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US Says, “No Way, Huawei!” 

Daniel Chase

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Serving as the president of any country is a difficult job. Now, when I say ‘difficult,’ I’m not talking about trying to write a ten-page essay the night before it was due, on a book you didn’t read for class and you’re still hungover from last night. While that is impressive, and, I can neither confirm nor deny whether I’ve bested that challenge before, no job in the world can amount to the incredible amount of stress endured as president. President Donald Trump and President Xi Jinping of China are two men responsible for leading the world’s leading superpowers, I can only imagine the pressure they are under.

After what has seemed like an unending trade war between the US and China, Trump and Jinping sat down together several days ago and ironed out a 90-day trade truce, resulting in China agreeing to buy $1.2 trillion worth of American products, and America would remain in a holding pattern and not impose any more tariffs on Chinese goods. 

Now, by trade, I am not necessarily a pessimist, but I try to be as realistic as humanly possible. Historically, or at least over the course of the last few years, whenever something positive takes place in the geopolitical arena, almost immediately a headline hits media outlets about a story of some sort of unethical business practice or war crime. In the case of the brief moments of laughter and childlike wonder felt after the US and China agreed to a trade truce, within hours of this deal, Meng Wanzhou, the chief financial officer of Chinese tech giant Huawei, was arrested in Canada.

Now, here’s where all of this starts to get interesting.

Canadian officials arrested Ms. Meng, at which time she was immediately “sought for extradition by the United States” according to Ian McLeod, a spokesman for Canada’s Justice Department. 

As for the reasoning behind Ms. Meng’s arrest, Huawei, China’s largest telecom equipment manufacturer, has recently been under investigation for allegations that the company has broken American trade controls on Cuba, Sudan, Iran, and Syria. Huawei has garnered significant successes by tapping into telecom markets in countries around the world, but when the company decided to work with Syria, where American officials had been working to impose limits on technology in an attempt to prevent further human rights abuses, these businesses tactics have resulted in claims that China is purporting these atrocities. Earlier this year, the US Treasury and Commerce Department began investigating Huawei for claims that the company was potentially violating economic sanctions against Iran, according to the New York Times. 

“US law prohibits exports of certain US-origin technologies to certain countries. When Huawei pays to license certain US tech, it promises not to export to certain countries like Iran, So it is not unreasonable for the US to punish Huawei for flouting this US law.”

Julian Ku, Professor, Hofstra University 

Under the guise of threats to national security, President Trump has done everything in his power, while president, to thwart any attempts made by China to threaten the US tech industry. The arrest of a Huawei executive only furthers this point, given that Huawei and several other Chinese telecommunications companies have come dangerously close to beating the US to release devices on 5G wireless networks. Back in March, President Trump convinced US government officials to block Broadcom, a Chinese telecom company, from acquiring its US-based rival Qualcomm (QCOM), suggesting that the deal would pose a significant threat to national security. 

Naturally, a government panel was immediately assembled to investigate these potential national  security risks, specifically the Committee on Foreign Investment in the United States (Cfius), which then released a letter explaining their concerns on the matter:

“Qualcomm has become well-known to and trusted by, the U.S. government. Reduction in Qualcomm’s long-term technological competitiveness and influence in the standard setting would significantly impact U.S. national security…This is…because a weakling of Qualcomm’s position would leave an opening for China to expand its influence on the 5G standard-setting process. Chinese companies, including Huawei, have increased their engagement…”

Committee on Foreign Investment in the United States Letter 

The degree to which the US, and the Trump administration, is willing to go, in terms of scrutinizing the business operations of Chinese tech companies, only furthers the notion that President Trump feels threatened by China. In terms of the arrest of Meng Wanzhou, I foresee China responding accordingly very shortly. 

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Robinhood Steals From The Banks And Gives You The Rest

Daniel Chase

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If Americans love anything, we love our independence. We demanded our freedom from the clutches of Britain in 1776, and since then, mastering our own destinies has been the vibe. As the land of the free and the home of the brave, being an American means doing what we want, when we want, for as long as we would like, then cooling off with a Pabst Blue Ribbon whilst dragging on an American Spirit cigarette. But our expression of our right to live as we so choose is not confined to our beer/tobacco preferences, we support any company, no matter the industry, that empowers us to act on our own accord, and if we can capitalize on these ventures, they become all the more attractive to us. 

Banking off the sex appeal of the American DIY economy, Robinhood was founded in 2013 with the idea of taking the experience of investing in the stock market and turning it into an easy-to-use smartphone app. Over the course of the last five years, the startup has built a base of over 6 million users by offering consumers commission-free stock trades, resulting in the company’s current $5.6 billion valuation. According to Forbes, Robinhood’s six million accounts roughly equate to tens of billions of dollars, in terms of individual customer assets. While I have yet to download the Robinhood app, several colleagues of mine have raved without end on the app’s user interface, and ease when investing. Robinhood’s success has allowed the company to threaten brokers like E*Trade and Charles Schwab, and they are showing no signs of slowing down. 

