Earlier this year, 57% of Disney shareholders approved a compensation package for CEO Bob Iger that will be worth as much as $35 million. That’s for one year’s worth of work, mind you. Abigail Disney, filmmaker, philanthropist and granddaughter and grand niece of company co-founders Roy and Walt Disney, responded that CEOs "in general are paid far too much." Though she did not single out Iger, she added that "if your CEO salary is at 700, 600, 500 times your median workers' pay, there is nobody on Earth—Jesus Christ himself isn't worth 500 times his median workers' pay." It can be difficult to know when an idea has fully entered the contemporary zeitgeist. But when even a Disney heiress thinks that CEOs are wildly overpaid, it is safe to say that something is up. And as recently outlined in our explainer on proxy voting, executive pay, or “Say on Pay,” is another issue where you as a shareholder can weigh in. How did executive compensation become such a hot topic? Though it is hardly a new phenomenon, income inequality—or the pooling of wealth among a sliver, or “1 percent,” of the population— wasn’t something talked about widely for a long time. But the topic re-entered the national conversation during Senator Bernie Sanders first campaign for President, and it is a theme he has returned to repeatedly during his current run. Last year he introduced the 'Stop BEZOS Act' in the Senate, which was meant to highlight what he felt was the perceived disparity between Amazon chief executive Jeff Bezos, the richest man in the world, and the wages of Amazon workers, many of whom reportedly rely on food stamps to make ends meet. The bill called for large employers like Amazon and Walmart to reimburse the government for food stamps, public housing, Medicaid and other federal assistance received by their workers. In response, Bezos raised Amazon workers' wages to $15 an hour. Regardless of your opinion on Sanders and his politics, he seemingly tapped into a raw cultural nerve, and has continued to draw attention to low hourly minimum wage for workers at other companies. He appeared at Walmart’s 2019 shareholder meeting and held a town hall at McDonald’s ’meeting, calling for both companies to raise worker pay to $15 an hour. Sanders is also not the only one questioning the gap between the pay of CEOs and rank-and-file employees. Since 2015, the shareholder advocacy non-profit As You Sow has been ranking “The 100 Most Overpaid CEOs” using a formula that contrasts "excess CEO pay assuming such pay is related to total shareholder return" and "companies where the most shares were voted against the CEO pay package," then lists "the company, the CEO and his pay as reported at the annual shareholder meeting, and the pay of the company’s median employee." Number one with a bullet (or lucrative bonus, as it were) is Fleetcor Technologies’ CEO Ronald F. Clarke, who boasts a CEO-to-median-worker-pay ratio of 1,517. Why did pay ratio become a thing? Dodd-Frank. Introduced by Congressman Barney Frank and Senator Chris Dodd (with input from Senator and now-Presidential Candidate Elizabeth Warren), the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 requires publicly traded companies to disclose their chief executive’s compensation in terms of the median salary of its employees. It was enacted in response to the 2008 economic collapse. As recently reported by The Financial Times, “the median chief executive pay ratio for 2018 was 254:1.” 2018 was the first full year reported, but it’s worth noting that the reported ratio was “235:1 in 2017, when only two-thirds of the companies it tracks disclosed such figures.” So things have gone up a bit. But as reported by MarketWatch, even close to a decade "after the passage of the reform law, 5 of 12 mandatory executive compensation rules remain to be approved by the Securities and Exchange Commission." While Dodd-Frank requires companies to be transparent about CEO pay, the act was also intended to curb excessive executive pay. As its supporters argue, extravagant salaries incentivize the sort of short-term, risky behavior that led to the grave effects of 2008 in the first place. Astronomical executive pay wasn’t exactly reined in. As you probably surmised already. As noted in the MarketWatch piece, "The Securities Industry and Financial Markets Association, whose members include the largest broker-dealers, provided comments to all of the regulators responsible for drafting and approving the incentive compensations rules for financial institutions, saying they would have a significant negative impact on financial institutions’ ability to recruit and retain top talent." The SEC did not adopt rules that would curb CEO pay. How did we get here, anyway? No CEO wants to feel like he or she is being underpaid. Or, more plainly, the attitude is “if you have it, I want it too.” Poynter recently talked to corporate governance expert Charles Elson about why CEO pay is so high in the