" through March.

By the end of March, Johnson & Johnson plans to have delivered 20 million shots. The company has promised to distribute 100 million doses by summer.

Feb. 28, 202103:25

Dr. Rochelle Walensky, director of the CDC, signed off Sunday on an advisory committee's recommendation to endorse the Johnson & Johnson vaccine.

She said the shots are coming at a "potentially pivotal time."

"CDC's latest data suggest that recent declines in Covid-19 cases may be stalling and potentially leveling off at still very high numbers," Walensky said in a statement.

The Johnson & Johnson vaccine is for adults 18 and older. It is the only single-dose shot for the virus.

Vaccines from Pfizer-BioNTech and Moderna require two shots, three to four weeks apart.

All three vaccines are "highly efficacious," Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Sunday on NBC's "Meet the Press," and he encouraged people to take whatever vaccine is offered.

"If you go to a place and you have J&J and that's the one that's available now, I would take it. I personally would do the same thing," Fauci said. "I think people need to get vaccinated as quickly and as expeditiously as possible."

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Erika Edwards

Erika Edwards is a health and medical news writer and reporter for NBC News and "TODAY."

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Goldman bankers join Walmart effort to take on Wall Street - Financial Times

The head of Goldman Sachs’ consumer finance division, Omer Ismail, and one of its top executives, David Stark, are both leaving to join a fintech start-up backed by Walmart and Ribbit Capital.

The hires represent a big step in the second big effort by the world’s largest retailer to enter financial services, after it abandoned its plan to start a bank over a decade ago, under pressure from regulators.

Walmart and Ribbit have provided little information about the start-up, which was announced in January, other than to say that it would “deliver tech-driven financial experiences tailored to Walmart’s customers and associates.” It will be majority owned by the retailer, and the companies said that “growth may come through partnerships and acquisitions.” 

Ismail was tapped to lead Goldman’s consumer division, known as Marcus, less than six months ago, taking over from founding chief Harit Talwar. A graduate of Dartmouth College and Harvard Business School, Ismail has been at Goldman since 2002. Stark, a Goldman partner who has been at Marcus since its founding almost five years ago, was recently put in charge of partnerships at the unit. He played a key role in establishing the credit-card partnership with Apple. 

In 2020, Marcus generated just under $1.2bn in revenue, up 40 per cent from 2019, but a small fraction of Goldman’s total. It had $8bn of loans outstanding at year-end, divided between credit card and instalment loans, to go with $97bn in deposits.

Ribbit Capital is a major backer of Robinhood. It provided more than $500m in convertible debt financing to the share-trading platform when it needed to increase its capital buffers with Gamestop and other “meme” stocks trading at unheard of volumes and amid wild price volatility. Ribbit, founded in 2012, is led by the Venezuelan venture capitalist Micky Malka. 

Goldman Sachs said in a statement that Marcus “has serious momentum and a deep and growing bench of talent. We wish these two well.” Walmart did not respond to a request for comment.

Walmart had tried to form a bank after the turn of the century, but withdrew its application for a US bank charter in 2007, after facing resistance from the Federal Deposit Insurance Corporation.

Non-bank companies are generally forbidden from owning banks in the US. But Walmart had applied for an industrial loan corporation charter, a special banking licence that allows certain corporations, such as car manufacturers, to lend to their customers. Walmart’s application was vehemently opposed by the banking industry.

Recently another regulator, the Office of the Comptroller of the Currency, had proposed a light-touch bank charter for fintech companies that do not take deposits. That proposal, too, has met with immediate resistance from bank lobbyists.

Ed Mills, a policy analyst at broker Raymond James, said: “The interesting thing is that the banks have spent the last 15 years fighting against Walmart getting a bank charter, but what has changed is that Walmart is no longer the biggest threat to the banking industry — tech and fintech is. They spent so much time winning that battle, but have they lost the war?”

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Walmart Lures Goldman Bankers in Bid to Fight Wall Street - Bloomberg

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1. Walmart Lures Goldman Bankers in Bid to Fight Wall Street  Bloomberg
2. Goldman Consumer Head Is Leaving to Run Walmart Fintech  The Wall Street Journal
3. Walmart has reportedly lured away two Goldman Sachs bankers to help lead its new fintech venture  Business Insider
4. View Full Coverage on Google News

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Fauci says all three Covid vaccines highly effective, urges people to take shot most available - CNBC

Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, speaks during a White House press briefing, at the James Brady Press Briefing Room of the White House January 21, 2021 in Washington, DC.

