U.S. markets closed
  • Bitcoin Plunges Along With Other Coins
    Business
    Bloomberg

    Bitcoin Plunges Along With Other Coins

    (Bloomberg) -- Bitcoin plunged on Thursday in a sell-off that saw other digital assets fall as much as 27%, a slide likely to stoke speculation about the durability of the latest boom in cryptocurrencies.The largest token slumped as much as 13%, potentially heading for its worst day since the pandemic was declared in March.The rout began just hours after Bitcoin rose to within $7 of its record high of $19,511, the culmination of a 250% surge in past nine months. Fears over tighter crypto regulation and profit-taking after a frenetic rally were among the reasons cited for the sudden drop.The sell-off gathered pace late Wednesday after Coinbase Inc. Chief Executive Officer Brian Armstrong tweeted about speculation the U.S. is considering new rules that would undermine anonymity in digital transactions.“News that the Trump administration may clamp down on crypto might have been a trigger for the drop,” said Antoni Trenchev, managing partner of Nexo in London, which bills itself as the world’s biggest digital-coin lender. “But any asset that rallies 75% in 2 months and 260% from the March lows is allowed to undergo a correction.”Other coins including XRP tumbled as much as 27%, according to prices compiled by Bloomberg.After garnering more support from Wall Street money managers and fund providers, the rally in cryptocurrencies had looked over-heated. The fierce retreat could stir yet another debate over the their value in diversifying portfolios.“Conditions are very massively overbought and bound for a correction,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “So I don’t think it’s unusual.”Crypto believers tout purchases by retail investors, institutions and even billionaires, as well as the search for a hedge against dollar weakness amid the pandemic, as reasons why the boom can last.Skeptics argue the cryptocurrency’s famed volatility portends a repeat of what happened three years ago, when a bubble burst spectacularly. Some see signs of retail investors piling in to chase momentum for fast gains, storing up an inevitable reckoning.Concern about potential U.S. crypto rules help explain Thursday’s price drop across most major digital assets, said Ryan Rabaglia, global head of trading at OSL brokerage in Hong Kong.“It’s also not unusual to see a short-term pullback following periods of significant, accelerated gains as traders look to take profits before resetting once volatility subsides,” he said. “Once the dust settles, we’re back to business as usual with all medium to long-term bullish indicators still in play.”Proponents of digital assets say the current focus on cryptocurrencies compared with three years ago is different because of growing institutional interest, for instance from the likes of Fidelity Investments and JPMorgan Chase & Co.Just this week, Van Eck Associates Corp. launched a Bitcoin exchange-traded note on the Deutsche Boerse Xetra exchange. In October, PayPal Holdings Inc. said it would allow its customers access to cryptocurrencies.There is also a buzz around Ethereum, the most-actively used blockchain in the world, which is set for a network upgrade that would allow it to process a similar number of transactions as Mastercard Inc. and Visa Inc. The shift to the new system could curb the total supply of Ether, whose price has quadrupled so far this year.Luno’s Ayyar said he expects Bitcoin to stabilize and achieve all-time highs. But that would be followed by a larger drop in the cryptocurrency, he said.(Updates prices, adds context on tighter regulations)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • 2 Stocks Flirting With a Bottom; Analysts Say ‘Buy’
    Business
    TipRanks

