Author: Dorian Holden

The Nikola (NKLA) soap opera continues.

“Like sands through the hourglass, so are the days of our lives.” 

When we last left off, Nikola had just been bashed by two short-sellers.

Hindenburg Research accused the EV company of being “an intricate fraud,” which has allegedly been built on lies by its Founder and Chairman Trevor Milton. 

“We have gathered extensive evidence-including recorded phone calls, text messages, private emails and behind-the-scenes photographs-detailing dozens of false statements by Nikola Founder Trevor Milton,” said the report, as quoted by MarketWatch.

Then, Citron Research piled on.

“Congrats to Hindenburg for exposing what appears to be a total fraud with $NKLA. Citron will cover half of all legal expenses. You can’t SLAPP the truth away. Explains why Milton sold at $10 this June $NKLA response warrants an SEC investigation to maintain integrity of EV mkt.”

But Nikola shouldn’t be counted out just yet.

This morning, shares are rebounding after providing a detailed rebuttal to Hindenburg, calling their report “false and misleading.”  Nikola has also contacted its own attorneys and the US SEC on allegations the Hindenburg report was designed to manipulate the stock.

According to Nikola, as noted by MarketWatch, “Hindenburg made dozens of inaccurate allegations, including a misrepresentation of Nikola’s position on battery technology, attempts to falsely link the termination of a former CFO with the announcement that it would refund Nikola One reservation deposits, allegations that the 2016 Nikola One was not a real truck, that it mischaracterized a quote by a Bosch employee and that the company buys and does not make inverters in-house.”  

To read the full rebuttal from Nikola, click here.

The post Nikola Rebounding on Its Hindenburg Short Seller Rebuttal appeared first on Morningology.

We may be nearing a COVID-19 vaccine.

In fact, Pfizer (PFE) CEO Albert Bourla just said there’s a “good chance” the company will know if its vaccine works by the end of October 2020.

The CEO told Face the Nation, “We started already manufacturing and we have already manufactured hundreds of thousands of doses, so just in case we have a good study readout, conclusive and FDA, plus the advisory committee feels comfortable that we will be ready.”

The company, along with BioNTech (BNTX) has already begun enrolling 30,000 people in its Phase 3 vaccine trial.  However, it’s now looking to expand that enrollment to 40,000, as it attempts to expand to far more vulnerable populations.

“We go to younger people. Right now, the study recruits from 18 to 85. Now we will go to 16 years old,” he said. “Also, we will go to people with special conditions, chronic conditions like HIV patients, but also we will try to use it to increase the diversity of the population.”

Of course, this could be substantial news for the companies, and the world ready to be finished with this debilitating virus.

At the moment, there are 29.05 million global cases with 924,953 deaths.

In the U.S., the number of cases is up to 6.52 million.  In India, 4.8 million.  In Brazil, the count is up to 4.33 million.  In Russia, it’s up to 1.06 million.  And in Peru, it’s up to nearly 730,000.

On the news, shares of Pfizer are up 80 cents to $36.83.  BNTX is up $3.36 to $68.49.

The post COVID-19: We Could Have Critical Vaccine Answers by Oct. 2020 appeared first on Morningology.

Shares of electric vehicle company, Nikola (NKLA) just turned lower on a short seller report.

Just today, Hindenburg Research accused the EV company of being “an intricate fraud,” which has allegedly been built on lies by its Founder and Chairman Trevor Milton. 

“We have gathered extensive evidence-including recorded phone calls, text messages, private emails and behind-the-scenes photographs-detailing dozens of false statements by Nikola Founder Trevor Milton,” said the report, as quoted by MarketWatch.

“We have never seen this level of deception at a public company, especially of this size.” 

The MarketWatch report added, “Nikola has misled partners by making false claims about the company’s technology, including its hydrogen fuel cell batteries, which Hindenburg says never existed. The company is now planning to use General Motors Co. battery technology after signing a deal with GM this week, under which it will issue $2 billion of new shares to GM.”

At the moment, shares of NKLA are down nearly 8%, or $3.30 to $39.06.  

The post Short Seller Attack: Here’s Why Nikola Stock Just Turned Lower appeared first on Morningology.

The idea of space tourism is out of this world.

As is demand…

In fact, while companies aren’t ready to send consumers into space just yet, companies are already seeing big demand.  According to analysts at Cowen, 39% of people with a net worth of more than $5 million are already interested in paying at least $250,000 for a flight, says CNBC.

