YULA Stock Watch Mach 2021 - Issue 2

YULA BOYS HIGH SCHOOL

MARCH 2021 | ISSUE NO. 2

The Reddit Rebellion The great uprising that might just change investing forever.

By Jeremy Wizenfeld '22, Editor in Chief

While Wall Street has taken massive financial hits in the past, whether from the 2008 financial crisis or more recently the COVID-19 pandemic, never did they think they would lose billions from the collective work of retail investors, dubbed “dumb money.” Over the past few years and increasingly more in the months of the pandemic, hedge funds, most notably Melvin Capital, placed short positions on brick-andmortar businesses as they believed that the shift to e-commerce, as well as the pandemic, would completely wipe out these businesses. Short positions involve borrowing and immediately selling stock with the intention of repurchasing the shares at a cheaper price. However, if the stock price rises, short positions can generate huge losses.

Keith Gill, who worked in marketing for Massachusetts Mutual Life Insurance Co, noticed that the “smart money,” Wall Street, overplayed its hand with one of the short positions: they shorted more shares of Gamestop than were even available. So, he bought $53,000 worth of Gamestop shares back in 2019, and ever since has been trying to spread his discovery to the investing world. He posted on the Reddit group r/WallStreetBets and made YouTube videos to explain the technical reasons that Gamestop was a good investment: If enough people would buy the stock and drive the price of Gamestop higher, these hedge funds would be forced to close their short positions sending the stock price to insane highs.

Gill’s plan worked, and during January 2021, with the help of millions of people who joined the r/WallStreetBets Reddit group, Gamestop’s shares surged from the mid-teens at the beginning of the month to as high as $500, January 28th. Even Tesla CEO Elon Musk joined Gill’s cause when he tweeted “Gamestonk,” promoting others to buy the stock. Not only did Gamestop’s shares surge, but other heavily shorted stocks, including AMC, Blackberry, Express, and Koss, also saw their share prices increase by ridiculous percentages. Gill’s $53,000 life-changing bet turned him into a multi-millionaire in just a few short weeks, and he changed the lives of so many ordinary retail investors. Consequently, Melvin Capital reported a loss of 53% of its assets in January due to the Reddit market frenzy.

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OPINION: Bitcoin

COVID Vaccine Impact

History of Dogecoin

MARCH 2021 | ISSUE NO. 2

The Reddit Rebellion

Continued from previous page

Throughout the craziness in the market, many brokerages eventually imposed regulatory measures on buying shares of these specific stocks to stop the volatility of the market. These restrictions lasted for a few days and many brokerages, Robinhood in particular, faced much backlash and multiple class-action lawsuits for their decisions to restrict trading. Democratic Representative Alexandria Ocasio-Cortez and Republican Senator Ted Cruz agreed via Twitter (that’s something you definitely won’t see every day) that Robinhood’s decisions were outrageous and limited America’s free market. For many retail investors, the volatility of the market became much more than a get-rich-quick scheme; their efforts turned into a rebellion in order to stop Wall Street’s manipulating the market.

As the price of these stocks settle back into more accurate evaluations, many uncertainties about the market’s future remain. Will the Securities and Exchange Commission pass laws to restrict large short positions? Will retail investors boycott trading platforms that restricted their access to stocks? Will we see a shift to decentralized financial markets to protect the American free market?

Editors' Pick: MARA

The crypto world has grown at exponential rates in the past few months with Bitcoin reaching $58,000, and Marathon Digital Holdings (MARA), a crypto blockchain company, surging over 1000% since November 2020. Marathon has purchased over 103,000 miners and will receive shipments of these miners each month until October 2021. At full capacity, Marathon’s hash rate (the rate at which they mine) will increase to over 10 EH/s, the highest of any blockchain company. As Bitcoin continues this crazy bull run, expect Marathon to grow way past its current market cap of 3.3B and price of $34.89 as of March 2nd.

MARCH 2021 | ISSUE NO. 2

COVID Vaccine Impact A return to normal...finally

By Eitan Gelb '22, Editor In Chief

With more Americans getting vaccinated, schools are beginning to open, people are traveling more, the YULA Tennis Team is preparing to win state. The vaccine will have the largest impact on the American economy since the March lockdowns. And this time, it’ll be a positive one. The most directly related companies are pharmaceutical companies that produce the vaccine. Pfizer (PFE) and Moderna (MRNA) already saw their stocks soar when they released their vaccines this past December. Johnson & Johnson (JNJ) has seen its stock steadily rise with rumors of a vaccine release giving people hope for the future.

