LONDON, July 22, 2020
FN Media Group Presents Oilprice.com Market Commentary
LONDON, July 22, 2020 /PRNewswire/ -- The stock market rally is faltering, and investors are now looking for new hot spots to park their money for a lasting COVID bump. Three sectors are attracting all the attention. Mentioned in today's commentary includes: NIO Inc. (NYSE: NIO), Nikola Corporation (NASDAQ: NKLA), General Motors Company (NYSE: GM), Ford Motor Company (NYSE: F), DraftKings Inc. (NASDAQ: DKNG).
As investors await new earnings reports and COVID-19 uncertainty rises amid a massive surge in cases in the U.S. without any assurance of more stimulus, all eyes are on EVs and biopharma for the obvious risk-return rewards, but online gambling offers the biggest payout, with potential Netflix-sized growth prospects.
The Robinhood no-fee trading app has democratized the investing world and unseasoned young traders with a penchant for impact investing have jumped into the digital trading world. They're hot on EVs in particular, and so far, 10,000 day traders an hour are buying up Tesla, pushing the EV darling's stock to remarkable new heights.
On the home entertainment scene, streaming, esports, video gaming and online sports betting are reaching new heights, while sports betting continues to pull in tons of cash during the pandemic. One new entrant, FansUnite Entertainment Inc. (FANS; FUNFF), is hot on the acquisition trail in Canada and now launching a more stealth-like move into the U.S.
The first phase of the wildly explosive online gaming and sports betting industry was all about getting the tech right. The second phase is about bringing it all together. And FansUnite is where it all comes together.
Meanwhile, the biopharma industry is riding high on its mandate to save the world, with one stock exploding for a company that doesn't even have any product on the market--and never has. Still, it's gotten the farthest with COVID vaccine test results, and now its valuation is futuristically ballooning.
#1 Electric Vehicles Are Booming
There's absolutely no stopping the ESG momentum right now, and Tesla (TSLA) is the prime beneficiary for a couple of reasons. COVID-19 should have hit the EV industry hard because of a pandemic lull in driving in Q2--but it didn't. Instead, EVs have been one of the most visible beneficiaries of the solidified power of impact investing, particularly with regard to climate change.
Tesla has been tearing it up, with stocks surging threefold year-to-date, and it's also boosting other EV stocks in the process. Now, not only is Tesla the biggest manufacturer of electric cars and the most valuable car company in the world, but it's even bigger than American oil supermajor ExxonMobil.
Like Tesla, NIO Inc. (NIO) has also seen its share prices skyrocket since the beginning of the year. Though the trade war weighed on it significantly in 2019, Nio has received a wave of investor interest as China's economy began to recover from the COVID hit. The stock has gone from $3.72 back in January to $12.86 at the time of writing, earning patient investors a stunning 245% return. The momentum is also now resulting in a downpour of IPOs in this space as more companies try to latch onto this at the right time.
Hydrogen truck maker Nikola (NKLA) has gone public after a reverse merger with VectoIQ in June, with its stock up more than 60% since. Likewise, Hyliion EV truck company announced its own IPO plans in June, merging with Tortoise Acquisition Corp.
EV maker Fisker plans to go public via a merger with Spartan Energy Acquisition, in a deal that values Fisker at $2.9 billion, and China-based EV startup Lixiang Automotive Inc. filed for IPO last week.
It's a space that is filling up so fast that it threatens to leave traditional automakers in the dust. But they're not going out without a fight.
In addition to its line of electric cars, General Motors (GM) has set itself apart from many large automakers, creating its own brand of electric bikes, called Ariv. While they err on the side of pricey, coming in at $3,800 per unit, they do boast a high top speed and can travel a modest distance on a single charge.The kicker for many, however, is that they can fold into an easily carriable pack, making them the perfect choice for a lot of commuters. Especially in big cities like London or Berlin.
Ford (F) is also taking a different approach to green mobility. It's swooped right into the scooter market, buying Spin for a clean $100 million. Initially deployed in San Francisco back in 2017, Spin is widely considered to be a part of the Big Three of the scooter world, along with Lime and Bird. While Ford's buyout of Spin made headlines, it's certainly not the first urban transportation alternative Ford's sunk its teeth into.
