Hello—we are back at it for this week. Also, as an FYI for those interested in machine and OSINT-made EU policy briefings in addition to markets, make sure to check out the bi-weekly EU Drip. As always, feel free to reach out with questions, thoughts, or project inquiries. - CT
Stocks
VistaGen Therapeutics, Inc. (NASDAQ: VTGN): is a biopharmaceutical company that specializes in developing treatments for disorders related to the central nervous system (CNS), such as anxiety and depression. Their primary drug candidate is called Fasedienol (PH94B), which has demonstrated successful results in Phase 3 trials for social anxiety disorder. Fasedienol has several advantages over other similar therapies, including being non-systemic, having a low potential for abuse, and providing quick relief without interfering with daily activities when administered intranasally. The company has plans to launch two additional Phase 3 trials in 2024. According to Google search data, there has been a significant increase in global interest in anxiety medication since 2004, so if the drug is well received, the marketplace should be robust.
Google Search Trends “anxiety medication”
Qualcomm (NASDAQ:QCOM): Rosenblatt Securities has recently increased its price target for Qualcomm (QCOM) from $170 to $200, while maintaining a Buy rating. The main reason for this is that Qualcomm's Snapdragon system-on-a-chip (SOC) is expected to lead the market in the next class of computing platforms, which will help bring generative AI to the edge. Recent data shows that the number of Snapdragon 8 Gen 3-based Samsung Galaxy S24 shipments is significantly higher than previous models. The release of the Snapdragon X Elite for PCs is expected in the coming months. Qualcomm shares are trading at a 40% discount to the broader Philadelphia Semiconductor Index. What’s more, Qualcomm holds more SOC patents than Nvidia, AMD, TSMC, and Apple by a large margin - especially within portable computing, albeit more recently, Apple has led in the most SOC patents over the last two years with their focus on interface and personal digital assistant technologies.
Number of SOC Patents - Qualcomm, Apple, Nvidia, TSMC
SOC Patent Sub-Focus: Qualcomm, Apple, Nvidia, and TSMC
Furthermore, both Samsung's (one of QCOMM’s biggest customers) and Qualcomm’s web traffic has increased over the last few quarters.
Qualcomm Web traffic
Samsung Web traffic
Opera Limited (NASDAQ: OPRA): OPRA continues to report successful monetization through Opera GX, as observed in the expanding MAUs and ARPUs over the past few quarters. As the browser gains traction and the platform expands, OPRA's growth story remains intact. Opera's browser market share is growing rapidly, especially in developing markets in Africa and South Asia. The company's new initiatives, like Opera News and fintech offerings, provide additional growth avenues. Opera's revenue growth has accelerated, with Q4 2023 year-over-year growth of 44%. The company is guiding for 43% revenue growth in 2024. Despite the strong growth, Opera trades at just 14x forward earnings, a discount to peers. Additionally, Opera continues to report successful monetization through its Opera GX gaming-focused browser, as observed in the expanding Monthly Active Users (MAUs) and Average Revenue Per User (ARPU) metrics over the past few quarters, which presents upside. While the exact market size estimates vary slightly between sources, they all point to a current gaming market in the $217-$250 billion range as of 2022. Looking ahead, the market is projected to grow robustly, with CAGR estimates ranging from 8.76% to 13.4% across the different forecasts. By 2027-2030, the gaming market TAM is expected to reach between $363 billion to over $665 billion.
Carnival Corporation & plc (NYSE: CCL): The cruise line operator’s stock closed at $16.60 on March 17, 2024. The stock has a 52-week trading range of $8.52-$19.74. Carnival plans to report Q1 2024 earnings on March 27. Analysts expect revenue growth, but the company is still expected to post a loss. Nonetheless, the cruise line's job postings, web traffic, and Google Search interest have increased recently to their highest points in years. Moreover, over the last few months, hiring increases were followed by an increase in stock price.
Job Postings x Stock Increases.
Carinval.com Web Traffic
Coherus Biosciences (NASDAQ: CHRS): The company's shares are currently trading at the lower end of their 52-week range following recent announcements of job cuts and a portfolio reorganization with a focus on oncology. However, analysts view these changes as positioning the company for future growth.