United States, as opposed to other countries. “‘It’s all about peer groups,’ said Elson. Consultants and a board compensation committee first compile a list of as many as a dozen comparable companies and what their CEOs make. ‘Then they pay their own CEO 50 percent of that figure or higher.’” The result has been a steep rise in CEO pay, even as wages for most Americans have remained stalled for decades. As noted by Forbes, a 2017 report by the The Economic Policy Institute, shows “CEO pay in the US peaked in 2000 at $20.7 million (in 2016 dollars), 376 times the pay of the typical worker. In 1995, the CEO-to-worker pay ratio was 123-to-1; in 1989, it was 59-to-1; in 1978, it was 30-to-1; and in 1965, it was... 20-to-1." So extravagant CEO salaries are a bad thing? It depends on whom you ask. Here’s a few of the arguments against super-duper CEO pay that have been making the rounds lately. The first and most obvious argument is that it is just a bad look for any company when its CEO is making exorbitantly more money than the average worker. It’s an especially bad look for a CEO to be raking it in while the company begins laying off employees, as happened recently with the video game company Activision Blizzard. It laid off 800 employees despite self-reported “record results in 2018." Don’t search social media for the reaction to this move, as it is not pretty. While it has never been a closely kept secret that CEOs earn more than anyone else at a company, thanks to Dodd-Frank, employees are now learning just how much more they are being paid. As reported by the Society for Human Resources Management , this could lead to a rise in employee dissatisfaction and low morale, which ultimately hurts productivity and retention. "’Employees will see quickly if they are paid more or less than the median employee, not only at your company but also at other organizations within the same industry or geography. This information may change their perceptions with regard to their current compensation,’ which could impact productivity and job satisfaction and lead to retention issues,” said Donna Westervelt, a principal at Conduent HR Services in New York City. CEO pay is generally tied to benchmarks the company must hit to justify high salaries and bonuses. But these targets, as Fortune has pointed out, are often low-bar, “mushily subjective or can be easily manipulated. If you want more sales, simply cut prices. If you want more cash flow, hold back investment.” What could be considered "mushily subjective"? One of the main mechanisms that companies use to hit goals is with stock buybacks. This is when a company uses excess cash reserves or profit to buy up its own shares on the public markets. With fewer shares on the market, buybacks tend to drive up the company’s stock price. Given that CEOs typically own company shares, and often have various stock option plans, stock buybacks tend to increase a CEOs’ wealth without increasing his or her salary. Critics of buybacks argue that cash reserves should not only go back to executives and investors but to employee compensation, research and development, long-term projects, and other areas that can help a business grow and become even more profitable in the long-term. Under this logic, long-term shareholders and the workers who help make their companies successful, would reap the benefits. Senators Sanders and Minority Leader Chuck Schumer have proposed legislation that, among other provisions, would prevent companies from buying back their own stock unless they raise their minimum wage to $15 an hour and increase health benefits. But investment guru Warren Buffett, CEO of Berkshire Hathaway Inc. and JPMorgan Chase CEO Jamie Dimon have both invested in buybacks in the past few years, arguing that they’re not examples of short-termism. It’s kinda become their thing. In a letter earlier this year to shareholders, Buffet argued that "Repurchases will benefit both those shareholders leaving the company and those who stay." In last year's JPMorgan Chase 2018 annual report, Dimon called buybacks "a no-brainer" and "an important tool that businesses must have to reallocate excess capital." He also noted that "Seven years ago, we offered an example of this: If we bought back a large block of stock at tangible book value, earnings and tangible book value per share would be substantially higher just four years later than without the buyback." It’s not just Buffet and huge banks, either—Apple is also big into buybacks, as CEO Tim Cook used the money the company saved from President Trump’s Tax Cuts and Jobs Act to scoop up $75 billion of the company’s own stock. OK, what about the argument for high CEO pay? There are lots of people in the “for” corner. Let’s use Iger’s pay at Disney as an example. Under his stewardship, Disney acquired both the Star Wars franchise and Marvel, the two biggest film properties on the planet. Since becoming CEO in 2005, he has led Disney to unparalleled