#2 Online Betting Is The Next Multi-Billion Industry
Welcome to the next multi-billion-dollar industry. Competitive video gaming and esports were already picking up major momentum before the pandemic, but when traditional sports events were canceled in most countries around the world, esports picked up tens of millions of new viewers instantly.
Now, global esports industry revenue is set to top $1.05 billion in 2020 and projected to jump another 50% to $1.6 billion by 2023, according to SafeBettingSites.com data. It was already on a tear before COVID, jumping 24% from $776 million in revenue in 2018 to a smashing $957-million-plus in 2019. Add online esports betting and online gambling to this mix and you get a market worth $2 trillion--just now being tapped.
One company in a great position is FansUnite (FANS; FUNFF), which launched on the Canadian Securities Exchange on May 5, and through its new acquisition, has two esports-themed casino games under its umbrella--both set to be released this year on multiple casino game aggregators, with more in development.
Just two months after scooping up UK-based McBookie--a white-label sportsbook that's been around for over a decade--FansUnite moved to merge with Canadian esports giant Askott Entertainment. The combined entity now has 350 CAD million B2C betting volumes since inception, and over 300,000 registered members. Even better: It gave FansUnite four B2B contracts generating revenue with leading esports companies.
Now, it's hungry for more M&A. The modus operandi? To build a global infrastructure behind the scenes that will seamlessly connect the world's leading gaming platforms through new, cutting-edge technology. Now it's eyeing more acquisitions and a stealthy swoop into the U.S. market.
And where the pre-COVID online gambling environment was a minefield of mistrust--there aren't many worries here: FansUnite is the new face of online casino transparency and cleanliness. In fact, Scotland-based McBookie already operates under a sub-license granted by the UK Gambling Commission. Its users are able to settle any betting disputes through the IBAS, a U.K.-based third-party independent arbitrator whose rulings are binding on registered operators up to the tune of £10,000.
FansUnite (FANS; FUNFF) is cleaning house and taking names in the future of online gambling, and it's stealth moves are against the backdrop of some major user boosts and mega consolidation in this booming industry:
The eNASCAR Series--the digital version of the most-watched competitive sports event on cable TV this year--now draws over 1.3 million viewers, and four megamergers in the sports betting space have set the tone with the most recent to draw massive attention being the tie-up between DraftKings and SBTech.
DraftKings (DKNG) was a big winner in the merge. Its stock has skyrocketed since the merger, taking its valuation to $12.7B less than two months since the event. That's already a 346% gain for investors in just a few months and some project it to go even higher. Investors who jumped on this when it went public in April were handsomely rewarded. It's now valued higher than many casino giants.
#3 The Biopharma Roller Coaster
Biopharma is banking in a big way on a return to normalcy. It's a pandemic, so naturally, biopharma is the biggest beneficiary. After all, the entire world is waiting for this industry to come up with a vaccine that will allow life to get back to normal. That's a lot of pressure on a single industry--even if the end game is a wildly lucrative one. It's typically a longer game that investors have to play here, but in this case, time is of the essence.
Every time there's any tiny glimmer of hope published about ongoing COVID vaccine research and development, the stocks in key biopharma and big pharma companies rally, with some of the key names being Astra Zeneca, Gilead Sciences, GlaxSmithKline , Pfizer and, most recently, Moderna.
So, What Next?
While ESG is taking over and Robinhood is inflating Tesla beyond everyone's wildest imagination, and while pharma has massive money-making potential with equally massive risk (watch Moderna start producing a vaccine that is still experimental), home entertainment is where money may be safer. And the biggest gains could be set for the online gambling segment.
COVID is still on the rise, with a line-up of states considering new stay-at-home orders and business still up in the air. Home entertainment is the biggest beneficiary of this, and not only that: Even when COVID eventually subsides or we have a vaccine, no one is likely to give it up.
Fans Unite (FANS; FUNFF) is now one of Canada's leading online gaming companies, and its next stop is the United States. It's a stealth move on an industry that's already over 10x bigger than the marijuana industry, and once everything's consolidated, it may well be worth $2 trillion--and counting.
By. Stella Kay
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