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2024-05-25

At current valuation, Nvidia is at optimum risk! Competitors will catch up really soon.

Nvidia: Profit Explosion And Stock Split Are Game-Changers

2023-11-20

SeekingAlpha, don't put yourself down writing this article!😂What growth Ebay has? Mono, period!

Alibaba: Don't Fall For This Trap

2024-09-18

Who cares? Is he bringing his money with him to heaven ?😄

Billionaire Hedge Fund Manager Says He Would Pull His Money from the Market If Harris Wins Election

01-14

This is a pyramid scheme betting on Bitcoin's bull. Bitcoin is a dinosaur of crypto. When all other cryptos have utilities that generate revenue, Bitcoin is crash to zero.

MicroStrategy: Shares Should Trade At A Premium

2023-12-05

Apple is dead.

Can Apple's iPhone 15 Spark a Tech Rally? Analyst Eyes China Growth

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Bitcoin is a dinosaur of crypto. When all other cryptos have utilities that generate revenue, Bitcoin is crash to zero.","listText":"This is a pyramid scheme betting on Bitcoin's bull. Bitcoin is a dinosaur of crypto. When all other cryptos have utilities that generate revenue, Bitcoin is crash to zero.","text":"This is a pyramid scheme betting on Bitcoin's bull. Bitcoin is a dinosaur of crypto. When all other cryptos have utilities that generate revenue, Bitcoin is crash to zero.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/392317344620560","repostId":"1123227021","repostType":2,"repost":{"id":"1123227021","kind":"news","pubTimestamp":1736819878,"share":"https://ttm.financial/m/news/1123227021?lang=&edition=fundamental","pubTime":"2025-01-14 09:57","market":"us","language":"en","title":"MicroStrategy: Shares Should Trade At A Premium","url":"https://stock-news.laohu8.com/highlight/detail?id=1123227021","media":"Seeking Alpha","summary":"SummaryMicroStrategy shares have surged due to its unique strategy of leveraging Bitcoin and issuing debt and equity to grow Bitcoin holdings per share.The company's 21/21 plan aims to raise $42 billi","content":"<html><head></head><body><h2 id=\"id_402728908\">Summary</h2><ul style=\"\"><li><p>MicroStrategy shares have surged due to its unique strategy of leveraging Bitcoin and issuing debt and equity to grow Bitcoin holdings per share.</p></li><li><p>The company&#39;s 21/21 plan aims to raise $42 billion to buy more Bitcoin, enhancing shareholder value through increased Bitcoin yield.</p></li><li><p>The net asset value per share is estimated at $111.13 as of 12/31, but shares trade at a premium due to expected high Bitcoin yield growth.</p></li><li><p>Despite volatility, I believe MicroStrategy is a buy, as its Bitcoin yield strategy promises substantial long-term returns if Bitcoin prices continue to rise.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7a5531c6cc0d95be1909c48d83381f2d\" alt=\"Bitcoin Concept With Binary Codes\" title=\"Bitcoin Concept With Binary Codes\" tg-width=\"750\" tg-height=\"450\"/><span>Bitcoin Concept With Binary Codes</span></p><p></p><p><strong>Eoneren</strong></p><p></p><p><em>Co-Authored by Noah Cox and Brock Heilig</em></p><h2 id=\"id_103363165\">Investment Thesis</h2><p>MicroStrategy (NASDAQ:MSTR) shares were one of the top-performing equities here in the US in 2024 with shares up 479.68% over the last 12 months.</p><p>At the end of 2024, MicroStrategy was added to the NASDAQ 100 index, representing how the company as both a Bitcoin treasury and software technology firm has reached a new paradigm.</p><p>I think the biggest question in front of investors for MicroStrategy is why shares should deserve to trade at a premium. On the surface, the company looks like a closed-end Bitcoin fund that issues a combination of debt and equity securities in order to accumulate Bitcoin. I think this grossly understates what Chairman Michael Saylor’s plans are.</p><p>MicroStrategy plans to be far more than just a closed-end Bitcoin fund. As Bitcoin prices move higher, MicroStrategy is able to monetize their access to debt markets in order to split the risk of Bitcoin into a series of ‘tranches’ based on which security investors buy.</p><p>In essence, MicroStrategy is looking to give convertible bond investors a risk-adjusted return to invest in Bitcoin with.</p><p>For common stockholders, MicroStrategy is aiming to act like a leveraged Bitcoin fund that is trying to grow the amount of Bitcoin per share by a rate of 6-10% per year for the next 3 years.</p><p>As MicroStrategy shares move higher (powered by Bitcoin’s rise), this enables management at MicroStrategy to issue new stock in the company at progressively higher prices. The cash proceeds from these stock offerings simultaneously raise the average net asset value per share, providing more benefit to existing shareholders. It’s a weird form of dilution that is actually net beneficial.</p><p>As shares become more valuable because they contain more Bitcoin, investors are buying into these shares at a premium above net asset value because they believe that Saylor will be able to increase the amount of Bitcoin through debt offerings and equity offerings.</p><p>With this, I am a buy on MicroStrategy. While shares promise to be volatile, I think as Saylor rolls out his strategy, investors will be rewarded with the amount of Bitcoin he can accumulate per share. As Bitcoin itself compounds, shares should continue to do well.</p><h3 id=\"id_1467102866\">Background</h3><p>Michael Saylor co-founded MicroStrategy in 1989 alongside co-founders Sanju Bansal and Thomas Spahr. A $250,000 consulting contract from DuPont in 1989 allowed MicroStrategy to kickstart its business.</p><p>By 1992, MicroStrategy signed its first major client, McDonald’s, to a $10 million deal.</p><p>Saylor, who served as the company’s CEO from its inception in 1989 to 2022 (and now as Chairman), is a major advocate of Bitcoin. As of their 8K filed on January 6th, the company owns 447,470 Bitcoin.</p><p>As seen in an earnings presentation from Q3, MicroStrategy’s Bitcoin stockpile has been growing significantly. Keep in mind, this was before their large purchases in Q4 (up to the 447,470 Bitcoin I mentioned before).</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/5c973f12a5f017836468b8056a1ad9c9\" alt=\"Bitcoin Treasury Growth\" title=\"Bitcoin Treasury Growth\" tg-width=\"1280\" tg-height=\"720\"/><span>Bitcoin Treasury Growth</span></p><p style=\"text-align: left;\"><strong>Bitcoin Treasury Growth (MSTR Earnings Deck)</strong></p><p></p><p>So, MicroStrategy has clearly been successful in building up its Bitcoin holdings. But what is this all worth? For this, I think we first need to look at what the net asset value is today via balance sheet analysis.</p><h3 id=\"id_1253596215\">Balance Sheet Analysis</h3><p>For us to truly understand what MicroStrategy is worth, we need to analyze their balance sheet and assets.</p><p>Since MicroStrategy has reported via an 8K their most current Bitcoin holdings, we will use these figures. In the 8K filing, MicroStrategy noted they own 447,470 Bitcoin. Using the valuation provided in the 8K, the Bitcoin treasury company pegs their Bitcoin valuation of $41.789 billion.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/dd999090b0874f133f21810d68745a26\" alt=\"MSTR Bitcoin Holdings\" title=\"MSTR Bitcoin Holdings\" tg-width=\"1280\" tg-height=\"171\"/><span>MSTR Bitcoin Holdings</span></p><p style=\"text-align: left;\"><strong>MSTR Bitcoin Holdings (MSTR)</strong></p><p></p><p>Throw in the cash the company had at the end of Q3 of $46.3 million, accounts receivable as of Q3 of $115.1 million, and property, plant and equipment (as of Q3) of $82.8 million and we get total assets of roughly $42.03 billion.</p><p>On the liabilities side, the company had current liabilities as of Q3 of $288.1 million, debt liabilities as of December 31st of $10.379 billion (including a small secured loan of $9.8 million), and capital leases of $57.5 million. The company’s total liabilities are roughly $10.72 billion.</p><p>I am doing this math to get a rough estimate of what the net asset value for shares is.</p><p>The rough net asset value of the company as of 12/31 appears to be $31.31 billion.</p><p>On a diluted basis (including convertible notes) the company has 281.735 million implied diluted shares outstanding.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/90e19d2282b25a5cf316afbd159cd6af\" alt=\"MSTR Capital Structure\" title=\"MSTR Capital Structure\" tg-width=\"1280\" tg-height=\"507\"/><span>MSTR Capital Structure</span></p><p style=\"text-align: left;\"><strong>MSTR Capital Structure (MSTR 8K)</strong></p><p></p><p>In essence, this implies an approx. net asset value of $111.13/share as of 12/31.</p><p>So, from here, I think the main question is straightforward: why should we pay roughly 2.95x net asset value for Saylor’s company? I think the answer has to do with how MicroStrategy management is monetizing the debt and equity markets.</p><h3 id=\"id_2169120568\">Issuing Stock Grows Their NAV As Bitcoin Rises</h3><p>Based on our balance sheet analysis using the fair value of Bitcoin, each share of MicroStrategy has a net asset value of $111.13 per share.</p><p>While each share currently has $111.13 in value right now, we have to consider Saylor’s 21/21 monetization plan that he’s looking to get shareholder approval for and then execute on over the next three years.</p><p>Yahoo Finance explained in detail what Saylor’s 21/21 monetization plan entails.</p><blockquote><p>...the &#34;21/21 Plan,&#34; is to raise $42 billion, then use it to buy more Bitcoin. Half of the funds, or $21 billion, would come from at-the-market offerings of new shares in the company. The other $21 billion would come from new fixed-income offerings, primarily in the form of convertible debt.</p></blockquote><p>While the strategy includes convertible debt, I want to focus for a second on the common stock offerings that, I think, are a key part of this equation.</p><p>MicroStrategy wants to increase its common share count (class A) from 330 million shares to 10.33 billion shares (or a 10 billion share increase) through shareholder approval and then common stock offerings.</p><p>What this means is that as MicroStrategy proceeds to issue more class A shares, the cash proceeds from each share sale will increase the average net asset value of all shares.</p><p>Because, if shares are offered (and purchased) by the public at $300/each, the company receives roughly $300/share in cash that is then available to be used to purchase Bitcoin.</p><p>Previously, the company has been successful in issuing shares well above their net asset value. In November, MicroStrategy completed an at-the-market offering of 7.854 million shares of common stock. These shares were sold for well above net asset value at the time based on the amount of Bitcoin that was on their balance sheet and also the going price of shares at the time of the sale.</p><p>Given this, we know the market has some appetite to buy shares above net asset value. The reason (I believe) is because as each share is issued, current shareholders know they will see their net asset value grow (hence the ‘Bitcoin Yield’ metric).</p><p>While this new offering will cause a lot of dilution of common shares, I think it&#39;s safe to assume that this new offering will continue to help enhance Bitcoin yield. I expect Bitcoin per share to continue to grow. If we look at the company’s Q3 earnings call, their goal was 6-10% per year in Bitcoin Yield.</p><p>However, since the election with the run-up in the price of Bitcoin, their Bitcoin yield in Q4 alone was a strong 48.0% according to their 8K.</p><p>This yield is key. The company’s projected Bitcoin yield helps us determine what net asset value premium the company should be trading at.</p><h3 id=\"id_3037863165\">Valuation</h3><p>Currently, shares trade at roughly 2.95 times their net asset value. In order for us to figure out what tangible book value ratio the shares should trade at, we should think about the expected CAGR of Bitcoin over the next 10 years.</p><p>Over the last 14 years, Bitcoin has had a CAGR of 142%. Saylor, in his Q3 earnings call, believes Bitcoin is now compounding at roughly 50% per year.</p><blockquote><p>We are built on an asset, bitcoin, which is growing 50% a year and we are growing with that asset.</p></blockquote><p>So basically, if we take the company’s projected Bitcoin yield growth per year, and multiply it by the growth in the price of Bitcoin per year, we should arrive at the growth rate of the net asset value of the company per year.</p><p>Saylor mentioned earlier in his call he was targeting 6-10% per year in Bitcoin yield. Over the course of 10 years, growing an asset at 50% per year vs. growing an asset at 60% per year results in the 60% CAGR asset reaching 190.67% of the value of the 50% CAGR asset.</p><p>In essence, the market is applying this 2.95x multiple on net asset value because it expects Saylor and the management team at MicroStrategy to grow their Bitcoin per share at a rate that gives shareholders a return 2.95x greater than Bitcoin over the next 10 years. The way you do this is to give each shareholder 2.95x more Bitcoin per share over the next 10 years.</p><p>Using this math, in order to get this level of growth, investors are implying a CAGR Bitcoin yield of roughly 11.42%. This is only slightly higher than Saylor’s conservative 6-10% Bitcoin yield growth estimates.</p><p>Again, keep in mind that the company’s Bitcoin yield in Q4 alone was 48%.</p><p>In essence, this is why you pay a premium for MicroStrategy shares over buying Bitcoin directly. You are betting that Saylor can grow your Bitcoin per share at a rate greater than 11.42% annually.</p><p>I personally think he can as well. I think his 6-10% target is conservative and the company (especially with the 21/21 plan) can grow its Bitcoin per shareholder at 15% per year for the next 10 years. As I mentioned above, share offerings accelerate Bitcoin yield. That is what we saw in Q4. That is what I think we will see again.</p><p>If we saw the company generate a Bitcoin yield of 15% per year for the next 10 years, each shareholder would have 4.05x more Bitcoin per share than they do right now.</p><p>In essence, net asset value would grow by 4.05x over the next 10 years. Compared to the 2.95x net asset value premium on shares, this means shares have roughly 37% upside from here (if they were to converge on this net asset value premium that represents what I think the company can generate in Bitcoin yield).</p><h3 id=\"id_185094782\">Risks</h3><p>I think the biggest risk for MicroStrategy is that their 21/21 plan does not get approved. MicroStrategy’s goal is to become a Bitcoin treasury company.</p><p>Because their goal is to become a Bitcoin treasury company, they are highly dependent on debt and equity offerings in order to fund the purchase of additional Bitcoin. Currently, the company is bumping up near their class A share count limit.</p><p>In essence, in order for the company to continue to grow their Bitcoin yield, the firm has to raise their Class A and Class B share count limits.</p><p>However, if we look at data from Polymarket, we can see that Polymarket is currently pricing in a greater than 95% chance that shareholders will approve this 21/21 offering. This makes me optimistic. From here, the 21/21 plan (because it is so dilutive) should allow the company to hit this 15% target Bitcoin yield that I mentioned before.</p><h2 id=\"id_39111032\">Bottom Line</h2><p>While MicroStrategy shares have experienced an incredible run-up over the past year, I think it’s key to dive in and understand why investors are paying a net asset value premium for shares. The answer is this Bitcoin yield that I mentioned above.</p><p>Saylor’s plan to buy more Bitcoin via the 21/21 offering plan should allow investors to see their Bitcoin yield compound at a rate faster than the 6-10% Saylor thinks the company can hit over the next 3 years. The faster this Bitcoin yield compounds, the faster shares could move up.</p><p>Really, what Saylor is doing is raising money for an investment that he believes will compound at 50% YoY on a CAGR basis. This is no different than any company raising money for cash flowing assets that compound value at 50% year over year. While some investors may be concerned about Saylor’s leverage through these convertible notes, it&#39;s important to note that just $9.8 million of the $10.379 billion in debt liabilities are secured. This means that MicroStrategy does not face an effective ‘margin call’ if their debt to equity ratio becomes concerning for some investors.</p><p>With this, while shares are incredibly volatile (and risky) I think they are a buy. As long as the price of Bitcoin continues to move higher over time (which I believe it will over most 5, 10 year horizons) MicroStrategy should be able to benefit as well.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>MicroStrategy: Shares Should Trade At A Premium</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMicroStrategy: Shares Should Trade At A Premium\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-14 09:57 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4749087-microstrategy-shares-should-trade-at-a-nav-premium><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryMicroStrategy shares have surged due to its unique strategy of leveraging Bitcoin and issuing debt and equity to grow Bitcoin holdings per share.The company's 21/21 plan aims to raise $42 ...</p>\n\n<a href=\"https://seekingalpha.com/article/4749087-microstrategy-shares-should-trade-at-a-nav-premium\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"MSTR":"MicroStrategy"},"source_url":"https://seekingalpha.com/article/4749087-microstrategy-shares-should-trade-at-a-nav-premium","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1123227021","content_text":"SummaryMicroStrategy shares have surged due to its unique strategy of leveraging Bitcoin and issuing debt and equity to grow Bitcoin holdings per share.The company's 21/21 plan aims to raise $42 billion to buy more Bitcoin, enhancing shareholder value through increased Bitcoin yield.The net asset value per share is estimated at $111.13 as of 12/31, but shares trade at a premium due to expected high Bitcoin yield growth.Despite volatility, I believe MicroStrategy is a buy, as its Bitcoin yield strategy promises substantial long-term returns if Bitcoin prices continue to rise.Bitcoin Concept With Binary CodesEonerenCo-Authored by Noah Cox and Brock HeiligInvestment ThesisMicroStrategy (NASDAQ:MSTR) shares were one of the top-performing equities here in the US in 2024 with shares up 479.68% over the last 12 months.At the end of 2024, MicroStrategy was added to the NASDAQ 100 index, representing how the company as both a Bitcoin treasury and software technology firm has reached a new paradigm.I think the biggest question in front of investors for MicroStrategy is why shares should deserve to trade at a premium. On the surface, the company looks like a closed-end Bitcoin fund that issues a combination of debt and equity securities in order to accumulate Bitcoin. I think this grossly understates what Chairman Michael Saylor’s plans are.MicroStrategy plans to be far more than just a closed-end Bitcoin fund. As Bitcoin prices move higher, MicroStrategy is able to monetize their access to debt markets in order to split the risk of Bitcoin into a series of ‘tranches’ based on which security investors buy.In essence, MicroStrategy is looking to give convertible bond investors a risk-adjusted return to invest in Bitcoin with.For common stockholders, MicroStrategy is aiming to act like a leveraged Bitcoin fund that is trying to grow the amount of Bitcoin per share by a rate of 6-10% per year for the next 3 years.As MicroStrategy shares move higher (powered by Bitcoin’s rise), this enables management at MicroStrategy to issue new stock in the company at progressively higher prices. The cash proceeds from these stock offerings simultaneously raise the average net asset value per share, providing more benefit to existing shareholders. It’s a weird form of dilution that is actually net beneficial.As shares become more valuable because they contain more Bitcoin, investors are buying into these shares at a premium above net asset value because they believe that Saylor will be able to increase the amount of Bitcoin through debt offerings and equity offerings.With this, I am a buy on MicroStrategy. While shares promise to be volatile, I think as Saylor rolls out his strategy, investors will be rewarded with the amount of Bitcoin he can accumulate per share. As Bitcoin itself compounds, shares should continue to do well.BackgroundMichael Saylor co-founded MicroStrategy in 1989 alongside co-founders Sanju Bansal and Thomas Spahr. A $250,000 consulting contract from DuPont in 1989 allowed MicroStrategy to kickstart its business.By 1992, MicroStrategy signed its first major client, McDonald’s, to a $10 million deal.Saylor, who served as the company’s CEO from its inception in 1989 to 2022 (and now as Chairman), is a major advocate of Bitcoin. As of their 8K filed on January 6th, the company owns 447,470 Bitcoin.As seen in an earnings presentation from Q3, MicroStrategy’s Bitcoin stockpile has been growing significantly. Keep in mind, this was before their large purchases in Q4 (up to the 447,470 Bitcoin I mentioned before).Bitcoin Treasury GrowthBitcoin Treasury Growth (MSTR Earnings Deck)So, MicroStrategy has clearly been successful in building up its Bitcoin holdings. But what is this all worth? For this, I think we first need to look at what the net asset value is today via balance sheet analysis.Balance Sheet AnalysisFor us to truly understand what MicroStrategy is worth, we need to analyze their balance sheet and assets.Since MicroStrategy has reported via an 8K their most current Bitcoin holdings, we will use these figures. In the 8K filing, MicroStrategy noted they own 447,470 Bitcoin. Using the valuation provided in the 8K, the Bitcoin treasury company pegs their Bitcoin valuation of $41.789 billion.MSTR Bitcoin HoldingsMSTR Bitcoin Holdings (MSTR)Throw in the cash the company had at the end of Q3 of $46.3 million, accounts receivable as of Q3 of $115.1 million, and property, plant and equipment (as of Q3) of $82.8 million and we get total assets of roughly $42.03 billion.On the liabilities side, the company had current liabilities as of Q3 of $288.1 million, debt liabilities as of December 31st of $10.379 billion (including a small secured loan of $9.8 million), and capital leases of $57.5 million. The company’s total liabilities are roughly $10.72 billion.I am doing this math to get a rough estimate of what the net asset value for shares is.The rough net asset value of the company as of 12/31 appears to be $31.31 billion.On a diluted basis (including convertible notes) the company has 281.735 million implied diluted shares outstanding.MSTR Capital StructureMSTR Capital Structure (MSTR 8K)In essence, this implies an approx. net asset value of $111.13/share as of 12/31.So, from here, I think the main question is straightforward: why should we pay roughly 2.95x net asset value for Saylor’s company? I think the answer has to do with how MicroStrategy management is monetizing the debt and equity markets.Issuing Stock Grows Their NAV As Bitcoin RisesBased on our balance sheet analysis using the fair value of Bitcoin, each share of MicroStrategy has a net asset value of $111.13 per share.While each share currently has $111.13 in value right now, we have to consider Saylor’s 21/21 monetization plan that he’s looking to get shareholder approval for and then execute on over the next three years.Yahoo Finance explained in detail what Saylor’s 21/21 monetization plan entails....the \"21/21 Plan,\" is to raise $42 billion, then use it to buy more Bitcoin. Half of the funds, or $21 billion, would come from at-the-market offerings of new shares in the company. The other $21 billion would come from new fixed-income offerings, primarily in the form of convertible debt.While the strategy includes convertible debt, I want to focus for a second on the common stock offerings that, I think, are a key part of this equation.MicroStrategy wants to increase its common share count (class A) from 330 million shares to 10.33 billion shares (or a 10 billion share increase) through shareholder approval and then