Alex Wong | Getty Images

White House Chief Medical Advisor Dr. Anthony Fauci said on Sunday he would take the newly approved Johnson & Johnson Covid-19 vaccine and urged Americans to take whichever shot is available when they are eligible.

The Food and Drug Administration approved J&J's vaccine on Saturday, giving the U.S. a third tool to fight the pandemic following vaccines from Moderna and Pfizer. The company expects to deliver 20 million doses by the end of March.

"All three of them are really quite good, and people should take the one that's most available to them," Fauci said on NBC's "Meet the Press."

"If you go to a place and you have J&J, and that's the one that's available now, I would take it," Fauci said. "I personally would do the same thing. I think people need to get vaccinated as quickly and as expeditiously as possible."

The J&J vaccine is different from the others because it's a one-dose regimen and does not require patients to return for a second dose. It can be stored at refrigerator temperatures for months. The shot has demonstrated 66% effectiveness overall, 72% in the U.S. and 57% in South Africa, which has seen a rapid spread of the B.1.351 variant.

Though the Pfizer and Moderna vaccines showed higher efficacy rates in trials using two doses versus J&J's single-dose vaccine, Fauci insisted that the J&J shot is not a weaker vaccine and said trial data shouldn't be compared for the three shots because they were tested at different times.

"You now have three highly efficacious vaccines, for sure," Fauci said. "There's no doubt about that."

While the country is seeing a decline in new coronavirus cases and an improvement in the vaccination rate, Fauci warned states not to prematurely loosen pandemic restrictions, a move which could lead to another surge in infections.

Cases have plummeted from 300,000 a day to roughly 70,000, a baselines that's still too high, Fauci said.

"We don't want to continue to prevent people from doing what they want to do. But let's get down to a good level," Fauci told CBS' "Face the Nation." "Let's get many, many more people vaccinated. And then you could pull back on those types of public health measures."

"But right now, as we're going down and plateauing is not the time to declare victory because we're not victorious yet," he said.

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Bond-Market Tumult Puts ‘Lower for Longer’ in the Crosshairs - The Wall Street Journal

Some Federal Reserve officials have said the recent rise in the yield on the benchmark 10-year Treasury note is healthy.

Photo: Samuel Corum/Bloomberg News

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$3 gasoline could be around the corner — unless OPEC and Russia start pumping more oil - CNN

A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here.

US crude has raced back above $60 a barrel. That's a far cry from the depths it reached last April when oil crashed below zero (negative $40.32 a barrel, to be exact) for the first time in history. Prices at the pump are starting to creep higher, too. The national average hit $2.70 a gallon Friday, according to AAA. That's well above the April low of $1.76 per gallon.

Investors are betting the pandemic will soon be under control — and that in turn will unleash pent-up demand for road trips, cruises, flights and other oil-consuming activities.

Against this backdrop, OPEC and its allies, known as OPEC+, are scheduled to meet Thursday to deliberate whether to add more barrels into to the hungry market. They've certainly got the firepower, and the price incentive, to do just that.

Last year, OPEC+ slashed output by a record-shattering 9.7 million barrels per day. The emergency steps, along with production cuts by US and other producers, drove a strong rebound in prices. That recovery has accelerated in recent months as millions of people around the world have gotten vaccinated against Covid.

OPEC+ could soon announce the market is now healthy enough to step up production this spring.

"Given the allure of higher prices, there should be more supply coming onto the market," said Ryan Fitzmaurice, energy strategist at Rabobank.

Indeed, sources within OPEC+ told Reuters last week that an output increase of half a million barrels per day beginning in April is possible without building up inventories, although a final decision had not been made.

"Given where prices are, how will anyone tell Russia that they need to curtail production?" said Jim Mitchell, head of Americas oil analysts at Refinitiv.

There are several good reasons for OPEC+ to release more barrels.

First, higher prices mean countries like Saudi Arabia that rely on oil to balance their budgets can bring in badly-needed revenue.

Second, if OPEC+ doesn't start producing more, other countries will. That includes frackers in Texas who were sidelined by the oil crash.

Bank of America strategists told clients in a recent note that OPEC+ will "preserve market share" by pumping more soon. During the second quarter alone, Bank of America expects OPEC+ to add more than 1.3 million barrels per day of supply.

There's another reason OPEC+ will want to act before it's too late: self-preservation.

If gasoline prices keep rising and hit $3 a gallon — and beyond — it will only accelerate clean energy investments and persuade more drivers to dump their gas-guzzling SUVs for electric vehicles.

"If oil shoots up to extreme levels," said Rabobank's Fitzmaurice, "that only helps the renewables story and eats away at oil demand."

