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Daily Crunch: IBM sells off Watson Health unit to private equity firm Francisco Partners

I normally try to bring some pep to my little intros in this missive. But today I am going to avoid astruturning my own mood to simply say, hey, what’s up with the stock market?

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Hello and welcome to Daily Crunch for January 21, 2022! I normally try to bring some pep to my little intros in this missive. But today I am going to avoid astroturfing my own mood to simply say, hey, what’s up with the stock market? After a period of time when things only went up, have we flipped the coin? I am not going to say that I love it, but hey, at least it’s the weekend. – Alex

The TechCrunch Top 3

  • Is Microsoft buying a union? Raven Software’s quality assurance department is forming a union at Activision Blizzard. TechCrunch called the move the “first union to form at a major U.S. gaming company.” Given that Microsoft is supposed to buy Raven Software’s parent company, the union situation has an even more interesting flavor than most tech union news that we’ve seen lately.
  • VCs wanted to spin-out Facebook’s Slack competitor: Facebook’s internal work tool that it turned into a product won’t be leaving the confines of the Meta corporation. TechCrunch learned that VCs wanted the social giant to spin it out at a valuation north of $1 billion, but Team Zuck didn’t bite.
  • Netflix’s poor results prove the pandemic trade is over: After reporting numbers that left Wall Street less than enthused, the value of Netflix stock tanked today. The result, and resulting investor reaction underscores our general belief that the pandemic trade is behind us. Recall that in late December, TechCrunch asked if the era of super-rich tech valuations was behind us. The answer? Yeah, it looks like it.

Startups/VC

  • If you are working on corporate spend, please collect your check: As Ramp, Brex, and Airbase battle it out in the United States, Moss’ work to build a corporate spend behemoth in Europe is attracting allies. Rich ones, it turns out, as the company just landed $86 million. The company is now worth nearly $600 million, thanks to its latest share sale.
  • Please print me one (1) mocktail: One of the funniest bits of a Hitchhiker’s Guide to the Galaxy series of novels is the silly spaceship that can’t make tea. It can, to paraphrase, make something that is akin to tea, but not quite. That’s a long-winded way of saying that beverage printing is not a new concept. But it is a new reality, at least to my brain. Cana Technology just unveiled what it calls “the world’s first molecular beverage printer.” To which we ask: Can it make tea? Either way, this sounds dope.
  • Europe -> Africa: The African technology startup market is accelerating. That’s known. But what if you are building a company, say in Europe, and want to move into the African market? Venture firm Partech’s new Chapter54 accelerator is working on just that problem, TechCrunch reports.
  • Another Israeli VC puts together a new fund: 2022 is shaping up to be a hot year for the Israeli technology scene, with Entrée Capital announcing a $300 million fund. That’s the second new fund from Israel thus far this year that we can name. So much for a slowdown, yeah?

Inside Secfi’s 2021 state of stock options equity report

Image Credits: Andriy Onufriyenko (opens in a new window) / Getty Images

It’s great to have a stake in the company you’re helping to build, but when employees don’t know the optimal way to exercise their stock options, they usually end up with a raw deal.

Last year, startup employees paid an estimated $11 billion in avoidable taxes by exercising their options post-exit, rather than pre-exit, according to Secfi data.

In a post for TechCrunch+, CEO Frederik Mijnhardt shared his analysis of the biggest trends around stock options in 2021, including why, despite stellar IPOs, most employees couldn’t exercise their options until after the exit, dramatically increasing their tax liability.

“Looking ahead to 2022, it seems that the industry’s current trend toward mega-sized rounds of funding and longer exit timelines mean that for the average startup employee, their total cost to exercise stock options will continue to rise,” says Mijnhardt.

(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

  • Peloton (kinda) answers production stories: Yes, the company is “resetting our production levels for sustainable growth,” its CEO admitted in a note that kinda, sorta, dealt with a wave of stories about Peloton’s consumer demand. More when the company reports earnings, as this story is far from over.
  • Intel could build a huge plant in Ohio: Building chips is expensive, and hard to spin up. So it’s good news that Intel intends to “build two chip manufacturing facilities outside of Columbus, Ohio.” The total work could cost $20 billion. Score one point for domestic production, I suppose.
  • IBM manages to divest its Watson Health unit: Francisco Partners is buying the asset, though we don’t know for how much. The Watson push seems to be stumbling to a conclusion, selling for a price that is expected to be a fraction of what IBM paid to compile the corporate assets behind its health-focused AI push.

TechCrunch Experts

Image Credits: Pete Saloutos / Getty Images

TechCrunch wants to know which software consultants you’ve worked with for anything from UI/UX to cloud architecture. Let us know here.

If you’re curious about how these surveys are shaping our coverage, check out this interview Miranda Halpern did with Wolfpack Digital CEO Georgina Lupu-Florian, “How should non-technical founders collaborate with software developers?”

