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Market summary: 📊
Small cap stocks led a bloodbath in India, putting Indian markets on a slippery slope. US had a mixed day too, with rising inflation giving investors cold feet.
US:
S&P 500 - 0.034%
Nasdaq - 0.16%
India:
Nifty 50 - up 0.01%
Sensex - down 0.05%
Quick shot of espresso ☕
✅ Pizza galore — Yum Brands mafia taking over the street! No.2 franchisee of Yum Brands in India, Sapphire Foods, filed its docs for a public listing with SEBI, right in time to throw shade on competitor Devyani International’s open! Sapphire operates a whole bunch of Pizza Huts, KFCs, and other fast food eateries in India, Sri Lanka, Malaysia and a few other Asian countries, making ₹1,000 crore+ in revenues.
✅ Give it back, or else — Tuesday saw one of the biggest hacks in the history of crypto — after an unknown hacker group found a vulnerability in a decentralized-finance platform by the name of Poly Network (not the Polygon from India, thankfully), and managed to run away with $600 million worth of currency. What’s crazy? Poly made a humble appeal, and the hackers have started to return the currency, already sending nearly half of it back! That’s kind, but Shit like this keeps attacking at the credibility of the game tho! 🤷
Coinbase signals a new era, that’s here to stay 📈
While conservative investors continue to brush aside crypto, Coinbase out here is literally making bank — with revenues growing an explosive 1,000%+ YoY, to $2.2 billion last quarter, smashing all investor expectations on growth and profitability.
Closer look at the numbers:
Despite the gloomy-ish quarter in crypto, monthly transacting users grew 44% YoY to 8.8 million
Users traded a total of $462 billion of volume in Q2 — nearly $80B more than markets were expecting!
Interestingly, $ETH volume was higher than $BTC
Here’s a link to the shareholder report.
Big picture — obviously these are out of whack growth rates, jacked up by low-bases in 2020, but… $COIN shows these businesses can be sustainable, while being clean enough for shareholder and public market scrutiny.
Stock popped 4%, indicating investors increasingly buying into the thesis.
India’s clean energy darling going public 💥
What’s happening — SEC okayed the $8 billion SPAC merger of ReNew Power — India’s largest clean energy company, paving way for the company to trade on the Nasdaq.
To the uninitiated, ReNew started barely 10 years ago, rode India’s aggressive transition from a coal-powered economy to clean energy future, scaling up a portfolio of ~10GW of clean energy assets, across wind, solar farms, solar rooftop projects and such across 8 states and 110 different projects.
In 2020, they made $680 million+ in revenues, and money raised in the listing will be put to double capacity to 20GW within the next 5 years!
We lost a gem to the foreign markets!
Zomato put out a “deal with it” message 🙄
Zomato had its first ever investor date as a public entity yesterday — and its wasn’t all that cheerful. Revenues bounced a solid, but losses widened too.
Quick look at numbers:
Total order volumes of $605 million, 37% sequential growth
100 million food orders processed during the last 3 months
Revenue of $113.4 million, largely driven by core food delivery business — a big YoY jump, but that’s because business had frozen to 0 same time last year
Losses jumped nearly 3x to $48 million — but majority of that was driven by ESOPs granted to founder, and a few other major employees.
But that’s not what markets fussed over… Management said they’ll be talking to analysts on a conference call only once a year, vs. each quarter like other public firms do and that soured the mood a bit. 👎
Bottomline — there’s a common belief among growth companies that mainstream analysts don’t have the “vision” to even out quarter-over-quarter bumpiness and see the big picture.
But even Elon Musk faced some harsh questions for a decade before Tesla felt like it was going anywhere, so why not in India? Doesn’t set the right precedent.
Closing out — small cap investors lost their minds 😐
If you ain’t updated with the market crash, either you’re a true long term investor, or lost in deep slumber. Both, good for you!
What happened — Small and mid-cap stocks took massive dumps, shaking the bottom floor of the markets after the Bombay Stock Exchange, on the behest of regulators, disclosed some steps to put an end to pump and dumps, and extreme volatility.
In simple terms, the exchange will update its circuit-breaker rules, basically limits that make sure trading in a stock is halted, if those stocks make wild up or down moves (greater than 20%), particularly thinly traded stocks listed exclusively on the BSE.
BSE says in addition to regular circuit limits, it will put weekly and monthly limits as well for a set of companies, list of which will be disclosed. Here’s a link to the new “limit” schedule though.
Consequences — 520+ stocks tanked more than 20% yesterday, and nearly 2,500+ ended the day in the red as scared investors ran for the door. BSE small cap and mid-cap indices tanked 2-5% yesterday. Phew!
What does this mean for me — unless you’re an active stock picker with exposure to tiny market-cap companies, counting on daily liquidity, you won’t have to worry much.
Short term, markets could feel some jitters and pull back a notch. Long term, regulators stepping-in to restrict shenanigans should help flush the bottom of the pit of systematic manipulative actors.
What else are we snackin’ 🍿
🗣️ Better stay full - RBI will fine banks ₹10,000 on failing to fill up the ATMs within 10 hours of cash-out. Good move!
👨💼 Getting more - Lenskart is adding 2,000 jobs to serve pent up demand over the next year.
Hit that 💚 if you liked today’s issue.
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