success, and is at least partially responsible for bringing Groot onto the big screen, a titanic achievement. But while many critics think there is a reasonable limit to how much anyone can be rewarded, there are plenty of people who think sky-high CEO pay is just fine, thank you very much. The main argument for high CEO pay is that the market can justify it as a simple result of supply and demand. And what’s more, if a CEO is not paid his or her absolute highest worth, he or she can bring their talents to another company that will value them more. So if Iger isn’t getting his maximum bonus, he can just over to Netflix or HBO or whathaveyou. While some critics argue that CEOs would continue to work hard even if they were merely paid very well instead of very, very, very well, Investopedia sums up the more-is-best argument thusly: "Companies that come up with this justification say that by awarding a big part of an executive’s compensation in the form of stock grants, they are providing an incentive for him or her to run the company well and personally benefit, as well as reward shareholders." Take Tesla’s Elon Musk. He was last year’s highest-paid CEO. Tesla shareholders voted to approve a 10-year compensation plan valued at about $2.3 billion dollars in stock options, a number The New York Times called the biggest ever, noting that one of the reasons the package was deemed necessary was to require Musk to focus on Tesla and not go off to space: “The award’s structure was driven by concern that Mr. Musk’s attention could wander to his other ventures, like SpaceX, or that he could leave Tesla altogether.” The thing to keep in mind, however, is that Musk would only see that money if Tesla hit remarkably aggressive performance goals. In response, Musk said that he did not receive any money for performance-based compensation in 2018, tweeting “Tesla last year was actually net negative comp for me.” Might excessive CEO pay be a canary in the wealth-gap coal mine? Exorbitant CEO pay might not just hurt a company’s image and productivity. Some economic thinkers believe that excessive pay, as symptomatic of growing wealth disparity between the ultra-haves and the median/less-haves, might hurt society itself. As reported by MarketWatch, Ray Dalio, founder of hedge fund Bridgewater Associates, said that the ever-increasing wealth gap is threatening to put "the very existence of the United States at risk." Dalio posits that the wealth gap is the highest it has been since the 1930s and will “lead to increasing conflict, and, in the government, that manifests itself in the form of populism of the left and populism of the right and often in revolutions of one sort or another.” Some thinkers, like late M&T Bank CEO and billionaire Robert Wilmers, agreed with Dalio and warned in American Banker that widespread resentment of high CEO pay would inevitably lead to some sort of backlash and greater regulatory response. “It is easy to understand the widespread public resentment,” he wrote in 2014. “It is this sentiment that provides fuel for our elected officials and policymakers to call for more legislation and regulation, which is placing a costly burden on the engines of growth for our economy." Now, are CEOs the only people in the world that compromise the 1%s that have most of the wealth? Of course not. There are, obviously, others in the c-suite (Iger is certainly not the only person at Disney making ultra-bank), real-estate titans, and all sorts of financial wizards who make more money than most of the country. But high levels of CEO pay are now being reported on so frequently and making for eye-catching headlines, that they rapidly are becoming a sort of social shorthand for inequality as a whole. Is it fair that CEOs are quickly becoming a symbol for massive inequality and the huge chasm between the middle class and the rich? That is a debatable subject. Is it rapidly becoming the case in the mind of the American public? That seems much less debateable. So what can shareholders do about it? Whether high CEO pay rubs you the wrong way or inspires you, it is hard at this point to not have an opinion on the subject. You also have a say in the matter. While Dodd-Frank didn’t achieve all its goals, it wasn’t a goose egg either. It requires companies to allow shareholder “say-on-pay” votes at least once every three years as well as a “frequency” vote at least once every six years that allows shareholders to say how often they’d like to be given a say-on-pay vote. So remember, as a shareholder, you have a say in CEO pay. Whether you think that ultra, ultra rich should maybe be merely very rich or you think the sky’s the limit when it comes to these things, use your voice and cast your proxy vote. —Michael Tedder
The gold markets have shown themselves to be resilient after initially pulling back during the day. In fact, we find ourselves testing a significant downtrend line that could open up a huge move higher.