The switch to electric means more costly recalls

Hyundai is recalling 82,000 electric cars globally to replace their batteries after 15 reports of fires involving the vehicles. Despite the relatively small number of cars involved, the recall is one of the most expensive in history.

The numbers: The recall will cost Hyundai 1 trillion Korean won, or $900 million. On a per-vehicle basis, the average cost is $11,000 — an astronomically high number for a recall.

The episode signals how electric car defects could create hefty costs for automakers — at least in the near future, report my colleagues Chris Isidore and Peter Valdes-Dapena.

The recall is another indication of just how expensive EV batteries are relative to the cost of the entire car. Until the cost of batteries comes down, through greater production worldwide and economies of scale, the cost of making electric vehicles will remain higher than comparable gasoline cars.

Once batteries do become less expensive, as is expected in the coming years, electric cars could become much cheaper to build because they have fewer moving parts and require as much as 30% fewer hours of labor for assembly compared to traditional vehicles.

Fewer parts on electric vehicles could also mean that auto recalls become less common in the future. But for now, there could be significant costs if battery fire problems require battery replacements.

Monday: US ISM Manufacturing Index

Tuesday: Target, Kohl's, AutoZone, AMC Entertainment and HP Enterprise earnings

Wednesday: US ISM Non-Manufacturing Index; EIA crude oil inventories; Dollar Tree, Stellantis and American Eagle earnings

Thursday: OPEC+ meeting; US jobless claims; Kroger, Gap and Costco earnings

Friday: US jobs report for February; Big Lots earnings

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Johnson & Johnson's one-shot COVID vaccine authorized for emergency use - CBS News

The Food and Drug Administration on Saturday authorized Johnson & Johnson's COVID-19 vaccine for emergency use. The vaccine is the third to be approved for use in the United States, and the first that requires only one shot.  

The FDA's Vaccines and Related Biological Products Advisory Committee (VRBPAC) voted unanimously to recommend authorizing the vaccine by Janssen, a division of Johnson & Johnson, on Friday. The committee provides expert advice to the FDA but does not have final say on approval.

"The authorization of this vaccine expands the availability of vaccines, the best medical prevention method for COVID-19, to help us in the fight against this pandemic, which has claimed over half a million lives in the United States," said Acting FDA Commissioner Dr. Janet Woodcock on Saturday. 

"The FDA, through our open and transparent scientific review process, has now authorized three COVID-19 vaccines with the urgency called for during this pandemic, using the agency's rigorous standards for safety, effectiveness and manufacturing quality needed to support emergency use authorization."

NEW: Johnson & Johnson single shot vaccine just approved by FDA for 18 and older.

We are ready to roll it out!

— Andy Slavitt (@aslavitt46) February 27, 2021

Johnson & Johnson's vaccine has been shown to provide 85% protection against severe COVID-19 by 28 days after vaccination. Among people who got the vaccine in clinical trials, there were no COVID-related deaths. Phase 3 clinical trials also showed protection against multiple emerging virus variants, including a more contagious strain that was first discovered in South Africa and has since been detected in the U.S.

The vaccine can be stored at standard refrigerator temperatures for up to three months.

"There's no question that this vaccine is going to be a game-changer," Dr. Mathai Mammen, global head of pharmaceutical research and development for Johnson & Johnson, told CBS News' Dr. Tara Narula in January. "The real-world effectiveness of this vaccine is apt to be very high."

The Centers for Disease Control and Prevention updated state and local partners on distribution plans for the vaccine on Friday, ahead of the FDA's authorization and VRBPAC's approval. According to a pre-decision draft and CDC talking points obtained by CBS News, the vaccine is expected to be made available for ordering on Sunday. 

The new vaccine will not immediately add a significant boost to America's vaccine availability. Johnson & Johnson announced earlier this week it expected under 4 million doses would be ready to ship after the emergency use authorization — 6 million less than it originally committed to having ready by the end of February.  

"There will be limited supply of Janssen vaccine in the short term," the draft CDC document says. "Weekly allocations may vary based on availability for the first few weeks."

Nearly 70 million vaccine doses had been administered across the country as of Thursday. Doses are split almost evenly between the two already approved for use in the U.S.: Pfizer's vaccine at 36 million, and Moderna's at 34 million, according to CDC data. 

As of February 25, about 1.5 million doses were being distributed daily across the U.S., according to seven-day average data reported by the CDC. The rate marked a 7.1% decrease from the previous week, likely due to extreme winter weather, the agency said. 