One of the top stocks seeing sizable momentum on the story is Virgin Galactic (SPCE), which is seeing big interest from analysts.

Credit Suisse, for example just reiterated an outperform rating on the stock, telling investors not to be on the sidelines, as SPCE enters the next round of development testing.

“With flight schedule visibility improving, and with scarce public investment opportunities in Space, we see a healthy demand environment for shares during the catalyst period,” Credit Suisse analyst Robert Spingarn said, as quoted by CNBC.

UBS initiated coverage with a buy rating and said the SPCE stock could rocket 50% over the next year, as space tourism becomes a potential $800 billion industry by 2030, says Forbes.  UBS also sees demand outstripping supply for many years when SPCE starts its commercial operations.

Although “there will be competitors,” Virgin Galactic has an advantage in its “life-long brand connection, in addition to an operating model supporting a uniquely high flight-rate,” UBS analyst Myles Walton said in his note.

And while earnings are nothing to write home about just yet, there’s still opportunity – as it expects to see its first commercial space flight taking place in the first quarter of 2021.  

In its most recent quarter, SPCE posted a Q2 loss of 30 cents on zero revenue.  Analysts were expecting a loss of 28 cents a share.  In addition, the company has already received 700 deposit payments for potential passengers as part of its “One Small Step” initiative.  

The post A Potential $800 Billion Space Tourism Opportunity appeared first on Morningology.

Tesla (TSLA) is taking a massive hit this morning.

At 10am, shares were down another $77 a share after plunging on news of a stock offering.  Nowadays, the EV maker it down on news of an S&P 500 snub.  Even after posting its fourth consecutive quarter of profitability, Tesla was left out of the index.

“Unclear why [Tesla] was not included in the recent rebalancing cycle, though we do think the stock will be eventually added to the S&P 500, having fulfilled all inclusion criteria,” Baird analyst Ben Kallo said, as quoted by Marketwatch.

While the stock appears weak, keep an eye on it for a buy opportunity.

And remember there’s still plenty of momentum behind the company.  

According to a new study from the Boston Consulting Group, by 2025, EVs could account for a third of all auto sales.  By 2030, EVs could surpass internal combustion engine vehicles with a market share of 51%.   Plus, experts now predict that by 2030, electric cars will make up 58% of the light vehicle market.

In addition, the TSLA stock is quite attractive after a 5:1 split.  TSLA now trades at $344.  From here, we’re confident the stock could see higher highs once the pullback is exhausted.

The post This is Why Shares of Tesla Were Smoked this Morning appeared first on Morningology.

It’s still not time to panic in the market.

What we’re seeing is a healthy correction after a sizable rally from March 2020 lows.  We were long overdue for this – and we don’t expect for it to drag on for too long.

A 10% to 15% correction in the markets would be healthy.  That’s according to long-time bull Ed Yardeni, President of Yardeni Research, as noted by CNBC.

“The market has had a huge move since March 23. The Nasdaq is up something like 70%. That’s a melt-up. It’s not as big as what we had in 1999 when we had over 200%. But I wouldn’t want to see a repeat of that. So, I’m actually somewhat comforted by the market taking a break here,” he told CNBC.

Allianz’s Mohamed El-Erian also just told CNBC, “We could have another 10% fall, easily.”

“El-Erian said the market, though, remains decoupled from not only the U.S. economy, but the VIX, treasury and high-yield markets at current levels. With the tech-heavy Nasdaq up double digits and the benchmark index up nearly 7%, the market was ripe for a pullback after five straight months of gains and the strongest August in decades,” added CNBC.

If you are panicking, stay calm.  Sit tight.  The worst thing an investor can do is sell into chaos.  What you have to remember is that markets are resilient, and the latest pullback is getting a bit overdone at this point.

Stay tuned for more on the pullback.  We’ll keep you up to date.

The post It’s Not Time to Panic with This Pullback appeared first on Morningology.

If you pay attention to technical analysis, you saw the pullback coming.

Not only were indices overbought at their upper Bollinger Band (2,20), but RSI, MACD, and Williams’ %R were all aligned in overbought territory.  We saw the exact same set up twice before just this year.  Each one led to a pullback.

While we don’t expect for this pullback to last long, we could see a further drop.

And we’re not the only ones that believe so.  Allianz Chief Economic Advisor Mohamed El-Erian just told CNBC, “We could have another 10% fall, easily.”  