On Thursday, Robinhood announced a new component of their business model, “Robinhood Checking & Saving,” which, staying true to the creative name, will see the company offer to its users free checking and savings accounts with a MasterCard debit card issues through Sutton Bank. According to several sources, Robinhood’s new accounts program will have no minimum balances, overdraft charges, or membership fees for its account holders. In addition to these incentives, Robinhood users who elect to store their money in these new accounts will earn 3% interest annually. 

“Brick-and-mortar locations are costly. Our goal with this product was to build a completely digital experience so we can reduce our overhead so we can pass more of the value back to customers. Saving accounts in the US pay on average 0.09 percent and we all know the banks are making far more than that from the deposits. With Robinhood you earn 3 perfect of all of your money. Mental math is hard so if you look at the median US household that has about $8000 in liquid savings, they’d earn $240 a year.”

Baiju Batt, Co-Chief Executive Officer, Robinhood 

Robinhood’s CEO is spot on when he talks about how banks profit off the money we store in our checking and savings accounts. Banking institutions like Wells Fargo and JP Morgan Chase use depositors’ money to pay for everything from loans for other customers to doling it out to other branches in need of quarter rolls for coin-operated laundry. Either way, lack of bank transparency is one of the motivating factors behind the success, albeit not recently, of decentralized currency. 

The original intended purpose for cryptocurrency was to alleviate the trust-based model of depending on traditional banks to transact and safely store money. Blockchain technology allows consumers to access the ledger for every transaction they take part in, thus allowing for the transparency that big banks have yet to catch on to, or simply avoid. 

The release of Robinhood-backed checking and savings accounts indicates that, similarly to decentralized currencies, consumer mistrust in traditional banking institutions is increasing. People want to know their money is secure, and, while its kept in a location, how the money is being used. 

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Virgin Galactic Goes Interstellar

Daniel Chase

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“Space…the final frontier…these are the voyages of the starship Enterprise. It’s five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.” For you non-science geeks out there, this quote played at the beginning of every episode of the tv series, “Star Trek,” and when it did, people across the globe, including myself, would squirm with excitement for a show that depicted life in the future. Although Star Trek was largely science fiction, its fans had an inkling that one day, space exploration for humans would be possible. Space represents our next step in human life, with possibilities as infinite as the reaches of the cosmos. Until recently, unless you trained all your life to become an astronaut for NASA, getting to space was more attainable through imagination then physically traveling there. However, if we’ve learned anything in the last decade, if you have vast amounts of expendable income, you can achieve what was previously conceived to be impossible. 

Typically, when speaking on an individual with significant capital to create crazy inventions and such, we assume Elon Musk is behind the curtain, but not today, friends…not today…Richard Branson, the founder of Virgin Group, the company responsible for selling records, flying airplanes, making olive oil, and as of Thursday, sending two test pilots in their SpaceShipTwo to the edge of space. 

According to reports, the aircraft took at 7:30am on Thursday morning, climbed over 52 miles of altitude and hit a top speed of Mach 2.9, or 2225.08 miles per hour for you non-aerospace plebeians. Continuing the brief aerospace lesson for a hot moment. When reports say SpaceShipTwo reached the “edge of space,” they are referring to the internationally recognized Karman line. Referencing the always faithful Wikipedia definition, the Karman line “lies at an altitude of 100km (62 miles, 330,000 ft) above Earth’s sea level and commonly represents the boundary between Earth’s atmosphere and outer space.” So, to put it nicely, the two astronauts aboard Virgin Galactic’s spacecraft didn’t quite reach space just yet. 

Branson’s Virgin Galactic enterprise represents the nascent nature of the space tourism industry. It’s not that we’ve necessarily exhausted all travel accommodations here on Earth, but outer space has been virtually unattainable for non-astronauts for as long as space travel has been possible. Thursday’s test flight is the fourth in a series of tests for VSS Unity, the official name of Virgin Galactic’s spacecraft, meant to make sure that every aspect of the space-bound journey is safe for commercial missions in the future. 

“Incremental flight test programs are by definition open-ended and, to a great extent, each test depends on the data from the test that precedes it. There is no guarantee that everything will work the perfectly first time and, like all programs seeking to take  bold steps, we will inevitably have times when things don’t go as planned.”

Official statement from Virgin Galactic regarding VSS Unity test flight

So, what does this mean for the future of the space tourism industry and space travel as a whole? 

