SoftBank Mobile Goes Live 📱 Pharma Swallows A Bitter Pill 💊

by | 19 Dec, 2018

 

1. SoftBank Mobile Goes Live 

The much-anticipated Initial Public Offering (IPO) of tech investment giant, SoftBank’s, telecommunications arm, SoftBank Corp, kicked off this morning in Japan’s biggest-ever IPO. The $23.5 billion price tag, however, proved to be a bit overambitious with the share dropping more than 14% during the session, and it may not be done yet!

2018 has been a rough year for IPOs, especially in the tech sector, with many sliding significantly in the first few weeks or months before forming a solid base. Amidst one of the worst global sell-offs in a decade, SoftBank’s above-market 1,500 Yen opening price was seen more as a high-risk move by investors, rather than a sign of confidence. Bold moves don’t always pay off.

The run-up to the IPO was far from smooth and may be part of the reason why it drowned in a sea of red today. Network outages in Japan caused by software issues, and links to Huawei’s IP theft allegations put the IPO on shaky ground before it had even gone live.

Saudi Arabia’s involvement in SoftBank’s $100 billion Vision fund has also become a contentious issue, with many businesses objecting to joint-ventures on moral grounds following the Khashoggi execution.

The overall picture of a weak global environment, network outages and sketchy business partners culminated into an overvalued IPO, which may still have another 10-20% still to lose…Hard luck, SoftBank!

 

2. Pharma Swallows A Bitter Pill

Pharma’s 12 largest companies have released data showing their lowest returns on R&D in over 9 years, falling to a lowly 1.9% from 3.7% in 2017. Yikes, that is a bitter pill to swallow!

Drug development has almost doubled in price since 2010 and looks set to continue at its current pace unless big pharma can come up with a solution. Peak sales of new medicines have also halved since then, giving a grim picture of higher costs and lower consumption…The feared double-whammy!

The focus seems to have shifted away from broad production to niche, specialist treatments and medications for small targeted groups of patients. By comparison, the next generation of more agile specialised biotech firms fared much better, only declining from 12.5% returns on R&D to 9.3%. It seems bigger is not always better.

The big names, such as Pfizer, Novartis & GlaxoSmithKline had better get innovating before their returns sink into the negatives. It’s about time the top dogs got a shake-up!

Today we are watching…

1. WTI Crude Oil (#wtioil)

WTI cascaded below the $50 per barrel mark during yesterday’s session, sliding more than 7% to shatter its previous low. Rampant oil production in the US, Russia and the Middle-East has caused an oversupply crisis that has forced prices down 40% in the space of two months. With production still breaking record levels, the floor may still be further out in 2019!

2. Tesla (#tesla)

Morgan Stanley and Goldman Sachs Cut Tesla down to size yesterday in reports predicting dwindling demand in Q1 of 2019 and downside potential between 15-35%! Tesla dipped 3.29% yesterday, and may have room for more if the two banking giants keep adding selling pressure. All eyes on Tesla.

 

 

 

 

 

 

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:

Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.

Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.

Brokerage services of US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth, LLC a registered broker-dealer and member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. 

DriveWealth provides no tax, legal, or investment advice of any kind, nor does DriveWealth give advice or offer opinions with respect to the nature, potential value, or suitability of any securities transaction or investment strategy. DriveWealth acts as the clearing firm for securities transactions entered on the Invstr mobile platform. DriveWealth is not affiliated with Invstr. Invstr does not participate in DriveWealth’s decision-making.

There is no minimum initial deposit required to open an investing account with DriveWealth. Expenses and Fees associated with the DriveWealth platform in conjunction with Beanstox includes either a monthly membership fee of $4.99 with a commission charge of $0.01 per share* or, in the event the membership fee is not paid, a commission charge of $0.0125 per share applies, subject to a minimum of $2.99 per transaction. There are no monthly minimum fees, or required ongoing minimum account balance. For non-resident aliens, there is a one-time tax verification fee of $5.00 (representing Form W-8BEN pass-through processing cost). View a full list of our fees at http://bit.ly/DWFees

The monthly subscription charge is four dollars and ninety-nine cents (US$4.99) per month plus one cent (US$0.01) per share traded (as examples, for a Transaction of 0.90 shares, the per share traded charge is one cent (US$0.01), and for a Transaction of 1.6 shares, the per share traded charge would be two cents ($0.02), and the quarterly subscription charge is fourteen dollars and ninety-nine cents (US$14.97) every 3 months plus one cent (US$0.01) per share traded. The monthly and quarterly subscription charges may be greater or less depending on additional services offered by a DriveWealth partners as part of the subscription model offering, or based on any subsidies provided by a DriveWealth partner as part of the subscription model offering. For non-resident aliens, there is a one-time tax verification fee of $5.00 (representing Form W-8BEN pass-through processing cost).View a full list of our fees at http://bit.ly/DWFees

This communication is not an offer or solicitation to purchase or sell securities. Investing in securities carries risk, including the loss of principal. Past performance is not indicative of future returns, which may vary. Online trading has inherent risk due to system response and access times that may be affected by various factors, including but not limited to market conditions and system performance. An investor should understand such facts before trading. The risks associated with investing in international securities, including US-listed ADRs and ETFs that contain non-US securities include, among others, country/political risk relating to the government in the home country; exchange rate risk if the country's currency is devalued; and inflationary/purchasing power risks if the currency of the home country becomes less valuable as the general level of prices for goods and services rises. Before investing in an ETF, an investor should consider the investment objectives, risks, charges, and expense of the investment company carefully. ETF prospectuses are accessible within the mobile application via a link under each company’s “Description.”

A fractional share is a share of equity ownership that is less than one full share. Fractional share investing has certain limitations and restrictions that investors should understand prior to purchasing fractional shares: ownership of less than one full share does not give the fractional share owner the right to vote on company matters; fractional shares are non-transferrable, meaning they cannot be transferred to another brokerage firm; and fractional share orders will be accepted as market orders only. For more information and details on fractional shares, and any associated limitations or restrictions please visit: https://drivewealth.com/fractional-shares-disclosure

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