STOCKS TELEGRAPH

Author: ST Staff

  • Sonoma Pharmaceuticals Inc. (SNOA) stock rises during pre-market trading. Here’s to know why?

    Sonoma Pharmaceuticals Inc. (SNOA) stock surged by 8.47% at the last trading close whereas the SNOA rises by 26.78% in the pre-market trading after it announced their agreement with EMC Pharma, LLC. Sonoma Pharmaceuticals is a worldwide healthcare pioneer in the development and production of stabilized hypochlorous acid (HOCl) products for wound treatment, animal health, eye care, nasal care, oral care, disinfectant use, and dermatological conditions.

    What is happening?

    Sonoma announced that it has entered into a definitive agreement with EMC Pharma, LLC for the exclusive right to manage, market, and distribute Sonoma’s HOCl-based prescription dermatology and eye care products in the United States for a five-year period, with an option to extend. EMC Pharma will also have a non-exclusive contract with the government to manage, supply, and distribute such Microcyn-based wound care products. EMC Pharma is a national healthcare products and services firm that operates in FDA-approved prescription medication creation, pharmaceutical distribution, and effective pharmacy services.

    EMC will purchase all of the current inventory and pay a royalty and transfer rates for the first five years as part of the collaboration deal. To keep the distribution rights reserved, the parties agreed on certain minimum purchase conditions. The CEO of SNOA said that, through this agreement with EMC we are intending to increase our distributor network in order to enhance their approach for patients and consumers on national level and for this purpose EMC is the most appropriate platform due to its wide distribution network and experience in this business.

    Furthermore,

    Sonoma’s direct sale model was not really working in favor of SNOA therefore following this new agreement SNOA has reduced its sales force, working for the direct sale model in USA. The management of SNOA hopes that partnering with EMC would enable the company to cut costs while working with EMC to develop a profitable distribution model for its prescription drugs.

    Hence, this recent development in SNOA has caught the attention of investors which resulted in the rise of SNOA stock price. But the investors are still expected to be more careful before they make bet for a long-term.

  • What is happening with Spark Networks SE (LOV) stock?

    What is happening with Spark Networks SE (LOV) stock?

    On 31st March 2021, Spark Networks SE (LOV) reported second half and full year financial results of 2020. The announcement led to the 7.11% increase in LOV stock in after-market trading session. A day prior, LOV stock price increased 18.72% after Spark announced that it will deliver live streaming video to Zoosk, its largest brand.

    About Spark Networks SE

    Spark Networks SE is a worldwide dating company, headquartered in Berlin, Germany and has offices in Utah and New York. Originally Spark started as JDate, dating sight for the Jewish community, in 1997. The current Spark Network SE was formed in 2017 as a result of merger between Affinitas GmbH and Spark Networks, Inc. Spark Networks has a widening portfolio of freemium and premium applications that include EliteSingles, SilverSingles, Zoosk, JSwipe, Christian Mingle, JDate and much more. After the acquisition of Zoosk, Inc. Spark became the second largest dating company in North America in terms of revenue. What started as a small startup, now has a presence in 29 countries, is second largest publicly listed dating company and currently has almost one million monthly paying subscribers from all over the world.

    Spark Networks second half and full year financial report

    Spark Networks SE announced the financial results of second half and full year 2020. The key performance indicators of the financial report are as follows:

    • The average monthly paying subscribers decreased to 941,104 in the second half of 2020 as compared to 2019’s 1,017,321 subscribers of the same period. For the full year, the, average paying subscribers increased 27%.
    • The monthly average revenue per unit increased by 11.8% to $21.05 in second half of 2020 as compared to the prior year’s $18.83. The average revenue per unit for full year of 2020 increased to $20.93 in comparison to $19.48 of the previous year.

    The announcement of the financial results led to 7.11% increase in LOV stock in after-hours trading session. The LOV stock closed at $7.45, increasing 0.4% on 31st March, 2021, as compared to the previous day.