The CDC said Friday it expects Janssen's 3.9 million doses will be divided as follows: 2.8 million doses for states, and 800,000 doses for retail pharmacies, 70,000 doses for community vaccine centers, and 90,000 doses for federally qualified health centers.  

Janssen's product is a single-shot vaccine, and could address one obstacle in distribution: Getting second doses in arms on time. Both Pfizer's and Moderna's vaccines require a person to get two shots weeks apart.

Millions of Americans are not getting their second dose within the recommended time period for ensuring optimal protection from the virus, according to a CBS MoneyWatch review of CDC data.

As of Wednesday, more than 2.8 million Americans who received their first shot — nearly 12% of those vaccinated — had not gotten their second dose within the 28-day interval prescribed for Moderna's vaccine. 

Alexander Tin and Stephen Gandel contributed to this report. 

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After Robinhood GameStop trading frenzy, SEC could examine penny stock listing standards - Fox Business

Sources tell FOX Business’ Charlie Gasparino that the listing of penny stocks allows trading of speculative shares on platforms like Robinhood and Schwab.

The Securities and Exchange Commission may soon be reevaluating the listings standards of major exchanges in a move that could bar the Nasdaq and the New York Stock Exchange from listing speculative penny stocks, according to people with knowledge of the matter.

The SEC — also known as Wall Street's top cop — has long classified as penny stocks any share that trades below $5, and according to the commission, "these companies may have little or no earnings" and are "highly speculative."

But the NYSE and Nasdaq combined list as many as 1,000 companies that would meet the SEC's penny stock designation and thus may not be suitable for small investors.

By listing the companies, some regulators believe the exchanges are giving an imprimatur of safety to these shares, according to people with knowledge of the matter.

An SEC spokesman declined comment, as did press officials for the NYSE and Nasdaq.

Ticker	Security	Last	Change	Change %
GME	GAMESTOP	101.74	-6.99	-6.43%
AMC	AMC ENTERTAINMENT HOLDINGS INC	8.01	-0.28	-3.38%
BB	BLACKBERRY LTD.	10.05	-0.53	-5.01%

The exchanges' listing policy on penny stocks was brought to the commission's attention following the Robinhood trading frenzy. The trading involved a handful of long-time penny stocks that exploded amid widespread message board hype that gained traction among hordes of novice investors utilizing the no-commission and accessible Robinhood trading app.

Shares of video game retailer GameStop, which had traded below $5 for much of the summer, jumped to nearly $500 in January during the heart of the mania.

WHAT IS ROBINHOOD? WHAT TO KNOW ABOUT COMPANY UNDER FIRE OVER GAMESTOP TRADE RESTRICTIONS

The trading spree ultimately sparked significant investor losses, though it doesn't seem to be over yet as shares of GameStop started climbing in recent days to above $100 a share after falling to around $40. The wild swings have sparked a congressional hearing and regulatory reviews from the SEC among other agencies.

As reported by FOX Business, the SEC's enforcement division is looking into whether shares of the stocks have been manipulated by traders making false claims about the companies on message boards, enticed investors to buy at the inflated prices and then dumping shares just before they crashed in value.

Shares of video game retailer GameStop, which had traded below $5 for much of the summer, jumped to nearly $500 in January during the heart of the mania. (iStock)

Meanwhile, the SEC's Division of Trading and Markets may take a deep dive into the listings standards for the NYSE and Nasdaq after discovering that Robinhood only allows for trading of stocks that are listed on a major exchange, FOX Business has learned.

DAVE PORTNOY, ROBINHOOD CEO CLASH OVER GAMESTOP STOCK: 'YOU KILLED THE LITTLE GUY!

Robinhood does not allow the trading of so-called "over the counter" penny stocks that don't meet NYSE and Nasdaq standards (other discount brokerages such as Charles Schwab allow such trading). If the stocks in the middle of the trading frenzy were delisted in the summer, investor losses would have been averted, people close to the matter say.

Robinhood does not allow the trading of so-called "over the counter" penny stocks that don't meet NYSE and Nasdaq standards. (Getty Images)

Critics of the Nasdaq and NYSE listing of penny stocks say the major exchanges have justified the inclusion of penny stocks to keep earning listing fees from these companies.

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But people at the exchanges say even companies that trade below $5 a share can have significant market value and thus be suitable for investing. The NYSE listing standards allow penny stocks to be listed if they have a market value of $50 million over a period of 30 days while meeting other thresholds. The Nasdaq is said to have more lenient market capitalization standards.

