(Bloomberg) — Snowflake Inc.’s initial public offering isn’t just creating new fortunes, it’s adding to the wallets of some of Silicon Valley’s biggest names.Iconiq Capital, a multifamily office whose clients include Facebook Inc.’s Mark Zuckerberg, LinkedIn Corp.’s Reid Hoffman and Twitter Inc.’s Jack Dorsey, took part in multiple Snowflake funding rounds beginning in 2017. Its 12% stake in the company, purchased for $245 million, was worth more than $4 billion at the initial offering price of $120. By the end of Wednesday, the same stake was worth a staggering $8.6 billion.Read more: Snowflake soars into tech big leagues with $73 billion valuationShares of the cloud-computing company surged as high as $319 in New York trading before dropping back to close at $253.93. That made it worth $70 billion, about as much as Goldman Sachs Group Inc. and almost six times the $12.4 billion it was valued at in a February fundraising round.Cloud computing “is a secular trend right now,” said Bloomberg Intelligence analyst Mandeep Singh. “We have already seen Zoom, DocuSign and Datadog do well this year. Investors understand the cloud business model well and that makes a high-growth company like Snowflake attractive.”The San Mateo, California-based firm’s top executives also saw their wealth surge. Four of them — Frank Slootman, Bob Muglia, Michael Scarpelli and Benoit Dageville — now own stakes worth a combined $8 billion.Only one of them, Dageville, was a founder. His stake is smaller than Slootman’s, who joined as chief executive officer from ServiceNow Inc. last year.Concurrent with the IPO, former CEO Muglia sold half of his 8.1 million Snowflake shares to Berkshire Hathaway Inc., which is also investing an additional $250 million at the IPO price. Such deals aren’t typically part of Warren Buffett’s play book, although in 2018 Berkshire invested in the initial offering of Brazilian fintech StoneCo Ltd.Buffett’s move boosted the already sky-high institutional interest in the cloud-computing firm, Singh said. It “definitely validates the attractiveness of Snowflake’s IPO,” he said.So far it has been a winning bet for Buffett, with the value of Berkshire’s investment more than doubling by the end of the day.(Updates value of Iconiq’s stake in second paragraph and top executives’ in fifth.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Week Ahead – Data, Covid-19, Geopolitics and More to Keep the Markets Busy
On the Macro
It’s a busy week ahead on the economic calendar, with 79 stats in focus in the week ending 2nd October. In the week prior, 32 stats had been in focus.
For the Dollar:
It’s a particularly busy week ahead on the economic data front.
Early in the week, September consumer confidence figures will be the key driver on Tuesday.
The market focus will then shift to September ADP nonfarm employment change figures due out on Wednesday.
While finalized 2nd quarter GDP numbers are also due out, these are unlikely to have a material impact on the day.
On Thursday, August inflation and personal spending figures are due out along with the ISM Manufacturing PMI for September.
With the weekly jobless claims also due out, there’s plenty to consider ahead of Friday’s labor market numbers.
At the end of the week, September’s nonfarm payroll and the unemployment rate will also have a material impact.
Trade data, finalized Markit survey PMIs, factory orders, and Michigan consumer sentiment figures should have a limited impact in the week.
Throughout the week a plethora of FOMC members’ speeches is also scheduled.
On the geopolitics front, the markets will also get the first of the Presidential debates on Wednesday. It could be a humdinger of a week…
The Dollar Spot Index ended the week up by 1.85% to 94.642.
For the EUR:
It’s also a busy week ahead on the economic data front.
Early in the week, key stats include prelim inflation figures for September and economic sentiment figures for the Eurozone.
Following disappointing August inflation figures, expect any pickup in deflationary pressure to test the EUR.
On Wednesday, French and German consumer spending and German unemployment figures are due out.
Eurozone inflation figures will also be in focus ahead of another busy day on Thursday.
On Thursday, Manufacturing PMIs for Italy and Spain will be in focus. Expect plenty of interest in the numbers.
