1) On ecommerce, fintech, software stocks -
Over the past month, we have seen a huge discrepancy between the performance of the above stocks and the rest of the market.
Instead of crashing and burning like many said they would, these 'overvalued' stocks have been bid up...
Over the past month, we have seen a huge discrepancy between the performance of the above stocks and the rest of the market.
Instead of crashing and burning like many said they would, these 'overvalued' stocks have been bid up...
2)...by market participants.
The recent rally has made some of these stocks even more 'overvalued' yet thus far, there has been no letdown in their strength.
So what is going on here?
Due to COVID-19, the vast majority of the economy has come to a standstill and many...
The recent rally has made some of these stocks even more 'overvalued' yet thus far, there has been no letdown in their strength.
So what is going on here?
Due to COVID-19, the vast majority of the economy has come to a standstill and many...
3)...industries (airlines, gyms, hotels, physical retail, restaurants, spas, sporting events etc.) have completely frozen (revenue losses of 80-100%)!
As businesses within these industries are struggling to survive, many ecommerce, fintech and software companies are seeing...
As businesses within these industries are struggling to survive, many ecommerce, fintech and software companies are seeing...
4)...a surge in demand!
Billions of people who are stuck at home are now buying stuff online and since cash isn't an option, they are paying for these goods/services via online payments solutions.
On the corporate front, businesses are now adjusting..
Billions of people who are stuck at home are now buying stuff online and since cash isn't an option, they are paying for these goods/services via online payments solutions.
On the corporate front, businesses are now adjusting..
5)...to the 'work from home' reality and since their employees are now working from remote locations, their *need* for software (collaboration, cybersecurity and video conferencing etc) has increased.
So, we now have a situation whereby most industries are really suffering...
So, we now have a situation whereby most industries are really suffering...
6)...whereas ecommerce, fintech/online payments and some software companies are doing ok!
And these aren't the only businesses which are benefiting from the lockdowns. Online gaming, SVOD and social media are also seeing an increase in customers and usage.
There can be...
And these aren't the only businesses which are benefiting from the lockdowns. Online gaming, SVOD and social media are also seeing an increase in customers and usage.
There can be...
7)...no doubt that the current situation is very difficult for most companies and before this is all over, many businesses may end up going bankrupt.
So, it is possible that eventually, even the companies in ecommerce, fintech/online payments and software might feel the heat...
So, it is possible that eventually, even the companies in ecommerce, fintech/online payments and software might feel the heat...
8)...BUT that pain might simply equate to a slowdown in their growth rates (as opposed to YOY rev. declines).
In any event, I think it is improbable that like many of the other industries, these companies will see their YOY revenues decline by 50% or 80-90%! ...
In any event, I think it is improbable that like many of the other industries, these companies will see their YOY revenues decline by 50% or 80-90%! ...
9) Finally, the best companies in ecommerce, fintech/payments + software aren't carrying much debt on their balance-sheets and during the ongoing crisis, this is adding to their allure.
All this might change but IMHO this is why these stocks have been bid up.
THE END.
All this might change but IMHO this is why these stocks have been bid up.
THE END.
