The market ended the day in the green, rebounding from Japan’s COVID announcement.
All 3 major indices ended today’s trading session in the green.
After a tough week with some negative news weighing on the market, like Japan banning spectators from the Olympics over COVID spikes, index prices corrected themselves before the close. This could be investors attempting to lock in some possible gains before we head into the weekend.
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Stamps.com (STMP) is bought out by Thoma Bravo firm, boosting the price nearly 64% by close.
I was browsing today’s Winners list on the Stock Card website when I noticed Stamps.com (STMP), which had seen nearly a 64% jump by closing time. You may know that Stamps.com is one of my favorite stocks. I even have an old podcast episode investigating the origin of Stamps.com. I highly recommend you listen to it. Stamps.com saw challenges when it voluntarily discontinued its exclusive partnership with the USPS, yet this is a classic example of a well-managed company that is worth holding for the long run.
Today the news broke that the eCommerce shipping giant had confirmed a buyout by private equity firm Thoma Bravo. Stamps.com was purchased for a whopping $6.6 billion dollars.
Thoma Bravo is a firm that specializes in buyouts, making small changes to aid in the growth of companies it acquires. The firm definitely recognizes the potential in the eCommerce sector and the advantage Stamps.com has. It is a veteran in the space, providing other eCommerce businesses with services across the entire pipeline of online orders and shipping. It can benefit from the growth of online shopping and shipping that is a bigger part of our society than ever before.
If you own it, hold until the buyout is closed. After an acquisition, there is always the possibility of a new acquisition offer to come in. If not, you just get paid cash at the end when the buyout is closed.
Peloton (PTON) regains recall losses, but the future is unclear.
Peloton (PTON) stock has had a tough 2021 so far. The downward trend of the price was only given more momentum since its treadmill recall that caused shares to plummet early in May. That being said, this dip could offer an opportunity to those who believe in the company and its business model. At the end of June we saw Peloton’s price finally gain back the losses from the recall, but it has not been able to maintain that value these past two weeks. Is this dip worth buying?
Overall, investors are worried that the market itself is ripe for at-home athletic equipment companies. Since the pandemic era when all gyms were closed, many consumers are opting to keep their workouts at home. This was a boost for Peloton, but the same goes for its competitors. Beachbody (BODY) went public on Monday, which may pose a challenge to Peloton. This company is founded by the P90X team, who have been keeping the company profitable for 20 of it’s 22 years in business. Beachbody can take advantage of the 2.6 million user base it has recorded, but even that is barely more than half of Peloton’s 4.4 million users.
If you go to the company’s Stock Card and scroll down to strong operations, Peloton holds a green rating for sales growth, cash availability, and effective management. The fundamentals are there, but too many slip ups like this year’s recalls, and it could struggle for a while. My goal is to figure out whether Peloton can continue to grow rapidly despite the re-opening of gyms and people's appetite to get out of the house to work out.
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