    Spark Networks announces livestreaming video for its users

    On 30th March, 2021, Spark announced that it will be bringing livestreaming video services for its users Zoosk, its largest brand. This will be done with an agreement with the leading interactive dating solutions provider, ParshipMeet group. This will allow the users to make new informal connections in a fun and interactive manner. Investors responded positively to the news and LOV stock increased by 18.72%.

  • Aave: Venturing into New Frontiers

    Aave: Venturing into New Frontiers

    Aave is a decentralized finance protocol which enables Ethereum holders to borrow and lend their cryptocurrencies in a decentralized manner. The native token of the network, AAVE is the largest DeFi token in terms of market capitalization. The algorithm-based money market obtains loans from a pool rather than from individual lenders.

    Exploring New Frontiers

    The success of the DeFi marketplace has led it to venture into other territories. The Decentralised Finance has gained popularity and its adoption does not seem to be slowing down any time soon. However, the high traffic led to congestion of the popular DeFi cryptocurrency, Ethereum, and other Ethereum-based cryptocurrencies, like AAVE. The high transaction fees have contrained the use of Aave to certain high-worth users which is against the fundamentals of the Aave network.

    The exploring New frontiers initiative is to solve this problem by working on scalability. The first implementation of the program is with Polygon (MATIC). Polygon is a sidechain of Ethereum with key features being fast and cheap transactions – which makes it ideal for Aave.

    The Aave market on Polygon will enable the use of MATIC as collateral. Furthermore, Chainlink will ensure the safety and security of the network. The Polygon Aave market will be launched with the assets, MATIC, USDC, USDT, DAI, WETH, AAVE and WBTC.

    A smart contract bridge will also be launched which will enable users to transfer their favourite assets to the Polygon block chain and a part of transaction fees of MATIC tokens will also be given to users in order to cover their transaction costs on the Polygon block chain.

    What does it mean for Aave?

    The Ethereum-based cryptocurrency established its all-time high in February at $542 and is trading at $385 at the time of writing. The price has been on an uptrend in the 24-hour timeframe. With the market sentiment bullish, and the new announcement of integration with Polygon, AAVE can be expected to continue its climb upwards. Polygon will ensure scalability of the Aave network and this has made the Aave community very excited for the things that are to unfold.

  • XpresSpa Group Inc. (XSPA) stock declines during pre-market trading session. Let’s find out why?

    XpresSpa Group Inc. (XSPA) stock declines during pre-market trading session. Let’s find out why?

    XpresSpa Group Inc. (XSPA) stock surged by 6.36% in the last trading closed whereas the XSPA stock declines by 13.59% in the pre-market trading after XSPA announced its fourth quarter 2020 financial results. The XpresSpa Group is a multinational health and wellness business. With 45 outlets in 23 airports around the world, the XpresSpa Group’s core asset, XpresSpa, is a leading airport seller of spa services and related health and wellness products.

    Fourth Quarter Financial Results

    • For the fourth quarter 2020 the revenue was $0.3 million relative to $10.9 million for the same time in 2019. The decline in sales was attributed to the negative effects of COVID-19, which resulted in XSPA temporarily closing essentially all global spa locations due to local authorities classifying the spa locations as “non-essential services.”
    • The General and administrative expense was $5.0 million for the fourth quarter of 2020 and 2019, both.
    • XSPA impairment of asset expense relatively increased to $9.0 million from $5.2 million in the previous year.
    • The cash and cash equivalents was calculated as $89.8 million whereas it does not include restricted cash. The total current assets were of $91.8 million and total current liabilities were of $13.5 million.
    • Cost of sales fell to $2.4 million from $9.2 million in the fourth quarter of the previous year. The decrease was attributed to lower variable costs as a result of lower XpresSpa spa sales, as well as a decline in occupancy costs as a result of rent reductions from airports.