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The penny stock listing issue could be raised during hearings for the confirmation of President Biden's incoming SEC chair, Gary Gensler, scheduled for this coming week. Gensler will face a number of hot-button issues when he takes over the SEC, including regulating special purpose acquisition companies, cryptocurrency and the recent stock trading frenzy.

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‘Share-plunge’ GameStop traders serve valuable function - New York Post

It feels wrong to hope that a company goes out of business and its stock craters to zero, which is why short sellers — the traders who make money when stocks tank — are treated with disdain in many corners of Wall Street and now increasingly in Washington. 

But the devil in this case deserves some sympathy. Without short sellers, the investing public is truly doomed. And for proof, look no further than a one-time penny stock that’s headed back to nosebleed levels.

The stock is GameStop, of course, a video-game retailer undergoing a corporate restructuring that includes store closures and, according to many analysts, an outdated business model as people increasingly buy video games online instead of in stores. 

As we all now know, GameStop has become a market darling of novice traders for reasons that defy logic — sending the stock to a high of nearly $500 a share a few weeks ago before crashing and then rebounding this week.

Initially, the stock was buoyed by an unusual array of factors, including by chatter on Reddit message boards that the company was bound for greatness. Adding fuel to the fire were novice traders armed with a Robinhood no-fee trading app and a deep desire to stick it to the big boys betting on the stock’s decline.

Short sellers borrow shares of stock, sell them and repay the loan at a later date, betting shares will fall. That’s why they make a lot of money when stocks tank. But they can lose a lot of money when stocks they short rise, which is what happened with GameStop.

The mania sparked a short squeeze and hedge funds got crushed. Robinhood had to halt trading because it didn’t have the capital to settle and process all the trades.

Ultimately, the House Financial Services Committee held a hearing to sort things out. But the committee mainly tried to place the blame on hedge funds that shorted the stock.

Reddit’s “r/wallstreetbets” thread, the online forum behind the GameStop frenzy.

AFP via Getty Images

What was largely overlooked during the hearings was that even as the hedge funds lost money, they were eventually proven right. As they predicted, shares of GameStop collapsed. Small investors who ignored the short thesis and engaged in the Reddit-induced mania by buying near the top (sometimes with borrowed money) got crushed as the stock plummeted below $50.

Just last week, GameStop’s stock climbed yet again, up to close to $200 a share before settling at just $100, which is still light years above its penny-stock levels of under $4 during last summer. And that’s setting up small investors to get screwed yet again. 

I took a stroll through the muck on Reddit’s “r/wallstreetbets” thread, the epicenter of the GameStop tout, to see what, if anything, is being pushed about GameStop’s business model. The answer: very little, though I did find one post from a user who promised to “tattoo wallstreetbets logo on my right butt cheek if we get GME to $1,000.”

Note the language here: “If we get GME to $1,000.” It is typical of stock touting, where traders hype stocks for flimsy reasons. The dumb money comes rushing, pushing shares up further before savvy traders dump their holdings for a profit.

Of course, it’s impossible to know whether GameStop will match $1,000 a share or even the $500 mark it nearly hit during the height of the mania in late January. But this time there are reasons to believe the losses to average investors could be even steeper: There’s an absence of short sellers providing a much-needed second opinion.

Short interest in GameStop that had surpassed more than 100 percent of the float in January has fallen dramatically. 

Hammered by the short squeeze and Congress (during the Finance Committee hearings, committee Chair Maxine Waters used the term “predatory” to describe short selling), the shorts are now running for cover. The information flow is being dominated by the touts.

As I reported on Fox Business, legendary short seller James Chanos is worried about the market implications of the anti-short mania that is sweeping retail investors and now possibly Congress.

Chanos, a friend of President Biden, has reached out to economic aides in the White House to convince them short sellers are needed now more than ever. Record low interest rates, no-fee trading apps and message-board hype are creating a perfect storm of small investors snapping up speculative stocks that are likely to implode when reality hits again.

Of course, Chanos is one of those evil short sellers who have made a fortune betting stocks will crash, so consider the source. Recently he made what many touts consider a mistake by stating that Tesla was a “walking insolvency” given where the stock is trading and how the electric-car maker is faring today.

Time will tell if he’s wrong.

But some 20 years ago he made history with research that uncovered one of the great corporate frauds ever: the Enron accounting scandal. Investors who listened to him made money; those who didn’t lost money. Regulators who ignored him were forced to reform accounting laws for greater transparency.

Count me as someone who thinks we need to hear more from the likes of Chanos as markets hit new highs while low interest rates and fee-free trading apps lure more novice investors into thinking that trading is a no-lose situation because that’s what they’re reading on Reddit.

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