SPAC v. Direct Listing v. IPO?

Posted on July 26, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

What’s the difference between an IPO, a special purpose acquisition company (SPAC), and a direct listing?

[By staff reporters]

IPOs are a 6–12 month journey where a company works with investment banks and underwriters, who buy a bunch of shares and then sell them to investors in the public market during the actual IPO. Early investors are able to liquidate their shares, and the company raises new funds.

Direct listings skip the underwriting hullabaloo. But without that stability guarantee, direct listings can result in a more volatile opening. Some companies, like Coinbase, find that it’s worth it to keep their hard-earned money out of bankers’ hands.

SPACs, aka “blank-check companies,” offer yet another alternative path to public markets. A SPAC is a shell company that raises money through the traditional IPO process, then merges with a private company and takes it public. 

MORE: https://medicalexecutivepost.com/2019/06/24/what-is-a-direct-listing-process-on-wall-street/

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DOW JONES INDUSTRIAL AVERAGE: 30 “Blue Chip” Stock Index Update

Posted on July 26, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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The Dow Jones Industrial Average is a collection of 30 “blue-chip” U.S. stocks. Blue chip = big, established, and influential companies like Microsoft, JPMorgan, Disney, and McDonald’s. The Dow recently updated its roster, swapping ExxonMobil, Pfizer, and Raytheon for Salesforce, biotech Amgen, and manufacturing heavyweight Honeywell.

The Dow is weighted by share price, so higher-priced stocks have more influence on the index’s total value. Price-weighting also means that if the price of any stock in the Dow changes by $1, it has the same impact on the index, even though a $1 increase to a stock worth $20 is more significant (relatively) than a $1 change to a stock worth, say, $40.

  • During stock splits—when a company increases its number of outstanding shares and chops prices by the same factor—a company’s influence in the Dow can fall even if their market value doesn’t change. The Dow has some mechanisms to account for stock splits, but they can still lead to a shakeup in the index (like what happened last summer).

At 124 years old, the Dow has had plenty of time to cement its reputation as a leading indicator of the stock market. But with only 30 stocks representing a smattering of U.S. corporate titans, it’s not exactly representative.

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At one point the Dow Jones Industrial Average was up 585 points before it sold off later yesterday afternoon, though it wrapped the trading session with a small win. The S&P 500 fought its way into positive territory but struggled to stay there, eventually sinking into negative territory at the end of the day.

As for the NASDAQ, the tech selloff continued to punish the index for most of yesterday afternoon. Treasury yields fell a bit on positive GDP news, though the big PCE [personal consumption expenditures] announcement is the one investors have been waiting for.

Oil popped on a stronger than expected GDP reading, with traders banking on future economic growth and stronger oil demand.

Bitcoin sank a bit yesterday ahead of a major conference that could set the tone for the entire digital asset industry for years to come.

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DAILY UPDATE: The US Economy of KH and Medicare [Part C] with Mixed Stock Markets

Posted on July 26, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

MEDICAL EXECUTIVE-POST – TODAY’S NEWSLETTER BRIEFING

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Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

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The Wall Street Journal explores what Kamala Harris as president would mean for the economy. (the Wall Street Journal)

  • Q2 GDP was shockingly strong, with today’s reading of 2.8% growth outpacing the 2.1% economists expected.
  • The Japanese yen is rising while US tech stocks are falling.
  • You’re in my seat: Southwest Airlines is getting rid of its open seating arrangement and shifting to assigned seats.
  • 32 charts that tell you everything you need to know about markets midway through 2024 at a glance.
  • The Fed should cut interest rates at next week’s meeting, according to the former president of the Federal Reserve Bank of New York.
  • Bill Ackman is trying to turn social media stardom into profit.

CITE: https://www.r2library.com/Resource

Here’s where the major stock market benchmarks ended:

  • The S&P 500® index (SPX) fell about 28 points (0.5%) to 5,399.22; the Dow Jones Industrial Average® ($DJI) rose 81 points (0.2%) to 39,935.07; the NASDAQ Composite ended 161 points lower (0.9%) at 17,181.72.
  • The 10-year Treasury note yield (TNX) dropped four basis points to 4.255%.
  • The CBOE Volatility Index® (VIX)declined 0.6% to 17.94.

What’s up

What’s down

  • Universal Music Group tumbled 23.54% after subscription and streaming revenues fell well short of analyst expectations.
  • Ford plummeted 18.40% for the automaker’s worst day of trading since 2009 after it missed profit expectations and provided no positive forecast for the quarters ahead.
  • Lululemon slid 9.09% thanks to a downgrade from Citi analysts from “buy” to “neutral” predicated on a sales slowdown.
  • Royal Caribbean sank 7.61% after the company indicated that it’s facing a slowdown in demand.
  • Edwards Lifesciences crashed 31.27% thanks to a mixed earnings report, as well as management’s guidance that sales for its key heart valve replacement therapy will sink next quarter.

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Thousands of seniors are losing coverage at local hospitals as problems plague Medicare Advantage. Lower payout rates for Medicare and Medicaid are sparking insurance companies to leave certain areas and change coverage options across the country.

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