Barring any marked deviation from prelim, however, finalized numbers from France and Germany will be brushed aside. The Eurozone’s finalized PMI will influence, however.
Other stats in the week include the Eurozone’s unemployment rate that should have a limited impact.
On the monetary policy front, ECB President Lagarde is scheduled to speak on Monday and Wednesday.
With geopolitics also front and center, the EU leader summit later in the week will also need monitoring. Brexit will undoubtedly be a hot topic.
The EUR/USD ended the week down by 1.77% to $1.1631.
For the Pound:
It’s a relatively quiet week ahead on the economic calendar. September’s finalized Manufacturing sector PMI on Thursday will be the key driver.
Finalized 2nd quarter business investment and GDP numbers are also due out on Wednesday. Barring any deviation from prelims, however, the numbers will likely have a muted impact on the Pound.
The lighter economic calendar will leave the Pound in the hands of Brexit and COVID-19.
The GBP/USD ended the week down by 1.32% to $1.2746.
For the Loonie:
It’s a relatively quiet week ahead on the economic calendar.
July GDP and August RMPI numbers are due out mid-week.
Expect July’s GDP to have the greatest impact on Wednesday.
From elsewhere, economic data from the U.S and China will also influence crude oil prices and the Loonie.
The Loonie ended the week down by 1.38% to C$1.3386 against the U.S Dollar.
Out of Asia
For the Aussie Dollar:
It’s a relatively busy week ahead on the economic calendar.
On Wednesday, August building approvals and private sector credit figures are due out. We would expect the private sector credit figures to have the greatest impact.
On Thursday, the focus shifts to manufacturing numbers for September, ahead of August retail sales figures on Friday.
With RBA reliant upon consumer spending to support economic recovery, the retail sales figures will draw plenty of attention.
Market risk sentiment and economic data from China will also influence, however.
The Aussie Dollar ended the week down by 3.54% to $0.7031.
For the Kiwi Dollar:
It’s a relatively quiet week ahead on the economic calendar.
Key stats include August building consents and September business confidence figures.
Expect the business confidence figures to have the greatest impact on the day.
From elsewhere, China’s manufacturing PMIs will also influence in the week. We’ve seen plenty of Kiwi Dollar sensitivity to economic data from China.
The Kiwi Dollar ended the week down by 3.15% to $0.6546.
For the Japanese Yen:
It is a busier week than usual on the economic calendar.
In the 1st half of the week, September inflation figures are due out along with August industrial production and retail sales figures.
In the 2nd half of the week, the 3rd quarter’s Tankan survey numbers are due out that will draw plenty of interest.
The Japanese Yen ended the week down by 0.97% to ¥105.58 against the U.S Dollar.
Out of China
It’s a relatively busy week ahead on the economic data front.
September’s private sector PMIs are due out on Wednesday. Expect the Caixin Manufacturing PMI to have the greatest impact on risk sentiment on the day.
Going into the week, industrial profit figures due out on Sunday that will also draw interest.
Expect the markets to be sensitive to any major speed bumps amidst U.S-China tensions.
The Chinese Yuan ended the week down 0.81% to CNY6.8238 against the U.S Dollar.
It could be quite a week for the Pound. September is coming to a rapid end and the EU Leaders’ Summit is later in the week.
As things stand, Britain and the EU are nowhere near a blueprint. With the Internal Market Bill now also in the loop, is it judgment day? The markets have been waiting since the summer of 2016 to get a sense of what Brexit will look like.
With Johnson at the helm, the risk has always been for Britain to pull out of talks. Is this the week that the curtain comes down on the EU and its demands?
U.S – China
There’s never a dull moment. With the Presidential Election debates kicking off this week, China will likely remain a hot topic.
With Trump trailing Biden, time is running out, and smear tactics are more than likely. The markets may not like it, however.
Presidential Election fever is picking. Brokers are calling for more margin to manage an anticipated spike in volatility. Trump continues to attack China on COVID-19 and tech.