common stock offerings.What this means is that as MicroStrategy proceeds to issue more class A shares, the cash proceeds from each share sale will increase the average net asset value of all shares.Because, if shares are offered (and purchased) by the public at $300/each, the company receives roughly $300/share in cash that is then available to be used to purchase Bitcoin.Previously, the company has been successful in issuing shares well above their net asset value. In November, MicroStrategy completed an at-the-market offering of 7.854 million shares of common stock. These shares were sold for well above net asset value at the time based on the amount of Bitcoin that was on their balance sheet and also the going price of shares at the time of the sale.Given this, we know the market has some appetite to buy shares above net asset value. The reason (I believe) is because as each share is issued, current shareholders know they will see their net asset value grow (hence the ‘Bitcoin Yield’ metric).While this new offering will cause a lot of dilution of common shares, I think it's safe to assume that this new offering will continue to help enhance Bitcoin yield. I expect Bitcoin per share to continue to grow. If we look at the company’s Q3 earnings call, their goal was 6-10% per year in Bitcoin Yield.However, since the election with the run-up in the price of Bitcoin, their Bitcoin yield in Q4 alone was a strong 48.0% according to their 8K.This yield is key. The company’s projected Bitcoin yield helps us determine what net asset value premium the company should be trading at.ValuationCurrently, shares trade at roughly 2.95 times their net asset value. In order for us to figure out what tangible book value ratio the shares should trade at, we should think about the expected CAGR of Bitcoin over the next 10 years.Over the last 14 years, Bitcoin has had a CAGR of 142%. Saylor, in his Q3 earnings call, believes Bitcoin is now compounding at roughly 50% per year.We are built on an asset, bitcoin, which is growing 50% a year and we are growing with that asset.So basically, if we take the company’s projected Bitcoin yield growth per year, and multiply it by the growth in the price of Bitcoin per year, we should arrive at the growth rate of the net asset value of the company per year.Saylor mentioned earlier in his call he was targeting 6-10% per year in Bitcoin yield. Over the course of 10 years, growing an asset at 50% per year vs. growing an asset at 60% per year results in the 60% CAGR asset reaching 190.67% of the value of the 50% CAGR asset.In essence, the market is applying this 2.95x multiple on net asset value because it expects Saylor and the management team at MicroStrategy to grow their Bitcoin per share at a rate that gives shareholders a return 2.95x greater than Bitcoin over the next 10 years. The way you do this is to give each shareholder 2.95x more Bitcoin per share over the next 10 years.Using this math, in order to get this level of growth, investors are implying a CAGR Bitcoin yield of roughly 11.42%. This is only slightly higher than Saylor’s conservative 6-10% Bitcoin yield growth estimates.Again, keep in mind that the company’s Bitcoin yield in Q4 alone was 48%.In essence, this is why you pay a premium for MicroStrategy shares over buying Bitcoin directly. You are betting that Saylor can grow your Bitcoin per share at a rate greater than 11.42% annually.I personally think he can as well. I think his 6-10% target is conservative and the company (especially with the 21/21 plan) can grow its Bitcoin per shareholder at 15% per year for the next 10 years. As I mentioned above, share offerings accelerate Bitcoin yield. That is what we saw in Q4. That is what I think we will see again.If we saw the company generate a Bitcoin yield of 15% per year for the next 10 years, each shareholder would have 4.05x more Bitcoin per share than they do right now.In essence, net asset value would grow by 4.05x over the next 10 years. Compared to the 2.95x net asset value premium on shares, this means shares have roughly 37% upside from here (if they were to converge on this net asset value premium that represents what I think the company can generate in Bitcoin yield).RisksI think the biggest risk for MicroStrategy is that their 21/21 plan does not get approved. MicroStrategy’s goal is to become a Bitcoin treasury company.Because their goal is to become a Bitcoin treasury company, they are highly dependent on debt and equity offerings in order to fund the purchase of additional Bitcoin. Currently, the company is bumping up near their class A share count limit.In essence, in order for the company to continue to grow their Bitcoin yield, the firm has to raise their Class A and Class B share count limits.However, if we look at data from Polymarket, we can see that Polymarket is currently pricing in a greater than 95% chance that shareholders will approve this 21/21 offering. This makes me optimistic. From here, the 21/21 plan (because it is so dilutive) should allow the company to hit this 15% target Bitcoin yield that I mentioned before.Bottom LineWhile MicroStrategy shares have experienced an incredible run-up over the past year, I think it’s key to dive in and understand why investors are paying a net asset value premium for shares. The answer is this Bitcoin yield that I mentioned above.Saylor’s plan to buy more Bitcoin via the 21/21 offering plan should allow investors to see their Bitcoin yield compound at a rate faster than the 6-10% Saylor thinks the company can hit over the next 3 years. The faster this Bitcoin yield compounds, the faster shares could move up.Really, what Saylor is doing is raising money for an investment that he believes will compound at 50% YoY on a CAGR basis. This is no different than any company raising money for cash flowing assets that compound value at 50% year over year. While some investors may be concerned about Saylor’s leverage through these convertible notes, it's important to note that just $9.8 million of the $10.379 billion in debt liabilities are secured. This means that MicroStrategy does not face an effective ‘margin call’ if their debt to equity ratio becomes concerning for some investors.With this, while shares are incredibly volatile (and risky) I think they are a buy. As long as the price of Bitcoin continues to move higher over time (which I believe it will over most 5, 10 year horizons) MicroStrategy should be able to benefit as well.","news_type":1},"isVote":1,"tweetType":1,"viewCount":155,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":350779786858656,"gmtCreate":1726644654764,"gmtModify":1726646218024,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"Who cares? Is he bringing his money with him&nbsp;to heaven ?😄","listText":"Who cares? Is he bringing his money with him&nbsp;to heaven ?😄","text":"Who cares? Is he bringing his money with him to heaven ?😄","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/350779786858656","repostId":"1191591104","repostType":2,"repost":{"id":"1191591104","kind":"news","pubTimestamp":1726641553,"share":"https://ttm.financial/m/news/1191591104?lang=&edition=fundamental","pubTime":"2024-09-18 14:39","market":"us","language":"en","title":"Billionaire Hedge Fund Manager Says He Would Pull His Money from the Market If Harris Wins Election","url":"https://stock-news.laohu8.com/highlight/detail?id=1191591104","media":"Fox Business","summary":"Hedge fund billionaire and major Trump fundraiser John Paulson said Tuesday he will pull his money out of the market if Vice President Harris wins the presidential election this fall, saying the Democ","content":"<html><head></head><body><p>Hedge fund billionaire and major Trump fundraiser John Paulson said Tuesday he will pull his money out of the market if Vice President Harris wins the presidential election this fall, saying the Democrat nominee&#39;s economic policies would spook investors.</p><p>The Paulson &amp; Co. founder, known for his lucrative bet against the subprime mortgage in 2007, appeared on FOX Business&#39; &#34;The Claman Countdown,&#34; where host Liz Claman asked him what he sees as the next big bet similar to that.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/26217d693544662a8757fbe76f185dba\" alt=\"Hedge fund manager John Paulson (Spencer Platt/Getty Images)\" title=\"Hedge fund manager John Paulson (Spencer Platt/Getty Images)\" tg-width=\"931\" tg-height=\"523\"/><span>Hedge fund manager John Paulson (Spencer Platt/Getty Images)</span></p><p>&#34;Well, I would say it very much depends on who&#39;s in the White House and who controls Congress,&#34; Paulson replied. &#34;I&#39;d be very concerned if Harris is elected and pursues the tax plans and other economic plans that she articulated.&#34;</p><p>Paulson said during the interview that former President Trump and Harris&#39; plans for the economy are very different, noting that Trump wants to extend the 2017 tax cuts implemented during his term in office while Harris wants to let them expire.</p><p>He also noted that Harris has proposed raising the corporate tax rate from 21% to 28% and wants to raise the capital gains rate from 20% to 28%.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a723aa42a1f9edac3d9c30a6f56c2a60\" alt=\"Republican presidential nominee former President Trump arrives for a campaign event at the Central Wisconsin Airport on Sept. 7, 2024, in Mosinee, Wisconsin. (Scott Olson/Getty Images)\" title=\"Republican presidential nominee former President Trump arrives for a campaign event at the Central Wisconsin Airport on Sept. 7, 2024, in Mosinee, Wisconsin. (Scott Olson/Getty Images)\" tg-width=\"931\" tg-height=\"523\"/><span>Republican presidential nominee former President Trump arrives for a campaign event at the Central Wisconsin Airport on Sept. 7, 2024, in Mosinee, Wisconsin. (Scott Olson/Getty Images)</span></p><p>The billionaire pointed to Harris&#39; proposed 25% tax on unrealized gains for individuals making $100 million or more, and he predicted that, if implemented, it &#34;would cause mass selling of almost everything – stocks, bonds, homes, art – I think it would result in a crash in the markets and an immediate, pretty quick recession.&#34;</p><p>Claman went on to note that some people who were concerned about the policies of previous presidents, namely Barack Obama, Trump and Joe Biden, pulled their money out of the markets when they were elected, and the move turned out to be a big mistake as the markets continued to perform well.</p><p>But Paulson has said that market timing and investor timing will really matter depending on who is president, and Claman asked him if he is ready to take that chance.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/218fff4868171aaa606369d587ac33b6\" alt=\"Democrat presidential nominee Vice President Harris speaks during a campaign event on Sept. 2, 2024, in Pittsburgh. (Michael M. Santiago/Getty Images)\" title=\"Democrat presidential nominee Vice President Harris speaks during a campaign event on Sept. 2, 2024, in Pittsburgh. (Michael M. Santiago/Getty Images)\" tg-width=\"931\" tg-height=\"523\"/><span>Democrat presidential nominee Vice President Harris speaks during a campaign event on Sept. 2, 2024, in Pittsburgh. (Michael M. Santiago/Getty Images)</span></p><p>&#34;It depends on the policy,&#34; Paulson said. &#34;I think if Harris was elected, I would pull my money from the market. I&#39;d go into cash, and I&#39;d go into gold because I think the uncertainty regarding the plans they outlined would create a lot of uncertainty in the markets and likely lower markets.&#34;</p><p>When pressed by Claman, Paulson reiterated that he would sell the liquid equities that he owns if Harris wins the White House.</p></body></html>","source":"lsy1602566126337","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Billionaire Hedge Fund Manager Says He Would Pull His Money from the Market If Harris Wins Election</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBillionaire Hedge Fund Manager Says He Would Pull His Money from the Market If Harris Wins Election\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-18 14:39 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.foxbusiness.com/politics/billionaire-hedge-fund-manager-says-he-would-pull-his-money-from-market-harris-wins-election><strong>Fox Business</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Hedge fund billionaire and major Trump fundraiser John Paulson said Tuesday he will pull his money out of the market if Vice President Harris wins the presidential election this fall, saying the ...</p>\n\n<a href=\"https://www.foxbusiness.com/politics/billionaire-hedge-fund-manager-says-he-would-pull-his-money-from-market-harris-wins-election\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.foxbusiness.com/politics/billionaire-hedge-fund-manager-says-he-would-pull-his-money-from-market-harris-wins-election","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1191591104","content_text":"Hedge fund billionaire and major Trump fundraiser John Paulson said Tuesday he will pull his money out of the market if Vice President Harris wins the presidential election this fall, saying the Democrat nominee's economic policies would spook investors.The Paulson & Co. founder, known for his lucrative bet against the subprime mortgage in 2007, appeared on FOX Business' \"The Claman Countdown,\" where host Liz Claman asked him what he sees as the next big bet similar to that.Hedge fund manager John Paulson (Spencer Platt/Getty Images)\"Well, I would say it very much depends on who's in the White House and who controls Congress,\" Paulson replied. \"I'd be very concerned if Harris is elected and pursues the tax plans and other economic plans that she articulated.\"Paulson said during the interview that former President Trump and Harris' plans for the economy are very different, noting that Trump wants to extend the 2017 tax cuts implemented during his term in office while Harris wants to let them expire.He also noted that Harris has proposed raising the corporate tax rate from 21% to 28% and wants to raise the capital gains rate from 20% to 28%.Republican presidential nominee former President Trump arrives for a campaign event at the Central Wisconsin Airport on Sept. 7, 2024, in Mosinee, Wisconsin. (Scott Olson/Getty Images)The billionaire pointed to Harris' proposed 25% tax on unrealized gains for individuals making $100 million or more, and he predicted that, if implemented, it \"would cause mass selling of almost everything – stocks, bonds, homes, art – I think it would result in a crash in the markets and an immediate, pretty quick recession.\"Claman went on to note that some people who were concerned about the policies of previous presidents, namely Barack Obama, Trump and Joe Biden, pulled their money out of the markets when they were elected, and the move turned out to be a big mistake as the markets continued to perform well.But Paulson has said that market timing and investor timing will really matter depending on who is president, and Claman asked him if he is ready to take that chance.Democrat presidential nominee Vice President Harris speaks during a campaign event on Sept. 2, 2024, in Pittsburgh. (Michael M. Santiago/Getty Images)\"It depends on the policy,\" Paulson said. \"I think if Harris was elected, I would pull my money from the market. I'd go into cash, and I'd go into gold because I think the uncertainty regarding the plans they outlined would create a lot of uncertainty in the markets and likely lower markets.\"When pressed by Claman, Paulson reiterated that he would sell the liquid equities that he owns if Harris wins the White House.","news_type":1},"isVote":1,"tweetType":1,"viewCount":437,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":309716079456376,"gmtCreate":1716618868535,"gmtModify":1716619241512,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"At current valuation, Nvidia is at optimum risk! Competitors will catch up really soon.&nbsp;","listText":"At current valuation, Nvidia is at optimum risk! Competitors will catch up really soon.&nbsp;","text":"At current valuation, Nvidia is at optimum risk! Competitors will catch up really soon.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":8,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/309716079456376","repostId":"2438065998","repostType":2,"repost":{"id":"2438065998","kind":"highlight","pubTimestamp":1716597000,"share":"https://ttm.financial/m/news/2438065998?lang=&edition=fundamental","pubTime":"2024-05-25 08:30","market":"us","language":"en","title":"Nvidia: Profit Explosion And Stock Split Are Game-Changers","url":"https://stock-news.laohu8.com/highlight/detail?id=2438065998","media":"Seeking Alpha","summary":"Nvidia's stock surged 9% after strong Q1 earnings, driven by record revenues and profits in its Data Center business.The company announced a ten-for-one stock split to make shares more affordable for ","content":"<html><head></head><body><ul style=\"\"><li><p>Nvidia&#39;s stock surged 9% after strong Q1 earnings, driven by record revenues and profits in its Data Center business.</p></li><li><p>The company announced a ten-for-one stock split to make shares more affordable for investors.</p></li><li><p>Nvidia&#39;s strong growth is fueled by product adoption of its AI GPUs in the Data Center segment. Nvidia is likely to see significant EPS estimate upside revisions going forward.</p></li><li><p>Shares trade at 30X earnings which seems much less expensive after the company&#39;s net income rose 628% Y/Y.</p></li><li><p>Nvidia&#39;s significant free cash flow/earnings upswing, a strong margin profile, a stock split and an enviable market position in Data Center GPUs are reasons why I am changing my rating to buy.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6144f6f01bec9d39bca22c82ac595a7e\" alt=\"BING-JHEN HONG\" title=\"BING-JHEN HONG\" tg-width=\"750\" tg-height=\"500\"/><span>BING-JHEN HONG</span></p><p>Shares of Nvidia (NASDAQ:NVDA) surged 9% after the chipmaker submitted its earnings sheet for its first fiscal quarter of FY 2025 on Wednesday. The company is seeing strong chip adoption in its Data Center business, which led to record segment revenues, record total revenues and an explosion in profits for Nvidia. Data Center-related revenues now represent 87% of consolidated revenues, and the company issued a strong outlook for the coming quarter as well. Given the massive increase in the company’s valuation in the last year, Nvidia now also announced a ten-for-one stock split to make shares more affordable for investors. I believe the value proposition has improved greatly, and I am up-grading shares of Nvidia to buy!</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/0e67ec90ffc4b62e7169874abe6c147a\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"424\"/><span>Data by YCharts</span></p><h2 id=\"id_1852762567\">Previous rating</h2><p>Nvidia is, and has been for a while, my biggest regret in the investment realm. I rated Nvidia a strong sell for much of 2023 due to valuation concerns, but slowly came around in the last quarter due to Nvidia’s strong margin picture and Data Center growth: Lessons Learned From My Worst Call Ever. I am now up-grading shares of the chipmaker to buy due to the company’s profit explosion, driven by its Data Center business, which could also lead to a number of EPS estimate upside revisions in the near term. The ten-for-one stock split could also attract more buyers to Nvidia as shares become more affordable for investors.</p><h2 id=\"id_3293729479\">Nvidia leaves estimates in the dust</h2><p>Nvidia delivered a solid earnings and top line beat for its latest quarter: the chipmaker achieved adjusted earnings of $6.12 per-share on revenues of 26.04B. Earnings beat the consensus by $0.54 per-share, due to Nvidia benefiting enormously from growing product adoption of its AI GPUs in the Data Center segment. Revenues also came in higher than expected, and together with a solid forecast for FQ2’25, explain why shares reached a new all-time high on Thursday.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e2629d3af67333b0efc47f54f802a4cb\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"640\" tg-height=\"257\"/><span>Seeking Alpha</span></p><h2 id=\"id_2516211838\">Data Centers are now dominating Nvidia’s revenue mix</h2><p>Nvidia’s total revenues hit $26.0B in FQ1’25, showing a massive 18% quarter over quarter and 262% year over year growth. This expansion in the top line has been chiefly driven by strong execution in the Data Center segment, which reached all-time record revenues of $22.6B last quarter, showing 427% year over year growth. Key to Nvidia’s growth is strong product adoption of its AI GPUs, which are specifically designed to support Data Center operations. One key driver of growth going forward could be close relationships with other U.S. companies that are investing heavily into their own AI capabilities, in part to train their own large language models.</p><p>Nvidia is deepening relationships with Microsoft, Oracle, Amazon Web Services and Google, which are investing billions of dollars into their own artificial intelligence products. Nvidia’s core AI GPU, the H100 tensor core GPU, is flying out the door at the moment and the company’s launch of the next-gen H200 GPU, a top-of-the-line chip to support AI applications, could extend Nvidia’s current momentum way into the second half of the year.</p><p>Nvidia&#39;s AI GPUs have been so successful that Data Centers are now completely dominating Nvidia&#39;s revenue mix. The Data Center segment was responsible for 87% of the company&#39;s consolidated revenues, which compares to a revenue share of 60% last year. The revenue base more than quintupled year over year due to sky-high demand for new AI processors that can be used to train large language models.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/3a4fb97e54e19329fae8b676c6c4322d\" alt=\"Nvidia\" title=\"Nvidia\" tg-width=\"640\" tg-height=\"298\"/><span>Nvidia</span></p><p>Nvidia&#39;s revenue upswing has a number of catalysts including the launch of the next-gen H200 (FQ2&#39;25), reinvestment of Nvidia&#39;s surging free cash flow into new products such as Nvidia&#39;s Blackwell platform to support AI applications, and, possibly, at some point the return of this free cash flow via stock buybacks to shareholders. In FQ1&#39;25, Nvidia generated nearly $15B in free cash flow, of which approximately 52% was returned to shareholders via stock buybacks (a total of $7.74B).</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/68dbfdd76ef07335529cf008b0a8b95b\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"439\"/><span>Data by YCharts</span></p><h2 id=\"id_2967473601\">Strong outlook for FQ2&#39;25</h2><p>Nvidia is guiding for $28.0B in revenues in FQ2’25 (+/- 2%) which implies 7.5% quarter over quarter growth while at the same time the chipmaker is looking at a non-GAAP gross margin of 74.8%, +/- 50 basis points. The margin picture continues to look very solid, with Nvidia reporting a Q/Q increase in its GAAP gross margin of 2.4 PP last quarter. The expansion in the gross margin and healthy uptrend is another reason why I am changing my rating for Nvidia from hold to buy.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e4aebe623334c0ffaa077b571824bf4c\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"424\"/><span>Data by YCharts</span></p><h2 id=\"id_444258430\">Nvidia’s valuation, EPS upside revisions</h2><p>Nvidia is not cheap and hasn’t been for a while. In fact, focusing too much on valuation caused me to miss out on Nvidia’s share price rally, which I regret dearly. However, with Nvidia seeing a significant profit explosion in FQ1&#39;25, driven by Data Centers, Nvidia’s shares may not be as expensive as I once thought. Given Nvidia&#39;s strong performance in FQ1&#39;25, investors can reasonably expect an avalanche of EPS estimate upside revisions for Nvidia&#39;s coming second fiscal quarter.</p><p>Nvidia is currently trading at a price-to-earnings ratio of 29.8X, which is not as excessive as I used to think. The reason: Nvidia’s net income soared 628% in the last quarter to $14.9B… which means that Nvidia is now more profitable than Amazon or <a href=\"https://laohu8.com/S/META\">Meta Platforms</a> (META). Nvidia is more expensive than AMD (AMD), which is trading at a P/E ratio of 28.9X, but not by a lot and Nvidia still has a comparatively strong competitive position in the Data Center AI GPU market due to the early launch of the H100 Data Center chip.