10 July Watchlist đź‘€

by 10 Jul, 2020

Alibaba’s $200 Billion Baby to List and Disneyland Reopening

Over in Hong Kong, Alibaba’s having a baby. Let’s spotlight this because if Alibaba’s subsidiary, ANT Financial, goes public as Hong Kong’s biggest fintech stock, it could have a market value of over $200 billion.

This would fuel the fire of Asian markets that have been unstoppable recently, a pick-me-up for Hong Kong after China’s security law, and a shun to New York exchanges after the White House’s own anti-foreign stock legislation.

What is ANT Financial? The world’s largest venture capital investment. It operates AliPay, the world’s largest online payment system. If it goes public as reports suggest, it will change the world!

In recent years, attendance figures at Disneyland haven’t changed a great deal, but the average spending from visitors inside parks has seen a huge increase. These increases have been matched by new expenses for park operators, so profitability hasn’t changed much. This might be about to change.

The costs of running a park are fixed. It doesn’t matter how many visitors come through the turnstiles, the costs are the costs, and bigger visitor numbers are the priority to put distance between those costs. We call it operating leverage.

As Disney reopens, visitor numbers will be the focus as analysts predict most families will delay their magical trips another year. We’re about to find out, but if visitor numbers fall too much, investors could see the ugly side of operating leverage! 

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.


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