The first of the Presidential Election Campaigns in the week ahead will set the tone.
Investors will get a sense of who the market favors during the course of the debate…
This article was originally posted on FX Empire
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Lithuanian port caught in Belarus crossfire
A vital maritime trade hub for landlocked Belarus, the Lithuanian port of Klaipeda now faces economic fallout from the Baltic state’s hard line against President Alexander Lukashenko.
The embattled Belarusian leader has threatened to re-route import and export cargo through Russian ports after Lithuania and its neighbours Estonia and Latvia last month imposed sanctions against him.
Their move came as the strongman staged brutal crackdowns against protesters who demanded that he step down following a disputed August 9 presidential election.
Klaipeda is the largest port in the Baltic states and handles more than 45 million tonnes of goods a year — more than quarter of it from and to Belarus via Lithuanian rail.
“Belarusian cargo is very important for the port of Klaipeda,” Algis Latakas, director general of the port, told AFP, standing near carriages and a ship loaded with Belarusian fertilizer.
Andrius Romanovskis, president of Lithuania’s business confederation, said companies operating in Klaipeda were “very sensitive and are closely following” the latest news from Belarus.
“For some companies, it would mean quite a strong negative economic effect,” he said.
– ‘It may be possible’ –
Lukashenko, facing the biggest challenge to his 26-year rule, threatened to cut off the route through neighbouring Lithuania after Vilnius imposed sanctions for election fraud.
His tough talk has been backed up by Russia, his main ally that wants to divert oil shipments from Lithuanian to Russian ports.
Apart from oil products, Belarus also uses Klaipeda to export fertilizer from Belaruskali, the world’s largest producer of potash.
Latakas said a boycott would be purely political and would make no sense economically.
“We think that in the near term, politically it may be possible but it would prove rather complicated practically because it needs technologies and a concerted logistics chain.
“Klaipeda is the closest location to Belarusian fertilizer factories, and since 2006 Belarusian cargo has mostly sailed to the rest of the world through Klaipeda,” Latakas said.
He said the port and Lithuania’s railways have not seen any changes so far except that Lithuanian truckers have reported more thorough checks at the land border in recent days.
– Deal with Russia imminent? –
Before the presidential election, Belarus had been using oil imports through Klaipeda — including spot purchases from the United States and Saudi Arabia — to reduce its reliance on Russia.
Since the vote and mass protests that ensued, the Belarusian government has changed tack as Lukashenko became heavily reliant on his single most important backer.
Russian Energy Minister Alexander Novak visited Minsk to raise the issue earlier this month, sparking speculation about an imminent deal.
“We need to create the economic conditions that will be beneficial to both sides,” he said, voicing hope that a deal could be reached with Belarus by the end of the month.
Russian officials have said any Belarusian cargo could transit instead through the Russian Baltic Sea ports of Ust-Luga and Kaliningrad.
Even though this might be more expensive, some experts believe Moscow could be willing to compensate Belarus to get the cargo and punish EU and NATO member Lithuania.
Lithuania has particularly angered Minsk in recent weeks as it has been hosting opposition presidential candidate Svetlana Tikhanovskaya, who fled soon after claiming victory against Lukashenko and has inspired mass protests.
But Lithuanian President Gitanas Nauseda brushed aside the prospect of any impact if Belarus switches its trade to Russia, insisting that Belarus would not harm itself economically.
Earlier this month, he told AFP in an interview: “I do not want to speculate what is happening in the minds of these people but the economic reality is that Belarus benefits most from transporting its cargo through Klaipeda.”
7 Debt-Free Stocks to Buy For Peace of Mind In Volatile Markets
During times of uncertainty, investors crave a sure thing. There are times to be “risk-on” and there are times to be “risk-off.” When investors flock to the latter, they often look for companies with no debt.
That doesn’t mean these stocks won’t fluctuate with the overall market. But there is a level of comfort in owning stocks with financial stability.
Look back at how most individual stocks performed in March. The market threw a tantrum and nearly every name was punished. But those that were punished the most are those with the shakiest financials.