But these three stocks have already seen large growth. Although they may grow more, let’s look at other industries that have just begun their COVID “vaccination.”

Airlines stocks have also been rising since the vaccines were first released, but most are nowhere near their pre-COVID numbers. From their January 2020 prices, Delta Airlines (DAL) is still down about 20%, American Airlines (AAL) is still down about 30%, and United Airlines (UAL) is still down about 40%. What’s more, only about a third of America has been vaccinated, and most are still not comfortable with flying. Throughout the remainder of this year, there is a highly probable chance that airlines will continue to recover, making airline stocks a safe value investment with high floors and high ceilings. A third industry that will be affected is the virtual meeting industry. Stocks such as ZOOM (ZM) and RingCentral Inc. (RNG) will take some hits as people revert to in-person-based living. This is not to say that they will return to their minimal pre-COVID roles -- life will continue to have a more virtual air to it even with the end of COVID. But these stocks will definitely regress until the next global pandemic. The vaccine will affect the whole economy -- these industries are just a few examples. Research which industries will be positively affected by the vaccine, invest in them, and you can make it big!

Editors' Pick: CCL

The rollout for vaccine distribution continues and states start to lift their restrictions; the real recovery of Carnival Cruise Line (CCL) has just begun.

Carnival Cruise Line is still down over 40% from its highs prior to the Covid-19 pandemic trading at $27.59 as of March 2nd. As Carnival Cruise Line is the most popular cruise line in North America, once fully operational again, many Americans will be ready to take a vacation to escape from the whirlwind of a year we had.

Carnival Cruise Line has much potential for the coming months.

MARCH 2021 | ISSUE NO. 2

History of Dogecoin The most profitable joke of all time

By Aden Lyons '23

The recent popularity of cryptocurrencies amongst retail traders and institutions alike sent cryptocurrencies to all-time highs; most notably, Bitcoin (BTC) and Ethereum (ETH). One of the more peculiar digital currencies is a cryptocurrency called Dogecoin. Dogecoin was originally started as a joke by IBM software engineers Billy Markus from Portland, Oregon, and Jackson Palmer, who was a member of the Adobe Systems Marketing Department from Sydney. They created Dogecoin to reach a larger demographic than the already popular cryptocurrencies such as Bitcoin and also wanted to distance themselves from other coins’ controversial histories. On December 6, 2013, Dogecoin was officially launched, with over a million people visiting their website within the first month. Palmer, who is credited with the idea of the coin, wanted to combine Bitcoin with one of 2013’s most popular memes, doge. The 2013 meme features an image of a Shibu Inu dog with Comic Sans thought bubbles spouting out of it with mostly one syllabled ideas. Dogecoin gained attraction on Reddit, and many people jokingly tipped others with this coin on the internet for performing good deeds. Only a week after its launch, Dogecoin became the second most tipped currency. As Palmer said in 2013 “It’s not taking itself as seriously, it’s not being used by people worrying about whether they’ll become rich. It’s something to share for kudos.”

Editors' Pick: PSTH

Pershing Square Tontine Holdings (PSTH), a special purpose acquisition company (SPAC), is the biggest SPAC ever and founded by Bill Ackman. With about a 6B market cap, Ackman intends to bring a massively profitable company to the public. Social media has rumored that they might merge with the Fintech company, Stripe, with over a $100B valuation.

Regardless if this rumor is true, expect Ackman to take a strong company public and see their share price rapidly increase from the current price of $28.62 as of March 2nd.

MARCH 2021 | ISSUE NO. 2

Hot Sectors Under Biden's Administration

By Gideon Fishman ‘24

With the new administration in the White House, expect major legislation to affect different sectors of the market. That statement is intensified when considering the colossal differences between the Trump and Biden administration. And with the Biden administration comes new policies, affecting the cannabis, electric vehicle, and clean energy sectors.