    Other Recent Development

    Recently on March 29, 2021, XSPA announced that they will be expanding their COVID-19 testing service through providing travelers with another option with a fast PCR-based testing platform. With the addition, XpresCheck will be able to expand the availability of accelerated PCR–based COVID-19 tests at XpresCheck airport sites, beginning with pilots today at John F. Kennedy International Airport and next week at George Bush Intercontinental Airport in Houston.

    The Accula SARS-CoV-2 Test from Thermo Fisher Scientific will be available via XSPA. The U.S. Food and Drug Administration (FDA) has granted the research procedure an Emergency Use Authorization, and the results are available in 30 minutes.

  • HealthEquity Inc. (HQY) stock soared in the pre-market trading session: here’s why

    HealthEquity Inc. (HQY) stock soared in the pre-market trading session: here’s why

    HealthEquity Inc.(HQY) stock recently traded at $68 which is a 1.49% upward movement. The HQY stock previously closed at $67. HQY stock soared by 8.71% in the pre-market trading session, at the time of writing.

    The pattern of positive movement of the HQY stock in the recent trading session comes with no new news.

    How is HealthEquity a custodian of HSA?

    HealthEquity is a healthcare company specifically established for being the trustee of all health savings. The designation is given by IRS to become a non-bank trustee and allows HealthEquity to become the custodian of health savings accounts. The function of custodian ad trustee is regardless of the financial institution for which the funds are deposited.

    Since HealthEquity Inc. is associated and affiliated with IRS, there was looming expectations of how the stock will perform once President Biden would take the seat.

    Review of HQY stock’s Q4 performance for FY 2021

    The HQY stock had released its financial report on Q4 with earnings per share rising 7.69% year over year to $0.42. Thus EPS beats the estimate of $0.39. This year, the shares of HQY stock had also been able to easily surpass the S&P 500 index.

    However, the revenue posted by HQY was $188,169,000 which is a 6.48% decrease compared to the previous year’s quarter from $201.2 million. However, the report was still higher than the average estimate of $185,360,000.

    The Health Savings Account (HSA) provider had a total number of accounts of 5.8 million by the end of January 31, 2021. This is an increase of 8% year over year. The total active assets for HSA were $14.3 billion which is a 24% increment from last year.

    One performance variable’s outlook which made the investors slightly hesitant in further investment is the segmental performance. Service revenues were down by 8.9% to a total of $111.3 million. Custodial revenue had dipped 1.6% to $48.6 million compared year over year. The interchange revenues fell 4.7% year over year to $28.3 million.

    However, the HQY stock had a positive performance for its bottom-line. This is mainly due to the income tax benefit of $6.7 million and the interest expense had fallen in the fourth quarter than in the prior-year quarter.  The company at the end of fiscal fourth quarter had cash and cash equivalent amount of $328.8 million as compared to previous year fourth quarter where it was $191.7 million. Even due to the operating activities the total cash flow had totaled to $181.6 million in Q4 compared to $105 million an year ago.

    What to expect of HQY stock in future?

    Overall the HQY stock performance is solid as is the growth in its assets. But the segmental performance drop specifically the lowered adjusted operating margin as well as the gross margin is a basis of concern. This can prove challenging for the HQY company since it faces a lot of competition in the Medical Services market.

    HealthEquity has given guidance for FY 2022 and reports a revenue projection of $750-$760 million. The adjusted earnings per share are given within $1.37-$1.42. Furthermore, if the pandemic eases down and companies start to hire more employees to put their business back on track, this employment rate rise could benefit HQY stock.

  • Shelley: The dawn of a new era for Cardano

    Shelley: The dawn of a new era for Cardano

    Cardano (ADA), the cryptocurrency ranked at 5th in terms of market capitalization, achieved full decentralization yesterday. With an all-time high of $1.42, Cardano stands at $1.19 – at the time of writing.

