In today’s top stories, Berkshire Hathaway vice chairman Charlie Munger (pictured above) cuts his stake in Alibaba by more than 300,000 shares, while the SEC is investigating IPOs via SPAC. Analysts have downgraded Nvidia stocks, and tech firms have suffered under rising interest rates and ongoing geopolitical tensions. Meanwhile, Honda is accelerating its electric vehicle ambitions.
Charlie Munger ditches Alibaba
Daily Journal Corp [DJCO], whose stock portfolio is overseen by Warren Buffett’s right-hand man Charlie Munger, among others, has slashed its stake in China’s Alibaba [BABA] by half. A quarterly regulatory filing on Monday showed that the company owned 300,000 shares in Alibaba at the end of March, down from 602,060 last year. The move is divergent from Munger’s commentary at Daily’s Journal’s annual meeting in February, when he supported investing in both China broadly and Alibaba specifically.
High-volatility stocks to avoid
Rising interest rates and geopolitical tensions have made the markets difficult to predict. MarketWatch released a list of 20 high-volatility stocks to avoid for investors with short-term horizons. While tech stocks have fallen, they have not bottomed out. Stocks to avoid include AI lending platform Upstart Holdings [UPST] (down 40% since the start of the year), electric car maker Rivian [RIVN] (down 63%) and payments firm Block [SQ] (which has fallen 40%) taking the top three spots.
Honda takes its foot off the gas
Honda [7267.T] says it will produce 2 million electric vehicles per year by 2030, and launch 30 new models on offer by then. It’s going to be an expensive endeavour: Honda reckons it will need to spend almost $64bn on research and development over the next 10 years and invest $80m a year on synergistic startups to speed this shift. In June last year, Honda said it would stop selling gas-guzzling cars altogether by 2040.
Baird downgrades Nvidia
Tristan Gerra, an analyst at the investment firm, says slowing semiconductor demand and cancelled orders will weigh heavily on Nvidia [NVDA] as he downgraded the stock from ‘outperform’ to ‘neutral’. The stock’s price target is now $225, down from $360 and below where the stock closed on Friday. Gerra points out that Russia — currently sanctioned by the US — represents a chunky share of consumer CPU market, given how much gaming and crypto mining takes place in the country.
SPACs under scrutiny
IPOs via special-purpose acquisition companies have generated returns on stock warrants (which allow holders to buy shares at a set price in the future) as high as 888%, Bloomberg reports. Now the Securities and Exchange Commission is wondering whether those warrant holders really got lucky, or if they had insider information. Bloomberg analysis shows a spike in warrant trading before roughly one in four SPAC deals. The SEC enquiry may extend to Donald Trump’s social media holding company Digital World Acquisition Corp [DWAC].
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