The Nasdank Stonks Journal #2
Helo, I did it. The Nasdank Stonks Journal is now weekly!
I’ll publish every week if I feel like there are enough developments for me to substantiate them into an article. If I’m lacking content, I’ll wait it out, collect more things, and publish a little later.
Update: Boards have ruined my upload schedule :))
Welcome to the second edition of the Nasdank Stonks Journal, happy reading!
WallStreetBets Endorses Monké
The traders at r/wallstreetbets have been using their recent $GME gains for all the good motives – like adopting gorillas. The “madlads” have collectively raised upwards of $300,000 for the Dian Fossey Gorilla Fund, a not-for-profit organization dedicated to protecting gorillas and their habitats in Africa. The fund allows one to adopt endangered animals, and name them. The first gorilla to be adopted by a WSB trader was christened GameStop.
An adoption certificate awarded to the reddit trader.
Following this influx of “tendies”, the organization even revised its motto, which now reads “Apes Strong Together”.
A screenshot from the fund’s website.
The subreddit did not restrict their philanthropy to a single charity but helped out multiple wildlife organizations by adopting everything from warthogs, to snow leopards, and baby rhinos.
Bet the hedge funds at Wall Street never expected their $GME short positions to save mountain gorillas in Africa.
*Update – r/wallstreetbets has adopted about 3,500 gorillas.
NASDAQ Big Happy
As r/wallstreetbets puts it, “Stonks always go up, but sometimes they do go down, but then everyone buys the dip, and stonks go up again.” – US markets recovered following the $1,400 stimulus package confirmation. After having nosedived all through late February and early March, the tech-skewed NASDAQ is up 3.2% this week and the S&P 500 is poised at +2.5%.
GameStop shares witnessed another recent rally (+70%). After one bubble corrected, investors can’t wait to commence another one.
The VIX volatility index has plummeted 20%, highlighting positive market sentiment. Evidently, the Fed keeping the money printer afloat is all that is required to satisfy both Wall Street and Wall Street Bets.
The Cboe Volatility Index (VIX) yields a 30-day forward projection of market sentiment and is derived from near expiry S&P 500 Index options. The VIX is directly proportional to investor fear/market volatility – if the market is optimistic, the VIX tends to decline, however, if investors foresee a downturn, the VIX will skyrocket. One cannot buy the VIX because it is an index, not a stock, but one can grab an ETF that attempts to track the volatility index.
Crypto Big Happy
As stocks recovered, “tendies” echoed across to the crypto markets as well. Bitcoin touched another all-time high, transcending the $60,000 benchmark. The Crescent Crypto Market Index (CCMIX), an index that gauges market performance based on average market capitalisation digital tokens, gained 22.71% over the past week.
Coinbase’s Direct Listing and the BuzzFeed SPAC
Coinbase Global Inc, the largest cryptocurrency exchange in the US, plans to go public (no official date as of yet) through a direct listing on NASDAQ with a valuation of about $100 billion. The announcement came in late January, and more recently, the SEC has published the S-1 filing (formal documentation for the listing of fresh securities) regarding the same.
Coinbase is a cryptocurrency exchange – one can buy and sell multiple cryptocurrencies and store them in a crypto wallet.
Traditionally, to acquire bitcoin or any other digital token, one would have to participate in the mining process – a herculean task, that is energy-intensive, demands expensive equipment, and a tech big brain.
Crypto exchanges cut all the nerdy stuff and effort – you only need to open an account with the exchange to buy the tokens at the prevailing market price. The apparatus enables existing holders to liquidate their tokens and new investors to acquire the “digital gold”, while also yielding a wallet to safely store it.
Coinbase is also skipping the traditional IPO listing process by instead opting for a direct listing – a mechanism that does not utilize intermediaries like investment banks for the marketing of securities to potential investors. A direct listing does not create new shares, thereby, avoiding share dilution. It is a more erratic process – the facility to intricately determine valuation and hire underwriters to ensure subscription is absent. However, direct listing saves cost, is feasible if the business is well known, allows markets to naturally discover price, and arguably, the elimination of intermediation has symbolic importance to the blockchain firm.
Capitalizing on the recent market momentum, BuzzFeed, the digital media giant reportedly plans to go public via the SPAC route. It is likely to merge with 890 Fifth Avenue – a media, telecom, and technology-focused SPAC which raised approximately $290 million in January from its IPO. The SPAC’s shares are currently (March 14, 2021) being traded for $9.96 on NASDAQ.
India and Crypto
After initially adopting a conservative outlook on cryptocurrencies, the Finance Ministry has stated that it might not pursue an outright ban on cryptocurrencies.
This recent statement, however, conflicts with other official sources which claim that the government is working on a bill that seeks to criminalize possession, mining, trading, and issuance of cryptocurrencies. The rumored bill will also yield a six-month window to liquidate holdings.
Although the government has been increasingly vocal about promoting a robust blockchain infrastructure to cultivate India’s Fintech industry, the currency use case, in particular, attracts controversy. The adverse perception stems from crypto’s attempt to advance decentralization and eliminate financial intermediation- a direct challenge to the legitimacy and authority of central banks and the deep-rooted financial services industry. While curtailing “private” cryptocurrencies, the RBI also plans to issue its own digital token – ModiCoin, potentially, hmmmmm.
Despite the potential political and legal turmoil, India’s crypto markets are growing; estimates claim that about 8 million Indian investors hold upwards of $1.4 billion worth of these digital assets.
All we have right now are contrasting statements; it will be interesting to witness how India’s crypto saga culminates.
More NFT Sales
As covered in the previous article, many artists are promoting their art through NFTs or Non-Fungible Tokens. This week highlighted two significant sales, the first one being Mike Winkemann’s (also known as Beeple) NFT that sold for a whopping $69.3 million at a Christie’s Auction. The digital art piece went onto set the record for the most expensive NFT sale till date.
The second sale underway is by Elon Musk, who plans to sell his song about NFTs as an NFT. The trend gained further traction when individuals attempted to sell Musk’s tweet as an NFT; the tweet is currently auctioning for about $100,000.
You know we are in a bubble when someone sells an NFT of someone’s tweet about selling an NFT of their song about NFTs for $100,000.
This concludes the second edition of The Nasdank Stonks Journal, see you next week.
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(hmmm maybe)
Cover Image Credits – Aditya Kumar