On Wednesday, Ethereum (CCC:ETH-USD) co-founder Vitalik Buterin donated some $1 billion in Shiba Inu (CCC:SHIB-USD) crypto to help India fund its Covid-19 response. Source: shutterstock.com/JFunk The strange thing? Buterin never bought the Shiba coin himself. Instead, the Shiba community had gifted him the crypto as a joke. By sending him 50% of the outstanding coins, the gag went, the currency would become immune to a “rug pull” where controlling stakeholders hijack the coin for personal gain. Other joke cryptos — from Akita Inu (CCC:AKITA-USD) to Dogelon Mars (CCC:ELON-USD) — have since done the same.InvestorPlace - Stock Market News, Stock Advice & Trading Tips At the time, the 505 trillion Shiba coins were worth precisely $0, according to CoinMarketCap. Their first recorded price five months later — a princely sum of $0.0000000013 — would have valued Buterin’s coins at just $560,000. Fast forward to today and his SHIB coins alone are worth well over $9 billion. His other holdings add several billion more. 10 Dividend Aristocrat Stocks for Your Reliability Short List Already in 2021, cryptocurrencies have become one of the strangest financial manias in human history. Since January, digital currencies have added more than $1.3 trillion in market capitalization, growing far faster than the Nasdaq bubble of 1999. Traders have bought and sold trillions of dollars in cryptocurrency in the first five months of this year, even more than Americans spend on housing annually. As financial institutions start jumping into the fold, things will only get stranger. Much like the media giants of 1999, the U.S. banking sector of 2021 has begun rushing into an industry for fear of missing out. Whenever banks have run into an industry they don’t quite understand, the results have always been the same: historians look back and ask, “what on earth were those morons thinking?” The 2021 Crypto Bubble: Echoes of 1999 So far, the rise of cryptocurrencies has followed the same pattern of most asset bubbles: A grain of truth emerges (the idea that cryptocurrencies can help grease the wheels of finance). As the dominant players win (i.e., Bitcoin (CCC:BTC-USD) and Ethereum rise), the initial grain of truth gets stretched to extremes (the idea that all cryptocurrencies must win). The bubble bursts, leaving speculators with severe losses. The 1999 tech bubble followed this arc to a tee. For example, in 1999, one University of Pennsylvania study counted no fewer than 1,500 online marketplaces, as companies scrambled to join the internet revolution. Legacy firms like Mattel (NASDAQ:MAT) and Time Warner (now owned by AT&T (NYSE:T)) went on to splash out billions in buying these unprofitable tech moonshots. But the bonanza didn’t last. By 2004, only 31 had survived. Of those, only one public company — 1-800Contacts — ended with a price above its initial public offering. The remainder would spend years recouping lost share prices. (It would take Amazon (NASDAQ:AMZN) almost a decade to break out of its $90-range.) As for the legacy firms that bought in on fear? Time Warner would eventually write down 97% of AOL’s value, while Mattel would sell The Learning Company for a “catastrophic $27 million.” Fools Rush In Legacy banks have already started feeling the echoes of 1999. Much like the rise of digital media companies, today digital currencies pose an existential threat to existing players. Every dollar of deposits lost to Bitcoin or central-bank digital currencies means less available for lending. Many point to Facebook’s (NASDAQ:FB) Libra as the “Sputnik Moment” for banks. If a tech firm could issue a currency, why would customers need commercial banks? In response, bulge-bracket banks have rushed to develop in-house crypto platforms. Those without the means have started splashing out on acquisitions instead. According to PwC, a global consultancy, crypto deal-making already doubled in 2020 to $1.1 billion — a minor but rapidly growing figure. Now, 2021 has turned out even stranger. This week, the Andreessen Horowitz-backed Internet Computer Price (CCC:ICP-USD) quickly hit a $45 billion valuation. Today, it is the ninth largest cryptocurrency in the world by market cap. Few developers back the new currency, but its star-studded team was enough for investors to buy in. This Time It’s Worse: The Rise of ScamCoin It’s no surprise that the 2021 crypto bubble has inflated far faster than the 1999 tech one. Unlike dot-com companies, a skilled programmer can create a new cryptocurrency within minutes. Many tokens on the Ethereum or Binance (CCC:BNB-USD) blockchain don’t even bother with innovation — coins like SafeMoon (CCC:SAFEMOON-USD) copy their code directly from existing tokens. CoinMarketCap now counts over 5,000 different digital currencies. Adding in Ethereum and Binance’s token contracts puts that figure well over 700,000. In April, one TikTok creator made a coin called “SCAM” to highlight the absurdities of these copycats. “I just made the coin as a joke,” said Andre Lewis. The internet had the last laugh, sending the coin to a $70 million valuation within an hour. Within four days, the token would reach a peak value of almost $12 billion before Lewis shut the entire project down. How did this happen? In their rush to adopt digital currencies, institutional investors have created an aura of legitimacy around cryptocurrencies. Today, firms from JPMorgan to Citibank publish glowing reports on six-digit price targets for Bitcoin. That means legitimate cryptocurrencies like Ethereum now trade alongside jokes like Shiba Inu. As more cryptocurrencies join the fold, it will become increasingly difficult to