</p><p>At the end of FY 2023, Nvidia dominated the Data Center GPU market with a 92% market share, but this strong position may erode over time as AMD and Intel (INTC) roll out at scale their own artificial intelligence products. Still, Nvidia is currently in a very enviable position, as it can charge its customers a ton of money for its flagship AI GPUs.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/01cf204a914b89118ec7df150be5f080\" alt=\"IoT Analytics\" title=\"IoT Analytics\" tg-width=\"640\" tg-height=\"336\"/><span>IoT Analytics</span></p><p>Nvidia&#39;s H100 is still very expensive with a price tag of around $40,000. It is also up to four times more expensive than AMD&#39;s MI300X Data Center GPU, meaning Nvidia may at some point see deteriorating pricing power for its top-of-the-line AI GPU, especially if more customers choose the lower-price AMD GPU over Nvidia&#39;s solution. AMD, in my opinion, has a reasonable chance to see stronger EPS growth going forward because it is finally in the market with a competitive AI GPU offer. AMD has trailed Nvidia in the last two years in terms of Data Center GPUs, but with the availability of AMD&#39;s MI300X GPU, for which there seems to be record demand, I believe the situation could be slowly improving for AMD. One reason for this is that the MI300X GPU is much more affordable than Nvidia&#39;s H100 chip which could, in the longer term, help AMD achieve market share gains and post stronger EPS growth than Nvidia.</p><p>AMD, as an example, is expected to see strong sales for its MI300X and the market even expects AMD to exceed Nvidia&#39;s EPS growth. Nvidia, given its massive increase in profitability and continual momentum in Data Center revenues, has further revaluation potential, in my opinion. With Nvidia experiencing a big jump in profitability and free cash flow looking extremely strong, I believe shares could trade at 35X earnings... which implies ~20% upside revaluation potential and a potential fair value in the region of $1,220.</p><p>The 35X earnings multiple is chiefly supported by Nvidia&#39;s drastically improved profitability picture and very high gross margins, and is based off of a consensus EPS forecast of $34.81 for FY 2025. The EPS estimate also implies only about 29% year over year growth and with earnings projections likely to get revised to the upside in the coming weeks, I believe my $1,220 price target may actually be conservative.</p><p>EPS estimates for the upcoming quarter have already revised 36 times to the upside in the last 90 days, as analysts see Nvidia&#39;s earnings momentum to continue in the short term. My price target is a dynamic number and may be revised upward based off of the significance of EPS revisions as well as Nvidia&#39;s margin improvements going forward.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/bd7de7744b00814ea1323a5997fdf345\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"559\"/><span>Data by YCharts</span></p><h2 id=\"id_3561789180\">Risks with Nvidia</h2><p>The biggest risk for Nvidia, as I see it, is a potential deceleration of growth in the Data Center segment, to which investors are likely not going to react kindly. Other chipmakers are also starting to pump out their own AI products, which could indicate weakening pricing power for Nvidia&#39;s blockbuster AI GPU. Intel just announced the launch of Gaudi 3, an AI accelerator targeting the lucrative enterprise market, while AMD rolled out its MI300 Instinct chips to mount a frontal assault on the dominant market position of Nvidia’s H100 chip. If Intel and AMD were to see market share gains in the AI GPU market, then shares of Nvidia’s valuation factor may suffer headwinds.</p><h2 id=\"id_1853331776\">Final thoughts</h2><p>Nvidia continued to excel in the first fiscal quarter of FY 2025 and the stock split especially is a smart move for the company to make its shares more affordable for investors. The ten-for-one stock split is a cosmetic maneuver, of course, but it could prove successful nonetheless: a lower share price could make Nvidia more attractive to investors that have been put off by Nvidia’s $1,000 price tag. The revenue and margin outlook for FQ2’25 is also positive and with the H200 AI GPU set to provide further fuel in the Data Center business in the second-quarter, I believe Nvidia makes a much better value proposition!</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: Profit Explosion And Stock Split Are Game-Changers</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: Profit Explosion And Stock Split Are Game-Changers\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-25 08:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4695544-nvidia-profit-explosion-and-stock-split-are-game-changers-rating-upgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia's stock surged 9% after strong Q1 earnings, driven by record revenues and profits in its Data Center business.The company announced a ten-for-one stock split to make shares more affordable for ...</p>\n\n<a href=\"https://seekingalpha.com/article/4695544-nvidia-profit-explosion-and-stock-split-are-game-changers-rating-upgrade\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4077":"互动媒体与服务","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","BK4579":"人工智能","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","BK4588":"碎股","BK4503":"景林资产持仓","LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","BK4573":"虚拟现实","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","BK4581":"高盛持仓","BK4512":"苹果概念","BK6051":"信息科技咨询与其它服务","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","LU1316542783.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","NVDA":"英伟达","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","LU0238689110.USD":"贝莱德环球动力股票基金","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","BK4515":"5G概念","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","LU0072462426.USD":"贝莱德全球配置 A2","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK4567":"ESG概念","GB00B4QBRK32.GBP":"FUNDSMITH EQUITY \"R\" (GBP) INC","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","GB00B4LPDJ14.GBP":"FUNDSMITH EQUITY \"R\" (GBP) ACC","LU1989764664.SGD":"CPR Invest - Global Disruptive Opportunities A2 Acc SGD-H","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","BK4566":"资本集团","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","BK4575":"芯片概念","BK4587":"ChatGPT概念","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD"},"source_url":"https://seekingalpha.com/article/4695544-nvidia-profit-explosion-and-stock-split-are-game-changers-rating-upgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2438065998","content_text":"Nvidia's stock surged 9% after strong Q1 earnings, driven by record revenues and profits in its Data Center business.The company announced a ten-for-one stock split to make shares more affordable for investors.Nvidia's strong growth is fueled by product adoption of its AI GPUs in the Data Center segment. Nvidia is likely to see significant EPS estimate upside revisions going forward.Shares trade at 30X earnings which seems much less expensive after the company's net income rose 628% Y/Y.Nvidia's significant free cash flow/earnings upswing, a strong margin profile, a stock split and an enviable market position in Data Center GPUs are reasons why I am changing my rating to buy.BING-JHEN HONGShares of Nvidia (NASDAQ:NVDA) surged 9% after the chipmaker submitted its earnings sheet for its first fiscal quarter of FY 2025 on Wednesday. The company is seeing strong chip adoption in its Data Center business, which led to record segment revenues, record total revenues and an explosion in profits for Nvidia. Data Center-related revenues now represent 87% of consolidated revenues, and the company issued a strong outlook for the coming quarter as well. Given the massive increase in the company’s valuation in the last year, Nvidia now also announced a ten-for-one stock split to make shares more affordable for investors. I believe the value proposition has improved greatly, and I am up-grading shares of Nvidia to buy!Data by YChartsPrevious ratingNvidia is, and has been for a while, my biggest regret in the investment realm. I rated Nvidia a strong sell for much of 2023 due to valuation concerns, but slowly came around in the last quarter due to Nvidia’s strong margin picture and Data Center growth: Lessons Learned From My Worst Call Ever. I am now up-grading shares of the chipmaker to buy due to the company’s profit explosion, driven by its Data Center business, which could also lead to a number of EPS estimate upside revisions in the near term. The ten-for-one stock split could also attract more buyers to Nvidia as shares become more affordable for investors.Nvidia leaves estimates in the dustNvidia delivered a solid earnings and top line beat for its latest quarter: the chipmaker achieved adjusted earnings of $6.12 per-share on revenues of 26.04B. Earnings beat the consensus by $0.54 per-share, due to Nvidia benefiting enormously from growing product adoption of its AI GPUs in the Data Center segment. Revenues also came in higher than expected, and together with a solid forecast for FQ2’25, explain why shares reached a new all-time high on Thursday.Seeking AlphaData Centers are now dominating Nvidia’s revenue mixNvidia’s total revenues hit $26.0B in FQ1’25, showing a massive 18% quarter over quarter and 262% year over year growth. This expansion in the top line has been chiefly driven by strong execution in the Data Center segment, which reached all-time record revenues of $22.6B last quarter, showing 427% year over year growth. Key to Nvidia’s growth is strong product adoption of its AI GPUs, which are specifically designed to support Data Center operations. One key driver of growth going forward could be close relationships with other U.S. companies that are investing heavily into their own AI capabilities, in part to train their own large language models.Nvidia is deepening relationships with Microsoft, Oracle, Amazon Web Services and Google, which are investing billions of dollars into their own artificial intelligence products. Nvidia’s core AI GPU, the H100 tensor core GPU, is flying out the door at the moment and the company’s launch of the next-gen H200 GPU, a top-of-the-line chip to support AI applications, could extend Nvidia’s current momentum way into the second half of the year.Nvidia's AI GPUs have been so successful that Data Centers are now completely dominating Nvidia's revenue mix. The Data Center segment was responsible for 87% of the company's consolidated revenues, which compares to a revenue share of 60% last year. The revenue base more than quintupled year over year due to sky-high demand for new AI processors that can be used to train large language models.NvidiaNvidia's revenue upswing has a number of catalysts including the launch of the next-gen H200 (FQ2'25), reinvestment of Nvidia's surging free cash flow into new products such as Nvidia's Blackwell platform to support AI applications, and, possibly, at some point the return of this free cash flow via stock buybacks to shareholders. In FQ1'25, Nvidia generated nearly $15B in free cash flow, of which approximately 52% was returned to shareholders via stock buybacks (a total of $7.74B).Data by YChartsStrong outlook for FQ2'25Nvidia is guiding for $28.0B in revenues in FQ2’25 (+/- 2%) which implies 7.5% quarter over quarter growth while at the same time the chipmaker is looking at a non-GAAP gross margin of 74.8%, +/- 50 basis points. The margin picture continues to look very solid, with Nvidia reporting a Q/Q increase in its GAAP gross margin of 2.4 PP last quarter. The expansion in the gross margin and healthy uptrend is another reason why I am changing my rating for Nvidia from hold to buy.Data by YChartsNvidia’s valuation, EPS upside revisionsNvidia is not cheap and hasn’t been for a while. In fact, focusing too much on valuation caused me to miss out on Nvidia’s share price rally, which I regret dearly. However, with Nvidia seeing a significant profit explosion in FQ1'25, driven by Data Centers, Nvidia’s shares may not be as expensive as I once thought. Given Nvidia's strong performance in FQ1'25, investors can reasonably expect an avalanche of EPS estimate upside revisions for Nvidia's coming second fiscal quarter.Nvidia is currently trading at a price-to-earnings ratio of 29.8X, which is not as excessive as I used to think. The reason: Nvidia’s net income soared 628% in the last quarter to $14.9B… which means that Nvidia is now more profitable than Amazon or Meta Platforms (META). Nvidia is more expensive than AMD (AMD), which is trading at a P/E ratio of 28.9X, but not by a lot and Nvidia still has a comparatively strong competitive position in the Data Center AI GPU market due to the early launch of the H100 Data Center chip.At the end of FY 2023, Nvidia dominated the Data Center GPU market with a 92% market share, but this strong position may erode over time as AMD and Intel (INTC) roll out at scale their own artificial intelligence products. Still, Nvidia is currently in a very enviable position, as it can charge its customers a ton of money for its flagship AI GPUs.IoT AnalyticsNvidia's H100 is still very expensive with a price tag of around $40,000. It is also up to four times more expensive than AMD's MI300X Data Center GPU, meaning Nvidia may at some point see deteriorating pricing power for its top-of-the-line AI GPU, especially if more customers choose the lower-price AMD GPU over Nvidia's solution. AMD, in my opinion, has a reasonable chance to see stronger EPS growth going forward because it is finally in the market with a competitive AI GPU offer. AMD has trailed Nvidia in the last two years in terms of Data Center GPUs, but with the availability of AMD's MI300X GPU, for which there seems to be record demand, I believe the situation could be slowly improving for AMD. One reason for this is that the MI300X GPU is much more affordable than Nvidia's H100 chip which could, in the longer term, help AMD achieve market share gains and post stronger EPS growth than Nvidia.AMD, as an example, is expected to see strong sales for its MI300X and the market even expects AMD to exceed Nvidia's EPS growth. Nvidia, given its massive increase in profitability and continual momentum in Data Center revenues, has further revaluation potential, in my opinion. With Nvidia experiencing a big jump in profitability and free cash flow looking extremely strong, I believe shares could trade at 35X earnings... which implies ~20% upside revaluation potential and a potential fair value in the region of $1,220.The 35X earnings multiple is chiefly supported by Nvidia's drastically improved profitability picture and very high gross margins, and is based off of a consensus EPS forecast of $34.81 for FY 2025. The EPS estimate also implies only about 29% year over year growth and with earnings projections likely to get revised to the upside in the coming weeks, I believe my $1,220 price target may actually be conservative.EPS estimates for the upcoming quarter have already revised 36 times to the upside in the last 90 days, as analysts see Nvidia's earnings momentum to continue in the short term. My price target is a dynamic number and may be revised upward based off of the significance of EPS revisions as well as Nvidia's margin improvements going forward.Data by YChartsRisks with NvidiaThe biggest risk for Nvidia, as I see it, is a potential deceleration of growth in the Data Center segment, to which investors are likely not going to react kindly. Other chipmakers are also starting to pump out their own AI products, which could indicate weakening pricing power for Nvidia's blockbuster AI GPU. Intel just announced the launch of Gaudi 3, an AI accelerator targeting the lucrative enterprise market, while AMD rolled out its MI300 Instinct chips to mount a frontal assault on the dominant market position of Nvidia’s H100 chip. If Intel and AMD were to see market share gains in the AI GPU market, then shares of Nvidia’s valuation factor may suffer headwinds.Final thoughtsNvidia continued to excel in the first fiscal quarter of FY 2025 and the stock split especially is a smart move for the company to make its shares more affordable for investors. The ten-for-one stock split is a cosmetic maneuver, of course, but it could prove successful nonetheless: a lower share price could make Nvidia more attractive to investors that have been put off by Nvidia’s $1,000 price tag. The revenue and margin outlook for FQ2’25 is also positive and with the H200 AI GPU set to provide further fuel in the Data Center business in the second-quarter, I believe Nvidia makes a much better value proposition!","news_type":1},"isVote":1,"tweetType":1,"viewCount":508,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":248726804230256,"gmtCreate":1701762239394,"gmtModify":1701763190384,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"Apple is dead.&nbsp;","listText":"Apple is dead.&nbsp;","text":"Apple is dead.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/248726804230256","repostId":"1131462273","repostType":2,"repost":{"id":"1131462273","kind":"news","pubTimestamp":1701760332,"share":"https://ttm.financial/m/news/1131462273?lang=&edition=fundamental","pubTime":"2023-12-05 15:12","market":"us","language":"en","title":"Can Apple's iPhone 15 Spark a Tech Rally? Analyst Eyes China Growth","url":"https://stock-news.laohu8.com/highlight/detail?id=1131462273","media":"Benzinga","summary":"ZINGER KEY POINTSWedbush's Ives highlights AI as a '1995 Moment' for tech, with cloud services leading the charge in consumer Internet impact.Apple remains top tech pick for Wedbush's Ives, expecting ","content":"<html><head></head><body><h4 id=\"id_522864863\" style=\"text-align: start;\">ZINGER KEY POINTS</h4><ul style=\"list-style-type: disc;\"><li><p><strong>Wedbush&#39;s Ives highlights AI as a &#39;1995 Moment&#39; for tech, with cloud services leading the charge in consumer Internet impact.</strong></p></li><li><p><strong>Apple remains top tech pick for Wedbush&#39;s Ives, expecting strong iPhone 15 cycle and robust China growth to drive future success.</strong></p></li></ul><p><strong>Wedbush </strong>analyst Daniel Ives&#39; favorite tech names remain <strong>Apple Inc</strong>, <strong>Microsoft Corp</strong>, <strong>Alphabet Inc</strong>, <strong>Google</strong>, <strong>Palo Alto Networks, Inc</strong>, <strong>Palantir Technologies Inc</strong>, <strong>Zscaler, Inc</strong>, <strong>CrowdStrike Holdings, Inc</strong>, and <strong>MongoDB, Inc</strong>. </p><p style=\"text-align: start;\">Ives noted that this is the most significant technology revolution in the last 30 years, with AI a &#34;1995 Moment,&#34; and the fundamental tech growth stories are now starting to see the derivatives of this AI Revolution into 2024. </p><p style=\"text-align: start;\">The impact of the AI cycle on consumer Internet will be massive, and it will start with the cloud service divisions, <strong>Amazon.Com Inc&#39;s</strong> AWS and Alphabet&#39;s GCP. </p><p style=\"text-align: start;\">AWS and GCP acquire AI-capable chips, build AI-capable service offerings, and sell those services into their installed bases. He continues to like Amazon, Alphabet, and <strong>Meta Platforms Inc</strong> as his favorite tech plays. </p><p style=\"text-align: start;\">Apple&#39;s narrative quickly changing. Once the dust cleared from Apple&#39;s quarter and guidance, investors would focus through the noise around weak iPads, Macs, and FX and instead see iPhone units growing again, with Services back to steady double-digit growth. </p><p style=\"text-align: start;\">Finally, the &#34;iPhone China demise narrative&#34; was a great fictional story by the bears, which is far from reality as underlying mainland China&#39;s growth remains strong and a key asset for the core iPhone franchise. </p><p style=\"text-align: start;\">Ives cares about iPhone growth, Services revenue, gross margins, and China iPhone growth, which appears much better than feared, along with positive anecdotal commentary from Cook. </p><p style=\"text-align: start;\">Apple remains Ives&#39; top tech pick with a strong iPhone 15 upgrade cycle playing out into a strong holiday season, which appears to be a good start post-Black Friday weekend.</p><p style=\"text-align: start;\">Heading into 2024, Ives noted that the tech sector will likely accelerate spending around cloud and AI spending that the Street is significantly underestimating. </p><p style=\"text-align: start;\">Ives noted that the new tech bull market has begun, and tech stocks are likely for a strong 2024 with tech stocks we expect to be up 20%+ over the next year, led by Big Tech as the AI spending tidal wave hits the shores of the broader tech sector.</p></body></html>","source":"lsy1606299360108","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Can Apple's iPhone 15 Spark a Tech Rally? Analyst Eyes China Growth</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCan Apple's iPhone 15 Spark a Tech Rally? Analyst Eyes China Growth\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-12-05 15:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.benzinga.com/analyst-ratings/analyst-color/23/12/36073810/can-apples-iphone-15-spark-a-tech-rally-analyst-eyes-china-growth><strong>Benzinga</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ZINGER KEY POINTSWedbush's Ives highlights AI as a '1995 Moment' for tech, with cloud services leading the charge in consumer Internet impact.Apple remains top tech pick for Wedbush's Ives, expecting ...</p>\n\n<a href=\"https://www.benzinga.com/analyst-ratings/analyst-color/23/12/36073810/can-apples-iphone-15-spark-a-tech-rally-analyst-eyes-china-growth\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.benzinga.com/analyst-ratings/analyst-color/23/12/36073810/can-apples-iphone-15-spark-a-tech-rally-analyst-eyes-china-growth","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1131462273","content_text":"ZINGER KEY POINTSWedbush's Ives highlights AI as a '1995 Moment' for tech, with cloud services leading the charge in consumer Internet impact.Apple remains top tech pick for Wedbush's Ives, expecting strong iPhone 15 cycle and robust China growth to drive future success.Wedbush analyst Daniel Ives' favorite tech names remain Apple Inc, Microsoft Corp, Alphabet Inc, Google, Palo Alto Networks, Inc, Palantir Technologies Inc, Zscaler, Inc, CrowdStrike Holdings, Inc, and MongoDB, Inc. Ives noted that this is the most significant technology revolution in the last 30 years, with AI a \"1995 Moment,\" and the fundamental tech growth stories are now starting to see the derivatives of this AI Revolution into 2024. The impact of the AI cycle on consumer Internet will be massive, and it will start with the cloud service divisions, Amazon.Com Inc's AWS and Alphabet's GCP. AWS and GCP acquire AI-capable chips, build AI-capable service offerings, and sell those services into their installed bases. He continues to like Amazon, Alphabet, and Meta Platforms Inc as his favorite tech plays. Apple's narrative quickly changing. Once the dust cleared from Apple's quarter and guidance, investors would focus through the noise around weak iPads, Macs, and FX and instead see iPhone units growing again, with Services back to steady double-digit growth. Finally, the \"iPhone China demise narrative\" was a great fictional story by the bears, which is far from reality as underlying mainland China's growth remains strong and a key asset for the core iPhone franchise. Ives cares about iPhone growth, Services revenue, gross margins, and China iPhone growth, which appears much better than feared, along with positive anecdotal commentary from Cook. Apple remains Ives' top tech pick with a strong iPhone 15 upgrade cycle playing out into a strong holiday season, which appears to be a good start post-Black Friday weekend.Heading into 2024, Ives noted that the tech sector will likely accelerate spending around cloud and AI spending that the Street is significantly underestimating. Ives noted that the new tech bull market has begun, and tech stocks are likely for a strong 2024 with tech stocks we expect to be up 20%+ over the next year, led by Big Tech as the AI spending tidal wave hits the shores of the broader tech sector.","news_type":1},"isVote":1,"tweetType":1,"viewCount":585,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":243522235539552,"gmtCreate":1700490692171,"gmtModify":1700490822333,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"SeekingAlpha, don't put yourself down&nbsp;writing this article!