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International

The State of Democracy In Each Region Of the World

The state of democracy has dropped from an average global score of 5.37 to 5.28, the biggest drop since 2010 after the global financial crisis which translates…

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The world’s (almost) eight billion people live under a wide variety of political and cultural circumstances…[that] can be measured and presented on a sliding scale between “free” (democracy) and “not free” (authoritarian) and the…Democracy Index report by the Economist Intelligence Unit (EIU), is one such attempt to apply a score to countries based on how closely they measure up to democratic ideals.

According to EIU, the state of democracy is at its lowest point since the index began in 2006, dropping from an average global score of 5.37 to 5.28, the biggest drop since 2010 after the global financial crisis….[which] translates into the sobering fact that only 46% of the population is living in a democracy “of some sort.”

Below is a look at the democratic state of each region in the world:

The Americas

Europe

map showing democracy index measuring political regimes in europe

Africa

map showing democracy index measuring political regimes in africa

Middle East and Central Asia

map showing democracy index measuring political regimes in the middle east

East Asia and Oceania

map showing democracy index measuring political regimes in east asia and oceania

Decline in Global Democracy Levels

Two years after the world got hit by the pandemic, we can see that global democracy is in a downward trend with very region’s global score experiencing  a drop, with the exception of Western Europe, which remained flat. Out of the 167 countries, 74 (44%) experienced a decline in their democracy score.

Editor’s Note: The above article is an edited and abridged version of the original post on visualcapitalist.com by Raul Amoros with article editing by Nick Routley and graphics design by Sabrina Fortin.

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Economics

5 Top Consumer Stocks To Watch Right Now

Are these consumer stocks a buy amid the earnings season?
The post 5 Top Consumer Stocks To Watch Right Now appeared first on Stock Market News, Quotes,…

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5 Trending Consumer Stocks To Watch In The Stock Market Now         

As we tread through the earnings season, consumer stocks could be worth watching in the stock market this week. This would be the case since a number of big consumer names such as Costco (NASDAQ: COST) and Macy’s (NYSE: M) will be posting their financials for the quarter. As such, investors will be keeping an eye on these reports for clues on the strength of consumer spending amid this period of high inflation.

However, despite the soaring prices across the economy, it seems that consumers are surprisingly showing resilience. According to the Commerce Department, retail sales in April outpaced inflation for a fourth straight month. This could suggest that consumers as a whole were not only sustaining their spending, but spending more even after adjusting for inflation. Ultimately, it could be a reassuring sign that consumers are still supporting the economy and helping to diminish the narrative of an incoming recession. With that being said, here are five consumer stocks to check out in the stock market today.

Consumer Stocks To Buy [Or Sell] Right Now

Nordstrom

retail stocks (JWN stock)

Starting off our list of consumer stocks today is Nordstrom. For the most part, it is a fashion retailer of full-line luxury apparel, footwear, accessories, and cosmetics among others. The company operates through multiple retail channels, boutiques, and online as well. As it stands, Nordstrom operates around 100 stores in 32 states in the U.S. and three Canadian provinces.

Yesterday, the company reported its financials for the first quarter of 2022. Starting with revenue, Nordstrom pulled in net sales worth $3.47 million for the quarter. This marks an increase of 18.7% from the same quarter last year. Its Nordstrom banner saw net sales rise by 23.5% year-over-year, exceeding pre-pandemic levels. Next to that, its Nordstrom Rack banner saw a 10.3% increase in net sales from last year. Besides, net earnings were $20 million, with earnings per share of $0.13 for the quarter. Considering Nordstrom’s solid quarter, should you invest in JWN stock?

[Read More] Best Stocks To Invest In Right Now? 5 Value Stocks To Watch This Week

The Wendy’s Company

best consumer stocks (WEN stock)

Next up, we have The Wendy’s Company. For the most part, it is the holding company for the major fast-food chain, Wendy’s. Being one of the world’s largest hamburger fast-food chains, the company boasts over 6,500 restaurants in the U.S. and 29 other countries. The chain is known for its square hamburgers, sea salt fries, and the Frosty, a form of soft-serve ice cream mixed with starches. WEN stock is rising by over 8% on today’s opening bell.

According to an SEC filing, Wendy’s largest shareholder, Trian Partners, is looking into making a potential deal with the company. Trian said that it is considering a deal to “enhance shareholder value.” Also, the firm adds that this could lead to an acquisition or business combination. In response, Wendy’s stated that it is constantly reviewing strategic priorities and opportunities. It added that the company’s board will carefully review any proposal from Trian. Given this piece of news, will you be watching WEN stock?

