In this edition of Battle Of The Stocks, we look at two Chinese heavyweights in the online space, Alibaba [BABA] and JD.com [JD]. Both these companies are giants in China’s multi-billion dollar domestic market.
Shares of both the companies have been negatively impacted in recent times. There are concerns over China’s slowing economic growth. China’s economic growth slumped to a 9-year low of 6.5% in Q3 2018.
The mounting debt and trade war with the United States are weighing in on China. This has severely impacted the country’s domestic stocks as well. While Alibaba shares have declined 13% this year, JD.com shares are down a significant 53% in 2018.
So which stock is a more attractive buy at current levels? Read on to find out.
Driven by the massive increase in share prices, the market cap of Alibaba and JD.com had grown significantly till the start of 2018. The recent pullback has led to a fall in investor returns.
Alibaba was listed on the stock exchange in Sept. 2014 on the back of a record-breaking IPO (initial public offer). The stock rose 137% between its IPO and June 2018.
Comparatively, JD.com was listed in May 2014 and the stock has gained close to 150% between its IPO date and Feb. 2018.
While Alibaba’s market cap is $386B, JD.com has a market cap of $27.8B. However past returns are not an indicator of future price movements.
So let’s look at revenue, profitability and growth estimates for the two companies. These metrics are key drivers for stocks and have a significant impact on prices.
CNBC: Here’s Why WeWork Wants To Go Public
News broke recently that WeWork’s going public in September. In this video, CNBC breaks down why they’re going public.
Before you watch, though, here’s some context.
WeWork’s recent S-1 filing — the paperwork you file with the SEC right before you go public — had the entire internet up in arms, including ourselves, trying to decode how the heck WeWork justifies its insane valuation.
Considering, ya know, IWG, a direct competitor, has nearly double the revenue, five times the members, is $2.5B ahead on the bottom line and…well, you can sort of see where this is going.
Despite earning an insane $47B valuation this year, it’s bleeding dough. Yes, WeWork grossed $1.8B in 2018…but it also lost $1.9B.
Be that as it may, WeWork is going public this year (via parent company “The We Company”), the latest in a string of high-profile tech IPOs in 2019.
And speaking of tech. Despite numerous “tech” mentions in the S-1, critics are claiming WeWork is little more than a real estate company.
As far as the We losses go, CFO Artie Minson told CNBC that investors need not worry about those grim financials, but instead to look at WeWork’s losses as “investments” that will lead to greater cash flow. (Which is very possible.)
And even if short-term losses eventually unearth long-term cash flows, will they be enough to justify its lofty valuation…and even loftier ambitions?
While we’re waiting for time to tell on WeWork’s future, if you’re looking to raise your startup game right now, go check out our content partner More Labs’ brand-new drink Aqua+. (Yes, the same More Labs behind this drink that broke the internet.)
Video: Compound Interest, Explained
3 Ways To Invest From Your Smartphone For Under $5
The numbers say 80% of millennials don’t invest in stocks.
Reason? Half say they don’t have money, one-third says it’s too early and another third says they don’t know how.
In addition to that, there’s demographic gap. “The average age of a financial advisor is 55,” said Douglas Boneparth, a New York City-based financial planner. “There are more financial advisors over the age of 70 than there are under 30.”
Despite these beliefs, you don’t really need much money, nor experience, to get started. (Just look at our fearless co-founder Odunayo Eweniyi and what she’s pulled off here)
Be that as it may, here are three ways to get started for $5 or less.
What: A micro-investment app (iOS and Android) with over 30 ETFs according to industry, sector and risk tolerance.
How it works: Download the app and choose your investment.
Minimum investment: $5
Cost: Fees range from $1 a month for accounts under $5,000 to 0.25% a year.
“We help people who don’t have a lot save money on a weekly basis,” CEO and co-founder Brandon Krieg said in one interview. “Stashers look like America, they look like people you meet every day: they are nurses and teachers and Uber and Lyft drivers.”
What: iOS and Android app.
How it works: Download the app and choose one of six index funds. When you buy, say a cup of coffee for $1.75, it rounds up the change to $2 and deposits the difference.
Minimum investment: $5
Cost: Just like Stash, fees range from $1 a month for accounts under $5,000 to 0.25% a year.
“We’re not trying to preach austerity to the client, because that’s a bummer,” CMO Manning Field says. “Some people will say, ‘Don’t have the cup of coffee.’ We’ll tell you to have the cup of coffee and invest along the way.”
What: A commission-free investment app (iOS and Android).
How it works: Download and start buying stocks.
Minimum investment: Whatever stock you want to buy.
And by the way, if you want to get a fast start on real estate, here’s Forbes’ list of nine REITs with yields between 8% and 10%.