😂What growth Ebay has? Mono, period!&nbsp;","listText":"SeekingAlpha, don't put yourself down&nbsp;writing this article!😂What growth Ebay has? Mono, period!&nbsp;","text":"SeekingAlpha, don't put yourself down writing this article!😂What growth Ebay has? Mono, period!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/243522235539552","repostId":"2384589323","repostType":2,"repost":{"id":"2384589323","kind":"highlight","pubTimestamp":1700488117,"share":"https://ttm.financial/m/news/2384589323?lang=&edition=fundamental","pubTime":"2023-11-20 21:48","market":"us","language":"en","title":"Alibaba: Don't Fall For This Trap","url":"https://stock-news.laohu8.com/highlight/detail?id=2384589323","media":"seekingalpha","summary":"Let's figure it out. Alibaba's Q2 Results Weren't That Bad Alibaba Group experienced a 9% stock drop after reporting its second-quarter results, which included revenue of RMB224.79 billion , growing 8.5% year-over-year but falling short of analysts' expectations. But non-GAAP earnings per American depositary share  increased by 21% to RMB15.63 , surpassing estimates. Seeking Alpha News Segment-wise, revenue for Taobao and Tmall Group reached RMB97.7 billion, up 4%, with adjusted EBITDA increasing by 3% to RMB47.1 billion. Alibaba International Digital Commerce Group reported revenue of RMB24.5 billion, a 53% increase, while Cainiao's total revenue grew by 25% to RMB22.8 billion. Local Services Group revenue rose by 16% to RMB15.6 billion. Cloud Intelligence Group generated revenue of RMB27.6 billion, a 2% increase, while its adjusted EBITDA increased by 44% to RMB1.4 billion. The Digital Media Entertainment group reported revenue of RMB5.8 billion, marking an 11% increase, with an impr","content":"<html><head></head><body><ul style=\"\"><li><p>Alibaba&#39;s Q2 results fell short of expectations, but non-GAAP earnings per ADS surpassed estimates.</p></li><li><p>The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the individual companies to grow faster under conditions of relative independence, has not materialized.</p></li><li><p>Alibaba&#39;s low valuation is mainly due to a lack of growth, making it less attractive compared to other companies in the same industry.</p></li><li><p>I still don&#39;t see the point of buying the Chinese giant for 7.57x FY2029 P/E to get a 6-year EPS CAGR of 4.1% when I can buy <a href=\"https://laohu8.com/S/EBAY\">eBay</a> for 6.64x and get a CAGR of 6.6%.</p></li><li><p>I do not recommend investors buy BABA shares, no matter how cheap and promising they may seem at first glance.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f805543ab3786cb8cb1d7d9034e0368\" tg-width=\"750\" tg-height=\"500\"/></p><p>Robert Way</p><h2 id=\"id_3023641657\">Introduction</h2><p>I&#39;ve been covering <strong>Alibaba Group Holding Limited</strong> (NYSE:BABA) here on Seeking Alpha since September 2021. I started with a &#39;Sell&#39; rating when Alibaba was trading at $150 per share and upgraded the stock to &#39;Hold&#39; in December 2021 when the shares started trading at $113. Since then, I&#39;ve not changed my rating, although BABA kept falling lower.</p><p>The last time I published my &#39;Hold&#39; article was at the end of August 2023: At that time, I noted that BABA&#39;s attractiveness for Western investors wasn&#39;t really changing from a fundamental perspective, despite the obvious undervaluation. As time has shown, that thesis was correct, as the already cheap Chinese tech giant became even cheaper.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7b2f2064f6a0cfcde1d0e9ba1c35b075\" tg-width=\"640\" tg-height=\"323\"/></p><p>Seeking Alpha, author&#39;s notes</p><p>On November 16, 2023, Alibaba published its reports for Q2 FY2024, which had a strong negative impact not only on its own shares but also on the entire tech sector in China. What happened and is it really that bad? Maybe BABA has now become a &#39;bargain&#39;? Let&#39;s figure it out.</p><h2 id=\"id_2364546700\">Alibaba&#39;s Q2 Results Weren&#39;t That Bad</h2><p>Alibaba Group experienced a 9% stock drop after reporting its second-quarter results, which included revenue of RMB224.79 billion ($30.81 billion), growing 8.5% year-over-year but falling short of analysts&#39; expectations. But non-GAAP earnings per American depositary share (ADS) increased by 21% to RMB15.63 ($2.14), surpassing estimates.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/abe690de6ca639b19d15e44fb7751e43\" tg-width=\"640\" tg-height=\"375\"/></p><p>Seeking Alpha News</p><p>Segment-wise, revenue for Taobao and Tmall Group reached RMB97.7 billion, up 4%, with adjusted EBITDA increasing by 3% to RMB47.1 billion. Alibaba International Digital Commerce Group reported revenue of RMB24.5 billion, a 53% increase, while Cainiao&#39;s total revenue grew by 25% to RMB22.8 billion. Local Services Group revenue rose by 16% to RMB15.6 billion.</p><p>Cloud Intelligence Group generated revenue of RMB27.6 billion, a 2% increase, while its adjusted EBITDA increased by 44% to RMB1.4 billion. The Digital Media Entertainment group reported revenue of RMB5.8 billion, marking an 11% increase, with an improved adjusted EBITDA loss of RMB201 million compared to RMB362 million. The All Other segment, including DingTalk and Intelligent Information Platform, reported stable revenue at RMB48.1 billion and an adjusted EBITDA loss of RMB1.4 billion compared to RMB2.9 billion in the same quarter last year, primarily due to improved operating results from various businesses within the segment.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f079d95db1bcd6936771edae5f66ad82\" tg-width=\"640\" tg-height=\"343\"/></p><p>BABA&#39;s IR materials [November 2023]</p><p>Cost trends, excluding share-based compensation (SBC), revealed a decrease in the cost of revenue ratio to 62%, stability in product development expenses (5%), sales and marketing expenses (11%), and a 1% decrease in general and administrative expenses (3%).</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/801092f739134e38068d82e084028aa1\" tg-width=\"640\" tg-height=\"330\"/></p><p>BABA&#39;s IR materials [November 2023]</p><p>The company repurchased ~$3 billion worth of shares from July 1 to November 15, accounting for 1.3% of total shares outstanding [~18.6 million ADSs]. Free cash flow for the quarter was RMB45.2 billion or $6.2 billion, reflecting a massive 27% increase YoY.</p><p>During the latest earnings call, the management emphasized 3 priorities for cash deployment in the upcoming quarter: innovation for growth, reducing total shares outstanding through accretive stock repurchases, and rewarding long-term investors via dividends. In addition to the existing $40 billion share repurchase program, Alibaba&#39;s board approved an annual cash dividend of US$0.125 per ordinary share or US$1.00 per ADS for fiscal year 2023, totaling ~$2.5 billion, with a payment date expected around January 11, 2024, for ordinary shareholders and January 18, 2024, for ADS holders.</p><p>As of September 30, 2023, Alibaba maintained a strong net cash position of RMB457.8 billion or $62.7 billion. At the same time, the company&#39;s current ratio is 1.94 and the debt-to-equity ratio is only 0.16, which is very low. So BABA&#39;s financial strength looks solid with such a low level of debt and good liquidity.</p><h2 id=\"id_1338785005\">But A New Catalyst Is Already A Thing Of The Past</h2><p>I remember a few months ago when the Alibaba bulls were trying to assess the positive impact of the proposed split of the company into different companies. At the time, many thought that BABA would unlock tremendous value for its shareholders if it split into 6 separate companies that would not interfere with each other&#39;s potential growth rate.</p><p>As time has shown, this catalyst was not to prove true: During the earnings call, management announced that Alibaba had decided not to pursue a full spin-off of the Cloud Intelligence Group due to uncertainties caused by US export restrictions on advanced computer chips. That was a surprise to the market - I think this is why the stock fell so sharply after the announcement.</p><p>The emphasis now is on investing in the core businesses, including Taobao and Tmall Group, for sustainable growth. Alibaba wants to increase its ROIC to double digits in the next few years, focusing on core businesses and ensuring non-core businesses become profitable, potentially monetizing certain investments to increase cash flow.</p><p>In my subjective opinion, BABA’s problem for a long time was precisely the lack of appropriate growth in the cloud segment. While Google (GOOG), Microsoft (MSFT), and Amazon (AMZN), to which BABA is often compared, continue to grow revenue in their cloud business segments at solid double-digit rates, Alibaba&#39;s Cloud is stagnating and losing more and more global market share. AI technologies are an excellent growth driver for this niche, but for some reason, BABA&#39;s cloud still refuses to grow even though we keep hearing about AI constantly.</p><p>From the last earnings call, I realized that <strong>Alibaba&#39;s future growth will be closely linked to &#39;Value&#39; segments whose growth will heavily depend on the macroeconomic conditions in China</strong> after the post-COVID low-base effect disappears, which has not yet fully materialized.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b5ae8faa3881acff6c7b9e92ede4f2ed\" tg-width=\"640\" tg-height=\"455\"/></p><p>YCharts, author&#39;s notes</p><p>Goldman Sach notes in its October report [proprietary source], that slower growth, coupled with policy uncertainty and geopolitical risks, is lowering China&#39;s equity market fair value. However, the report suggests that while these factors are already priced in, investment opportunities lie more in alpha themes than broad market beta.</p><p>China&#39;s GDP will most likely stop growing as before. I assume that Alibaba&#39;s already high market penetration in various Chinese markets makes the company&#39;s growth more variable, which could justify its current low valuation.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ddee6c1ca09cb057d9f22c78e80fb06a\" tg-width=\"640\" tg-height=\"511\"/></p><p>Goldman Sachs [October 2023] - proprietary source</p><p>Yes, it is hard to believe that the current valuation of the company may be fair: BABA looks extremely undervalued with a P/E ratio for next year of ~8.8x and an EV/EBITDA of ~6.7x.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cb157da684786f7e6ee0470b55d84105\" tg-width=\"635\" tg-height=\"467\"/></p><p>Data by YCharts</p><p>I think we could easily see price increases of 10-20-30% against this backdrop. But most likely these potential &#39;rips&#39; will be used by hedge funds to exit their positions, as has happened many times before. But even now that there are no &#34;rips&#34; in the Chinese market, hedge funds continue to exit their positions.</p><blockquote><p>US and European fund managers have sold a net $1.6 billion of Chinese shares so far this month, following $3.5 billion of outflows in September, data from EPFR Global and Morgan Stanley show.</p><p>Source: Bloomberg [October 19, 2023]</p></blockquote><p>I suggest we return to the burning issue - Alibaba&#39;s low valuation. Let&#39;s think for a moment about what might explain BABA&#39;s current cheapness. You might think that BABA&#39;s P/E ratio is probably below 10x due to geopolitics and market overreaction. I will answer you that this is true to some extent, but mainly BABA is cheap because there is no growth (almost). If we take the long-term consensus estimates for earnings per share and the implied P/E ratios, we see that BABA is actually valued slightly higher than eBay (EBAY) today:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d7e2b3f55b77b3e323cd6e5ec8f19e32\" tg-width=\"640\" tg-height=\"385\"/></p><p>Author&#39;s calculations, Seeking Alpha data</p><p>By overpaying just 2x to BABA&#39;s long-term P/E ratio of BABA, you can buy <a href=\"https://laohu8.com/S/MELI\">MercadoLibre</a> (MELI), whose EPS is estimated to grow more than 8 times faster over the same period (6 years). <em>Could anyone find &#39;fairness&#39; in the valuation of the two companies?</em></p><h2 id=\"id_4226314352\">The Bottom Line</h2><p>I understand that when comparing BABA with MELI, I&#39;m doing a little wrong by comparing companies with different business cycles. But I still don&#39;t see the point of buying the Chinese giant for 7.57x FY2029 P/E to get a 6-year EPS CAGR of 4.1% when I can buy eBay for 6.64x and get a CAGR of 6.6% (these 2 companies are roughly in the same business cycle).</p><p>The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the individual companies to grow faster under conditions of relative independence, has not materialized. Now I expect Alibaba to constrain itself and have relatively modest growth rates for which it makes no sense to overpay and take a big country risk when there are cheaper analogs in the U.S. (and even more so in emerging markets like Brazil).</p><p>Yes, Alibaba&#39;s financial position is very solid as the company continues to recover operationally and continues to buy shares from the market in large quantities. Therefore, I wouldn&#39;t be surprised if the company&#39;s shares suddenly rebound strongly. However, this potential recovery in stock price will likely provide an opportunity for the remaining investors to get out.</p><p>Based on the above, I do not recommend investors buy BABA shares, no matter how cheap and promising they may seem at first glance.</p><p><em>Thanks for reading!</em></p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Alibaba: Don't Fall For This Trap</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAlibaba: Don't Fall For This Trap\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-11-20 21:48 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4653008-alibaba-dont-fall-for-this-trap><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Alibaba's Q2 results fell short of expectations, but non-GAAP earnings per ADS surpassed estimates.The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4653008-alibaba-dont-fall-for-this-trap\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4653008-alibaba-dont-fall-for-this-trap","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2384589323","content_text":"Alibaba's Q2 results fell short of expectations, but non-GAAP earnings per ADS surpassed estimates.The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the individual companies to grow faster under conditions of relative independence, has not materialized.Alibaba's low valuation is mainly due to a lack of growth, making it less attractive compared to other companies in the same industry.I still don't see the point of buying the Chinese giant for 7.57x FY2029 P/E to get a 6-year EPS CAGR of 4.1% when I can buy eBay for 6.64x and get a CAGR of 6.6%.I do not recommend investors buy BABA shares, no matter how cheap and promising they may seem at first glance.Robert WayIntroductionI've been covering Alibaba Group Holding Limited (NYSE:BABA) here on Seeking Alpha since September 2021. I started with a 'Sell' rating when Alibaba was trading at $150 per share and upgraded the stock to 'Hold' in December 2021 when the shares started trading at $113. Since then, I've not changed my rating, although BABA kept falling lower.The last time I published my 'Hold' article was at the end of August 2023: At that time, I noted that BABA's attractiveness for Western investors wasn't really changing from a fundamental perspective, despite the obvious undervaluation. As time has shown, that thesis was correct, as the already cheap Chinese tech giant became even cheaper.Seeking Alpha, author's notesOn November 16, 2023, Alibaba published its reports for Q2 FY2024, which had a strong negative impact not only on its own shares but also on the entire tech sector in China. What happened and is it really that bad? Maybe BABA has now become a 'bargain'? Let's figure it out.Alibaba's Q2 Results Weren't That BadAlibaba Group experienced a 9% stock drop after reporting its second-quarter results, which included revenue of RMB224.79 billion ($30.81 billion), growing 8.5% year-over-year but falling short of analysts' expectations. But non-GAAP earnings per American depositary share (ADS) increased by 21% to RMB15.63 ($2.14), surpassing estimates.Seeking Alpha NewsSegment-wise, revenue for Taobao and Tmall Group reached RMB97.7 billion, up 4%, with adjusted EBITDA increasing by 3% to RMB47.1 billion. Alibaba International Digital Commerce Group reported revenue of RMB24.5 billion, a 53% increase, while Cainiao's total revenue grew by 25% to RMB22.8 billion. Local Services Group revenue rose by 16% to RMB15.6 billion.Cloud Intelligence Group generated revenue of RMB27.6 billion, a 2% increase, while its adjusted EBITDA increased by 44% to RMB1.4 billion. The Digital Media Entertainment group reported revenue of RMB5.8 billion, marking an 11% increase, with an improved adjusted EBITDA loss of RMB201 million compared to RMB362 million. The All Other segment, including DingTalk and Intelligent Information Platform, reported stable revenue at RMB48.1 billion and an adjusted EBITDA loss of RMB1.4 billion compared to RMB2.9 billion in the same quarter last year, primarily due to improved operating results from various businesses within the segment.BABA's IR materials [November 2023]Cost trends, excluding share-based compensation (SBC), revealed a decrease in the cost of revenue ratio to 62%, stability in product development expenses (5%), sales and marketing expenses (11%), and a 1% decrease in general and administrative expenses (3%).BABA's IR materials [November 2023]The company repurchased ~$3 billion worth of shares from July 1 to November 15, accounting for 1.3% of total shares outstanding [~18.6 million ADSs]. Free cash flow for the quarter was RMB45.2 billion or $6.2 billion, reflecting a massive 27% increase YoY.During the latest earnings call, the management emphasized 3 priorities for cash deployment in the upcoming quarter: innovation for growth, reducing total shares outstanding through accretive stock repurchases, and rewarding long-term investors via dividends. In addition to the existing $40 billion share repurchase program, Alibaba's board approved an annual cash dividend of US$0.125 per ordinary share or US$1.00 per ADS for fiscal year 2023, totaling ~$2.5 billion, with a payment date expected around January 11, 2024, for ordinary shareholders and January 18, 2024, for ADS holders.As of September 30, 2023, Alibaba maintained a strong net cash position of RMB457.8 billion or $62.7 billion. At the same time, the company's current ratio is 1.94 and the debt-to-equity ratio is only 0.16, which is very low. So BABA's financial strength looks solid with such a low level of debt and good liquidity.But A New Catalyst Is Already A Thing Of The PastI remember a few months ago when the Alibaba bulls were trying to assess the positive impact of the proposed split of the company into different companies. At the time, many thought that BABA would unlock tremendous value for its shareholders if it split into 6 separate companies that would not interfere with each other's potential growth rate.As time has shown, this catalyst was not to prove true: During the earnings call, management announced that Alibaba had decided not to pursue a full spin-off of the Cloud Intelligence Group due to uncertainties caused by US export restrictions on advanced computer chips. That was a surprise to the market - I think this is why the stock fell so sharply after the announcement.The emphasis now is on investing in the core businesses, including Taobao and Tmall Group, for sustainable growth. Alibaba wants to increase its ROIC to double digits in the next few years, focusing on core businesses and ensuring non-core businesses become profitable, potentially monetizing certain investments to increase cash flow.In my subjective opinion, BABA’s problem for a long time was precisely the lack of appropriate growth in the cloud segment. While Google (GOOG), Microsoft (MSFT), and Amazon (AMZN), to which BABA is often compared, continue to grow revenue in their cloud business segments at solid double-digit rates, Alibaba's Cloud is stagnating and losing more and more global market share. AI technologies are an excellent growth driver for this niche, but for some reason, BABA's cloud still refuses to grow even though we keep hearing about AI constantly.From the last earnings call, I realized that Alibaba's future growth will be closely linked to 'Value' segments whose growth will heavily depend on the macroeconomic conditions in China after the post-COVID low-base effect disappears, which has not yet fully materialized.YCharts, author's notesGoldman Sach notes in its October report [proprietary source], that slower growth, coupled with policy uncertainty and geopolitical risks, is lowering China's equity market fair value. However, the report suggests that while these factors are already priced in, investment opportunities lie more in alpha themes than broad market beta.China's GDP will most likely stop growing as before. I assume that Alibaba's already high market penetration in various Chinese markets makes the company's growth more variable, which could justify its current low valuation.Goldman Sachs [October 2023] - proprietary sourceYes, it is hard to believe that the current valuation of the company may be fair: BABA looks extremely undervalued with a P/E ratio for next year of ~8.8x and an EV/EBITDA of ~6.7x.Data by YChartsI think we could easily see price increases of 10-20-30% against this backdrop. But most likely these potential 'rips' will be used by hedge funds to exit their positions, as has happened many times before. But even now that there are no \"rips\" in the Chinese market, hedge funds continue to exit their positions.US and European fund managers have sold a net $1.6 billion of Chinese shares so far this month, following $3.5 billion of outflows in September, data from EPFR Global and Morgan Stanley show.Source: Bloomberg [October 19, 2023]I suggest we return to the burning issue - Alibaba's low valuation. Let's think for a moment about what might explain BABA's current cheapness. You might think that BABA's P/E ratio is probably below 10x due to geopolitics and market overreaction. I will answer you that this is true to some extent, but mainly BABA is cheap because there is no growth (almost). If we take the long-term consensus estimates for earnings per share and the implied P/E ratios, we see that BABA is actually valued slightly higher than eBay (EBAY) today:Author's calculations, Seeking Alpha dataBy overpaying just 2x to BABA's long-term P/E ratio of BABA, you can buy MercadoLibre (MELI), whose EPS is estimated to grow more than 8 times faster over the same period (6 years). Could anyone find 'fairness' in the valuation of the two companies?The Bottom LineI understand that when comparing BABA with MELI, I'm doing a little wrong by comparing companies with different business cycles. But I still don't see the point of buying the Chinese giant for 7.57x FY2029 P/E to get a 6-year EPS CAGR of 4.1% when I can buy eBay for 6.64x and get a CAGR of 6.6% (these 2 companies are roughly in the same business cycle).The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the individual companies to grow faster under conditions of relative independence, has not materialized. Now I expect Alibaba to constrain itself and have relatively modest growth rates for which it makes no sense to overpay and take a big country risk when there are cheaper analogs in the U.S. (and even more so in emerging markets like Brazil).Yes, Alibaba's financial position is very solid as the company continues to recover operationally and continues to buy shares from the market in large quantities. Therefore, I wouldn't be surprised if the company's shares suddenly rebound strongly. However, this potential recovery in stock price will likely provide an opportunity for the remaining investors to get out.Based on the above, I do not recommend investors buy BABA shares, no matter how cheap and promising they may seem at first glance.Thanks for reading!","news_type":1},"isVote":1,"tweetType":1,"viewCount":529,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":309716079456376,"gmtCreate":1716618868535,"gmtModify":1716619241512,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"At current valuation, Nvidia is at optimum risk! Competitors will catch up really soon.