“El-Erian said the market, though, remains decoupled from not only the U.S. economy, but the VIX, treasury and high-yield markets at current levels. With the tech-heavy Nasdaq up double digits and the benchmark index up nearly 7%, the market was ripe for a pullback after five straight months of gains and the strongest August in decades,” added CNBC.

If you take a look at a one-year chart of the Dow Industrials, you can see the index has just begun to pivot lower from its upper Bollinger Band.  At the same time, you can see RSI, MACD, and Williams’ %R have also just begun to pivot lower.

From here, the index could easily test support at 27,526.  Should it break below that, it could test its 50-day moving average, which would put it around 27,058.  From there, the next test would be of double bottom support at 25,992.

We don’t think the pullback will become that severe, though.  Stay tuned for more.

The post This is Why the Dow Jones Could Fall Another 10% — Easily appeared first on Morningology.

With the pandemic, Zoom Video Communications (ZM) was a no-brainer trade.

After all, with more people working and schooling from home, ZM was one of the top beneficiaries of it.  So, it came as no surprise that earnings were explosive.

Revenue soared 355% to $663.5 million, topping analyst expectations for $500.5 million.  Adjusted EPS came in at 92 cents, which was more than double expectations for 45 cents. 

Zoom also raised its guidance for the full 2021 fiscal year. Revenue is now expected to fall in a range of $2.37 billion and $2.39 billion, which, according to CNBC, implies 282% growth in the middle of the range.  That’s also above estimates for sales of $1.81 billion.

“Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform. At Zoom, we strive to deliver a world-class, frictionless, and secure communication experience for our customers across locations, devices, and use cases,” said Zoom founder and CEO, Eric S. Yuan. 

“Our ability to keep people around the world connected, coupled with our strong execution, led to revenue growth of 355% year-over-year in Q2 and enabled us to increase our revenue outlook to approximately $2.37 billion to $2.39 billion for FY21, or 281% to 284% increase year-over-year.”

However, Zoom isn’t the only way to trade the story.  

Other hot Zoom-like stocks to keep an eye on include:

DocuSign Inc. (DOCU), which soared this week after Zoom Video Communications’ earnings report.  “Zoom’s earnings, which topped expectations, suggested that technologies enabling remote business functions are still seeing explosive growth due to the pandemic. DocuSign, which enables electronic signatures on legal documents, is due to report its own results after Thursday’s closing bell,” noted MarketWatch.

Slack Technologies (WORK), which is now up to $34 a share is also benefiting as people work and attend school from home.  The company will release its next earnings report on Tuesday, September 8, 2020 after the closing bell.

The post One of These Stocks Could Produce the Next Zoom-Like Boom appeared first on Morningology.

After splitting 5:1 earlier this week, shares of Tesla (TSLA) ran from $435.40 to a high of $502.08.  From there, the stock took a dive to $440.49.

That’s happening for two reasons.

One, it just disclosed that one of its biggest shareholders sold a good deal of stock.  In fact, according to a U.S. SEC filing, Scotland-based Baillie Gifford & Co. cut its stake to 39.53 million shares from 39.63 million shares.

However, according to The Wall Street Journal, the firm sold to “meet internal guidelines that limit the percentage of the portfolio that can be invested in a single stock,” as quoted by MarketWatch.

“We intend to remain significant shareholders for many years ahead. We remain very optimistic about the future of the company. Tesla no longer faces any difficulty in raising capital at scale from outside sources but should there be serious setbacks in the share price we would welcome the opportunity to once again increase our shareholding,” they added.

Two, the news comes just a day after Tesla announced it would sell $5 million worth of stock.  

But don’t count the stock out just yet.

There’s still plenty of bullish momentum remaining for Tesla and the EV boom.  

According to a new study from the Boston Consulting Group, by 2025, EVs could account for a third of all auto sales.  By 2030, EVs could surpass internal combustion engine vehicles with a market share of 51%.   Plus, experts now predict that by 2030, electric cars will make up 58% of the light vehicle market. 

At the moment, shares of Tesla are down $30.45 on the day to $444.60.

It’ll be interesting to see what happens next for the stock. Technically, it’s overbought at the moment at its upper Bollinger Band (2,20), with severe over-extensions on relative strength (RSI), MACD, and Williams’ %R.  Worse case, TSLA could dip to test its 50-day at $318.

We don’t believe the pullback will get that severe, though.

The post This is Why Tesla Stock is Dropping appeared first on Morningology.