tell them apart. Will Any Crypto Win? To a certain extent, all cryptocurrencies essentially serve the same purpose — to help investors record monetary and real-world transactions. Ethereum and its “Ethereum killer” competitors — like Cardano (CCC:ADA-USD) and Polkadot (CCC:DOT-USD) — track nonfungible items in the real world. Meanwhile, Bitcoin and competitors like Dogecoin (CCC:DOGE-USD) and Litecoin (CCC:LTC-USD) act as stores of digital value. That means the survival rate for cryptos will likely be lower than those seen by 1999 e-commerce companies. When coins like Litecoin and Dogecoin have practically zero technological differentiation, there’s no practical reason for both to exist. Like past bubbles, retail investors will be the first ones to lose. Currencies like Dogecoin, SafeMoon and Shiba Inu have already lost traders billions from peak to trough. Copycats like Dogelon Mars, SafeMars (CCC:SAFEMARS-USD), and Akita Inu will likely keep these miniature boom-bust cycles going. But institutional investors will eventually inflate the broader bubble to a breaking point. From the Savings and Loan (S&L) Crisis of the 1980s to the mortgage-backed bonanza of the mid-2000s, financial institutions have a long history of taking good ideas to terrible extremes. Just like one Citigroup (NYSE:C) executive said in 2007, “as long as the music is playing, you’ve got to get up and dance.” In the near term, that means Bitcoin and its blue-chip altcoin counterparts will continue to see their values inflate. Financial institutions seem intent on keeping up with central banks and tech firms in adopting digital currencies. In the longer term, however, most cryptocurrencies will implode. Like Amazon’s competitors that went bankrupt, most of the 700,000 tokens today will disappear. Just like the 1999 bubble, we’ll look back at 2021 — a year where billions in Dogecoin rested on a single SNL performance — and wonder “what were those morons thinking?” On the date of publication, Tom Yeung did not have (either directly or indirectly) any positions in the securities mentioned in this article. Tom Yeung, CFA, is a registered investment advisor on a mission to bring simplicity to the world of investing. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post SafeMoon, Shiba Inu, Dogecoin: The 2021 Crypto Bubble Is Unlike Anything We’ve Seen appeared first on InvestorPlace.
Two of the world's most prominent billionaires Tesla Inc.'s CEO Elon Musk and Jack Dorsey are facing off over the merits of bitcoin, with the future of the world's No. 1 crypto likely hanging in the balance.
Dogecoin will likely transition from a proof-of-work protocol to proof-of-stake, speculated Alex Mashinsky, the chief executive and founder of The Celsius Network on Friday during a webcast hosted by his lending platform on YouTube.
It’s the end of the week and we’re closing it out right here at InvestorPlace with coverage of the most talked-about penny stocks on Reddit for Friday. Source: Shutterstock But don’t just jump right in. First, I have to warn you about the dangers of penny stocks. If you’re reading an article like this, then you likely already know, but penny stocks can be incredibly volatile. That’s due to the cheap prices making them easy to manipulate. However, that low barrier to entry is also what attracts fearless traders. Now, let’s dive into the Reddit penny stocks seeing the most chatter today.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Reddit Penny Stocks: Senseonics Holdings (SENS) All about the company: Senseonics Holdings (NYSEAMERICAN:SENS) is a Taiwanese company that makes power supplies for PCs. What the stock is doing today: Shares are heading nearly 12% higher today. What Reddit has to say: Users of the r/pennystocks subreddit are talking about the positive earnings report from the company. Reddit Penny Stocks: Atossa Therapeutics (ATOS) All about the company: Atossa Therapeutics (NASDAQ:ATOS) is a clinical-stage biopharmaceutical company focusing on breast cancer treatments. What the stock is doing today: Shares are heading more than 16% higher. What Reddit has to say: Reddit traders are discussing the withdrawal of a share authorization vote today. 10 Dividend Aristocrat Stocks for Your Reliability Short List Reddit Penny Stocks: Citius Pharmaceuticals (CTXR) All about the company: Citius Pharmaceuticals (NASDAQ:CTXR) is a specialty pharmaceutical company focused on developing therapeutic products. What the stock is doing today: Shares are up 2.4%. What Reddit has to say: Redditors are debating the merits of holding the stock over using it for day trading. Reddit Penny Stocks: Clover Health Investments (CLOV) All about the company: Clover Health Investments (NASDAQ:CLOV) is a health insurance company founded in 2014 that operates out of Tennessee. What the stock is doing today: Shares are heading over 4% higher today. What Reddit has to say: Traders are chattering about picking up shares ahead of earnings on Monday. Reddit Penny Stocks: Applied Genetic Technologies (AGTC) All about the company: Applied Genetic Technologies (NASDAQ:AGTC) clinical-stage biotechnology company focusing on developing genetic therapies for patients. What the stock is doing today: Shares are rising 4.4% Friday. What Reddit has to say: Members of the penny stocks subreddit are talking about recent manufacturing expansion news from the company. On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks. Read More: Penny Stocks — How to Profit Without Getting Scammed More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post 5 Reddit Penny Stocks Seeing the Most Chatter Friday appeared first on InvestorPlace.