&nbsp;","listText":"At current valuation, Nvidia is at optimum risk! Competitors will catch up really soon.&nbsp;","text":"At current valuation, Nvidia is at optimum risk! Competitors will catch up really soon.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":8,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/309716079456376","repostId":"2438065998","repostType":2,"repost":{"id":"2438065998","kind":"highlight","pubTimestamp":1716597000,"share":"https://ttm.financial/m/news/2438065998?lang=&edition=fundamental","pubTime":"2024-05-25 08:30","market":"us","language":"en","title":"Nvidia: Profit Explosion And Stock Split Are Game-Changers","url":"https://stock-news.laohu8.com/highlight/detail?id=2438065998","media":"Seeking Alpha","summary":"Nvidia's stock surged 9% after strong Q1 earnings, driven by record revenues and profits in its Data Center business.The company announced a ten-for-one stock split to make shares more affordable for ","content":"<html><head></head><body><ul style=\"\"><li><p>Nvidia&#39;s stock surged 9% after strong Q1 earnings, driven by record revenues and profits in its Data Center business.</p></li><li><p>The company announced a ten-for-one stock split to make shares more affordable for investors.</p></li><li><p>Nvidia&#39;s strong growth is fueled by product adoption of its AI GPUs in the Data Center segment. Nvidia is likely to see significant EPS estimate upside revisions going forward.</p></li><li><p>Shares trade at 30X earnings which seems much less expensive after the company&#39;s net income rose 628% Y/Y.</p></li><li><p>Nvidia&#39;s significant free cash flow/earnings upswing, a strong margin profile, a stock split and an enviable market position in Data Center GPUs are reasons why I am changing my rating to buy.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6144f6f01bec9d39bca22c82ac595a7e\" alt=\"BING-JHEN HONG\" title=\"BING-JHEN HONG\" tg-width=\"750\" tg-height=\"500\"/><span>BING-JHEN HONG</span></p><p>Shares of Nvidia (NASDAQ:NVDA) surged 9% after the chipmaker submitted its earnings sheet for its first fiscal quarter of FY 2025 on Wednesday. The company is seeing strong chip adoption in its Data Center business, which led to record segment revenues, record total revenues and an explosion in profits for Nvidia. Data Center-related revenues now represent 87% of consolidated revenues, and the company issued a strong outlook for the coming quarter as well. Given the massive increase in the company’s valuation in the last year, Nvidia now also announced a ten-for-one stock split to make shares more affordable for investors. I believe the value proposition has improved greatly, and I am up-grading shares of Nvidia to buy!</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/0e67ec90ffc4b62e7169874abe6c147a\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"424\"/><span>Data by YCharts</span></p><h2 id=\"id_1852762567\">Previous rating</h2><p>Nvidia is, and has been for a while, my biggest regret in the investment realm. I rated Nvidia a strong sell for much of 2023 due to valuation concerns, but slowly came around in the last quarter due to Nvidia’s strong margin picture and Data Center growth: Lessons Learned From My Worst Call Ever. I am now up-grading shares of the chipmaker to buy due to the company’s profit explosion, driven by its Data Center business, which could also lead to a number of EPS estimate upside revisions in the near term. The ten-for-one stock split could also attract more buyers to Nvidia as shares become more affordable for investors.</p><h2 id=\"id_3293729479\">Nvidia leaves estimates in the dust</h2><p>Nvidia delivered a solid earnings and top line beat for its latest quarter: the chipmaker achieved adjusted earnings of $6.12 per-share on revenues of 26.04B. Earnings beat the consensus by $0.54 per-share, due to Nvidia benefiting enormously from growing product adoption of its AI GPUs in the Data Center segment. Revenues also came in higher than expected, and together with a solid forecast for FQ2’25, explain why shares reached a new all-time high on Thursday.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e2629d3af67333b0efc47f54f802a4cb\" alt=\"Seeking Alpha\" title=\"Seeking Alpha\" tg-width=\"640\" tg-height=\"257\"/><span>Seeking Alpha</span></p><h2 id=\"id_2516211838\">Data Centers are now dominating Nvidia’s revenue mix</h2><p>Nvidia’s total revenues hit $26.0B in FQ1’25, showing a massive 18% quarter over quarter and 262% year over year growth. This expansion in the top line has been chiefly driven by strong execution in the Data Center segment, which reached all-time record revenues of $22.6B last quarter, showing 427% year over year growth. Key to Nvidia’s growth is strong product adoption of its AI GPUs, which are specifically designed to support Data Center operations. One key driver of growth going forward could be close relationships with other U.S. companies that are investing heavily into their own AI capabilities, in part to train their own large language models.</p><p>Nvidia is deepening relationships with Microsoft, Oracle, Amazon Web Services and Google, which are investing billions of dollars into their own artificial intelligence products. Nvidia’s core AI GPU, the H100 tensor core GPU, is flying out the door at the moment and the company’s launch of the next-gen H200 GPU, a top-of-the-line chip to support AI applications, could extend Nvidia’s current momentum way into the second half of the year.</p><p>Nvidia&#39;s AI GPUs have been so successful that Data Centers are now completely dominating Nvidia&#39;s revenue mix. The Data Center segment was responsible for 87% of the company&#39;s consolidated revenues, which compares to a revenue share of 60% last year. The revenue base more than quintupled year over year due to sky-high demand for new AI processors that can be used to train large language models.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/3a4fb97e54e19329fae8b676c6c4322d\" alt=\"Nvidia\" title=\"Nvidia\" tg-width=\"640\" tg-height=\"298\"/><span>Nvidia</span></p><p>Nvidia&#39;s revenue upswing has a number of catalysts including the launch of the next-gen H200 (FQ2&#39;25), reinvestment of Nvidia&#39;s surging free cash flow into new products such as Nvidia&#39;s Blackwell platform to support AI applications, and, possibly, at some point the return of this free cash flow via stock buybacks to shareholders. In FQ1&#39;25, Nvidia generated nearly $15B in free cash flow, of which approximately 52% was returned to shareholders via stock buybacks (a total of $7.74B).</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/68dbfdd76ef07335529cf008b0a8b95b\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"439\"/><span>Data by YCharts</span></p><h2 id=\"id_2967473601\">Strong outlook for FQ2&#39;25</h2><p>Nvidia is guiding for $28.0B in revenues in FQ2’25 (+/- 2%) which implies 7.5% quarter over quarter growth while at the same time the chipmaker is looking at a non-GAAP gross margin of 74.8%, +/- 50 basis points. The margin picture continues to look very solid, with Nvidia reporting a Q/Q increase in its GAAP gross margin of 2.4 PP last quarter. The expansion in the gross margin and healthy uptrend is another reason why I am changing my rating for Nvidia from hold to buy.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e4aebe623334c0ffaa077b571824bf4c\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"424\"/><span>Data by YCharts</span></p><h2 id=\"id_444258430\">Nvidia’s valuation, EPS upside revisions</h2><p>Nvidia is not cheap and hasn’t been for a while. In fact, focusing too much on valuation caused me to miss out on Nvidia’s share price rally, which I regret dearly. However, with Nvidia seeing a significant profit explosion in FQ1&#39;25, driven by Data Centers, Nvidia’s shares may not be as expensive as I once thought. Given Nvidia&#39;s strong performance in FQ1&#39;25, investors can reasonably expect an avalanche of EPS estimate upside revisions for Nvidia&#39;s coming second fiscal quarter.</p><p>Nvidia is currently trading at a price-to-earnings ratio of 29.8X, which is not as excessive as I used to think. The reason: Nvidia’s net income soared 628% in the last quarter to $14.9B… which means that Nvidia is now more profitable than Amazon or <a href=\"https://laohu8.com/S/META\">Meta Platforms</a> (META). Nvidia is more expensive than AMD (AMD), which is trading at a P/E ratio of 28.9X, but not by a lot and Nvidia still has a comparatively strong competitive position in the Data Center AI GPU market due to the early launch of the H100 Data Center chip.</p><p>At the end of FY 2023, Nvidia dominated the Data Center GPU market with a 92% market share, but this strong position may erode over time as AMD and Intel (INTC) roll out at scale their own artificial intelligence products. Still, Nvidia is currently in a very enviable position, as it can charge its customers a ton of money for its flagship AI GPUs.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/01cf204a914b89118ec7df150be5f080\" alt=\"IoT Analytics\" title=\"IoT Analytics\" tg-width=\"640\" tg-height=\"336\"/><span>IoT Analytics</span></p><p>Nvidia&#39;s H100 is still very expensive with a price tag of around $40,000. It is also up to four times more expensive than AMD&#39;s MI300X Data Center GPU, meaning Nvidia may at some point see deteriorating pricing power for its top-of-the-line AI GPU, especially if more customers choose the lower-price AMD GPU over Nvidia&#39;s solution. AMD, in my opinion, has a reasonable chance to see stronger EPS growth going forward because it is finally in the market with a competitive AI GPU offer. AMD has trailed Nvidia in the last two years in terms of Data Center GPUs, but with the availability of AMD&#39;s MI300X GPU, for which there seems to be record demand, I believe the situation could be slowly improving for AMD. One reason for this is that the MI300X GPU is much more affordable than Nvidia&#39;s H100 chip which could, in the longer term, help AMD achieve market share gains and post stronger EPS growth than Nvidia.</p><p>AMD, as an example, is expected to see strong sales for its MI300X and the market even expects AMD to exceed Nvidia&#39;s EPS growth. Nvidia, given its massive increase in profitability and continual momentum in Data Center revenues, has further revaluation potential, in my opinion. With Nvidia experiencing a big jump in profitability and free cash flow looking extremely strong, I believe shares could trade at 35X earnings... which implies ~20% upside revaluation potential and a potential fair value in the region of $1,220.</p><p>The 35X earnings multiple is chiefly supported by Nvidia&#39;s drastically improved profitability picture and very high gross margins, and is based off of a consensus EPS forecast of $34.81 for FY 2025. The EPS estimate also implies only about 29% year over year growth and with earnings projections likely to get revised to the upside in the coming weeks, I believe my $1,220 price target may actually be conservative.</p><p>EPS estimates for the upcoming quarter have already revised 36 times to the upside in the last 90 days, as analysts see Nvidia&#39;s earnings momentum to continue in the short term. My price target is a dynamic number and may be revised upward based off of the significance of EPS revisions as well as Nvidia&#39;s margin improvements going forward.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/bd7de7744b00814ea1323a5997fdf345\" alt=\"Data by YCharts\" title=\"Data by YCharts\" tg-width=\"635\" tg-height=\"559\"/><span>Data by YCharts</span></p><h2 id=\"id_3561789180\">Risks with Nvidia</h2><p>The biggest risk for Nvidia, as I see it, is a potential deceleration of growth in the Data Center segment, to which investors are likely not going to react kindly. Other chipmakers are also starting to pump out their own AI products, which could indicate weakening pricing power for Nvidia&#39;s blockbuster AI GPU. Intel just announced the launch of Gaudi 3, an AI accelerator targeting the lucrative enterprise market, while AMD rolled out its MI300 Instinct chips to mount a frontal assault on the dominant market position of Nvidia’s H100 chip. If Intel and AMD were to see market share gains in the AI GPU market, then shares of Nvidia’s valuation factor may suffer headwinds.</p><h2 id=\"id_1853331776\">Final thoughts</h2><p>Nvidia continued to excel in the first fiscal quarter of FY 2025 and the stock split especially is a smart move for the company to make its shares more affordable for investors. The ten-for-one stock split is a cosmetic maneuver, of course, but it could prove successful nonetheless: a lower share price could make Nvidia more attractive to investors that have been put off by Nvidia’s $1,000 price tag. The revenue and margin outlook for FQ2’25 is also positive and with the H200 AI GPU set to provide further fuel in the Data Center business in the second-quarter, I believe Nvidia makes a much better value proposition!</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: Profit Explosion And Stock Split Are Game-Changers</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: Profit Explosion And Stock Split Are Game-Changers\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-25 08:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4695544-nvidia-profit-explosion-and-stock-split-are-game-changers-rating-upgrade><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Nvidia's stock surged 9% after strong Q1 earnings, driven by record revenues and profits in its Data Center business.The company announced a ten-for-one stock split to make shares more affordable for ...</p>\n\n<a href=\"https://seekingalpha.com/article/4695544-nvidia-profit-explosion-and-stock-split-are-game-changers-rating-upgrade\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4077":"互动媒体与服务","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","BK4579":"人工智能","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","BK4588":"碎股","BK4503":"景林资产持仓","LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","BK4573":"虚拟现实","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","BK4581":"高盛持仓","BK4512":"苹果概念","BK6051":"信息科技咨询与其它服务","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","LU1316542783.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","NVDA":"英伟达","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","LU0238689110.USD":"贝莱德环球动力股票基金","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","BK4515":"5G概念","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","LU0072462426.USD":"贝莱德全球配置 A2","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK4567":"ESG概念","GB00B4QBRK32.GBP":"FUNDSMITH EQUITY \"R\" (GBP) INC","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","GB00B4LPDJ14.GBP":"FUNDSMITH EQUITY \"R\" (GBP) ACC","LU1989764664.SGD":"CPR Invest - Global Disruptive Opportunities A2 Acc SGD-H","LU0308772762.SGD":"Blackrock Global Allocation A2 SGD-H","BK4566":"资本集团","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","BK4575":"芯片概念","BK4587":"ChatGPT概念","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD"},"source_url":"https://seekingalpha.com/article/4695544-nvidia-profit-explosion-and-stock-split-are-game-changers-rating-upgrade","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2438065998","content_text":"Nvidia's stock surged 9% after strong Q1 earnings, driven by record revenues and profits in its Data Center business.The company announced a ten-for-one stock split to make shares more affordable for investors.Nvidia's strong growth is fueled by product adoption of its AI GPUs in the Data Center segment. Nvidia is likely to see significant EPS estimate upside revisions going forward.Shares trade at 30X earnings which seems much less expensive after the company's net income rose 628% Y/Y.Nvidia's significant free cash flow/earnings upswing, a strong margin profile, a stock split and an enviable market position in Data Center GPUs are reasons why I am changing my rating to buy.BING-JHEN HONGShares of Nvidia (NASDAQ:NVDA) surged 9% after the chipmaker submitted its earnings sheet for its first fiscal quarter of FY 2025 on Wednesday. The company is seeing strong chip adoption in its Data Center business, which led to record segment revenues, record total revenues and an explosion in profits for Nvidia. Data Center-related revenues now represent 87% of consolidated revenues, and the company issued a strong outlook for the coming quarter as well. Given the massive increase in the company’s valuation in the last year, Nvidia now also announced a ten-for-one stock split to make shares more affordable for investors. I believe the value proposition has improved greatly, and I am up-grading shares of Nvidia to buy!Data by YChartsPrevious ratingNvidia is, and has been for a while, my biggest regret in the investment realm. I rated Nvidia a strong sell for much of 2023 due to valuation concerns, but slowly came around in the last quarter due to Nvidia’s strong margin picture and Data Center growth: Lessons Learned From My Worst Call Ever. I am now up-grading shares of the chipmaker to buy due to the company’s profit explosion, driven by its Data Center business, which could also lead to a number of EPS estimate upside revisions in the near term. The ten-for-one stock split could also attract more buyers to Nvidia as shares become more affordable for investors.Nvidia leaves estimates in the dustNvidia delivered a solid earnings and top line beat for its latest quarter: the chipmaker achieved adjusted earnings of $6.12 per-share on revenues of 26.04B. Earnings beat the consensus by $0.54 per-share, due to Nvidia benefiting enormously from growing product adoption of its AI GPUs in the Data Center segment. Revenues also came in higher than expected, and together with a solid forecast for FQ2’25, explain why shares reached a new all-time high on Thursday.Seeking AlphaData Centers are now dominating Nvidia’s revenue mixNvidia’s total revenues hit $26.0B in FQ1’25, showing a massive 18% quarter over quarter and 262% year over year growth. This expansion in the top line has been chiefly driven by strong execution in the Data Center segment, which reached all-time record revenues of $22.6B last quarter, showing 427% year over year growth. Key to Nvidia’s growth is strong product adoption of its AI GPUs, which are specifically designed to support Data Center operations. One key driver of growth going forward could be close relationships with other U.S. companies that are investing heavily into their own AI capabilities, in part to train their own large language models.Nvidia is deepening relationships with Microsoft, Oracle, Amazon Web Services and Google, which are investing billions of dollars into their own artificial intelligence products. Nvidia’s core AI GPU, the H100 tensor core GPU, is flying out the door at the moment and the company’s launch of the next-gen H200 GPU, a top-of-the-line chip to support AI applications, could extend Nvidia’s current momentum way into the second half of the year.Nvidia's AI GPUs have been so successful that Data Centers are now completely dominating Nvidia's revenue mix. The Data Center segment was responsible for 87% of the company's consolidated revenues, which compares to a revenue share of 60% last year. The revenue base more than quintupled year over year due to sky-high demand for new AI processors that can be used to train large language models.NvidiaNvidia's revenue upswing has a number of catalysts including the launch of the next-gen H200 (FQ2'25), reinvestment of Nvidia's surging free cash flow into new products such as Nvidia's Blackwell platform to support AI applications, and, possibly, at some point the return of this free cash flow via stock buybacks to shareholders. In FQ1'25, Nvidia generated nearly $15B in free cash flow, of which approximately 52% was returned to shareholders via stock buybacks (a total of $7.74B).Data by YChartsStrong outlook for FQ2'25Nvidia is guiding for $28.0B in revenues in FQ2’25 (+/- 2%) which implies 7.5% quarter over quarter growth while at the same time the chipmaker is looking at a non-GAAP gross margin of 74.8%, +/- 50 basis points. The margin picture continues to look very solid, with Nvidia reporting a Q/Q increase in its GAAP gross margin of 2.4 PP last quarter. The expansion in the gross margin and healthy uptrend is another reason why I am changing my rating for Nvidia from hold to buy.Data by YChartsNvidia’s valuation, EPS upside revisionsNvidia is not cheap and hasn’t been for a while. In fact, focusing too much on valuation caused me to miss out on Nvidia’s share price rally, which I regret dearly. However, with Nvidia seeing a significant profit explosion in FQ1'25, driven by Data Centers, Nvidia’s shares may not be as expensive as I once thought. Given Nvidia's strong performance in FQ1'25, investors can reasonably expect an avalanche of EPS estimate upside revisions for Nvidia's coming second fiscal quarter.Nvidia is currently trading at a price-to-earnings ratio of 29.8X, which is not as excessive as I used to think. The reason: Nvidia’s net income soared 628% in the last quarter to $14.9B… which means that Nvidia is now more profitable than Amazon or Meta Platforms (META). Nvidia is more expensive than AMD (AMD), which is trading at a P/E ratio of 28.9X, but not by a lot and Nvidia still has a comparatively strong competitive position in the Data Center AI GPU market due to the early launch of the H100 Data Center chip.At the end of FY 2023, Nvidia dominated the Data Center GPU market with a 92% market share, but this strong position may erode over time as AMD and Intel (INTC) roll out at scale their own artificial intelligence products. Still, Nvidia is currently in a very enviable position, as it can charge its customers a ton of money for its flagship AI GPUs.IoT AnalyticsNvidia's H100 is still very expensive with a price tag of around $40,000. It is also up to four times more expensive than AMD's MI300X Data Center GPU, meaning Nvidia may at some point see deteriorating pricing power for its top-of-the-line AI GPU, especially if more customers choose the lower-price AMD GPU over Nvidia's solution. AMD, in my opinion, has a reasonable chance to see stronger EPS growth going forward because it is finally in the market with a competitive AI GPU offer. AMD has trailed Nvidia in the last two years in terms of Data Center GPUs, but with the availability of AMD's MI300X GPU, for which there seems to be record demand, I believe the situation could be slowly improving for AMD. One reason for this is that the MI300X GPU is much more affordable than Nvidia's H100 chip which could, in the longer term, help AMD achieve market share gains and post stronger EPS growth than Nvidia.AMD, as an example, is expected to see strong sales for its MI300X and the market even expects AMD to exceed Nvidia's EPS growth. Nvidia, given its massive increase in profitability and continual momentum in Data Center revenues, has further revaluation potential, in my opinion. With Nvidia experiencing a big jump in profitability and free cash flow looking extremely strong, I believe shares could trade at 35X earnings... which implies ~20% upside revaluation potential and a potential fair value in the region of $1,220.The 35X earnings multiple is chiefly supported by Nvidia's drastically improved profitability picture and very high gross margins, and is based off of a consensus EPS forecast of $34.81 for FY 2025. The EPS estimate also implies only about 29% year over year growth and with earnings projections likely to get revised to the upside in the coming weeks, I believe my $1,220 price target may actually be conservative.EPS estimates for the upcoming quarter have already revised 36 times to the upside in the last 90 days, as analysts see Nvidia's earnings momentum to continue in the short term. My price target is a dynamic number and may be revised upward based off of the significance of EPS revisions as well as Nvidia's margin improvements going forward.Data by YChartsRisks with NvidiaThe biggest risk for Nvidia, as I see it, is a potential deceleration of growth in the Data Center segment, to which investors are likely not going to react kindly. Other chipmakers are also starting to pump out their own AI products, which could indicate weakening pricing power for Nvidia's blockbuster AI GPU. Intel just announced the launch of Gaudi 3, an AI accelerator targeting the lucrative enterprise market, while AMD rolled out its MI300 Instinct chips to mount a frontal assault on the dominant market position of Nvidia’s H100 chip. If Intel and AMD were to see market share gains in the AI GPU market, then shares of Nvidia’s valuation factor may suffer headwinds.Final thoughtsNvidia continued to excel in the first fiscal quarter of FY 2025 and the stock split especially is a smart move for the company to make its shares more affordable for investors. The ten-for-one stock split is a cosmetic maneuver, of course, but it could prove successful nonetheless: a lower share price could make Nvidia more attractive to investors that have been put off by Nvidia’s $1,000 price tag. The revenue and margin outlook for FQ2’25 is also positive and with the H200 AI GPU set to provide further fuel in the Data Center business in the second-quarter, I believe Nvidia makes a much better value proposition!","news_type":1},"isVote":1,"tweetType":1,"viewCount":508,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":243522235539552,"gmtCreate":1700490692171,"gmtModify":1700490822333,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"SeekingAlpha, don't put yourself down&nbsp;writing this article!