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Month: March 2021

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Americans Are Using Their Stimulus Checks to Get Out of Debt

Stimulus checks for $1,400 went out this month to most Americans. I found myself wondering today, did they save it, invest it, or just blow it? Data indicates that the biggest use of stimulus funds has been to pay down debt. A Census Bureau survey found 52% of people mostly used their checks to pay off debt, while only 28% mostly spent them. Repeated rounds of stimulus have left households with the lowest debt levels on record: Households finished 2020 with $14.1 trillion combined in checking and savings accounts, compared with $11.4 trillion in 2019, according to Federal Reserve data. Their debt-service burden—the percentage of after-tax income used to pay off debt—fell to its lowest level in records going back […]

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Inside the Archegos Implosion: “We Don’t Know How Far the Tentacles Go”

Brokers are selling over $30 billion worth of positions in imploding hedge fund Archegos Capital Management, shaking markets. Wall Street does not know exactly how many positions the fund holds for two reasons: It is very lightly regulated because it’s organized as a “family office,” rather than a typical hedge fund Archegos didn’t actually own most of the stocks it […]

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When the Suez Canal Was Blocked for Eight Years

As the Suez Canal, chokepoint for 15% of world shipping, was cleared today, I thought of another time it was blocked. Not for a week, but for 8 years. Following the Six Day War in 1967 between Egypt and Israel, Egypt blocked the canal to prevent Israel from using it. They placed old ships, debris, and even explosives in the […]

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What if Your Mask Could Test You for COVID?

Harvard researchers have invented a mask that can test the wearer for COVID: Researchers at Harvard University’s Wyss Institute for Biologically Inspired Engineering have figured out how to integrate a freeze-dried diagnostic Covid-19 test into a face mask. The test reacts with exhaled particles and gives a diagnosis in 90 minutes or less. The tests and a tiny blister pack […]

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A Giant Hedge Fund Is Imploding, Taking Stocks with It

Ten billion dollar hedge fund Archegos Capital Management is imploding, causing banks to frantically sell its portfolio to stem further losses: One mystery in a dramatic year on Wall Street has been the identity of a trader whose persistent purchases have sent shares in ViacomCBS Inc., Discovery Inc. and a handful of other companies surging even when the broader market […]

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Has GameStop’s Business Peaked?

GameStop’s 2020 results, released this week, were disappointing, with losses over $200 million last year. These weak results may be the best GameStop is likely to do for some time. The reason is something called the “video game console cycle.” Video game consoles are a huge part of GameStop’s business, especially with the games themselves increasingly moving to digital downloads. […]

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Are GameStop Shareholders About to Be Diluted to Oblivion?

It’s no secret that GameStop shares are way up this year, despite recent struggles: This could be an opportune time for the company to sell more shares to fund its transformation from a brick-and-mortar to a digital business. Indeed, the company hints at this in their latest annual report, just released after Tuesday’s market close: Since January 2021, we have […]

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You Won’t Believe Just How Volatile GameStop Is

The volatility in shares of GameStop Corp. has been widely reported, but just how volatile they’ve been this year truly boggles the mind. I found this gem in their annual report, which was just released this week: …from January 11, 2021 to March 17, 2021, the closing price of our Class A Common Stock on the NYSE ranged from as […]

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GameStop Sales Down 40% in 2 Years

Digging into GameStop Corp.’s annual report today, which just came out after yesterday’s market close, a couple numbers really stuck out to me: Sales are down 40% in 2 years Shareholder equity is down 80% in 2 years And lest we blame COVID for all of this, note that the percentage sales decrease from 2018 to 2019 was slightly larger […]

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Top GameStop Executive Resigns Suddenly

GameStop’s chief customer officer is resigning from the video-games retailer, per a Tuesday Securities and Exchange Commission filing released hours before the company announced its 2020 earnings. The filing said that Frank Hamlin, who also serves as executive vice-president, would leave the company on March 31, following a transition period. GameStop did not disclose the reasons for his departure, but […]

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The Best Motivational Speech of 2021

Investor Jason Calacanis was in rare form on the All-in Podcast on Friday: All of the answers are out there if you want to start a company. All the skills are freely available to you. You can learn anything online. I think the message I really want people to understand is you may believe that the world is filled with […]

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GameStop Has Failed to Modernize Before. This Is What Happened.

Many investors are excited about Chewy founder Ryan Cohen joining the GameStop Corp. board and helping the company transition to e-commerce. But what isn’t as widely known is that GameStop has tried this before, with abysmal results: Wall Street and short sellers placed heavy bets against GameStop because of strategic missteps. The company, at one point, latched onto game downloads […]