Hot Stocks Wanted

If you had invested $10,000 in Snowflake at its IPO price last week, you'd have a cool $20,000 or so by now.

Two major IPOs of last week — Unity (a 3D game development software) and Snowflake (a data warehousing company) saw big price pops almost immediately. At one point Snowflake was trading at $245 per share, more than double its IPO price of $120.

What drove the run: People close to the IPOs say both price spikes have been driven mainly by retail traders. In other words, amateur traders with apps like RobinHood.

Not the first time: You may remember other companies that saw large (some might say irrational) spikes in share prices over the summer, including Hertz. The rental car company's stock price soared during quarantine, which was especially perplexing as it happened after it declared bankruptcy.

Zoom out: Clearly there is money to be made correctly anticipating what retail traders on apps like RobinHood are going to pile into next. These zero-fee brokerages appear to be creating feedback loops that send stock prices — at least temporarily — through the roof. As long as you aren't the last one holding the bag, you're golden.
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Become a Spreadsheet Master

You know Excel, but c’mon, do you really know Excel?

This 6-week data analytics course from Lighthouse Labs, Canada’s leading tech education company, will turn you into an Excel pro. Colleagues, bosses, future employers — all will bow down to your spreadsheet skills. Plus you’ll learn how to use Tableau to present your results to your team.

Teaching real tech skills that employers look for is what Lighthouse Labs specializes in. And you can learn online from the comfort of your home on a schedule that works for you.

Oh, and did we mention $750 scholarships are available?

How to get started: The next round of classes kick off September 26th. Take a look at all the programs Lighthouse Labs offers here.

* Sponsored by Lighthouse Labs
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The Battle for MEC

A fight is heating up over plans to sell Mountain Equipment Co-op (MEC), a large Canadian outdoor retailer, to U.S. private equity firm Kingswood Capital Management.

What's at stake: Last week MEC announced it had obtained court protection from creditors and planned to sell its business to the private equity firm.

Why is there a fight: MEC has a unique corporate structure in that it is a consumer co-operative, meaning that customers who shop there must be "members" of the corporation. First-time customers at MEC must pay a $5 fee to become members. This allows them to, in theory, have some influence over corporate policies through voting for Board members. But members were not consulted over the sale to the PE firm.

What the members want: MEC members opposed to the plan have raised a $50,000 legal fund and plan to fight the sale, calling for an emergency members' meeting to replace the Board of Directors.

What's next: MEC members are hoping to get representation in the court process and present alternative proposals that would maintain Canadian ownership of the business. Whether this happens will be determined by what's decided in court.
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CMHC's Makeover

Canadian Mortgage and Housing Corporation CEO Evan Siddall is talking a big game when it comes to making over the organization he's been tasked with leading.

New Name: Siddall says the current name overemphasizes the financing of homes and doesn't do enough to highlight the agencies mandate of housing affordability. "Housing Canada" is being suggested as a replacement.

Big Goals: CMHC set the ambitious goal of providing all Canadians a home they can afford and that meets their needs by 2030.

Innovation: The agency has reduced turnaround times in funding new projects by 1/3, but more innovation is necessary to improve on this and other projects says the housing boss. He's floated the idea of an app to connect people without adequate housing with people who have excess capacity. Sounds like an egalitarian AirBnb.

Rapid Housing: Also suggested is a fund which would allow municipalities to buy up distressed assets when owners are forced to sell because of the pandemic, and turn them into housing.

Future Focus: Canada's housing agency has high aims, but first they'll need to help Canadians out of a hole, with $1 billion of mortgage payments having been deferred each month of the pandemic.
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Biggest Tech IPO Ever on TSX

Montreal payments startup Nuvei set records when it began trading on the Toronto Stock Exchange last week, becoming the biggest tech IPO ever on Canada's major exchange. The listing minted CEO Philip Fayer as Canada's newest billionaire.

Nuvei is a leader in global payment processing, founded in 2003 it now has 765 employees.