InvestorPlace – Stock Market News, Stock Advice & Trading Tips
Plus, who wants to own a stock with poor financial positioning? There’s a reason people say “cash is king.”
Here are 7 companies with no debt you need to know about:
Intuitive Surgical (NASDAQ:ISRG)
Monster Beverage (NASDAQ:MNST)
Lululemon Athletica (NASDAQ:LULU)
At the end of the day, the companies with the biggest bank accounts have the most flexibility, and can better withstand long economic disruptions. They can lean on M&A, taking investments stakes in other companies and outmuscling their debt-ridden peers.
Companies With No Debt: Intuitive Surgical (ISRG)
Source: Sundry Photography / Shutterstock.com
Rarely do you see a balance sheet like that of Intuitive Surgical, making it a great candidates to kick off our list of stocks with no debt.
The company has $10.1 billion in total assets with just $1.3 billion in total liabilities. A robust balance sheet may boast a five-to-one ratio between total assets and total liabilities, but there aren’t many companies in that category. Intuitive Surgical’s asset-to-liability ratio sits at nearly 10.
Of those assets, almost $4.5 billion is held in cash. Not only does that give the company flexibility in a time of uncertainty, it should also give investors relief knowing that it will not suffer a liquidity event. The downside to Intuitive Surgical is this year’s growth estimates. Analysts expect sales and earnings to decline this year, before snapping back to very strong results in 2021.
Known mostly for its Da Vinci Device, the health field is one that will continue to grow and innovate over time. Admittedly, the novel coronavirus has disrupted the medical industry, but ultimately procedures will go on.
As CEO Gary Guthart said in the most recent earnings report, “We’ve seen hospitals with adequate supplies of staff, PPE and physical resources returned to above 90% of pre-COVID procedure run rates over a few months period.”
Source: Nopparat Khokthong / Shutterstock.com
Pinterest is one of my favorite names on this list. Considered a social media stock, it’s not just the conventional social online platform we’ve come to know.
The company is one of the most efficient at turning ad dollars into revenue, something that makes Pinterest a very lucrative platform for businesses. That’s also helped to fuel its top-line growth. Despite the slowdown from the novel coronavirus, Pinterest still found a way to grow sales last quarter. Analysts are forecasting more than 26% growth for the year despite the economic uncertainty.
But the real beauty lies in the way management handles its finances. Pinterest is expected to swing to profitability this year, from roughly break-even operations in 2019. The company is also free cash flow positive on a trailing basis.
With no debt, $1.7 billion in cash and plenty of long-term growth potential, Pinterest is a stock to own for long-term investors.
Monster Beverage (MNST)
Source: Domagoj Kovacic / Shutterstock.com
Everyone looks to tech when thinking about the biggest long-term winners. Few think of Monster Beverage.
While shares are up modestly over the past few years, this stock has been a beast over the long term. Monster Beverage is up 942% over the last 10 years and an unimaginable 80,000% over the last 20 years.
Obviously we’re not going to get those returns again, but that doesn’t make Monster one to avoid. The stock is forecast to have steady growth in 2020 and 2021. Analysts expect 7% sales growth this year and an acceleration to 10.7% growth next year. For earnings, estimates call for 10.3% and 13.3% growth this year and next year, respectively.
On top of it, the balance sheet is enviable. Monster boasts $5.15 billion in total assets, more than five-fold the $979 million it holds in total liabilities. Of course, it’s a stock with no debt.
Finally, Coca-Cola (NYSE:KO) acquired a 16.7% stake in the company in 2015. That stake has climbed to almost 20% thanks to Monster’s buybacks. Perhaps Coca-Cola is content with its stake — but perhaps it will be interested in an eventual takeover too.
Source: Lori Butcher / Shutterstock.com
DraftKings is the youngest public company on the list. The company went public via a SPAC offering earlier this year and it has been on fire ever since.