😂What growth Ebay has? Mono, period!&nbsp;","listText":"SeekingAlpha, don't put yourself down&nbsp;writing this article!😂What growth Ebay has? Mono, period!&nbsp;","text":"SeekingAlpha, don't put yourself down writing this article!😂What growth Ebay has? Mono, period!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/243522235539552","repostId":"2384589323","repostType":2,"repost":{"id":"2384589323","kind":"highlight","pubTimestamp":1700488117,"share":"https://ttm.financial/m/news/2384589323?lang=&edition=fundamental","pubTime":"2023-11-20 21:48","market":"us","language":"en","title":"Alibaba: Don't Fall For This Trap","url":"https://stock-news.laohu8.com/highlight/detail?id=2384589323","media":"seekingalpha","summary":"Let's figure it out. Alibaba's Q2 Results Weren't That Bad Alibaba Group experienced a 9% stock drop after reporting its second-quarter results, which included revenue of RMB224.79 billion , growing 8.5% year-over-year but falling short of analysts' expectations. But non-GAAP earnings per American depositary share  increased by 21% to RMB15.63 , surpassing estimates. Seeking Alpha News Segment-wise, revenue for Taobao and Tmall Group reached RMB97.7 billion, up 4%, with adjusted EBITDA increasing by 3% to RMB47.1 billion. Alibaba International Digital Commerce Group reported revenue of RMB24.5 billion, a 53% increase, while Cainiao's total revenue grew by 25% to RMB22.8 billion. Local Services Group revenue rose by 16% to RMB15.6 billion. Cloud Intelligence Group generated revenue of RMB27.6 billion, a 2% increase, while its adjusted EBITDA increased by 44% to RMB1.4 billion. The Digital Media Entertainment group reported revenue of RMB5.8 billion, marking an 11% increase, with an impr","content":"<html><head></head><body><ul style=\"\"><li><p>Alibaba&#39;s Q2 results fell short of expectations, but non-GAAP earnings per ADS surpassed estimates.</p></li><li><p>The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the individual companies to grow faster under conditions of relative independence, has not materialized.</p></li><li><p>Alibaba&#39;s low valuation is mainly due to a lack of growth, making it less attractive compared to other companies in the same industry.</p></li><li><p>I still don&#39;t see the point of buying the Chinese giant for 7.57x FY2029 P/E to get a 6-year EPS CAGR of 4.1% when I can buy <a href=\"https://laohu8.com/S/EBAY\">eBay</a> for 6.64x and get a CAGR of 6.6%.</p></li><li><p>I do not recommend investors buy BABA shares, no matter how cheap and promising they may seem at first glance.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4f805543ab3786cb8cb1d7d9034e0368\" tg-width=\"750\" tg-height=\"500\"/></p><p>Robert Way</p><h2 id=\"id_3023641657\">Introduction</h2><p>I&#39;ve been covering <strong>Alibaba Group Holding Limited</strong> (NYSE:BABA) here on Seeking Alpha since September 2021. I started with a &#39;Sell&#39; rating when Alibaba was trading at $150 per share and upgraded the stock to &#39;Hold&#39; in December 2021 when the shares started trading at $113. Since then, I&#39;ve not changed my rating, although BABA kept falling lower.</p><p>The last time I published my &#39;Hold&#39; article was at the end of August 2023: At that time, I noted that BABA&#39;s attractiveness for Western investors wasn&#39;t really changing from a fundamental perspective, despite the obvious undervaluation. As time has shown, that thesis was correct, as the already cheap Chinese tech giant became even cheaper.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7b2f2064f6a0cfcde1d0e9ba1c35b075\" tg-width=\"640\" tg-height=\"323\"/></p><p>Seeking Alpha, author&#39;s notes</p><p>On November 16, 2023, Alibaba published its reports for Q2 FY2024, which had a strong negative impact not only on its own shares but also on the entire tech sector in China. What happened and is it really that bad? Maybe BABA has now become a &#39;bargain&#39;? Let&#39;s figure it out.</p><h2 id=\"id_2364546700\">Alibaba&#39;s Q2 Results Weren&#39;t That Bad</h2><p>Alibaba Group experienced a 9% stock drop after reporting its second-quarter results, which included revenue of RMB224.79 billion ($30.81 billion), growing 8.5% year-over-year but falling short of analysts&#39; expectations. But non-GAAP earnings per American depositary share (ADS) increased by 21% to RMB15.63 ($2.14), surpassing estimates.</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/abe690de6ca639b19d15e44fb7751e43\" tg-width=\"640\" tg-height=\"375\"/></p><p>Seeking Alpha News</p><p>Segment-wise, revenue for Taobao and Tmall Group reached RMB97.7 billion, up 4%, with adjusted EBITDA increasing by 3% to RMB47.1 billion. Alibaba International Digital Commerce Group reported revenue of RMB24.5 billion, a 53% increase, while Cainiao&#39;s total revenue grew by 25% to RMB22.8 billion. Local Services Group revenue rose by 16% to RMB15.6 billion.</p><p>Cloud Intelligence Group generated revenue of RMB27.6 billion, a 2% increase, while its adjusted EBITDA increased by 44% to RMB1.4 billion. The Digital Media Entertainment group reported revenue of RMB5.8 billion, marking an 11% increase, with an improved adjusted EBITDA loss of RMB201 million compared to RMB362 million. The All Other segment, including DingTalk and Intelligent Information Platform, reported stable revenue at RMB48.1 billion and an adjusted EBITDA loss of RMB1.4 billion compared to RMB2.9 billion in the same quarter last year, primarily due to improved operating results from various businesses within the segment.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f079d95db1bcd6936771edae5f66ad82\" tg-width=\"640\" tg-height=\"343\"/></p><p>BABA&#39;s IR materials [November 2023]</p><p>Cost trends, excluding share-based compensation (SBC), revealed a decrease in the cost of revenue ratio to 62%, stability in product development expenses (5%), sales and marketing expenses (11%), and a 1% decrease in general and administrative expenses (3%).</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/801092f739134e38068d82e084028aa1\" tg-width=\"640\" tg-height=\"330\"/></p><p>BABA&#39;s IR materials [November 2023]</p><p>The company repurchased ~$3 billion worth of shares from July 1 to November 15, accounting for 1.3% of total shares outstanding [~18.6 million ADSs]. Free cash flow for the quarter was RMB45.2 billion or $6.2 billion, reflecting a massive 27% increase YoY.</p><p>During the latest earnings call, the management emphasized 3 priorities for cash deployment in the upcoming quarter: innovation for growth, reducing total shares outstanding through accretive stock repurchases, and rewarding long-term investors via dividends. In addition to the existing $40 billion share repurchase program, Alibaba&#39;s board approved an annual cash dividend of US$0.125 per ordinary share or US$1.00 per ADS for fiscal year 2023, totaling ~$2.5 billion, with a payment date expected around January 11, 2024, for ordinary shareholders and January 18, 2024, for ADS holders.</p><p>As of September 30, 2023, Alibaba maintained a strong net cash position of RMB457.8 billion or $62.7 billion. At the same time, the company&#39;s current ratio is 1.94 and the debt-to-equity ratio is only 0.16, which is very low. So BABA&#39;s financial strength looks solid with such a low level of debt and good liquidity.</p><h2 id=\"id_1338785005\">But A New Catalyst Is Already A Thing Of The Past</h2><p>I remember a few months ago when the Alibaba bulls were trying to assess the positive impact of the proposed split of the company into different companies. At the time, many thought that BABA would unlock tremendous value for its shareholders if it split into 6 separate companies that would not interfere with each other&#39;s potential growth rate.</p><p>As time has shown, this catalyst was not to prove true: During the earnings call, management announced that Alibaba had decided not to pursue a full spin-off of the Cloud Intelligence Group due to uncertainties caused by US export restrictions on advanced computer chips. That was a surprise to the market - I think this is why the stock fell so sharply after the announcement.</p><p>The emphasis now is on investing in the core businesses, including Taobao and Tmall Group, for sustainable growth. Alibaba wants to increase its ROIC to double digits in the next few years, focusing on core businesses and ensuring non-core businesses become profitable, potentially monetizing certain investments to increase cash flow.</p><p>In my subjective opinion, BABA’s problem for a long time was precisely the lack of appropriate growth in the cloud segment. While Google (GOOG), Microsoft (MSFT), and Amazon (AMZN), to which BABA is often compared, continue to grow revenue in their cloud business segments at solid double-digit rates, Alibaba&#39;s Cloud is stagnating and losing more and more global market share. AI technologies are an excellent growth driver for this niche, but for some reason, BABA&#39;s cloud still refuses to grow even though we keep hearing about AI constantly.</p><p>From the last earnings call, I realized that <strong>Alibaba&#39;s future growth will be closely linked to &#39;Value&#39; segments whose growth will heavily depend on the macroeconomic conditions in China</strong> after the post-COVID low-base effect disappears, which has not yet fully materialized.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b5ae8faa3881acff6c7b9e92ede4f2ed\" tg-width=\"640\" tg-height=\"455\"/></p><p>YCharts, author&#39;s notes</p><p>Goldman Sach notes in its October report [proprietary source], that slower growth, coupled with policy uncertainty and geopolitical risks, is lowering China&#39;s equity market fair value. However, the report suggests that while these factors are already priced in, investment opportunities lie more in alpha themes than broad market beta.</p><p>China&#39;s GDP will most likely stop growing as before. I assume that Alibaba&#39;s already high market penetration in various Chinese markets makes the company&#39;s growth more variable, which could justify its current low valuation.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ddee6c1ca09cb057d9f22c78e80fb06a\" tg-width=\"640\" tg-height=\"511\"/></p><p>Goldman Sachs [October 2023] - proprietary source</p><p>Yes, it is hard to believe that the current valuation of the company may be fair: BABA looks extremely undervalued with a P/E ratio for next year of ~8.8x and an EV/EBITDA of ~6.7x.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cb157da684786f7e6ee0470b55d84105\" tg-width=\"635\" tg-height=\"467\"/></p><p>Data by YCharts</p><p>I think we could easily see price increases of 10-20-30% against this backdrop. But most likely these potential &#39;rips&#39; will be used by hedge funds to exit their positions, as has happened many times before. But even now that there are no &#34;rips&#34; in the Chinese market, hedge funds continue to exit their positions.</p><blockquote><p>US and European fund managers have sold a net $1.6 billion of Chinese shares so far this month, following $3.5 billion of outflows in September, data from EPFR Global and Morgan Stanley show.</p><p>Source: Bloomberg [October 19, 2023]</p></blockquote><p>I suggest we return to the burning issue - Alibaba&#39;s low valuation. Let&#39;s think for a moment about what might explain BABA&#39;s current cheapness. You might think that BABA&#39;s P/E ratio is probably below 10x due to geopolitics and market overreaction. I will answer you that this is true to some extent, but mainly BABA is cheap because there is no growth (almost). If we take the long-term consensus estimates for earnings per share and the implied P/E ratios, we see that BABA is actually valued slightly higher than eBay (EBAY) today:</p><p></p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d7e2b3f55b77b3e323cd6e5ec8f19e32\" tg-width=\"640\" tg-height=\"385\"/></p><p>Author&#39;s calculations, Seeking Alpha data</p><p>By overpaying just 2x to BABA&#39;s long-term P/E ratio of BABA, you can buy <a href=\"https://laohu8.com/S/MELI\">MercadoLibre</a> (MELI), whose EPS is estimated to grow more than 8 times faster over the same period (6 years). <em>Could anyone find &#39;fairness&#39; in the valuation of the two companies?</em></p><h2 id=\"id_4226314352\">The Bottom Line</h2><p>I understand that when comparing BABA with MELI, I&#39;m doing a little wrong by comparing companies with different business cycles. But I still don&#39;t see the point of buying the Chinese giant for 7.57x FY2029 P/E to get a 6-year EPS CAGR of 4.1% when I can buy eBay for 6.64x and get a CAGR of 6.6% (these 2 companies are roughly in the same business cycle).</p><p>The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the individual companies to grow faster under conditions of relative independence, has not materialized. Now I expect Alibaba to constrain itself and have relatively modest growth rates for which it makes no sense to overpay and take a big country risk when there are cheaper analogs in the U.S. (and even more so in emerging markets like Brazil).</p><p>Yes, Alibaba&#39;s financial position is very solid as the company continues to recover operationally and continues to buy shares from the market in large quantities. Therefore, I wouldn&#39;t be surprised if the company&#39;s shares suddenly rebound strongly. However, this potential recovery in stock price will likely provide an opportunity for the remaining investors to get out.</p><p>Based on the above, I do not recommend investors buy BABA shares, no matter how cheap and promising they may seem at first glance.</p><p><em>Thanks for reading!</em></p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Alibaba: Don't Fall For This Trap</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAlibaba: Don't Fall For This Trap\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-11-20 21:48 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4653008-alibaba-dont-fall-for-this-trap><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Alibaba's Q2 results fell short of expectations, but non-GAAP earnings per ADS surpassed estimates.The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4653008-alibaba-dont-fall-for-this-trap\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4653008-alibaba-dont-fall-for-this-trap","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2384589323","content_text":"Alibaba's Q2 results fell short of expectations, but non-GAAP earnings per ADS surpassed estimates.The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the individual companies to grow faster under conditions of relative independence, has not materialized.Alibaba's low valuation is mainly due to a lack of growth, making it less attractive compared to other companies in the same industry.I still don't see the point of buying the Chinese giant for 7.57x FY2029 P/E to get a 6-year EPS CAGR of 4.1% when I can buy eBay for 6.64x and get a CAGR of 6.6%.I do not recommend investors buy BABA shares, no matter how cheap and promising they may seem at first glance.Robert WayIntroductionI've been covering Alibaba Group Holding Limited (NYSE:BABA) here on Seeking Alpha since September 2021. I started with a 'Sell' rating when Alibaba was trading at $150 per share and upgraded the stock to 'Hold' in December 2021 when the shares started trading at $113. Since then, I've not changed my rating, although BABA kept falling lower.The last time I published my 'Hold' article was at the end of August 2023: At that time, I noted that BABA's attractiveness for Western investors wasn't really changing from a fundamental perspective, despite the obvious undervaluation. As time has shown, that thesis was correct, as the already cheap Chinese tech giant became even cheaper.Seeking Alpha, author's notesOn November 16, 2023, Alibaba published its reports for Q2 FY2024, which had a strong negative impact not only on its own shares but also on the entire tech sector in China. What happened and is it really that bad? Maybe BABA has now become a 'bargain'? Let's figure it out.Alibaba's Q2 Results Weren't That BadAlibaba Group experienced a 9% stock drop after reporting its second-quarter results, which included revenue of RMB224.79 billion ($30.81 billion), growing 8.5% year-over-year but falling short of analysts' expectations. But non-GAAP earnings per American depositary share (ADS) increased by 21% to RMB15.63 ($2.14), surpassing estimates.Seeking Alpha NewsSegment-wise, revenue for Taobao and Tmall Group reached RMB97.7 billion, up 4%, with adjusted EBITDA increasing by 3% to RMB47.1 billion. Alibaba International Digital Commerce Group reported revenue of RMB24.5 billion, a 53% increase, while Cainiao's total revenue grew by 25% to RMB22.8 billion. Local Services Group revenue rose by 16% to RMB15.6 billion.Cloud Intelligence Group generated revenue of RMB27.6 billion, a 2% increase, while its adjusted EBITDA increased by 44% to RMB1.4 billion. The Digital Media Entertainment group reported revenue of RMB5.8 billion, marking an 11% increase, with an improved adjusted EBITDA loss of RMB201 million compared to RMB362 million. The All Other segment, including DingTalk and Intelligent Information Platform, reported stable revenue at RMB48.1 billion and an adjusted EBITDA loss of RMB1.4 billion compared to RMB2.9 billion in the same quarter last year, primarily due to improved operating results from various businesses within the segment.BABA's IR materials [November 2023]Cost trends, excluding share-based compensation (SBC), revealed a decrease in the cost of revenue ratio to 62%, stability in product development expenses (5%), sales and marketing expenses (11%), and a 1% decrease in general and administrative expenses (3%).BABA's IR materials [November 2023]The company repurchased ~$3 billion worth of shares from July 1 to November 15, accounting for 1.3% of total shares outstanding [~18.6 million ADSs]. Free cash flow for the quarter was RMB45.2 billion or $6.2 billion, reflecting a massive 27% increase YoY.During the latest earnings call, the management emphasized 3 priorities for cash deployment in the upcoming quarter: innovation for growth, reducing total shares outstanding through accretive stock repurchases, and rewarding long-term investors via dividends. In addition to the existing $40 billion share repurchase program, Alibaba's board approved an annual cash dividend of US$0.125 per ordinary share or US$1.00 per ADS for fiscal year 2023, totaling ~$2.5 billion, with a payment date expected around January 11, 2024, for ordinary shareholders and January 18, 2024, for ADS holders.As of September 30, 2023, Alibaba maintained a strong net cash position of RMB457.8 billion or $62.7 billion. At the same time, the company's current ratio is 1.94 and the debt-to-equity ratio is only 0.16, which is very low. So BABA's financial strength looks solid with such a low level of debt and good liquidity.But A New Catalyst Is Already A Thing Of The PastI remember a few months ago when the Alibaba bulls were trying to assess the positive impact of the proposed split of the company into different companies. At the time, many thought that BABA would unlock tremendous value for its shareholders if it split into 6 separate companies that would not interfere with each other's potential growth rate.As time has shown, this catalyst was not to prove true: During the earnings call, management announced that Alibaba had decided not to pursue a full spin-off of the Cloud Intelligence Group due to uncertainties caused by US export restrictions on advanced computer chips. That was a surprise to the market - I think this is why the stock fell so sharply after the announcement.The emphasis now is on investing in the core businesses, including Taobao and Tmall Group, for sustainable growth. Alibaba wants to increase its ROIC to double digits in the next few years, focusing on core businesses and ensuring non-core businesses become profitable, potentially monetizing certain investments to increase cash flow.In my subjective opinion, BABA’s problem for a long time was precisely the lack of appropriate growth in the cloud segment. While Google (GOOG), Microsoft (MSFT), and Amazon (AMZN), to which BABA is often compared, continue to grow revenue in their cloud business segments at solid double-digit rates, Alibaba's Cloud is stagnating and losing more and more global market share. AI technologies are an excellent growth driver for this niche, but for some reason, BABA's cloud still refuses to grow even though we keep hearing about AI constantly.From the last earnings call, I realized that Alibaba's future growth will be closely linked to 'Value' segments whose growth will heavily depend on the macroeconomic conditions in China after the post-COVID low-base effect disappears, which has not yet fully materialized.YCharts, author's notesGoldman Sach notes in its October report [proprietary source], that slower growth, coupled with policy uncertainty and geopolitical risks, is lowering China's equity market fair value. However, the report suggests that while these factors are already priced in, investment opportunities lie more in alpha themes than broad market beta.China's GDP will most likely stop growing as before. I assume that Alibaba's already high market penetration in various Chinese markets makes the company's growth more variable, which could justify its current low valuation.Goldman Sachs [October 2023] - proprietary sourceYes, it is hard to believe that the current valuation of the company may be fair: BABA looks extremely undervalued with a P/E ratio for next year of ~8.8x and an EV/EBITDA of ~6.7x.Data by YChartsI think we could easily see price increases of 10-20-30% against this backdrop. But most likely these potential 'rips' will be used by hedge funds to exit their positions, as has happened many times before. But even now that there are no \"rips\" in the Chinese market, hedge funds continue to exit their positions.US and European fund managers have sold a net $1.6 billion of Chinese shares so far this month, following $3.5 billion of outflows in September, data from EPFR Global and Morgan Stanley show.Source: Bloomberg [October 19, 2023]I suggest we return to the burning issue - Alibaba's low valuation. Let's think for a moment about what might explain BABA's current cheapness. You might think that BABA's P/E ratio is probably below 10x due to geopolitics and market overreaction. I will answer you that this is true to some extent, but mainly BABA is cheap because there is no growth (almost). If we take the long-term consensus estimates for earnings per share and the implied P/E ratios, we see that BABA is actually valued slightly higher than eBay (EBAY) today:Author's calculations, Seeking Alpha dataBy overpaying just 2x to BABA's long-term P/E ratio of BABA, you can buy MercadoLibre (MELI), whose EPS is estimated to grow more than 8 times faster over the same period (6 years). Could anyone find 'fairness' in the valuation of the two companies?The Bottom LineI understand that when comparing BABA with MELI, I'm doing a little wrong by comparing companies with different business cycles. But I still don't see the point of buying the Chinese giant for 7.57x FY2029 P/E to get a 6-year EPS CAGR of 4.1% when I can buy eBay for 6.64x and get a CAGR of 6.6% (these 2 companies are roughly in the same business cycle).The bullish catalyst, which was supposed to facilitate BABA’s business processes and enable the individual companies to grow faster under conditions of relative independence, has not materialized. Now I expect Alibaba to constrain itself and have relatively modest growth rates for which it makes no sense to overpay and take a big country risk when there are cheaper analogs in the U.S. (and even more so in emerging markets like Brazil).Yes, Alibaba's financial position is very solid as the company continues to recover operationally and continues to buy shares from the market in large quantities. Therefore, I wouldn't be surprised if the company's shares suddenly rebound strongly. However, this potential recovery in stock price will likely provide an opportunity for the remaining investors to get out.Based on the above, I do not recommend investors buy BABA shares, no matter how cheap and promising they may seem at first glance.Thanks for reading!","news_type":1},"isVote":1,"tweetType":1,"viewCount":529,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":350779786858656,"gmtCreate":1726644654764,"gmtModify":1726646218024,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"Who cares? Is he bringing his money with him&nbsp;to heaven ?