Zevra Therapeutics (NASDAQ: ZVRA): The current stock value has decreased by approximately 46% from its highest value over the past 52 weeks. Despite this, analysts have given the stock a "Strong Buy" rating with an average price target of $17, representing a possible increase of 147%. Recently, William Blair has given it an Outperform rating despite the FDA's decision to extend the review period for the company's marketing application. This could suggest a potential increase in value should the drug ultimately be approved.
Rush Enterprises (NASDAQ: RUSHA): The stock is near its peak trading range but has been a slow and consistent burn. Rush looks undervalued based on normalized free cash flow and has gained market share in the truck sales and parts industries. Additionally, its web traffic has continued to grow over the last decade.
Economics & Markets
Americans Invested Billions in Chinese Companies; Now Their Money is Stuck
As recently as 2021, venture investors were pouring nearly $47 billion into Chinese companies, according to PitchBook. U.S. public pensions and university endowments invested about $146 billion from 2018 to 2022, according to Future Union, an advocacy group focused on exploring U.S. investments abroad. When investors talk about "zombie" companies, they're usually referring to distressed startups that are hobbling along, unable to grow, and unlikely ever to return the money they've raised. However, as deal-makers feverishly debated efforts this past week by lawmakers to force TikTok's Chinese parent company, ByteDance, to sell the app, they talked about a new version: China zombies.
MicroStrategy Plans Second Convertible Debt Offering this Month to Buy More Bitcoin
MicroStrategy is planning to raise capital through convertible bonds, offering to buy bitcoin for the second time in less than ten days, as the aggressive crypto investor is looking to increase its exposure to the booming cryptocurrency. Tysons, Virginia-based MicroStrategy has joined many companies offering convertible bonds in a high-interest rate environment. "Since late 2020, the company has come to market with convertible offerings and, to a lesser extent, at-the-market stock offerings to invest the proceeds in bitcoin.
Bitcoin, the world's largest cryptocurrency, hit a fresh record high at $73,803, taking its year-to-date gains to nearly 70%.
The company bought 3,000 bitcoins last month, taking its total holdings to 193,000 as of Feb 25.
According to LSEG IFR data, MicroStrategy is marketing the corporate bonds at a yield of 0.375%- 0.875% with an option to convert when the stock climbs 40% to 45% above current levels.
How We Got Here
Reddit is Preparing to Sell Shares to the Public.
We don’t yet know the exact cost of Reddit shares when they go on sale, but the company has indicated that the initial public offering price will be between $31 and $34 per share. Selected Redditors will get priority access ahead of the IPO, and unlike most preferential access deals, they will be free to sell their shares immediately if they wish to … The Reddit IPO The long-expected Reddit IPO became official last month following two controversial decisions clearly intended to maximize revenue to attract investors. While there is a $60 million content licensing deal with Google that allows its AI to be trained on the site data, Reddit has struggled to turn a profit on both a GAAP and adjusted basis despite its scale, which sees the site attracting 267 million weekly active users engaging across its more than 100,000 communities.
The offering, planned for March 21, is imminent, and Reddit said last week that it would sell 22 million shares at an expected price of $32.50 per share to help reach the aforementioned $748 million.
Around 1.76 million shares of the stock have been isolated for Redditors, meaning they'll have the opportunity to buy separate shares at the initial offering price and sell them without delay when the IPO happens. This reserves the shares for Reddit moderators and Redditors with at least 25k in karma, who will be able to buy them ahead of the IPO date.
Commodities
Gold Price Extends Loss as US Inflation Data Reinforces Fed Caution
Gold hit an all-time high of $2,195.15 on Friday. “The implication is that the Fed may not be ready to cut rates just yet.” “Mild inflation is still supportive as the market believes the Fed will still cut in June as this print is not bad enough to derail that view,” said Nicky Shiels, head of metals strategy at Geneva-based MKS PAMP SA. Copper and most other base metals also declined after the CPI data. Additooly
Gold Prices (USD)
At the same time, global political uncertainty has also been rising to its highest points over the last twenty years, although it has gone down to pre-2020 levels. Continued tensions in the Middle East and the upcoming U.S. and EU elections could reverse that trend.