Institutional investors do not take kindly to inflation and they sold. 1. If indexes fall below their moving averages, take action: Traders and investors alike should watch moving averages, especially the 50-, 100-, and 200-day. When the indexes were sliding a few days ago, the S&P 500 (SPX) for example, did not break its 50-day moving average at 4050.
The liquidation in growth stocks reached a fever pitch this week. On the index level, the Nasdaq is the poster child for the pain. From peak-to-trough, its retreat measures -8%. But even that masks the wholesale destruction beneath the surface. For the epicenter of the fallout, cast your eyes on the ARK Innovation ETF (NYSEARCA:ARKK), which has fallen nearly 40%. ARKK houses the bubbliest of all growth stocks. The lot of them were uniquely positioned to profit from many of the themes that arose from the novel coronavirus pandemic. Shareholders bid their prices to the moon, creating sky-high multiples in the process. Unfortunately, this year they’re all witnessing the downside of momentum. 10 Dividend Aristocrat Stocks for Your Reliability Short List With so many support levels broken and overhead supply looming large, rallies for ARKK and its constituents are suspect. Here are three of the most vulnerable to further downside:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Tesla (NASDAQ:TSLA) Square (NYSE:SQ) Twilio (NYSE:TWLO) Let’s take a closer look at each chart and map out a trade to profit if the weakness continues. ARKK Stocks to Throw Off Your Ship: Tesla (TSLA) Source: The thinkorswim® platform from TD Ameritrade Tesla is the largest holding in the ARKK fund and thus accounts for more of its performance than any other stock. Its price trend turned lower in February, and short of one failed recovery attempt in April, it’s been bearish ever since. With this week’s whack, TSLA is now testing its rising 200-day moving average for the first time since last March. Horizontal support is also coming into play at $570, adding further significance to the test. If we break here, a swift drop to $500 could be in the cards. We are seeing oversold readings flashing, so ideally, Tesla will pause for a few days before the floor gives way. Options on the EV giant are expensive, so I like spreads over buying puts outright. The Trade: Buy the July $550/$520 bear put for $10.50. Square (SQ) Source: The thinkorswim® platform from TD Ameritrade Square has developed a choppy range in 2021, making it a difficult stock to trade directionally. Its current position provides an easy spot to build trade ideas, though. Like Tesla, SQ stock is testing its rising 200-day moving average. This is a logical spot for buyers to make a stand if they are going to help the stock maintain its neutral intermediate trend. The 200-day also sits at a key price threshold at $200. We’ve seen multiple prior selloffs terminate in this area. Friday’s 5% jump is confirming bulls are once again running to defend their turf. As long as the level holds, I’m not interested in bear plays. But if it breaks V then it’s game on. The higher price tag makes put spreads better than long puts. I would wait for a break of Thursday’s low ($192.29) before entering. 10 Dividend Aristocrat Stocks for Your Reliability Short List The Trade: Buy the July $190/$175 bear put for $3 to $4. ARKK Stocks to Throw Off Your Ship: Twilio (TWLO) Source: The thinkorswim® platform from TD Ameritrade The final ARKK stock to stalk for bear trades is Twilio. Its trend reversal is more developed than Tesla and Square. It’s also still way above last year’s low, so there’s plenty of room for prices to unwind if sellers want to press their bets. The 200-day moving average already gave way, and TWLO is consolidating beneath it near $300. A few more sideways candles would be ideal to allow oversold conditions to ease. This would also allow the current low base pattern to fully form and make a support break trade easier to play. For now, try using a break of $280 as the trigger/signal that the next downswing is beginning. The Trade: Buy the July $280/$260 bear put for around $7. On the date of publication, Tyler Craig did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. For a free trial to the best trading community on the planet and Tyler’s current home, click here! More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post 3 ARKK Stocks to Throw Off Your Ship appeared first on InvestorPlace.
(COIN) Global, the leading U.S. cryptocurrency exchange, is highly dependent on Bitcoin. If other coins that aren’t supported by Coinbase (ticker: COIN) start to dominate the industry, the company may lose market share to other exchanges that list those coins. The shift in the crypto market away from Bitcoin dominance was one topic on Coinbase’s earnings call late on Thursday after the company released its first-quarter earnings.