By The Numbers:

  • Nuvei raised approximately $924.5 million CAD in the offering, selling 26.9 million shares.
  • The stock (TSX:NVEI), closed at $46.15 on Friday, with a market cap near $6 billion.
  • The company has 50,000 merchant customers, processing $35 billion of transactions in the 12 months ending June 30th.
  • In 2019, Nuvei generated revenue of US$245.8-million and posted a net loss of US$69.5-million.

Market Pop: Nuvei's success on the markets can in part be attributed to the momentum behind e-commerce, driven by Covid-19 stay at home orders. The company y-o-y growth spiked 28.4% in June compared to 15% growth early in the year.

The S&P/TSX information technology index is up 33% this year, propelling Shopify to be Canada's most valuable company.
 
Zoom Out...Nuvei is the fourth successful tech IPO on the TSX since March 2019, down south 2020 has been the best year for go-publics in six years, with a number of big names still slated for trading this year.
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Bless up TikTok

First we had a winner, now we have a blessing. President Trump told reporters Saturday that the deal between TikTok, Oracle and Walmart, has his "blessing," in that it satisfies the President's demands to not ban the popular app from the United States. TikTok confirmed this in a statement.

Deal Details:
The fine print is yet to be printed, the following is what's been reported to date:

  • A new U.S. company will be formed, TikTok Global, of which American firms Oracle and Walmart will own 20%.
  • Other American investors who own equity in TikTok's parent company, ByteDance, will transfer some of their equity to the new company, pushing US ownership of TikTok Global to 53%, satisfying Trump's demand TikTok being majority US owned.
  • About 11% of the new company will be held by European investors in ByteDance.
  • The remaining 36% will be Chinese owned, through ByteDance.
  • Oracle will act as TikTok Global's "trusted technology partner," storing all US user data to "ensure US national security requirements are fully satisfied."
  • Walmart is working with TikTok on a "commercial partnership."

Political Winners and Losers: The big winners of this deal are Oracle and Walmart. Top executives from both companies have been in direct contact with Trump throughout this process, with reports of multiple calls on Friday. Oracle is one of the biggest boosters of the Trump administration in corporate America. China hardliners from both parties appear to be unsatisfied with the deal, Sen. Marco Rubio (R-FL) has called the arrangement "insufficient," while Sen. Mark Warner (D-VA) warns it leaves American companies vulnerable to Chinese retaliation.

Path Ahead: The president's "blessing" isn't enough, the deal requires official approval from the Committee on Foreign Investment in the United States, which will review a finalized documented deal. On the other side of the divide, China's regulators could kibosh the arrangement citing their own national security concerns.

A $5 Billion Hole...Oh ya, if this deal wasn't confusing enough, there seems to be a miscommunication of about $5 billion in free money. President Trump told reporters the deal would involve "a $5 billion contribution toward education.” ByteDance told Chinese media they were unaware of this commitment.

On this topic: U.S. judge halts Commerce Department order to remove WeChat from app stores.
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RIP Notorious RBG

US Supreme Court Justice Ruth Bader Ginsburg passed away on Friday night after a battle with cancer. Her death has sparked an outpouring of grief for the judge who became a pop-culture icon later in life. No time was wasted before heated political debate over her replacement process took over.

RBG's Legacy

  • RBG attended Harvard Law School, one of only nine women in a class of 500, where she had to justify to the dean why she was taking the spot of a man
  • She built a career as a lawyer advancing women's equality through the courts. Her early cases included "the mother brief," a state law that only allowed women to claim a tax deduction for taking care of a sick family member, and "Reed v. Reed" a case which became the first time the Supreme Court struck down a law because it discriminated based on gender.
  • Ginsburg was the first female tenured professor at Columbia Law School.
  • In 1980, President Jimmy Carter appointed RBG to the U.S. Court of Appeals for the District of Columbia Circuit.
  • In 1993, President Bill Clinton promoted the Judge to the Supreme Court, making her the second woman on the bench.
  • In her later years, as the court become more conservative, Justice Ginsburg led the liberal wing, writing dissents to important cases, especially those with relevance to women's rights, including Hobby Lobby, and Ledbetter which impacted access to birth control and equal pay respectively.