First of all, Virgin Galactic’s test flight indicates that we are getting extremely close to commercial missions to space. The company says about 600 people have grabbed spots in line to be the first ones to fly to space, spending anywhere from $200,000 to $250,000 per ticket. In anticipation of the industry’s stellar future, Amazon’s chief executive and eventual intergalactic commissioner of the cosmos, Jeff Bezos, founded Blue Origin nearly two decades ago to send passengers into space on an automated, vertically launched rocked. To date, Blue Origin has yet to conduct a test flight with a manned aircraft, nor sell tickets in advance of the company’s eventual space voyages. 

Either way, the hopes and aspirations inspired by Star Trek’s opening monologue are no longer a fantasy. As Richard Branson and Virgin Galactic get closer to commercial space travel, fairly soon, we’ll be able to boldly go where no group of humans has gone before. 

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Nvidia Stock Price Tanks 50% After New Chip Release

Daniel Chase

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Success is a double-edged sword if you really think about it. Let’s assume, for sake of example, you start a tech company that manufactures custom keyboards for laptops and desktops. You convince a small VC firm to throw you some seed money and, after months of R&D, product design meetings, and countless visits to Office Depot, you’re exhausted and the company is headed down the tube. No one cares about you or your company, your girlfriend leaves you, it’s all bad news bears. Then, seemingly out of nowhere, everything changes. A major manufacturer of PCs in China wants to collaborate with your startup. You’ve hit the big time! TechCrunch raves about you, Elon Musk tweets that he’d love to grab lunch with you when you get the chance. Everything is perfect until Apple (AAPL) announces that they plan on releasing custom keyboards for their products, and Google (GOOGL) hires several street artists from South Korea to take a stab at the previously niche market that your company was responsible for creating. And in no time, there you are, right back in the tubes. 

Over the past several months, Nvidia (NVDA), known for manufacturing top-of-market graphical processing units (GPUs) for gaming and other applications such as computer-assisted design (CAD), has returned to the tubes after a significant period of sustained success. Back in August, U.S. News reported that 76.4% of PC gamers, at the time, used Nvidia (NVDA) graphics cards, elevating the company to benedictine status in the gaming industry. As we have seen with companies like Epic Games, the creators of “Fortnite,” there is serious lucrative potential in video games. However, most gamers prefer to play on consoles like Microsoft’s (MSFT) Xbox One or Sony’s (SNE) Playstation 4, rather than on a personal computer. Due to this notion, over the years, Nvidia (NVDA) looked elsewhere to e expand its product offering and, until very recently, found its niche in cryptocurrencies. 

About nine months ago, TechCrunch reported on a major inventory shortage of Nvidia’s (NVDA) GPUs due to the increased preference of these chips for mining for cryptocurrencies, specifically Ethereum (ETH). When news broke about the shortage, Nvidia’s (NVDA) Chief Executive Jensen Huang told the press that he wishes consumers would stop using his company’s products for crypto mining. 

“We’re sold out of many of our high-end SKUs, and so its a real challenge keeping [graphics cards’ in the marketplace for games. At the highest level the way to think about that is because of the philosophy of cryptocurrency — which is really about taking advantage of distributed high-performance computing — there are supercomputers in the hands of almost everybody in the world so that no singular force or entity that can control the currency.”

Jensen Huang, Chief Executive Officer, Nvidia 

While this was probably very exciting for Nvidia (NVDA), which saw impressive growth in their revenue stream from $1.05 billion in 2013 to $3.2 billion following the company’s foray into supplying crypto miners with processing equipment, anyone with a connection to the internet will know that cryptocurrencies haven’t felt too hot lately. The crypto industry has all but crashed, with Bitcoin down more than 80% from its all-time high set in December 2017. For one reason or another, crypto investors are selling off and bailing on the once-lucrative market. 

In addition to Nvidia’s (NVDA) financial troubles in connection with crypto losing its luster, it can’t help that companies across Silicon Valley are feeling anxious due to President Trump’s trade war with China. 

“Nvidia executives are watching the trade fight with growing unease over whether it will curb its access to Chinese customers. Almost 20% of Nvidia’s $9.7 billion in revenue last year came from China. Many of its chips are used there for assembly into other products, and it has heavily invested to tap China’s burgeoning AI industries.”

Dan Strumpf and Wenxin Fan, The Wall Street Journal 

Nvidia’s (NVDA) increasing irrelevance is not only due to the eventual death of cryptocurrency, but rather other companies in the space, namely tech giants like Apple (AAPL), Google (GOOGL), and Amazon (AMZN) are stepping up their game in the GPU manufacturing business. Though none of these companies have broken into manufacturing chips for the gaming industry, it may only be a matter of time before Nvidia (NVDA) loses its preeminence. In anticipation of the company’s decline, Nvidia (NVDA) stock has dropped from a closing price of $289.36 on Oct. 1 to Wednesday’s open of $148.42, a near 50% drop, according to TechCrunch. 

Only time will tell as to how Nvidia (NVDA) will fare in the coming months. 

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