Tag Archives: 2018 May 18

This Day In Market History: Facebook Goes Public

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day six years ago, Facebook, Inc. (NASDAQ: FB) held its highly anticipated IPO.

Where The Market Was

The Dow finished the day at 12,369.38. The S&P 500 traded at 1,295.22. Today, the Dow is trading at 24,713.98 and the S&P 500 is trading at 2,720.13.

What Else Was Going On In The World?

In 2012, Hurricane Sandy hit the U.S. East Coast, killing nearly 300 people and causing more than $50 billion in damage. Marvel’s “The Avengers” became one of the highest-grossing movies of all time. A dozen eggs cost $1.54.

Stumbling Out Of The Gate

There was tremendous buzz on Wall Street surrounding the Facebook IPO, but Facebook’s life on the public market didn’t get off to the kind of start investors had hoped for.

Facebook raised more than $16 billion from its IPO, which made it the largest technology IPO ever at the time. Facebook IPO shares were priced at $38.

When the stock began trading on May 18, it initially spiked as high as $45 before drifting lower throughout the day and finally closing at $38.23, just cents above its IPO price. From there, things only got worse for Facebook, which ultimately bottomed at $17.55 in late 2012.

All’s well that ends well for Facebook shareholders, however. Today the stock trades at a price above $180 per share.

Related Links:

This Day In Market History: Fed Chair Martin Issues Warning About Too Much Stock Market Speculation

Analysts Speak Up On Facebook's Big Quarter

Riot Blockchain's 10-Q Sheds Light On Crypto Mining Operation

Riot Blockchain Inc (NASDAQ: RIOT) quietly filed a 10-Q quarterly financial report on Thursday evening without issuing a press release or holding a conference call for investors. The filing provided some helpful insight into Riot's cryptocurrency mining business, according to H.C. Wainwright. 

The Analyst

Analyst Kevin Dede reiterated a Buy rating on Riot Blockchain and raised the price target from $9 to $10.

The Thesis 

Riot reported first-quarter mining revenue of $900,000, up from $200,000 in the fourth quarter, Dede said in a Friday note. The company said it plans to have 8,000 mining machines operational by the end of May.

Riot’s March quarter revenue fell short of H.C. Wainwright’s estimate, but Dede said the company could make up the difference later in the year.

Riot’s mining-focused business could simply be a stepping stone to the next stage of its long-term plan, he said. 

“Riot's long game entails building a digital currency exchange that operates independently but in harmony with household name, web-based, retail-focused brokerage systems, and the operations of a public company in good standing and concomitant oversight brings a cachet that differentiates from other privately held exchanges." 

While Riot’s cryptocurrency exchange may still be in the early planning stages, Dede said the company recently inked a deal with Coinsquare and purchased a Commodity Futures Trading Commission-registered brokerage firm. The cryptocurrency exchange could ultimately trump the mining business as Riot’s primary source of revenue, the analyst said. 

Price Action 

Riot stock was down 7.36 percent at the time of publication Friday, but shares have soared more than 30 percent in the past five days.

Related Links:

Despite Riot Blockchain's Risks, HC Wainwright Emerges As A Bull

Today In Cryptocurrency: Jack Dorsey Endorses Bitcoin, WSJ Finds Signs Of Crypto Fraud Everywhere

Photo courtesy of Riot Blockchain. 

Latest Ratings for RIOT

DateFirmActionFromTo
May 2018 H.C. Wainwright Initiates Coverage On Buy

View More Analyst Ratings for RIOT
View the Latest Analyst Ratings

Riot Blockchain's 10-Q Sheds Light On Crypto Mining Operation

Riot Blockchain Inc (NASDAQ: RIOT) quietly filed a 10-Q quarterly financial report on Thursday evening without issuing a press release or holding a conference call for investors. The filing provided some helpful insight into Riot's cryptocurrency mining business, according to H.C. Wainwright. 

The Analyst

Analyst Kevin Dede reiterated a Buy rating on Riot Blockchain and raised the price target from $9 to $10.

The Thesis 

Riot reported first-quarter mining revenue of $900,000, up from $200,000 in the fourth quarter, Dede said in a Friday note. The company said it plans to have 8,000 mining machines operational by the end of May.

Riot’s March quarter revenue fell short of H.C. Wainwright’s estimate, but Dede said the company could make up the difference later in the year.

Riot’s mining-focused business could simply be a stepping stone to the next stage of its long-term plan, he said. 

“Riot's long game entails building a digital currency exchange that operates independently but in harmony with household name, web-based, retail-focused brokerage systems, and the operations of a public company in good standing and concomitant oversight brings a cachet that differentiates from other privately held exchanges." 