[Read More] 4 Semiconductor Stocks To Watch In The Stock Market Today

Foot Locker

FL stock

Another stock investors could be watching is the shoes and apparel company, Foot Locker. In brief, the company uses its omnichannel capabilities to bridge the digital world and physical stores. As such, it provides buy online and pickup-in-store services, order-in-store, as well as the growing trend of e-commerce. Some of its most notable brands include Eastbay, Footaction, Foot Locker, Champs Sports, and Sidestep. Last week, the company reported its results for the first quarter of the year.

For starters, total sales came in at $2.175 billion, a slight uptick compared to sales of $2.153 billion in the year prior. Next to that, Foot Locker reported a net income of $133 million. Accordingly, adjusted earnings per share came in at $1.60, beating Wall Street’s expectations of $1.54. CEO Richard Johnson added, “Our progress in broadening and enriching our assortment continues to meet our customers’ demand for choice. These efforts helped drive our strong results in the first quarter, which will allow us to more fully participate in the robust growth of our category going forward.”  As such, is FL stock one to add to your watchlist? 

Tyson Foods 

TSN stock

Tyson Foods is a company that built its name on providing families with wholesome and great-tasting protein products. Its segments include Beef, Pork, Chicken, and Prepared Foods. With some of the fastest-growing portfolio of protein-centric brands, it should not be surprising that TSN stock often comes to mind when investors are looking for the best consumer stocks to buy. 

Earlier this month, Tyson Foods provided its fiscal second-quarter financial update. The company’s total sales for the quarter were $13.1 billion, representing an increase of 15.9% compared to the prior year’s quarter. Meanwhile, its GAAP earnings per share climbed to $2.28, up 75% year-over-year. According to Tyson, these financial figures are a reflection of the increasing consumer demand for its brands and products. To top it off, the company was also able to reduce its total debt by approximately $1 billion. Thus, does TSN stock have a spot on your watchlist?

[Read More] Stock Market Today: Dow Jones, S&P 500 Rise, Wendy’s Stock Gains On Potential Deal

DoorDash

food delivery stocks (DASH Stock)

DoorDash is a consumer company that operates an online food ordering and delivery platform. In fact, it is one of the largest delivery companies in the U.S. and enjoys a huge market share. The company connects hundreds of thousands of merchants to over 25 million consumers in the U.S., Canada, Australia, and Japan through its local logistics platform. Accordingly, its platform allows local businesses to thrive in today’s “convenience economy,” as the company puts it.

On May 5, the company reported its first-quarter financials for 2022. Diving in, it posted a revenue of $1.5 billion, growing by 35% year-over-year. This was driven by total orders that grew by 23% year-over-year to $404 million. Along with that, it reported a GAAP gross profit of $662 million, an increase of 34% year-over-year. The company said that it added more consumers than any quarter since Q1 2021, due in part to the growth of its DashPass members. The growth in Monthly Active Users and average order frequency has helped it gain share in the U.S. Food Delivery category this quarter as well. Given DoorDash’s performance for the quarter, should you watch DASH stock?

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The post 5 Top Consumer Stocks To Watch Right Now appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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Economics

Finding Shelter in an Inverse ETF

As the old saying goes, “What goes up must come down.” Indeed, up until the recent selling wave caused by Russia’s war against Ukraine and the continued…

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As the old saying goes, “What goes up must come down.”

Indeed, up until the recent selling wave caused by Russia’s war against Ukraine and the continued effects of supply chain disruptions amid the COVID-19 pandemic, tech stocks, including semiconductors, were the darlings of the investment world. That is, it seemed as if the sky-high valuations of some tech stocks were sustainable in an atmosphere of seemingly perpetual growth.

That, of course, was not the case, and the too-good-to-be-true valuations were quickly brought down to earth by the forces of inflation and tight monetary policy. As a result, the tech-heavy Nasdaq entered a free-fall that has not yet found a bottom.

At the same time, that does not mean that we should abandon the sector as a lost cause. One such way to play the sector during its downhill slide is the exchange-traded fund (ETF) Direxion Daily Semiconductor Bear 3X Shares (NYSEARCA: SOXS).

As its title suggests, this is an inverse ETF, meaning that it is built to go up in value when its parent index goes down. Specifically, SOXS provides three times leveraged inverse exposure to a modified market-cap-weighted index of semiconductor companies that trade in American markets by using swap agreements, futures contracts and short positions.

While the index’s holdings are weighted by market capitalization, the fund’s managers cap the weights of the top five securities in the portfolio at 8% each. The weight of the remaining securities is capped at 4% each.

As of May 24, SOXS has been up 0.37% over the past month and up 24.73% for the past three months. It is currently up 60.47% year to date.

Chart courtesy of www.stockcharts.com

The fund has amassed $258.15 million in assets under management and has an expense ratio of 1.01%.

In short, while SOXS does provide an investor with a way to invest in an inverse ETF, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

The post Finding Shelter in an Inverse ETF appeared first on Stock Investor.

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