Global Economic Policy Uncertainty Index
Ferrous, Coal Benchmarks Continue to Rise as China Market Revives
Iron ore futures climbed for the second consecutive session on Wednesday, aided by improved risk sentiment amid efforts by authorities in top consumer China to shore up market confidence. China's central bank said it would use various policy tools to maintain liquidity reasonably, improve credit structure, and step up support for private and small firms. Beijing will also boost efforts to attract foreign firms, the country's top financial regulator said. Steel benchmarks on the Shanghai Futures Exchange were higher.
Kuwait Oil Company Q8 to Buy 50% of Italian Biodiesel Producer EcoFox
Q8, the Italian branch of Kuwait Petroleum International (KPI), announced on Saturday that it plans to purchase a 50% stake in EcoFox, an Italian biodiesel producer. This move is part of KPI's efforts to reduce its reliance on fossil fuels and lower its emissions. KPI currently supplies aviation fuel to more than 70 international airports, produces high-quality oils, and holds shares in three refineries located in Italy, Vietnam, and Oman, along with other oil companies. The Kuwaiti official news agency, KUNA, reported this news.
Geo/Politics
China, Russia, and Iran Hold Fifth Trilateral Naval Drill
The naval forces of China, Russia, and Iran are conducting a four-day trilateral drill in the Gulf of Oman and the northern Indian Ocean that started on March 12. China sent the guided missile destroyer Urumqi and the guided missile frigate Linyi to the exercise, while Russia’s forces were led by the Varyag, a Slava-class cruiser. This marks the fifth joint naval drill between the three countries since 2019. “China and Russia have capitalized on their growing ties with Iran to safeguard their interests from Houthi aggression.
The Maritime Security Belt 2024 saw the participation of more than 20 ships from the Iranian, Russian, and Chinese navies, engaging in a series of comprehensive drills designed to counter piracy and ensure the safety of international maritime commerce.
While the Houthis have launched more than 60 attacks on commercial and military ships in the Red Sea and Gulf of Aden in recent months, the group refrains from targeting Chinese and Russian vessels.
Since Oct. 19, the Houthis in Yemen have launched at least 403 missiles or drones, targeting 61 ships.
A report by Iranian state television quoted Adm Mostafa Tajaddini, the drill’s spokesperson, as saying the drill took place in 6,600 square miles of water.
Climate Activists across Europe Block Access to North Sea Oil Infrastructure
Blockades at facilities in Germany, the Netherlands, Norway and Sweden, with protests in Scotland and action expected in Denmark Climate activists in four countries are blocking access to North Sea oil infrastructure as part of a coordinated pan-European civil disobedience protest. Blockades have been taking place at oil and gas terminals, refineries and ports in Germany, the Netherlands, Norway and Sweden, in protest at the continued exploitation of North Sea fossil fuel deposits.
Major Drone Attacks Hit Russia During Election
The Russian Defense Ministry reported downing 35 Ukrainian drones overnight, including four in the Moscow region. According to the Defense Ministry, two drones were shot down over the Kaluga region, just south of the Russian capital, and four in the Yaroslavl region, northeast of Moscow. The attacks on the Yaroslavl region, which is about 500 miles from the Ukrainian border, were some of the farthest launched by Ukraine so far. More Ukrainian drones were downed over the Belgorod, Kursk, and Rostov regions that border Ukraine and the southern Krasnodar region, the Defense Ministry said.
Macron Reiterates Call to Send French Ground Troops to Ukraine for War on Russia
In an interview this weekend with the newspaper, French President Emmanuel Macron reaffirmed that ground operations in Ukraine might be necessary “at some point.” Macron spoke after attending a summit in Berlin on Friday where France, Germany, and Poland declared their united support for escalating war with Russia, as NATO-backed Ukrainian forces face a military debacle on the front. Macron is making clear that European powers are preparing a ground intervention in Ukraine that threatens to unleash nuclear war between NATO and Russia.
There is massive opposition to the sending of European ground troops to Ukraine: polls have found 81 percent opposed in Germany and 68 percent in France.
European Union leaders on Wednesday announced a 5 billion euro, or $5.5 billion, fund for arms deliveries. The deal allows E.U. partners to discount shipments they have provided directly to Ukraine.
Russia’s active-duty military numbers are 1.5 million, compared to 205,000 for France, 184,000 for Germany, and 170,000 for Italy.
That is all for this week. Thanks for reading. Again, please reach out for project inquiries, comments, or thoughts - CT