😄","listText":"Who cares? Is he bringing his money with him&nbsp;to heaven ?😄","text":"Who cares? Is he bringing his money with him to heaven ?😄","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/350779786858656","repostId":"1191591104","repostType":2,"repost":{"id":"1191591104","kind":"news","pubTimestamp":1726641553,"share":"https://ttm.financial/m/news/1191591104?lang=&edition=fundamental","pubTime":"2024-09-18 14:39","market":"us","language":"en","title":"Billionaire Hedge Fund Manager Says He Would Pull His Money from the Market If Harris Wins Election","url":"https://stock-news.laohu8.com/highlight/detail?id=1191591104","media":"Fox Business","summary":"Hedge fund billionaire and major Trump fundraiser John Paulson said Tuesday he will pull his money out of the market if Vice President Harris wins the presidential election this fall, saying the Democ","content":"<html><head></head><body><p>Hedge fund billionaire and major Trump fundraiser John Paulson said Tuesday he will pull his money out of the market if Vice President Harris wins the presidential election this fall, saying the Democrat nominee&#39;s economic policies would spook investors.</p><p>The Paulson &amp; Co. founder, known for his lucrative bet against the subprime mortgage in 2007, appeared on FOX Business&#39; &#34;The Claman Countdown,&#34; where host Liz Claman asked him what he sees as the next big bet similar to that.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/26217d693544662a8757fbe76f185dba\" alt=\"Hedge fund manager John Paulson (Spencer Platt/Getty Images)\" title=\"Hedge fund manager John Paulson (Spencer Platt/Getty Images)\" tg-width=\"931\" tg-height=\"523\"/><span>Hedge fund manager John Paulson (Spencer Platt/Getty Images)</span></p><p>&#34;Well, I would say it very much depends on who&#39;s in the White House and who controls Congress,&#34; Paulson replied. &#34;I&#39;d be very concerned if Harris is elected and pursues the tax plans and other economic plans that she articulated.&#34;</p><p>Paulson said during the interview that former President Trump and Harris&#39; plans for the economy are very different, noting that Trump wants to extend the 2017 tax cuts implemented during his term in office while Harris wants to let them expire.</p><p>He also noted that Harris has proposed raising the corporate tax rate from 21% to 28% and wants to raise the capital gains rate from 20% to 28%.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a723aa42a1f9edac3d9c30a6f56c2a60\" alt=\"Republican presidential nominee former President Trump arrives for a campaign event at the Central Wisconsin Airport on Sept. 7, 2024, in Mosinee, Wisconsin. (Scott Olson/Getty Images)\" title=\"Republican presidential nominee former President Trump arrives for a campaign event at the Central Wisconsin Airport on Sept. 7, 2024, in Mosinee, Wisconsin. (Scott Olson/Getty Images)\" tg-width=\"931\" tg-height=\"523\"/><span>Republican presidential nominee former President Trump arrives for a campaign event at the Central Wisconsin Airport on Sept. 7, 2024, in Mosinee, Wisconsin. (Scott Olson/Getty Images)</span></p><p>The billionaire pointed to Harris&#39; proposed 25% tax on unrealized gains for individuals making $100 million or more, and he predicted that, if implemented, it &#34;would cause mass selling of almost everything – stocks, bonds, homes, art – I think it would result in a crash in the markets and an immediate, pretty quick recession.&#34;</p><p>Claman went on to note that some people who were concerned about the policies of previous presidents, namely Barack Obama, Trump and Joe Biden, pulled their money out of the markets when they were elected, and the move turned out to be a big mistake as the markets continued to perform well.</p><p>But Paulson has said that market timing and investor timing will really matter depending on who is president, and Claman asked him if he is ready to take that chance.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/218fff4868171aaa606369d587ac33b6\" alt=\"Democrat presidential nominee Vice President Harris speaks during a campaign event on Sept. 2, 2024, in Pittsburgh. (Michael M. Santiago/Getty Images)\" title=\"Democrat presidential nominee Vice President Harris speaks during a campaign event on Sept. 2, 2024, in Pittsburgh. (Michael M. Santiago/Getty Images)\" tg-width=\"931\" tg-height=\"523\"/><span>Democrat presidential nominee Vice President Harris speaks during a campaign event on Sept. 2, 2024, in Pittsburgh. (Michael M. Santiago/Getty Images)</span></p><p>&#34;It depends on the policy,&#34; Paulson said. &#34;I think if Harris was elected, I would pull my money from the market. I&#39;d go into cash, and I&#39;d go into gold because I think the uncertainty regarding the plans they outlined would create a lot of uncertainty in the markets and likely lower markets.&#34;</p><p>When pressed by Claman, Paulson reiterated that he would sell the liquid equities that he owns if Harris wins the White House.</p></body></html>","source":"lsy1602566126337","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Billionaire Hedge Fund Manager Says He Would Pull His Money from the Market If Harris Wins Election</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBillionaire Hedge Fund Manager Says He Would Pull His Money from the Market If Harris Wins Election\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-18 14:39 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.foxbusiness.com/politics/billionaire-hedge-fund-manager-says-he-would-pull-his-money-from-market-harris-wins-election><strong>Fox Business</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Hedge fund billionaire and major Trump fundraiser John Paulson said Tuesday he will pull his money out of the market if Vice President Harris wins the presidential election this fall, saying the ...</p>\n\n<a href=\"https://www.foxbusiness.com/politics/billionaire-hedge-fund-manager-says-he-would-pull-his-money-from-market-harris-wins-election\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.foxbusiness.com/politics/billionaire-hedge-fund-manager-says-he-would-pull-his-money-from-market-harris-wins-election","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1191591104","content_text":"Hedge fund billionaire and major Trump fundraiser John Paulson said Tuesday he will pull his money out of the market if Vice President Harris wins the presidential election this fall, saying the Democrat nominee's economic policies would spook investors.The Paulson & Co. founder, known for his lucrative bet against the subprime mortgage in 2007, appeared on FOX Business' \"The Claman Countdown,\" where host Liz Claman asked him what he sees as the next big bet similar to that.Hedge fund manager John Paulson (Spencer Platt/Getty Images)\"Well, I would say it very much depends on who's in the White House and who controls Congress,\" Paulson replied. \"I'd be very concerned if Harris is elected and pursues the tax plans and other economic plans that she articulated.\"Paulson said during the interview that former President Trump and Harris' plans for the economy are very different, noting that Trump wants to extend the 2017 tax cuts implemented during his term in office while Harris wants to let them expire.He also noted that Harris has proposed raising the corporate tax rate from 21% to 28% and wants to raise the capital gains rate from 20% to 28%.Republican presidential nominee former President Trump arrives for a campaign event at the Central Wisconsin Airport on Sept. 7, 2024, in Mosinee, Wisconsin. (Scott Olson/Getty Images)The billionaire pointed to Harris' proposed 25% tax on unrealized gains for individuals making $100 million or more, and he predicted that, if implemented, it \"would cause mass selling of almost everything – stocks, bonds, homes, art – I think it would result in a crash in the markets and an immediate, pretty quick recession.\"Claman went on to note that some people who were concerned about the policies of previous presidents, namely Barack Obama, Trump and Joe Biden, pulled their money out of the markets when they were elected, and the move turned out to be a big mistake as the markets continued to perform well.But Paulson has said that market timing and investor timing will really matter depending on who is president, and Claman asked him if he is ready to take that chance.Democrat presidential nominee Vice President Harris speaks during a campaign event on Sept. 2, 2024, in Pittsburgh. (Michael M. Santiago/Getty Images)\"It depends on the policy,\" Paulson said. \"I think if Harris was elected, I would pull my money from the market. I'd go into cash, and I'd go into gold because I think the uncertainty regarding the plans they outlined would create a lot of uncertainty in the markets and likely lower markets.\"When pressed by Claman, Paulson reiterated that he would sell the liquid equities that he owns if Harris wins the White House.","news_type":1},"isVote":1,"tweetType":1,"viewCount":437,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":392317344620560,"gmtCreate":1736823996693,"gmtModify":1736824602133,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"This is a pyramid scheme betting on Bitcoin's bull. Bitcoin is a dinosaur of crypto. When all other cryptos have utilities that generate revenue, Bitcoin is crash to zero.","listText":"This is a pyramid scheme betting on Bitcoin's bull. Bitcoin is a dinosaur of crypto. When all other cryptos have utilities that generate revenue, Bitcoin is crash to zero.","text":"This is a pyramid scheme betting on Bitcoin's bull. Bitcoin is a dinosaur of crypto. When all other cryptos have utilities that generate revenue, Bitcoin is crash to zero.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/392317344620560","repostId":"1123227021","repostType":2,"repost":{"id":"1123227021","kind":"news","pubTimestamp":1736819878,"share":"https://ttm.financial/m/news/1123227021?lang=&edition=fundamental","pubTime":"2025-01-14 09:57","market":"us","language":"en","title":"MicroStrategy: Shares Should Trade At A Premium","url":"https://stock-news.laohu8.com/highlight/detail?id=1123227021","media":"Seeking Alpha","summary":"SummaryMicroStrategy shares have surged due to its unique strategy of leveraging Bitcoin and issuing debt and equity to grow Bitcoin holdings per share.The company's 21/21 plan aims to raise $42 billi","content":"<html><head></head><body><h2 id=\"id_402728908\">Summary</h2><ul style=\"\"><li><p>MicroStrategy shares have surged due to its unique strategy of leveraging Bitcoin and issuing debt and equity to grow Bitcoin holdings per share.</p></li><li><p>The company&#39;s 21/21 plan aims to raise $42 billion to buy more Bitcoin, enhancing shareholder value through increased Bitcoin yield.</p></li><li><p>The net asset value per share is estimated at $111.13 as of 12/31, but shares trade at a premium due to expected high Bitcoin yield growth.</p></li><li><p>Despite volatility, I believe MicroStrategy is a buy, as its Bitcoin yield strategy promises substantial long-term returns if Bitcoin prices continue to rise.</p></li></ul><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/7a5531c6cc0d95be1909c48d83381f2d\" alt=\"Bitcoin Concept With Binary Codes\" title=\"Bitcoin Concept With Binary Codes\" tg-width=\"750\" tg-height=\"450\"/><span>Bitcoin Concept With Binary Codes</span></p><p></p><p><strong>Eoneren</strong></p><p></p><p><em>Co-Authored by Noah Cox and Brock Heilig</em></p><h2 id=\"id_103363165\">Investment Thesis</h2><p>MicroStrategy (NASDAQ:MSTR) shares were one of the top-performing equities here in the US in 2024 with shares up 479.68% over the last 12 months.</p><p>At the end of 2024, MicroStrategy was added to the NASDAQ 100 index, representing how the company as both a Bitcoin treasury and software technology firm has reached a new paradigm.</p><p>I think the biggest question in front of investors for MicroStrategy is why shares should deserve to trade at a premium. On the surface, the company looks like a closed-end Bitcoin fund that issues a combination of debt and equity securities in order to accumulate Bitcoin. I think this grossly understates what Chairman Michael Saylor’s plans are.</p><p>MicroStrategy plans to be far more than just a closed-end Bitcoin fund. As Bitcoin prices move higher, MicroStrategy is able to monetize their access to debt markets in order to split the risk of Bitcoin into a series of ‘tranches’ based on which security investors buy.</p><p>In essence, MicroStrategy is looking to give convertible bond investors a risk-adjusted return to invest in Bitcoin with.</p><p>For common stockholders, MicroStrategy is aiming to act like a leveraged Bitcoin fund that is trying to grow the amount of Bitcoin per share by a rate of 6-10% per year for the next 3 years.</p><p>As MicroStrategy shares move higher (powered by Bitcoin’s rise), this enables management at MicroStrategy to issue new stock in the company at progressively higher prices. The cash proceeds from these stock offerings simultaneously raise the average net asset value per share, providing more benefit to existing shareholders. It’s a weird form of dilution that is actually net beneficial.</p><p>As shares become more valuable because they contain more Bitcoin, investors are buying into these shares at a premium above net asset value because they believe that Saylor will be able to increase the amount of Bitcoin through debt offerings and equity offerings.</p><p>With this, I am a buy on MicroStrategy. While shares promise to be volatile, I think as Saylor rolls out his strategy, investors will be rewarded with the amount of Bitcoin he can accumulate per share. As Bitcoin itself compounds, shares should continue to do well.</p><h3 id=\"id_1467102866\">Background</h3><p>Michael Saylor co-founded MicroStrategy in 1989 alongside co-founders Sanju Bansal and Thomas Spahr. A $250,000 consulting contract from DuPont in 1989 allowed MicroStrategy to kickstart its business.</p><p>By 1992, MicroStrategy signed its first major client, McDonald’s, to a $10 million deal.</p><p>Saylor, who served as the company’s CEO from its inception in 1989 to 2022 (and now as Chairman), is a major advocate of Bitcoin. As of their 8K filed on January 6th, the company owns 447,470 Bitcoin.</p><p>As seen in an earnings presentation from Q3, MicroStrategy’s Bitcoin stockpile has been growing significantly. Keep in mind, this was before their large purchases in Q4 (up to the 447,470 Bitcoin I mentioned before).</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/5c973f12a5f017836468b8056a1ad9c9\" alt=\"Bitcoin Treasury Growth\" title=\"Bitcoin Treasury Growth\" tg-width=\"1280\" tg-height=\"720\"/><span>Bitcoin Treasury Growth</span></p><p style=\"text-align: left;\"><strong>Bitcoin Treasury Growth (MSTR Earnings Deck)</strong></p><p></p><p>So, MicroStrategy has clearly been successful in building up its Bitcoin holdings. But what is this all worth? For this, I think we first need to look at what the net asset value is today via balance sheet analysis.</p><h3 id=\"id_1253596215\">Balance Sheet Analysis</h3><p>For us to truly understand what MicroStrategy is worth, we need to analyze their balance sheet and assets.</p><p>Since MicroStrategy has reported via an 8K their most current Bitcoin holdings, we will use these figures. In the 8K filing, MicroStrategy noted they own 447,470 Bitcoin. Using the valuation provided in the 8K, the Bitcoin treasury company pegs their Bitcoin valuation of $41.789 billion.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/dd999090b0874f133f21810d68745a26\" alt=\"MSTR Bitcoin Holdings\" title=\"MSTR Bitcoin Holdings\" tg-width=\"1280\" tg-height=\"171\"/><span>MSTR Bitcoin Holdings</span></p><p style=\"text-align: left;\"><strong>MSTR Bitcoin Holdings (MSTR)</strong></p><p></p><p>Throw in the cash the company had at the end of Q3 of $46.3 million, accounts receivable as of Q3 of $115.1 million, and property, plant and equipment (as of Q3) of $82.8 million and we get total assets of roughly $42.03 billion.</p><p>On the liabilities side, the company had current liabilities as of Q3 of $288.1 million, debt liabilities as of December 31st of $10.379 billion (including a small secured loan of $9.8 million), and capital leases of $57.5 million. The company’s total liabilities are roughly $10.72 billion.</p><p>I am doing this math to get a rough estimate of what the net asset value for shares is.</p><p>The rough net asset value of the company as of 12/31 appears to be $31.31 billion.</p><p>On a diluted basis (including convertible notes) the company has 281.735 million implied diluted shares outstanding.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/90e19d2282b25a5cf316afbd159cd6af\" alt=\"MSTR Capital Structure\" title=\"MSTR Capital Structure\" tg-width=\"1280\" tg-height=\"507\"/><span>MSTR Capital Structure</span></p><p style=\"text-align: left;\"><strong>MSTR Capital Structure (MSTR 8K)</strong></p><p></p><p>In essence, this implies an approx. net asset value of $111.13/share as of 12/31.</p><p>So, from here, I think the main question is straightforward: why should we pay roughly 2.95x net asset value for Saylor’s company? I think the answer has to do with how MicroStrategy management is monetizing the debt and equity markets.</p><h3 id=\"id_2169120568\">Issuing Stock Grows Their NAV As Bitcoin Rises</h3><p>Based on our balance sheet analysis using the fair value of Bitcoin, each share of MicroStrategy has a net asset value of $111.13 per share.</p><p>While each share currently has $111.13 in value right now, we have to consider Saylor’s 21/21 monetization plan that he’s looking to get shareholder approval for and then execute on over the next three years.</p><p>Yahoo Finance explained in detail what Saylor’s 21/21 monetization plan entails.</p><blockquote><p>...the &#34;21/21 Plan,&#34; is to raise $42 billion, then use it to buy more Bitcoin. Half of the funds, or $21 billion, would come from at-the-market offerings of new shares in the company. The other $21 billion would come from new fixed-income offerings, primarily in the form of convertible debt.</p></blockquote><p>While the strategy includes convertible debt, I want to focus for a second on the common stock offerings that, I think, are a key part of this equation.</p><p>MicroStrategy wants to increase its common share count (class A) from 330 million shares to 10.33 billion shares (or a 10 billion share increase) through shareholder approval and then common stock offerings.</p><p>What this means is that as MicroStrategy proceeds to issue more class A shares, the cash proceeds from each share sale will increase the average net asset value of all shares.</p><p>Because, if shares are offered (and purchased) by the public at $300/each, the company receives roughly $300/share in cash that is then available to be used to purchase Bitcoin.</p><p>Previously, the company has been successful in issuing shares well above their net asset value. In November, MicroStrategy completed an at-the-market offering of 7.854 million shares of common stock. These shares were sold for well above net asset value at the time based on the amount of Bitcoin that was on their balance sheet and also the going price of shares at the time of the sale.</p><p>Given this, we know the market has some appetite to buy shares above net asset value. The reason (I believe) is because as each share is issued, current shareholders know they will see their net asset value grow (hence the ‘Bitcoin Yield’ metric).</p><p>While this new offering will cause a lot of dilution of common shares, I think it&#39;s safe to assume that this new offering will continue to help enhance Bitcoin yield. I expect Bitcoin per share to continue to grow. If we look at the company’s Q3 earnings call, their goal was 6-10% per year in Bitcoin Yield.</p><p>However, since the election with the run-up in the price of Bitcoin, their Bitcoin yield in Q4 alone was a strong 48.0% according to their 8K.</p><p>This yield is key. The company’s projected Bitcoin yield helps us determine what net asset value premium the company should be trading at.</p><h3 id=\"id_3037863165\">Valuation</h3><p>Currently, shares trade at roughly 2.95 times their net asset value. In order for us to figure out what tangible book value ratio the shares should trade at, we should think about the expected CAGR of Bitcoin over the next 10 years.</p><p>Over the last 14 years, Bitcoin has had a CAGR of 142%. Saylor, in his Q3 earnings call, believes Bitcoin is now compounding at roughly 50% per year.</p><blockquote><p>We are built on an asset, bitcoin, which is growing 50% a year and we are growing with that asset.</p></blockquote><p>So basically, if we take the company’s projected Bitcoin yield growth per year, and multiply it by the growth in the price of Bitcoin per year, we should arrive at the growth rate of the net asset value of the company per year.</p><p>Saylor mentioned earlier in his call he was targeting 6-10% per year in Bitcoin yield. Over the course of 10 years, growing an asset at 50% per year vs. growing an asset at 60% per year results in the 60% CAGR asset reaching 190.67% of the value of the 50% CAGR asset.</p><p>In essence, the market is applying this 2.95x multiple on net asset value because it expects Saylor and the management team at MicroStrategy to grow their Bitcoin per share at a rate that gives shareholders a return 2.95x greater than Bitcoin over the next 10 years. The way you do this is to give each shareholder 2.95x more Bitcoin per share over the next 10 years.</p><p>Using this math, in order to get this level of growth, investors are implying a CAGR Bitcoin yield of roughly 11.42%. This is only slightly higher than Saylor’s conservative 6-10% Bitcoin yield growth estimates.</p><p>Again, keep in mind that the company’s Bitcoin yield in Q4 alone was 48%.</p><p>In essence, this is why you pay a premium for MicroStrategy shares over buying Bitcoin directly. You are betting that Saylor can grow your Bitcoin per share at a rate greater than 11.42% annually.</p><p>I personally think he can as well. I think his 6-10% target is conservative and the company (especially with the 21/21 plan) can grow its Bitcoin per shareholder at 15% per year for the next 10 years. As I mentioned above, share offerings accelerate Bitcoin yield. That is what we saw in Q4. That is what I think we will see again.</p><p>If we saw the company generate a Bitcoin yield of 15% per year for the next 10 years, each shareholder would have 4.05x more Bitcoin per share than they do right now.