    Shelley: Complete decentralization of Cardano

    Shelley is the – or was – the next step in the development of the Cardano block chain. Cardanohas officially moved from a centralized ledger to a complete decentralized distributed ledger. Ouroboros – the first provable Proof of Stake protocol – has been successfully deployed. The transactions on the Cardano block chain are now verified without the need of any centralized authority. Ouroboros also ensures the process is done more efficiently – without employing as much resources as Bitcoin does with its Proof of Work mechanism.

    The percentage of tracsantions that are being processed by the genesis node has reached zero D=0, and the community pools of the network are now fully responsible for producing blocks on the Cardano block chain.

    What does Shelley mean for the future of Cardano?

    Ever since the announcement of the update, Cardano has been on an uptrend. Even though the cryptocurrency did suffer from some retracements, it was able to establish a new all-time high. Currently, the price is down by 1.2% in the 24-hour timeframe while the daily trading volume increased by around 10%. The Voltaire governance will be implemented through which the community will lead Cardano towards newer developments.

    IOHK, the developers behind Cardano, had justified the partial decentralization of the block chain but it was still a controversial topic in the cryptocurrency community as cryptocurrencies’ appeal lies in their decentralization. Despite the partial decentralization of the network, Cardano had been able to rise in the ranks of the market.

    With now ADA being fully decentralized, a further increase in the adoption of the cryptocurrency can be expected. Shelley is designed to bring greater security and robustness to the network by being 50-100 times more decentralized than other major block chains.

    What’s next?

    The extensive roadmap of the Cardano network has the next era Goguen planned to bring smart contracts, and hence decentralized apps, integration to the network. Followed by Basho which will focus on the scaling and the interoperability of the network. And finally, Voltaire governance system which will introduce voting and treasury system and will also mark the completion of Cardano becoming a self-sustaining system.

  • What led to the increase in share price of QuantumScape Corporation (QS) stock?

    What led to the increase in share price of QuantumScape Corporation (QS) stock?

    QuantumScape Corporation (QS) announced on 31st March 2021 that Volkswagen Group of America Investments, LLC successfully approved the second $100 million investment under the May 14thstock purchase agreement between QuantumScape and Volkswagen. QS stock increased 1.54% and closed at $44.75 after the announcement of the agreement.

    Overview of QuantumScape Corporation

    QuantumScape Corporation is a United States company that is a leader in the production of next generation solid state lithium metal batteries, which are generally cheaper, that are used in electric vehicles.  QuantumScape was founded in 2010 and later in 2012 they started working with the German automobile giant Volkswagen. Volkswagen is the biggest shareholder of QuantumScape after the $100 million investment. QuantumScape and Volkswagen have established a joint project for the mass production of solid state batteries. One of the biggest investors include the billionaire philanthropist and founder of Microsoft, Bill Gates. QuantumScape has almost 200 employees and is on a mission to revolutionize energy storage to enable sustainable storage.

    $100 million dollar investment agreement

    QuantumScape Corporation announced on Wednesday 31st March 2021 that they have successfully met the technical milestone, a condition that was set to close the additional $100 million investment by Volkswagen Group of America Investments, LLC in QuantumScape. The technical milestone included Volkswagen to test the successful latest generation of QuantumScape’s solid-state lithium-metal cells in their German labs. The test turned out to be a success. Under the 14th May 2020 stock purchase agreement, this will be the second and last closing between Volkswagen and QuantumScape. This marks the total of $200 million Volkswagen has now invested in QuantumScape.

    Effect on QS stock

    QS Stock soared a stunning 14.64% in after-hours trading session after the announcement of the successful completion of this technical milestone. The QS stock closed at $44.75, increasing 1.54% on 31st March 2021. Last week, the QS shares were down 12.4% on Wednesday, after a 10.6% drop on Tuesday. This happened after the company had announced its intention to raise more capital through the public offering of common stock. But the recent development regarding the $100 million investment agreement has proved beneficial for QS stock and its price increased gradually.

