Facebook's Gone Meta

Oct 31, 2021 | Should swing traders use the Metaverse as a way to get rich?

Weekly Newsletter- Week of 10.31.2021 

Facebook’s Gone Meta 

For the first time in 17 years, Mark Zuckerberg has a new job title. This week, he became the CEO and chairman of ‘Meta’, Facebook’s new parent company. As you’ve undoubtedly heard, Facebook, the social media empire is set to not only change their name and ticker but to also pivot their operations and core competencies as they look toward the future of the internet. 


Metaverse 

There’s still a lot of confusion over what exactly “The Metaverse” is. Is it simply the latest buzzwords to come out of Silicon Valley? Or maybe it’s a real-life version of The Matrix? Matthew Ball, author of Metaverse Primer explains it as an expansive network of 3D worlds and simulations that support continuity for objects, history, and payments. Facebook succinctly describes the Metaverse as “a virtual environment, where interconnected communities can meet, work and play, using VR or augmented reality”. The Metaverse will also encompass other aspects of your online life, such as shopping or social media posting. Facebook believes this will be the next evolution of connectivity, where your virtual life is living identically to your physical life. 

Facebook’s Pivot 

Facebook has routinely been in the news over the last several years, but those issues have hardly ever caused any pullbacks from the stock. Many analysts have called FB stock Teflon, given its ability to continuously push new highs, despite public sentiment about the company. For context, Facebook stock has produced gains of over 150% in the last 5 years alone. Many analysts have criticized the timing of the announcement as this comes at a time where FB stock has been down, and the company is continuously in the news for its latest whistleblower incident. Though FB has countered, saying they’ve been laying the groundwork for this massive announcement and pivot over the last few years. Zuck recently provided a futuristic demo of the company's Metaverse ambitions. This included Pixar-like animations of users hanging out in space, with cartoon-like versions of themselves. Though many of the features demoed are still several years away, FB believes the Metaverse will become mainstream within the next 5 to 10 years. Facebook also demoed a new VR headset and fully AR-capable smart glasses. At this time, it’s hard to truly know what the new Facebook parent company known as Meta will be producing. We and the rest of Wall Street will be anxiously watching for new announcements or developments. 

Weekly Swing Trades

PNRG (Prime Energy)

October 2, 2022

Entry Price:

80.62

Stop Price:

76.85

Target Price:

88.04

Time Frame:

1 Week Hold

Expecting a short-term bump after a recent OPEC+ announcement regarding the a supply constraint to oil. The constraint would result in ~1M less barrels of oil per day, which should cause a price jump. Low RSI and bouncing off our 250 day moving average, both hallmarks of a good swing trade.

DV (Doubleverify)

October 2, 2022

Entry Price:

27.75

Stop Price:

26.75

Target Price:

29.00

Time Frame:

3 Week Hold

Using our moving averages heavily on this swing trade, look for continued strength as we try to notch out a 6-8% gain. Specifically, we are taking advantage of of a recent cross over in the 50 day moving average. Last week closed down, so wait for confirmation of a reversal.

Amazon Deliveries are Going Electric 

This week Amazon disclosed it had recently taken a 20% equity stake in upstart Electric Vehicle (EV) car manufacturer, Rivian. Though Rivian is not currently a publicly-traded company, they did recently announce plans to take the company public through an IPO sometime in November. Rivian will trade under the ticker sign: RIVN after its IPO. 


The Amazon Deal 

Amazon declared their total value in equity and shares of Rivian were worth over $3.8B. As part of the new partnership, Amazon will have exclusive rights to Rivian’s electric delivery vehicles for the next four years. Followed by a right to refusal after that. Rivian has agreed to produce 100,000 EV delivery vehicles for the eCommerce behemoth by the year 2030. Amazon plans to both receive and deploy its first 10,000 electric delivery vehicles by the end of 2021. This massive EV initiative from Amazon is seen as a key effort in its larger goal to battle rising gas emissions. 


Rivian’s IPO 

As previously noted, Rivian is not currently publicly traded. In fact, Rivian is still both pre-revenue and pre-production as they are yet to actually start selling vehicles. Despite these factors and the growing competition within the EV space, Rivian is expected to be a long-term EV winner. And this massive deal with Amazon should help fuel growth for years to come. While they will also be selling personal vehicles, Rivian expects to target the commercial vehicle space. A sector that Ford has been focusing its EV efforts on as well. Despite all the enthusiasm, Rivian is expected to report a quarterly loss of over $1B as it nears production on its first vehicle. We expect heavy volume and wild trading from Rivian when it goes public. Follow our social media accounts for updates on Rivian’s IPO.


Adobe Joins the NFT Game 

Adobe has announced plans to better showcase NFT artwork through its platform. Adobe has now made it easier for artists to connect their crypto wallets to the site. Adobe has noted they have no desire to become another NFT marketplace, but rather they are focused on “enabling creators to better show off their artwork.”  In another effort to support NFTs, Adobe has also created a “Prepare as NFT” option on its site. This was done to help fight art theft. With a new tool called “Content Credentials” Adobe wants to help sellers prove they’re the true creators of the artwork. NFT creators will now be able to link their Adobe ID to their crypto wallet which will allow marketplaces to show a verified certificate, to help prove authenticity. While Adobe’s new features cannot prevent art theft, it does offer a way to prove the NFT you’re buying isn’t stolen. These new features from Adobe will become available within the next couple of months. 

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Weekly Watchlists

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Weekly Review

Market Performance- Week of 09.25.2022

Recent Winners

SBUX (Starbucks)

SBUX (Starbucks)

Entry Price:

85.00

September 11, 2022

Price at High:

89.90

Return for Members:

5.76%

Timeline:

2 Month Hold

Strong momentum over the last few weeks. Watch for a mean reversion, but if moving averages stay consistent look for an early play to open the week.

PNRG (Prime Energy Resources)

PNRG (Prime Energy Resources)

Entry Price:

83.20

September 4, 2022

Price at High:

100.00

Return for Members:

20.19%

Timeline:

3 Week Hold

PNRG had a drawdown to historical levels of support (around the 100 day moving average). Looking to make an entry in the coming days as we also have macro tailwinds with the energy crisis in Europe.

PYPL (Paypal)

PYPL (Paypal)

Entry Price:

87.00

August 28, 2022

Price at High:

103.00

Return for Members:

18.39%

Timeline:

4 Week Hold

Playing off the dip in June, we're starting to see momentum as the 50MA is crossing over the long-term averages. Look to for momentum to continue and an early entry on Monday.

Recent Watchlist Winners

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