While Riot’s cryptocurrency exchange may still be in the early planning stages, Dede said the company recently inked a deal with Coinsquare and purchased a Commodity Futures Trading Commission-registered brokerage firm. The cryptocurrency exchange could ultimately trump the mining business as Riot’s primary source of revenue, the analyst said. 

Price Action 

Riot stock was down 7.36 percent at the time of publication Friday, but shares have soared more than 30 percent in the past five days.

Related Links:

Despite Riot Blockchain's Risks, HC Wainwright Emerges As A Bull

Today In Cryptocurrency: Jack Dorsey Endorses Bitcoin, WSJ Finds Signs Of Crypto Fraud Everywhere

Photo courtesy of Riot Blockchain. 

Latest Ratings for RIOT

DateFirmActionFromTo
May 2018 H.C. Wainwright Initiates Coverage On Buy

View More Analyst Ratings for RIOT
View the Latest Analyst Ratings

Brent Crude Oil Reaches $80 Per Barrel, Can It Go To $100?

After Brent crude oil pushed through the psychological level of $80 per barrel early Thursday, there are once again whispers of $100 oil. Does this rally have further to run? Can oil hit $100?

With the price now 2.5 times higher than at from the nadir in 2016, the steady recovery in the price of oil has been driven by supportive fundamentals and geopolitics. Fundamentally, supply is tightening parallel to demand increasing. Solid global growth lifted global oil consumption by 1.6% last year; demand started to pick up again just as supply was being tightened by a range of factors.

Three main factors Influencing Oil Prices

1) OPEC

Firstly, the implementation by an OPEC led group, including Russia to cut production has almost eliminated the problematic supply glut. Whilst these cuts were initially intended as short-lived measures, they were extended last November. Questions remain over how and when OPEC will look to end these measures, which have been propping up the market. We don’t see OPEC rushing to bring the measures to an end, and that should keep oil well supported.

2) Venezuela

Venezuela has been producing half a million barrels less per day over the past year amid its ongoing economic and political crises, which is causing the collapse of the oil industry. Following a snap election on Sunday, rumoured to be rigged and unfair, oil traders are looking to see how the US will respond – talk of sanctions aimed at the oil industry are a real possibility. This in conjunction with the continued collapse of the Venezuelan oil industry would only boost the price of oil further making $100 an achievable target.

3) Iran

The most recent step higher for Brent, a rally of just around 10% in just over 2 weeks has come on the back of the US withdrawal from the Iran nuclear deal, and it reimposing sections aimed at the Iran oil industry. Regarding the sanctions, it’s still unclear how many countries and companies will comply with the sanctions and that uncertainty continues to push oil northwards. Next, we expect to see the US use trade negotiations to persuade China to reduce its Iranian oil imports. In this scenario we can expect oil prices to trend higher. On the other hand, should China deepen its energy ties with Iran, or keep them constant then we could expect the price oil to dip lower as the premium of the Iran announcement wears off.

Constraints On Rising Prices

Whilst the forces boosting oil higher are strong there are a several factors which are working against the rising price of oil could prevent a meaningful move towards $100.

1) Increasing US production

As the price of oil increase, US shale drillers are responding. Just last week 10 new US rigs were deployed taking the number of rigs to its highest level in three years. Production levels are exceeding expectations and has the potential to limit the rally in the price of oil. Investors will watch Friday’s Baker Hughes rig count closely; another strong reading could see Brent give back some recent gains.

2) Global Demand

Whilst global demand has been on the increase, a report by the EIA has warned that the price spike from the double supply shortfall from Iran and Venezuela will restrain oil demand. Interestingly, oil dipped lower on the news before shrugging it off and charging higher. This market response indicates that it is not something that traders are overly concerned about right now.

3) Strengthening Dollar

Given the inverse relationship between the dollar and oil, under normal circumstances we would expect the price of oil to come under pressure from the strengthening dollar.  Yet the breakdown of this correlation and subsequent (and most likely temporary) positive correlation between the two prices, begs the question if oil can rally hard on a stronger dollar, any fall in the greenback could send oil surging.

As Brent is in line for a weekly gain of over 3%, its 6th consecutive weekly increase, it’s fair to say that the bulls are clearly driving the oil market. Given the double supply shortfall, fundamentals are still very supportive of this rally having further to go. However, with CFTC data showing speculators cutting back on their very bullish positions for three straight weeks, we could be looking at a period of consolidation before another move higher. Should the supply shortfall factors continue, and OPEC keep the cuts in place across the year, then oil to $100 looks to be a real probability. 

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.