  • Greenlane (GNLN) And KushCo (KSHB) Announce Merger In All Stock Deal

    Greenlane (GNLN) And KushCo (KSHB) Announce Merger In All Stock Deal

    Stock price of Greenlane Holdings, Inc. (GNLN) surged over 32% after the cannabis focused service provider confirmed an all-stock merger of OTC traded KushCo Holding (KSHB), another cannabis accessory company.  In accordance to the merger contract for every purchase of KushCo common stock, shareholders will receive approximately 0.2546 shares of GNLN, as a result, KSHB shareholders holding 49.9% of the company while GNLN having the decision making authority at 50.1%

    The merged board of directors will consist of 4 members from GNLN and 3 members from KSHB with merger transaction expected to be finalized by the second quarter of 2021.

    After the completion of the merger, the CEO of kushCo, Nick Kovacevich has been appointed to become the CEO while the Co-founder of GNLN Aaron LoCascioashas opted to become president of the combined companies.

    Why this merger is transformative for both companies.

    The merged company is expected to provide more value to consumers, with an extended supply chain,  vast distribution network, licensed producers, various cannabis stores, and millions of clients. The company is projected to yield approximately $20M accumulated yearly costs, with a larger combined production reducing the overall costs giving the company an advantage over its competitors.

    Furthermore, market capitalization over $350M and expected net revenue of $330M in 2021 has investors keen on how the net proceeds have immensely increased.  The merger transaction is expected to be exempted from any tax due to income tax purposes bringing substantial synergies between the two business models.

    Conclusion

    GNLN offered a better-than-expected outlook for the current quarter and anticipates sales and profits to grow for the full year after the merger with KSHB. Furthermore, a larger distribution network and an increase in the cannabis retail market combined with a diversified product line has peaked investor interest in the company stock.

  • Jaguar Health Inc. (JAGX) stock rises in the after-hour trading. Why is it so?

    Jaguar Health Inc. (JAGX) stock rises in the after-hour trading. Why is it so?

    Jaguar Health Inc. (JAGX) stock surged by 3.45% in the last trading closed as well as the JAGX stock continued to rise by 9.44% in the after-hour after Jaguar Health announced its full year 2020 financial results. Jaguar Health, the pharmaceutical company is dedicated towards developing innovative, plant-based, non-opioid, and sustainably derived pharmaceutical drugs for people and animals who are suffering from gastrointestinal distress, especially chronic, debilitating diarrhea. The Mytesi product is the only oral plant-based prescribed drug approved under FDA Botanical Guidelines for the effective treatment of noninfectious diarrhea in adults with HIV/AIDS who are on antiretroviral therapy.

    2020 Financial Results

    • For the year 2020 Mytesi net sales were around $9.3 million and Mytesi gross sales have been calculated as $20.4 million, this is an increase of 64% and 148% respectively compared to the previous year.
    • The net operating expense generated for the year 2020 was $36.0 million while it was $34.7 million for the year 2019. The operating has increased by 4% from the previous year.
    • JAGX’s total cost of product revenue was $3.3 million compared to $3.8 million from the year 2019 that means it is a decrease of 14%.
    • The General and Administrative expense was $14.4 million for the year 2020 whereas the G&A expense for the previous year was $13.5 million that means it has increased.
    • The R&D expense of JAGX stock for 2020 was $6.4 million, relative to $5.8 million in 2019, a rise of 10%, or $0.6 million, year over year. Other expenditures of $0.9 million, mostly consulting, formulation, and regulatory fees, contributed to the rise.
    • Lastly the net loss faced by JAGX stock for the year 2020 was $33.8 million which has also decreased relative to the previous year where net loss was $38.5 million.