While newness doesn’t automatically equate to riskiness, investors have to size up everything about DraftKings.
Its positives include the secular trend toward legalizing online gaming and sports gambling. It has surprisingly solid growth given the massive disruption we’ve seen in the world this year.
DraftKings is also a play on the economy reopening and a return to sports. The latter catalyst is also a risk, though. Should sports leagues postpone again and/or should the economy begin to lock down, DraftKings could find itself on the wrong side of the bet.
Further, as of the most recent quarter, the company was not cash flow positive, nor is profitable yet. That said, some of those concerns are alleviated when considering the current circumstances. That includes realizing that the prior quarter came off the one of the quietest sporting periods in decades.
Further, one must realize that DraftKings can bide its time through the unrest. With minimal cash burn, $1.2 billion in cash and no debt, there’s no need to worry about a liquidity situation.
Lululemon Athletica (LULU)
Source: Richard Frazier / Shutterstock.com
Lululemon Athletica probably isn’t a name many investors expected on this list.
Years ago, the retailer had trouble finding the sweet spot. However, that’s all changed as Lululemon is now a premiere retailer on Wall Street. The company has strong growth, in-demand products and, naturally, a robust balance sheet.
The company’s deep liquidity will allow it to restart its buyback plan, a move the retailer announced on September 22. Further, that liquidity allowed Lululemon to scoop up Mirror for $500 million earlier this year. The startup is an in-home fitness company and should help Lululemon expand into a new growth avenue.
While that deal may slightly add to company debt, it’s not something investors will need to worry about. At a time where retailers are dropping like flies and under severe pressure due to the coronavirus, Lululemon continues to thrive. Aside from its balance sheet strength, it continues to boast strong growth.
Lululemon also continues to see direct-to-consumer (DTC) strength. DTC sales were up 157% year-over-year last quarter, representing more than 60% of all revenue.
A rarely discussed name, Progyny may be a stock investors want to keep on their radar.
The company focuses its work on infertility, a trend that has been growing for quite some time now. That has translated to frustrated couples who have difficulty conceiving. That’s where Progyny comes in to help — and it’s also where it has found solid growth.
Coronavirus-related costs have weighed on Progyny this year, which is expected to earn just 12 cents per share this year. That’s only up a penny from 11 cents per share in 2019. However, estimates call for a big-time acceleration in 2021, with more than 230% earnings growth to 40 cents per share.
Further, revenue growth is no joke. Estimates call for almost 50% growth this year followed by 60% growth in 2021. Progyny is free-cash flow positive over the trailing 12 months, is profitable and has no debt.
This stock has had its ups and downs, falling almost 60% from its February high to the March low. However, the dip gives investors an opportunity to take a closer look at this name.
Source: Pavel Kapysh / Shutterstock.com
Let me preface this by saying that Fastly does technically have some debt. However it’s very minute compared with its market cap and cash position.
Fastly, a recent Wall Street darling, has $5.2 million in current debt and long-term debt of just $20.1 million. $25.3 million in combined debt vs. $385 million in cash and a market cap pushing $10 billion is nothing.
Detractors will say that Fastly is just an edge-computing company in a commoditized market. Bulls would argue that it offers a superior product compared to its peers. Thanks to its superb management, Fastly is carving out a dominant position in an area that’s rapidly becoming important in our Covid-19 world.
As traffic grows and as data demand increases, more and more companies are moving to the edge. With the company’s latest acquisition of Signal Science, it’s also making a push into cybersecurity. This should open up another growth avenue for the company, driving long-term value. The cash and stock deal should also prevent a notable strain on the balance sheet.
While Fastly stock may be a bit pricey due to its monstrous run, shares should still be primed for more upside in the future. The recent demand from increased internet and cloud use isn’t going to subside overnight — or in some bulls’ estimates, at all.
On the date of publication, Bret Kenwell held long positions in PINS and FSLY.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
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The post 7 Debt-Free Stocks to Buy For Peace of Mind In Volatile Markets appeared first on InvestorPlace.
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