Early Retirement...Liberals and the left had been arguing for years now over whether aging democrat appointed Justices Ginsburg and Breyer should have resigned when Obama was in office and controlled congress. Too late to debate now.

2016 Flashback...When Republican appointed Supreme Court Justice Antonin Scalia died in the final year of Obama's presidency, Senate Majority Leader Mitch McConnell (R-KY) refused to hold a hearing for The President's nominee, reasoning the American people should decide via election. Now under similar circumstances, McConnell is using specious reasoning to justify voting on a Trump selection.

Amy Coney Barrett...is rumored to be the front runner for Trump's nominee, other contenders include Amul Thapar, Barbara Lagoa and Allison Jones Rushing, all of the candidates are judges for federal appeals courts.

43 Days...until the US elections, in this time Democrats will do everything in their power to avoid a vote on a Supreme Court appointee, while Republicans will stop at nothing to get Trump's pick on the bench.

Political Punditry...We're not going to try to predict how a fight over a Supreme Court seat will change the course of an already wild and unprecedented election, but traditionally conservatives are better organized and more motivated when it comes to the courts.

Post-Election-Pile-Up...If the election is close and the courts get involved (think Bush v. Gore in 2000), the Supremes are now split evenly between the left and right. In the event Trump is a clear loser, look for an attempt to push through a nominee in the period post election, before inauguration on January 20th, 2021.

The Road Ahead..BUMPY.
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Banking's Biggest Scandal

A massive data dump, being referred to as the "FinCEN Files," has exposed how the world's largest brand name banks knowingly profit from criminal money laundering, while authorities do nothing.

What are the FinCEN Files?

FinCEN is the US Financial Crimes Investigation Network, part of the US Treasury responsible for combating financial crimes. The files, known as suspicious activities reports (SARs) are thousands of documents sent from banks to flag suspicious behavior of clients.

What Does FinCEN do with SARs?

As it turns out mostly nothing. By sending the SARs to FinCEN the banks protect themselves from being complicit in the crime of laundering, FinCEN makes the files available to law enforcement agencies who rarely act on them. Bank execs and regulators know what's happening but don't take action, money is being made.

What Makes a Transaction Suspicious?

The suspicion is usually concerning where the money comes from. It's illegal for banks to accept proceeds of crimes, but for criminals to spend and store cash, a bank account is helpful.

Some suspicious transactions revealed include:

  • Standard Chartered took deposits from a business accused of laundering money for the Taliban
  • HSBC allowed a ponzi scheme to move millions through one of its branches.
  • Bank of America, Citibank, JPMorgan Chase, American Express and others processed millions of transactions for a corrupt politician on the run who was subject to an Interpol Red Notice. 

Why Does It Matter?

The laundering of money enables criminals around the world and the money ends up funding business we know and trust. The FinCEN Files are the biggest banking leak ever, they make clear that little effort is put in to stopping the global flow of criminal proceeds.
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Peak Picks

  • Thailand's revered King is under (quiet) fire for excessive spending during the COVID-19 pandemic. How excessive? The King amassed a fleet of 38 jets and helicopters for the Royal Family's use.
  • QAnon, the popular alt-right conspiracy theory, is taking the boomer internet by storm. Buzzfeed asks, how are you dealing with the QAnon believers in your life?
  • Black scholars are confronting white supremacy in... classical music. Read about how an oft-forgotten industry must confront their history of systemic racism.

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Leftovers

  • Safe Drugs: British Columbia is aiming to combat their drug overdose crisis by increasing access to safer, pharmaceutical versions.
  • Billionaire Boys Club: COVID wasn't bad for everyone... a study shows that Canada’s 20 richest people saw their fortunes grow by $37 billion during the global pandemic
  • School's Out (again): Only a week into the start of a new school year, a school in Pembroke Ontario has already had to shut down due to an outbreak of COVID.
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