    Other Recent Development

    On March 30, 2021, JAGX stock announced that it supports the main sponsor’s choice of investment bank and nominated advisor (“NOMAD”) for the proposed Dragon special purpose acquisition company. The Dragon SPAC plans to list on the AIM Italia exchange and merge with its named goal, Napo EU S.p.A. which is the Dragon SPAC’s Italian subsidiary.

    After the upcoming holidays, during the week of April 5th, more details on the Dragon SPAC’s banking engagement, including the Dragon SPAC’s selection of its necessary NOMAD, will be published. A NOMAD is a necessary financial services firm that will assist and help the issuer, the Dragon SPAC, in complying with Borsa Italiana’s IPO process for AIM Italia listing.

  • Western Digital Corporation (WDC) stock soared in the after-hours trading session: here’s why

    Western Digital Corporation (WDC) stock recently traded at $66.75 which is a 1.97% upward movement. The WDC stock previously closed at $65.46. WDC stock also soared in the after-hours trading session by 7.12% at the time of writing.

    This pattern of positive movement of the WDC stock in the recent trading session comes adjacent to the news that Western Digital Corporation (WDC) is looking to make a deal with Japanese chip maker Kioxia.

    What is Western Digital’s operational portfolio?

    Western Digital (WDC) is a hardware manufacturer that specifically focuses on computer hard disk drive as well as data storage. WDC has an expansive portfolio of systems and solutions for businesses as well as individuals. They design and manufacture data storage-based technology products, data center systems, and online cloud storage systems.

    It has three brands under which it sells its diverse portfolio and Western Digital Capital is the investment subsidiary of WD that provides funding for data technology companies like Elastifile.

    The first is Western Digital (WD brand) under which it sells external hard drives and includes SSD based HD. SSD ranged products include My Passport, My Book and WD Elements.

    SanDisk brand focuses on offering mobile based storage products. These mobile storage products consist of USB flash drives, cards and readers, SSD and MP3 players. The microSD card storage would work with android phones that had a memory slot.

    G-Technology is last but not the least brand under WDC stock is the company that outsources the data storage and system designs for professionals and institutions. The partnerships in the past include Apple, Intel and Atomos.

    WDC seeking acquisition with Kioxia may start a bidding war

    Currently, Western Digital Corp is exploring a potential deal for Kioxia Holdings Corp which is a semiconductor firm. But there could be a potential bidding war because another manufacturer of computer memory, Micron Technology Inc. is eying the same company for acquisition. The deal is reported by the WSJ to be estimated around $30 billion, citing people familiar with the matter.

    The global chip shortage is the main reason behind this deal

    The possible reasoning behind this acquisition attention towards Kioxia Holdings is because acquiring the world’s second largest maker of flash memory chips will allow both companies to tackle their own chip shortage amidst the global chip shortage.

    The global chip shortage has a whole complex of demand and supply problems. The gist of the global chip shortage problem is that although chip productions have reached normal levels as lockdown eased a new surge of chip demand has arisen. This surge is due to change in business and market behavior adapting to the change in a pandemic.

    Kioxia Holdings Corp. which had previously spun off from Toshiba had plans to list on the Tokyo Stock Exchange on Oct 6, 2020 and had 334.3 billion yens to offers as share. However, it had to shelve this plans amidst the US-China trade wars. The trade-wars was uniquely focused on controlling and blocking the supplies of chip-producing companies as both countries want to have the upper hand on the semiconductor position over the other.

    How poised are both companies for this deal?

    The structure of the deal and news around the deal is still not guaranteed but WSJ predicts that it could be finalized this spring.

    Both companies are poised in a position to expand into the semi-conductor manufacturing and supply production. WDC stock has been beating earnings estimates for the last two quarters and has solid fundamentals to maintain the trend. While Micron has recently shut-down its 3D XPoint memory facility and is aggressively looking for an acquisition. It has also reported better than expected results for the fiscal second quarter amid the global shortage of chips.

    If the deal however fails to take place for WDC stock and Micron, then Kioxia can still look back again to an Initial Public Offering for later this year.