    2 Stocks Flirting With a Bottom; Analysts Say ‘Buy’

    When a stock starts dropping, investors have to ask two questions. First, why it's dropping? Is something wrong with it? Or is it just facing a storm of circumstance, but is otherwise sound? If the latter, then the second question comes into play. Has this stock hit bottom?When a sound stock hits bottom, that’s a signal for investors to buy in. You can’t go wrong buying low and selling high, but you do have to know when ‘low’ is happening – otherwise you can miss your chance to maximize the profits.Wall Street’s analysts make their reputation by calling stocks right. Lately, some of these analysts have been tapping several apparent down-and-out equities as prime candidates for strong gains. These are stocks that, based on the TipRanks data, fit a profile: each has fallen on hard times during 2020; each has an average upside that starts north of 40%, and each has at least one analyst saying it’s likely to make radical gains in 2021.Benefitfocus (BNFT)We’ll start in the world of benefits management, an important sector that impacts a number of fields. Employers, insurance brokers, health plans, and retail partnerships all offer benefits to consumers of various stripes – and Benefitfocus offers a tech solution to make benefit administration easy. The company offers a software platform specifically designed to handle the HR and data aspects of benefits programs, from enrollment to management.This niche can be a two-edged sword, however. In good times, with benefit programs swinging, everyone will want in – but in bad times, Benefitfocus has found itself unable to regain traction. The company’s stock is down 42% year-to-date, and the third quarter results showed continuing year-over-year losses. Revenue is down 11% yoy, to $63.6 million, with declines across all of the company’s main segments: software revenue, subscription revenue, and platform revenue.At the same time, there were positive developments. Lincoln Financial Group and PayActive joined Benefitfocus as catalog suppliers, and the company held its first open enrollment with the University of Texas system. The company also ended Q3 with $176 million in cash on hand.These quarterly results came as Benefitfocus brought in new management. The company announced Stephen Swad as the new CEO, with his CFO position being filled by Alpana Wegner. In addition, the company announced new hires for the Chief Data Officer and EVP, Product & Engineering positions. These are major moves, that portend a new outlook at the top.Covering this stock for Piper Sandler, 5-star analyst Sean Wieland writes of BNFT: “With new mgmt at the helm, we sense a renewed energy moving the business forward. SaaS offerings are an area of focus, going head first into the B2B2C channel while de-emphasizing the direct to consumer business. Health of this customer base continues to trend above expectations, with a positive benefit fromgig workers, increasing net eligible lives 8.3% y/y to 18.2M. OEP fits into this positive narrative, as mgmt is happy with progress thus far, seeing continued strength as the selling season progresses."Wieland’s bullish outlook is also supported by his Overweight (i.e. Buy) rating and $29 price target, which implies a 132% one-year upside. (To watch Wieland’s track record, click here)Overall, Wall Street appears to be in agreement with Wieland on BNFT. The stock has a Strong Buy consensus rating, based on 3 Buy reviews and 1 Hold. Shares are selling for $12.50 and the average price target, at $17.67, suggests room for a 41% upside in the next 12 months. (See BNFT stock analysis on TipRanks)Momo, Inc. (MOMO)Next up is Momo, the Chinese social media mobile app. This company offers customers a free smartphone app for social posting and instant messaging, and monetizes the service through the usual routs of third-party services and paid subscriptions for upgrades.Momo has badly underperformed this year, however, having lost 54% year-to-date. The company’s fiscal third-quarter came in below expectation, with earnings at 30 cents per share and revenues at $3.9 billion. These numbers were down significantly year-over-year, especially the EPS, which showed a 40% yoy drop. Revenue and earnings peaked in 4Q19, as the corona virus started to break out – and its has yet to recover.Like BNFT above, Momo has had management changes in the calendar third quarter. The company brought on board a new Executive Chairman as well as a new CEO. It is hoped that the new blood will bring new energy at the top. The new CEO, Li Wang, previously served as company COO since 2014.Leo Chiang, of Deutsche Bank, acknowledges that Momo is in a tight spot, but believes the company can chart a course out. “Momo app is navigating to focusing on content ecosystem, user engagement and community activity to revitalize middle and long tail users, instead of exploiting top paying cohort, whose spending sentiment has been impaired significantly post pandemic. The process has begun in early August and management expects it to last for 6 months. We believe it could lead to a healthier long-term prosperity for a social app,” Chiang noted.Chiang sets a $25 price target here, indicating a possible 68% upside potential, to go along with his Buy rating. (To watch Chiang’s track record, click here)The analyst consensus here is a Moderate Buy, based on 8 reviews that include 3 Buys and 5 Holds. The stock’s average price target of $21.49 suggests a 45% upside from the current share price of $14.83. (See MOMO stock analysis on TipRanks)To find good ideas for beaten-down stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • Electric-Car Stocks Fall As China Signals Crackdown; Nikola-GM Doubts Grow
    Business
    Investor's Business Daily

    Electric-Car Stocks Fall As China Signals Crackdown; Nikola-GM Doubts Grow

    Electric-car stocks sold off on news of a probe in China, while Nikola failed to assuage investors on a proposed GM partnership.

  • Bitcoin Price Drops Almost $3,000 in Sharpest Sell-Off for 12 Weeks
    Business
    CoinDesk

    Bitcoin Price Drops Almost $3,000 in Sharpest Sell-Off for 12 Weeks

    Bitcoin fell more than 12%, its sharpest decline in 12 weeks.