Sam here, and it’s time to get another look behind the curtain at what the Babbl team has been reading lately. Particularly, content that’s been enabling us to make better decisions. First, however, you’ll get a look at what Ramsey and I choose to do with our weekends when we get a break from writing code & content. After that, a cryptocurrency leaks(?) $GME’s foray into NFT-tech, and a much better review of last week’s notable earnings calls than I’d be able to write for you.
This was a big deal for us. Last Saturday, Ramsey and I got to go to Target Field in Minneapolis to give a talk on how anyone can use sentiment analysis to get an understanding of the market mood. Of the 40 groups that applied to give talks, only 8 were chosen to demo by popular vote.
The 7 other talks were great, and we had a lot of fun chatting with folks who came to talk with us afterward. A lot of them are starting to realize we’re onto something, and we’re glad you, dear reader, knew that already.
I know this portion isn’t something we’ve read, other than Ramsey checking his notes on stage, so I’ll get to your regularly scheduled content shortly. But before we do, Ramsey closed his talk by mentioning to the attendees that while anyone can do analysis themselves, if you’d rather hand it off to people who live and breathe text analysis, you should get on the waitlist for our app ;).
$GME: Into the NFT-verse
This is one I wish you’d seen sooner, but there may still be room to grow. On October 27th, GMEdd.com posted their internal research showing they’d found clues in the Loopring’s (crypto: $LRC) codebase suggesting Gamestop was piloting a move to Web 3.0. Some of the evidence they provided was from Loopring’s public Github repo:
They’re calling this a ‘leak’ in the Loopring repo… aka there’s definitely cause for scrutiny.
$LRC is up 500% in the last month on this speculation, and there’s always the possibility that this was intentionally ‘leaked’ to garner interest in the project. Gamestop has yet to confirm or deny the partnership. However, their job listings in the Web 3.0 space appeared mysteriously around the same time.
Being that $LRC has already surged, it’s hard to be sure what will happen next. The next move seems to depend on whether $GME announces a partnership with Loopring, and will likely be existential for the token, so take a careful look before making any decisions in this arena.
Hankwitz’s Week in Review
This is from a special edition of Rate of Return by Austin Hankwitz. As he mentions in the intro, these are usually exclusively for paying subscribers, but this one is on the house. However, at $13/mo it might be worth it if you like his style, so here’s what we saw:
After a massive week of earnings calls and fallout, we have a lot to debrief. Austin starts with $PTON, which had announced earnings and guided full-year revenue ~15% below analyst expectations, causing the price to drop about 35% the next day. From the full review (linked here):
“I think there’s some misconception around Peloton, just like there was for Tesla back in the day. People were valuing Tesla as if they were a car company optimizing for profits - something they weren’t able to do until recently. I think people right now are looking at Peloton like they’re some sort of fitness equipment company optimizing for profits - and “they had a lot of revenue during COVID, that should result in more profits!”
When in actuality, by simply looking at the company’s CEO John Foley, we get a better glimpse into exactly how he’s running this company and what he’s optimizing for in the long term.
It’s not profits - it’s connected fitness subscribers.”
And in the Earnings release, you’ll find that Connected Fitness Subscriptions are up 87% YoY.
“By going along this single metric - connected fitness subscribers - we can see that Peloton is doing just fine. It’s absurd to me to think this stock, now at $57 / share, is being valued on an EV / TTM Revenue multiple lower than it was before the pandemic.”
“But let’s not forget this company’s dedicated userbase - their insanely low churn rate, and incredibly high lifetime value as a customer to this company.
Against the thoughts of what other people have said about Peloton, I’m going to buy this dip. I still think Peloton deserves a modest 1-3% weighting in my portfolio […] ”
Austin also covers reports from $QCOM, $MTTR, $MELI, $UBER (among others), and recent IPO’s of the likes of $BIRD and $ARHS in the same depth as above. So if you like what you see, check it out here.
I’ll leave you with his own TL;DR:
“There are now 3 Shopify-built companies trading on the stock market, Arhaus analysis coming soon, Realty Income Corporation continues to print cash, Qualcomm doubled down on the controllables - mobile, Roku’s ARPU has almost doubled since the pandemic, MercadoLibre is growing like a weed, Uber is inching toward profitability, Airbnb had their best quarter ever, and the unemployment rate is now at a new pandemic-low.”
Thinking things are looking alright out there…
Newsletter: Rate of Return
Tesla Lands on the Moon
$TSLA surged into the end of October, to put it lightly. The stock was up 50+% from where it started the month. When looking at what drove that (beyond the Hertz order), it’s pretty easy to point the finger at call-buying and short-closing, which ultimately lead to a gamma squeeze scenario (which has since cooled off).
Related article: Tesla Gamma Squeeze, GRIT Capital
$MSFT: Update Pending
Not sure how many of you heard, but Microsoft is getting a facelift in a few spots.
You can now run GPT-3 (the neural net that can answer questions and write books) in Azure
They’re doing something with Teams and the Metaverse?
They’re making something that… somehow isn’t Notion?
Notion is a well-loved app for internal knowledge bases and project management, and until now has been a one-of-a-kind company. Heck, we even use it here at Babbl. But, while I might be salty about how similar it looks, it would make me happy as a shareholder to see they’re starting to answer their calling as a tooling company for other companies.
$MVRS: I’m Scared
The day after the Zuck announced the name change to Metaverse, Facebook’s robotics research division published groundbreaking results in touch-sensitive sensors. I know I’m in the minority here, but I wish they’d pick an apocalyptic movie plot at this point so I’d know what’s coming. C’mon, the Matrix or the Terminator? Anyway, I’d be remiss if I didn’t send you off with some Meta-memes from Twitter:
Thanks for being here y’all! Ramsey will have a Spotlight report on interesting sentiment setup(s) in the next week or two. And thanks to those of you who responded with links to interesting articles/newsletters. If you’ve got anything we should take a look at, just respond to this email with a link or reach out directly at firstname.lastname@example.org.
Until next time,
Sam & Babbl team