Many have advocated for the federal government to remove cannabis from the list of schedule one drugs, a list of the most dangerous drugs in the U.S. Conveniently for them, President Biden campaigned with a promise to do just that. While some state-level reforms on marijuana have legalized its usage for recreational and medicinal purposes, legalizing cannabis at the federal level would open up many new markets, benefitting the entire marijuana industry. Companies such as Curaleaf (CURLF), Tilray (TLRY), Canopy Growth Corp (CGC) are just a few of the companies that have seen their stock rise in recent months. As we see Biden start to pass this legislation he promised during his campaign, the positive sentiment around this industry will only continue to grow.

Biden has also promised a variety of new legislation regarding electric vehicles and the shift to clean energy. He plans on phasing out the gas-powered vehicles in the government fleet and switching them over to all-electric vehicles. Additionally, he wants to invest over 400 billion dollars into clean energy (including batteries and EV companies). With companies, such as Tesla (TSLA) and Nio Inc (NIO) already seeing major growth in anticipation for Biden’s legislation, as other established automobile companies like Ford (F) and General Motors (GM) plan to turn fully electric in the next coming years, this sector has massive growth potential.

Editors' Pick: PLTR Although founded in 2003, Palantir Technologies (PLTR), a software company that deals with large data analytics and artificial intelligence, recently IPOed in September of 2020.

Palantir has a variety of different software which range from counter-terrorism analytics to the tracking of Covid-19 and vaccine distribution; they recently renewed their US government contracts for their cutting edge technology. After Palantir has cooled off from a 400% run since its IPO, they have much potential from their current price of $24.99 as of March 2nd. Cathie Woods, the CEO of the ARK ETFs, has expressed her support for the company with the purchase of over 8M shares of Palantir for her ETFs.

MARCH 2021 | ISSUE NO. 2

Bitcoin: A future currency The ultimate "Get Rich Quick" scheme

By Benjamin Sarir '23

Over the past couple of months, Bitcoin’s price has surged to an all-time high of over $58,000.

Many people wonder why Bitcoin prices have skyrocketed. Is Bitcoin legitimate, and what cryptocurrencies might soar next? One reason for Bitcoin’s recent rise is the support it has received from major companies and trusted experts. Tesla (TSLA), for example, has even gone as far as investing 1.5 billion dollars into Bitcoin and plans on accepting Bitcoin as payment for their cars. Other companies including MicroStrategy (MSTR) and Square (SQ) also invested heavily into Bitcoin, and these are just the first. Cathie Woods, the CEO of the very successful ARK ETFs, has expressed her prediction that Bitcoin could reach $500k if most companies allocate a small percentage of their assets into Bitcoin. A second factor behind Bitcoin’s rapid rise is that people do not want to miss out on the massive growth potential behind Bitcoin. The faster it climbs, the more people want to join in. Due to the uncertain future of Bitcoin and its volatile nature, some people are skeptical about investing, even though its price is rising. The truth: there is no guarantee that it will not be hacked or stolen or simply not accepted; however, all the information is hidden in an extremely secure blockchain, and more and more institutions have expressed support for it, something not seen in previous years. Obviously, the majority of the population does not have enough money to invest in one full Bitcoin, but digital currency exchanges such as Coinbase allow investors to purchase fractions of the full coin. There are also similar cryptos (altcoins) or stocks (such as RIOT and MARA) that trade at cheaper prices, and bring investors into the crypto world. For example, Ethereum (ETC) is a cryptocurrency similar to Bitcoin that has recently gained much attention in the market. Other cryptocurrency options to look into are Ripple, Litecoin, NEO, and even Dogecoin. While not an easy investment to initially comprehend, enough research on cryptocurrencies' purpose and historical data can turn into a nice profit, especially playing off of its extreme volatility.

YULA BOYS HIGH SCHOOL

A MONTHLY PUBLICATION CURATED BY THE MEMBERS OF THE YULA BOYS STOCK CLUB

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THE TEAM BEHIND IT ALL Editor in Chief: Eitan Gelb '22 Editor in Chief: Jeremy Wizenfeld '22 Executive Editor: Noah Chriqui '22 Graphics & Layout: Arshia Kohanteb '22 Faculty Advisor: Dr. Tehrani

Disclaimer: This pamphlet is for educational purposes only, NOT financial advice.

Please do your own due diligence before investing.

MARCH 2021 | ISSUE NO. 2