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Who's winning, and who's losing today?

10/28/2019

Microsoft wins a big contract; iRobot suffers from the trade war.

WHO'S WINNING?

Microsoft recently announced a major victory in securing a milestone - a $10 billion Pentagon contract for cloud computing services. This contract is a massive opportunity for the company to ensure future growth. Microsoft beat Amazon.com in this bidding war, by securing it for its Azure business segment. Amazon.com still has a chance to fight back and win the contract, however. For Microsoft, this can be the start of gaining several such contracts. Thus, gaining the momentum in growing its cloud business ahead of its counterpart. Following this news, the stock price, deservedly so, jumped to an all-time high.

WHO'S LOSING?

iRobot has been going through a rough patch for the past few months. The company's stock price has declined by over 60% since mid-summer. Initially, the stock price decline was due to increasing manufacturing costs in China, following the new round of tariffs on Chinese imports. The company is contemplating the option of diversifying its manufacturing activities outside of China to reduce costs. However, back in July, it increased its product prices to pass on a portion of tariffs to the customers. Across the board, investors didn't approve of the strategy and sent the stock price down from its all-time high of $132 to mid-$70 per share. Fast forward to October, and the price decline hasn't stopped despite the management's announcement of abandoning its strategy of passing on some U.S. tariff costs to U.S. consumers. Since the decision to reverted its prices to pre-tariff levels, demand in the U.S. has improved. Until the trade problems between the U.S. and China get resolved, iRobot will continue to face such production cost and demand challenges.

Disclaimer: Hey folks, this is Shama, and I own shares of Microsoft.

Who's winning, and who's losing today?

10/21/2019

Stamps.com is back on track, while Boeing is flying off the track.

WHO'S WINNING?

Stamps.com is getting back on track. Less than a year ago, the online shipping platform provider lost more than 80% of its value. Abrupt termination of its life-time exclusive partnership with the USPS made investors assume the worst, and run for the hills. Since then, the company focused on its transition from single-carrier operations to multi-country, multi-carrier business model, and the focus has started to pay off. The latest partnership with UPS has renewed investors' optimism about the future of the company. The stock is not back to its initial price level yet. However, its wild price swings in 2019 are nothing short of a fascinating tale of extreme pessimism.

WHO'S LOSING?

Boeing's corporate crisis is far from being over. The stock price has been falling steadily on the news that the company's employees did not share material safety information with the Federal Aviation Administration. While investors would have loved to see the crisis is under control, but until the aircraft are not back in the air, this crisis is nowhere close to being over. Typically, corporate crises of this nature take much longer to settle, and the financial impact is much more significant than the initial estimations. A few months after the initial shock, investors gradually warmed up to the idea that the worst was behind, and the stock price was a steady climb to its earlier all-time high level. However, the reality struck again for yet another corporate crisis to reveal its true nature.

Disclaimer: Hey folks, this is Hoda, and I own shares of Stamps.com.

Who's winning, and who's losing today?

10/14/2019

Facebook's vision for the future is crashing, while UPS is just getting started to shape the future.

WHO'S WINNING?

UPS recently got FAA approval to operate its first ‘drone airline’. This approval gives UPS the ability to fly at night and carry cargo heavier than 55 pounds. Drone delivery market plays a vital role in changing the cargo delivery services worldwide and has the capability to change the future. And guess what, UPS beat Amazon in this race

WHO'S LOSING?

Facebook has been going through a tough time trying to formalize its cryptocurrency's council, known as Libra. Several initial backers such as PayPal, eBay, Mastercard, Visa, and Stripe have already left the Libra Association, and Booking.com, Kayak and Priceline withdrew just before the signing of the charter. This could mean a bumpy ride for FB stock price till the dust settles.

WHAT ELSE?

Listen to Planet Money’s podcast, Episode # 943 - Unicorn Cowboy. It is a fascinating story of the founder of SoftBank, Masayoshi Son, and how he built his company.

Disclaimer: Hey folks, this is Shama Patwardhan. I wrote today's post, and I own shares of Facebook.

Who's winning, and who's losing today?

WHO'S WINNING?

WHO'S LOSING?

Who's winning, and who's losing today?

WHO'S WINNING?

WHO'S LOSING?

Who's winning, and who's losing today?

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