Equities such as Twitter and Zendesk were in focus in today’s headlines, alongside Alibaba, Tencent and JD.com, which were highlighted as top picks by JPMorgan if the stocks avoid being delisted from US exchanges. Elsewhere, the UK is planning to be a global crypto hub and BlackRock sees US stocks weathering macro headwinds.
Musk bets on Twitter
A 13-G filing has revealed that Elon Musk is now the largest shareholder in Twitter, having purchased a 9% stake (or 73.5 million shares) in the social media platform founded by Jack Dorsey at a value of approximately $3bn. The news sent Twitter’s [TWTR] share price up 27% on Monday — its largest one-day gain. As for Musk, it appears he is keen to have his say over the future of the platform. His first move? Asking users if they’d like an edit button.
House builders Persimmon [PSN.L], Barratt Developments [BDEV.L] and Taylor Wimpey [TW.L] have seen a bump in value following last week’s announcement that UK house prices are increasing at the fastest rate in 17 years. The average house price is up 14.3% in the past 12 months, according to Nationwide. Investors are seeing this as great news for the house building industry — which looks like it’ll have to foot a £4bn bill to remove flammable cladding from residential buildings.
Chinese tech stocks could gain
JPMorgan reckons that investors who are willing to take a gamble on Alibaba [BABA], Tencent [0700.HK] and JD.com [9618.HK] could be handsomely rewarded — so long as they can avoid being booted off the New York Stock Exchange. “Easing geopolitical tensions and improving US-China cooperation over audit records… should improve investor sentiment for this group of stocks,” Wendy Liu, JPMorgan’s chief China equity strategist, said. At 5pm GMT, Tencent had risen 25.12% since its 52-week low on 15 March, while Alibaba is up 59.58% over the same period.
Following in the footsteps of Alphabet [GOOGL] and Amazon [AMZN], Tesla [TSLA] is planning a stock split to increase liquidity. Plans submitted to the US Securities and Exchange Commission say the split will come later this year, and is being done with the aim of raising capital to pay a dividend to shareholders. The announcement led to an 8% rise in the electric car maker’s share price.
UK plans to be global crypto hub
As ordinary citizens grapple with skyrocketing energy costs and inflation, and government officials question how they can get dirty money out of the UK, chancellor Rishi Sunak has decided to turn his attention to NFTs. On Monday, it was reported that the Treasury had asked the Royal Mint to launch an NFT this summer, as part of a project to make the UK a “global crypto asset hub”. The plan is to introduce regulated stablecoins, pegged to a flat currency such as the pound or dollar.
BlackRock’s crystal ball
We are approaching a “new world order”, says investment firm BlackRock, with rising inflation and geopolitical uncertainties such as the war in Ukraine causing a paradigm shift in the markets. US stocks could have the edge in this environment, since the country is more insulated from energy price spikes and the impacts of the current war. Bonds on the other hand are “providing less portfolio ballast today as correlations to equities have converged”, BlackRock’s chief investment officer Tony DeSpirito noted.
Should Zendesk sell?
Shares in the customer support software company could be worth $180–200 in the event of a takeover by a strategic bidder, Glen Kacher, the founder of Light Street, told CNBC. Zendesk [ZEN] is currently being put under pressure by activist investor Jana Partners, who say they have lost faith in management after an aborted bid to acquire the parent company of SurveyMonkey. In February, Zendesk turned down a $127–132 per share private equity takeover offer, saying it undervalued the company.
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