Market Summary #8

Square buys more in bitcoin to boost crypto holdings

Square announced on Tuesday that it purchased $ 170 million in bitcoin to add to its expanding position. The payment company’s new purchase now brings its total bitcoin holdings to about 5% of its cash and cash equivalents. Averaging 3,318 bitcoins. The company had previously purchased about $ 50 million worth of bitcoin in October 2020. At the time, the purchase equaled about 1% of the company’s cash and cash equivalents. 

Reddit Raises Stock Sale of $368 Million

The online platform has stated on Tuesday in a regulatory filing that it raised $ 368 million from a preferred stock sale and has set a goal of raising up to $ 500 million. Reddit’s valuation is over $6 billion just as it has become the focus of a stock trading frenzy. The San Francisco-based company has said it plans to use the proceeds in several areas, including video, advertising and overseas expansion. 

Biden takes first military action with Syria strike on Iran-backed militias

The US has carried out an air strike under President Biden’s direction in response to attacks against US personnel in Iraq. Although no casualties were confirmed by US officials, an Iraqi militia official told the Associated Press that 1 fighter was killed, and the Syrian observatory of Human Rights reported at least 22 casualties. Syria’s foreign ministry said “It is a bad sign regarding the policies of the new US administration, which should adhere to international norms”. 

Chaotic treasury selloff fueled by $50 billion unwinding

After a record low demand on the 7-year US treasury bond auction, yields across all debt maturities spiked as the open interest in Treasury futures collapsed in an amount close to $50 Billion 10-year notes. Higher inflation expectations meant that the Eurodollar market, which is based off LIBOR, has repriced its expectations for future Federal Reserve interest rate hikes. Markets are now pricing in a Fed rate hike by March 2023 compared to mid-2023 previously. 

Lithium Prices rise as companies figth for supply 

The shift towards Electric Vehicles is gaining speed. According to experts, demand for lithium will rise at a 21% annual growth rate in the next six years. This forecast has begun a disruption in the global energy markets, where lithium prices have soared 71.24% in the last few months. As companies like Tesla, Google, and Apple fight for supply, companies capable of meeting this demand become attractive, as the market outlook is looking positive.

SEC Suspends Trading in 15 Stocks

On February 26th, the Securities and Exchange Commission announced that it temporarily stopped trading in 15 companies, one of them being Blue Sphere Corporation, due to concerns of artificially inflated stock prices. This repression is yet another consequence derived from the Game Stop case. The regulator has sought to remove dying companies from exchanges, but the effort has increased amid this year’s frenzy trade, where have been clear examples of speculative excess in the market.

AT&T to sell stake of Direct TV in a deal with TPG Capital

AT&T said on February 25th that TPG Capital is set to acquire 30% of the Direct TV stake. The agreement involves a joint venture in which TPG will run Direct TV and other AT&T TV operations in a deal valued at $16.25 billion dollars. After the sale, AT&T will invest more in 5G network, and TV production for HBO Max just as their balance sheet consolidates. The transition comes just after the sale of the anime video unit Crunchroll last December.

Fast track visas in UK to boost fintech after Brexit

The Finance Minister of UK, Rishi Sunak, said on February 26th that Britain would offer fast-track visas schemes to face the competition for talent in the fintech market, as after Brexit, the UK will no longer have access to the EU single market. The initiative will start in March 2022 and aims to attract global innovators and creators to a market with already 40% staff from overseas. 

Published by lisboninvestmentsociety


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