</p><p>In essence, net asset value would grow by 4.05x over the next 10 years. Compared to the 2.95x net asset value premium on shares, this means shares have roughly 37% upside from here (if they were to converge on this net asset value premium that represents what I think the company can generate in Bitcoin yield).</p><h3 id=\"id_185094782\">Risks</h3><p>I think the biggest risk for MicroStrategy is that their 21/21 plan does not get approved. MicroStrategy’s goal is to become a Bitcoin treasury company.</p><p>Because their goal is to become a Bitcoin treasury company, they are highly dependent on debt and equity offerings in order to fund the purchase of additional Bitcoin. Currently, the company is bumping up near their class A share count limit.</p><p>In essence, in order for the company to continue to grow their Bitcoin yield, the firm has to raise their Class A and Class B share count limits.</p><p>However, if we look at data from Polymarket, we can see that Polymarket is currently pricing in a greater than 95% chance that shareholders will approve this 21/21 offering. This makes me optimistic. From here, the 21/21 plan (because it is so dilutive) should allow the company to hit this 15% target Bitcoin yield that I mentioned before.</p><h2 id=\"id_39111032\">Bottom Line</h2><p>While MicroStrategy shares have experienced an incredible run-up over the past year, I think it’s key to dive in and understand why investors are paying a net asset value premium for shares. The answer is this Bitcoin yield that I mentioned above.</p><p>Saylor’s plan to buy more Bitcoin via the 21/21 offering plan should allow investors to see their Bitcoin yield compound at a rate faster than the 6-10% Saylor thinks the company can hit over the next 3 years. The faster this Bitcoin yield compounds, the faster shares could move up.</p><p>Really, what Saylor is doing is raising money for an investment that he believes will compound at 50% YoY on a CAGR basis. This is no different than any company raising money for cash flowing assets that compound value at 50% year over year. While some investors may be concerned about Saylor’s leverage through these convertible notes, it&#39;s important to note that just $9.8 million of the $10.379 billion in debt liabilities are secured. This means that MicroStrategy does not face an effective ‘margin call’ if their debt to equity ratio becomes concerning for some investors.</p><p>With this, while shares are incredibly volatile (and risky) I think they are a buy. As long as the price of Bitcoin continues to move higher over time (which I believe it will over most 5, 10 year horizons) MicroStrategy should be able to benefit as well.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>MicroStrategy: Shares Should Trade At A Premium</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMicroStrategy: Shares Should Trade At A Premium\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-14 09:57 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4749087-microstrategy-shares-should-trade-at-a-nav-premium><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryMicroStrategy shares have surged due to its unique strategy of leveraging Bitcoin and issuing debt and equity to grow Bitcoin holdings per share.The company's 21/21 plan aims to raise $42 ...</p>\n\n<a href=\"https://seekingalpha.com/article/4749087-microstrategy-shares-should-trade-at-a-nav-premium\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"MSTR":"MicroStrategy"},"source_url":"https://seekingalpha.com/article/4749087-microstrategy-shares-should-trade-at-a-nav-premium","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1123227021","content_text":"SummaryMicroStrategy shares have surged due to its unique strategy of leveraging Bitcoin and issuing debt and equity to grow Bitcoin holdings per share.The company's 21/21 plan aims to raise $42 billion to buy more Bitcoin, enhancing shareholder value through increased Bitcoin yield.The net asset value per share is estimated at $111.13 as of 12/31, but shares trade at a premium due to expected high Bitcoin yield growth.Despite volatility, I believe MicroStrategy is a buy, as its Bitcoin yield strategy promises substantial long-term returns if Bitcoin prices continue to rise.Bitcoin Concept With Binary CodesEonerenCo-Authored by Noah Cox and Brock HeiligInvestment ThesisMicroStrategy (NASDAQ:MSTR) shares were one of the top-performing equities here in the US in 2024 with shares up 479.68% over the last 12 months.At the end of 2024, MicroStrategy was added to the NASDAQ 100 index, representing how the company as both a Bitcoin treasury and software technology firm has reached a new paradigm.I think the biggest question in front of investors for MicroStrategy is why shares should deserve to trade at a premium. On the surface, the company looks like a closed-end Bitcoin fund that issues a combination of debt and equity securities in order to accumulate Bitcoin. I think this grossly understates what Chairman Michael Saylor’s plans are.MicroStrategy plans to be far more than just a closed-end Bitcoin fund. As Bitcoin prices move higher, MicroStrategy is able to monetize their access to debt markets in order to split the risk of Bitcoin into a series of ‘tranches’ based on which security investors buy.In essence, MicroStrategy is looking to give convertible bond investors a risk-adjusted return to invest in Bitcoin with.For common stockholders, MicroStrategy is aiming to act like a leveraged Bitcoin fund that is trying to grow the amount of Bitcoin per share by a rate of 6-10% per year for the next 3 years.As MicroStrategy shares move higher (powered by Bitcoin’s rise), this enables management at MicroStrategy to issue new stock in the company at progressively higher prices. The cash proceeds from these stock offerings simultaneously raise the average net asset value per share, providing more benefit to existing shareholders. It’s a weird form of dilution that is actually net beneficial.As shares become more valuable because they contain more Bitcoin, investors are buying into these shares at a premium above net asset value because they believe that Saylor will be able to increase the amount of Bitcoin through debt offerings and equity offerings.With this, I am a buy on MicroStrategy. While shares promise to be volatile, I think as Saylor rolls out his strategy, investors will be rewarded with the amount of Bitcoin he can accumulate per share. As Bitcoin itself compounds, shares should continue to do well.BackgroundMichael Saylor co-founded MicroStrategy in 1989 alongside co-founders Sanju Bansal and Thomas Spahr. A $250,000 consulting contract from DuPont in 1989 allowed MicroStrategy to kickstart its business.By 1992, MicroStrategy signed its first major client, McDonald’s, to a $10 million deal.Saylor, who served as the company’s CEO from its inception in 1989 to 2022 (and now as Chairman), is a major advocate of Bitcoin. As of their 8K filed on January 6th, the company owns 447,470 Bitcoin.As seen in an earnings presentation from Q3, MicroStrategy’s Bitcoin stockpile has been growing significantly. Keep in mind, this was before their large purchases in Q4 (up to the 447,470 Bitcoin I mentioned before).Bitcoin Treasury GrowthBitcoin Treasury Growth (MSTR Earnings Deck)So, MicroStrategy has clearly been successful in building up its Bitcoin holdings. But what is this all worth? For this, I think we first need to look at what the net asset value is today via balance sheet analysis.Balance Sheet AnalysisFor us to truly understand what MicroStrategy is worth, we need to analyze their balance sheet and assets.Since MicroStrategy has reported via an 8K their most current Bitcoin holdings, we will use these figures. In the 8K filing, MicroStrategy noted they own 447,470 Bitcoin. Using the valuation provided in the 8K, the Bitcoin treasury company pegs their Bitcoin valuation of $41.789 billion.MSTR Bitcoin HoldingsMSTR Bitcoin Holdings (MSTR)Throw in the cash the company had at the end of Q3 of $46.3 million, accounts receivable as of Q3 of $115.1 million, and property, plant and equipment (as of Q3) of $82.8 million and we get total assets of roughly $42.03 billion.On the liabilities side, the company had current liabilities as of Q3 of $288.1 million, debt liabilities as of December 31st of $10.379 billion (including a small secured loan of $9.8 million), and capital leases of $57.5 million. The company’s total liabilities are roughly $10.72 billion.I am doing this math to get a rough estimate of what the net asset value for shares is.The rough net asset value of the company as of 12/31 appears to be $31.31 billion.On a diluted basis (including convertible notes) the company has 281.735 million implied diluted shares outstanding.MSTR Capital StructureMSTR Capital Structure (MSTR 8K)In essence, this implies an approx. net asset value of $111.13/share as of 12/31.So, from here, I think the main question is straightforward: why should we pay roughly 2.95x net asset value for Saylor’s company? I think the answer has to do with how MicroStrategy management is monetizing the debt and equity markets.Issuing Stock Grows Their NAV As Bitcoin RisesBased on our balance sheet analysis using the fair value of Bitcoin, each share of MicroStrategy has a net asset value of $111.13 per share.While each share currently has $111.13 in value right now, we have to consider Saylor’s 21/21 monetization plan that he’s looking to get shareholder approval for and then execute on over the next three years.Yahoo Finance explained in detail what Saylor’s 21/21 monetization plan entails....the \"21/21 Plan,\" is to raise $42 billion, then use it to buy more Bitcoin. Half of the funds, or $21 billion, would come from at-the-market offerings of new shares in the company. The other $21 billion would come from new fixed-income offerings, primarily in the form of convertible debt.While the strategy includes convertible debt, I want to focus for a second on the common stock offerings that, I think, are a key part of this equation.MicroStrategy wants to increase its common share count (class A) from 330 million shares to 10.33 billion shares (or a 10 billion share increase) through shareholder approval and then common stock offerings.What this means is that as MicroStrategy proceeds to issue more class A shares, the cash proceeds from each share sale will increase the average net asset value of all shares.Because, if shares are offered (and purchased) by the public at $300/each, the company receives roughly $300/share in cash that is then available to be used to purchase Bitcoin.Previously, the company has been successful in issuing shares well above their net asset value. In November, MicroStrategy completed an at-the-market offering of 7.854 million shares of common stock. These shares were sold for well above net asset value at the time based on the amount of Bitcoin that was on their balance sheet and also the going price of shares at the time of the sale.Given this, we know the market has some appetite to buy shares above net asset value. The reason (I believe) is because as each share is issued, current shareholders know they will see their net asset value grow (hence the ‘Bitcoin Yield’ metric).While this new offering will cause a lot of dilution of common shares, I think it's safe to assume that this new offering will continue to help enhance Bitcoin yield. I expect Bitcoin per share to continue to grow. If we look at the company’s Q3 earnings call, their goal was 6-10% per year in Bitcoin Yield.However, since the election with the run-up in the price of Bitcoin, their Bitcoin yield in Q4 alone was a strong 48.0% according to their 8K.This yield is key. The company’s projected Bitcoin yield helps us determine what net asset value premium the company should be trading at.ValuationCurrently, shares trade at roughly 2.95 times their net asset value. In order for us to figure out what tangible book value ratio the shares should trade at, we should think about the expected CAGR of Bitcoin over the next 10 years.Over the last 14 years, Bitcoin has had a CAGR of 142%. Saylor, in his Q3 earnings call, believes Bitcoin is now compounding at roughly 50% per year.We are built on an asset, bitcoin, which is growing 50% a year and we are growing with that asset.So basically, if we take the company’s projected Bitcoin yield growth per year, and multiply it by the growth in the price of Bitcoin per year, we should arrive at the growth rate of the net asset value of the company per year.Saylor mentioned earlier in his call he was targeting 6-10% per year in Bitcoin yield. Over the course of 10 years, growing an asset at 50% per year vs. growing an asset at 60% per year results in the 60% CAGR asset reaching 190.67% of the value of the 50% CAGR asset.In essence, the market is applying this 2.95x multiple on net asset value because it expects Saylor and the management team at MicroStrategy to grow their Bitcoin per share at a rate that gives shareholders a return 2.95x greater than Bitcoin over the next 10 years. The way you do this is to give each shareholder 2.95x more Bitcoin per share over the next 10 years.Using this math, in order to get this level of growth, investors are implying a CAGR Bitcoin yield of roughly 11.42%. This is only slightly higher than Saylor’s conservative 6-10% Bitcoin yield growth estimates.Again, keep in mind that the company’s Bitcoin yield in Q4 alone was 48%.In essence, this is why you pay a premium for MicroStrategy shares over buying Bitcoin directly. You are betting that Saylor can grow your Bitcoin per share at a rate greater than 11.42% annually.I personally think he can as well. I think his 6-10% target is conservative and the company (especially with the 21/21 plan) can grow its Bitcoin per shareholder at 15% per year for the next 10 years. As I mentioned above, share offerings accelerate Bitcoin yield. That is what we saw in Q4. That is what I think we will see again.If we saw the company generate a Bitcoin yield of 15% per year for the next 10 years, each shareholder would have 4.05x more Bitcoin per share than they do right now.In essence, net asset value would grow by 4.05x over the next 10 years. Compared to the 2.95x net asset value premium on shares, this means shares have roughly 37% upside from here (if they were to converge on this net asset value premium that represents what I think the company can generate in Bitcoin yield).RisksI think the biggest risk for MicroStrategy is that their 21/21 plan does not get approved. MicroStrategy’s goal is to become a Bitcoin treasury company.Because their goal is to become a Bitcoin treasury company, they are highly dependent on debt and equity offerings in order to fund the purchase of additional Bitcoin. Currently, the company is bumping up near their class A share count limit.In essence, in order for the company to continue to grow their Bitcoin yield, the firm has to raise their Class A and Class B share count limits.However, if we look at data from Polymarket, we can see that Polymarket is currently pricing in a greater than 95% chance that shareholders will approve this 21/21 offering. This makes me optimistic. From here, the 21/21 plan (because it is so dilutive) should allow the company to hit this 15% target Bitcoin yield that I mentioned before.Bottom LineWhile MicroStrategy shares have experienced an incredible run-up over the past year, I think it’s key to dive in and understand why investors are paying a net asset value premium for shares. The answer is this Bitcoin yield that I mentioned above.Saylor’s plan to buy more Bitcoin via the 21/21 offering plan should allow investors to see their Bitcoin yield compound at a rate faster than the 6-10% Saylor thinks the company can hit over the next 3 years. The faster this Bitcoin yield compounds, the faster shares could move up.Really, what Saylor is doing is raising money for an investment that he believes will compound at 50% YoY on a CAGR basis. This is no different than any company raising money for cash flowing assets that compound value at 50% year over year. While some investors may be concerned about Saylor’s leverage through these convertible notes, it's important to note that just $9.8 million of the $10.379 billion in debt liabilities are secured. This means that MicroStrategy does not face an effective ‘margin call’ if their debt to equity ratio becomes concerning for some investors.With this, while shares are incredibly volatile (and risky) I think they are a buy. As long as the price of Bitcoin continues to move higher over time (which I believe it will over most 5, 10 year horizons) MicroStrategy should be able to benefit as well.","news_type":1},"isVote":1,"tweetType":1,"viewCount":155,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":248726804230256,"gmtCreate":1701762239394,"gmtModify":1701763190384,"author":{"id":"4088928099406900","authorId":"4088928099406900","name":"TeslaBoy","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4088928099406900","authorIdStr":"4088928099406900"},"themes":[],"htmlText":"Apple is dead.&nbsp;","listText":"Apple is dead.&nbsp;","text":"Apple is dead.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/248726804230256","repostId":"1131462273","repostType":2,"repost":{"id":"1131462273","kind":"news","pubTimestamp":1701760332,"share":"https://ttm.financial/m/news/1131462273?lang=&edition=fundamental","pubTime":"2023-12-05 15:12","market":"us","language":"en","title":"Can Apple's iPhone 15 Spark a Tech Rally? Analyst Eyes China Growth","url":"https://stock-news.laohu8.com/highlight/detail?id=1131462273","media":"Benzinga","summary":"ZINGER KEY POINTSWedbush's Ives highlights AI as a '1995 Moment' for tech, with cloud services leading the charge in consumer Internet impact.Apple remains top tech pick for Wedbush's Ives, expecting ","content":"<html><head></head><body><h4 id=\"id_522864863\" style=\"text-align: start;\">ZINGER KEY POINTS</h4><ul style=\"list-style-type: disc;\"><li><p><strong>Wedbush&#39;s Ives highlights AI as a &#39;1995 Moment&#39; for tech, with cloud services leading the charge in consumer Internet impact.</strong></p></li><li><p><strong>Apple remains top tech pick for Wedbush&#39;s Ives, expecting strong iPhone 15 cycle and robust China growth to drive future success.</strong></p></li></ul><p><strong>Wedbush </strong>analyst Daniel Ives&#39; favorite tech names remain <strong>Apple Inc</strong>, <strong>Microsoft Corp</strong>, <strong>Alphabet Inc</strong>, <strong>Google</strong>, <strong>Palo Alto Networks, Inc</strong>, <strong>Palantir Technologies Inc</strong>, <strong>Zscaler, Inc</strong>, <strong>CrowdStrike Holdings, Inc</strong>, and <strong>MongoDB, Inc</strong>. </p><p style=\"text-align: start;\">Ives noted that this is the most significant technology revolution in the last 30 years, with AI a &#34;1995 Moment,&#34; and the fundamental tech growth stories are now starting to see the derivatives of this AI Revolution into 2024. </p><p style=\"text-align: start;\">The impact of the AI cycle on consumer Internet will be massive, and it will start with the cloud service divisions, <strong>Amazon.Com Inc&#39;s</strong> AWS and Alphabet&#39;s GCP. </p><p style=\"text-align: start;\">AWS and GCP acquire AI-capable chips, build AI-capable service offerings, and sell those services into their installed bases. He continues to like Amazon, Alphabet, and <strong>Meta Platforms Inc</strong> as his favorite tech plays. </p><p style=\"text-align: start;\">Apple&#39;s narrative quickly changing. Once the dust cleared from Apple&#39;s quarter and guidance, investors would focus through the noise around weak iPads, Macs, and FX and instead see iPhone units growing again, with Services back to steady double-digit growth. </p><p style=\"text-align: start;\">Finally, the &#34;iPhone China demise narrative&#34; was a great fictional story by the bears, which is far from reality as underlying mainland China&#39;s growth remains strong and a key asset for the core iPhone franchise. </p><p style=\"text-align: start;\">Ives cares about iPhone growth, Services revenue, gross margins, and China iPhone growth, which appears much better than feared, along with positive anecdotal commentary from Cook. </p><p style=\"text-align: start;\">Apple remains Ives&#39; top tech pick with a strong iPhone 15 upgrade cycle playing out into a strong holiday season, which appears to be a good start post-Black Friday weekend.</p><p style=\"text-align: start;\">Heading into 2024, Ives noted that the tech sector will likely accelerate spending around cloud and AI spending that the Street is significantly underestimating. </p><p style=\"text-align: start;\">Ives noted that the new tech bull market has begun, and tech stocks are likely for a strong 2024 with tech stocks we expect to be up 20%+ over the next year, led by Big Tech as the AI spending tidal wave hits the shores of the broader tech sector.</p></body></html>","source":"lsy1606299360108","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Can Apple's iPhone 15 Spark a Tech Rally? Analyst Eyes China Growth</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCan Apple's iPhone 15 Spark a Tech Rally? Analyst Eyes China Growth\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-12-05 15:12 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.benzinga.com/analyst-ratings/analyst-color/23/12/36073810/can-apples-iphone-15-spark-a-tech-rally-analyst-eyes-china-growth><strong>Benzinga</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ZINGER KEY POINTSWedbush's Ives highlights AI as a '1995 Moment' for tech, with cloud services leading the charge in consumer Internet impact.Apple remains top tech pick for Wedbush's Ives, expecting ...</p>\n\n<a href=\"https://www.benzinga.com/analyst-ratings/analyst-color/23/12/36073810/can-apples-iphone-15-spark-a-tech-rally-analyst-eyes-china-growth\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.benzinga.com/analyst-ratings/analyst-color/23/12/36073810/can-apples-iphone-15-spark-a-tech-rally-analyst-eyes-china-growth","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1131462273","content_text":"ZINGER KEY POINTSWedbush's Ives highlights AI as a '1995 Moment' for tech, with cloud services leading the charge in consumer Internet impact.Apple remains top tech pick for Wedbush's Ives, expecting strong iPhone 15 cycle and robust China growth to drive future success.Wedbush analyst Daniel Ives' favorite tech names remain Apple Inc, Microsoft Corp, Alphabet Inc, Google, Palo Alto Networks, Inc, Palantir Technologies Inc, Zscaler, Inc, CrowdStrike Holdings, Inc, and MongoDB, Inc. Ives noted that this is the most significant technology revolution in the last 30 years, with AI a \"1995 Moment,\" and the fundamental tech growth stories are now starting to see the derivatives of this AI Revolution into 2024. The impact of the AI cycle on consumer Internet will be massive, and it will start with the cloud service divisions, Amazon.Com Inc's AWS and Alphabet's GCP. AWS and GCP acquire AI-capable chips, build AI-capable service offerings, and sell those services into their installed bases. He continues to like Amazon, Alphabet, and Meta Platforms Inc as his favorite tech plays. Apple's narrative quickly changing. Once the dust cleared from Apple's quarter and guidance, investors would focus through the noise around weak iPads, Macs, and FX and instead see iPhone units growing again, with Services back to steady double-digit growth. Finally, the \"iPhone China demise narrative\" was a great fictional story by the bears, which is far from reality as underlying mainland China's growth remains strong and a key asset for the core iPhone franchise. Ives cares about iPhone growth, Services revenue, gross margins, and China iPhone growth, which appears much better than feared, along with positive anecdotal commentary from Cook. Apple remains Ives' top tech pick with a strong iPhone 15 upgrade cycle playing out into a strong holiday season, which appears to be a good start post-Black Friday weekend.Heading into 2024, Ives noted that the tech sector will likely accelerate spending around cloud and AI spending that the Street is significantly underestimating. Ives noted that the new tech bull market has begun, and tech stocks are likely for a strong 2024 with tech stocks we expect to be up 20%+ over the next year, led by Big Tech as the AI spending tidal wave hits the shores of the broader tech sector.","news_type":1},"isVote":1,"tweetType":1,"viewCount":585,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}