Stock Take 14/05/2021

Aurora Cannabis still deep in red

Cannabis company Aurora Cannabis has reported on its business performance in its third fiscal quarter. Once again, Aurora Cannabis posted a net loss, with adjusted EBITDA coming in at CAD -24 million. This was worse than expected on the earnings side; analysts’ estimates for adjusted EBITDA had been CAD -8.4 million, compared to a loss of CAD 49.6 million a year ago.

Net sales of CAD 58.4 million were up from CAD 53.6 million a year earlier, with market consensus expecting CAD 68.9 million. The Aurora Cannabis share ultimately fell by 6.28 per cent to 6.86 US dollars in US trading on the NYSE.

Coinbase continues on the upswing

Coinbase, the largest US cryptocurrencies trading platform for assets such as Bitcoin or Ethereum, did brilliant business at the beginning of this year, thanks to the crypto boom.

In the first quarter, profits increased to $771 million, increasing more than twenty times year-on-year. The company announced this on Thursday after the US stock exchange closed in San Francisco. Revenues expanded from 191 million to 1.8 billion dollars. Coinbase also announced that it would soon open its platform to the meme coin project Dogecoin. This initially caused the self-proclaimed joke cryptocurrency to rise strongly.

The first annual report since the IPO in April underlines how cryptocurrency trading has been buzzing lately. Whether this will continue and Coinbase’s business model, which depends on transaction and trading fees, can deliver high profits in the mid to long term is another matter. On Thursday, Tesla CEO Elon Musk’s announcement that his company would no longer accept bitcoin payments due to environmental concerns over high power consumption caused the crypto market to plummet. Coinbase also came under pressure. The share is 18 per cent below its initial price at the time of the IPO.

In NASDAQ trading, Coinbase shares temporarily rose by 1.09 per cent to 268.00 US dollars. At the close of trading, however, it was down 2.54 per cent at 258.37 US dollars.

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Coca-Cola suspends energy drink business in the USA

Coca-Cola is pulling the plug on its energy drink business in the US. The group will stop selling Coca-Cola Energy in the USA and Canada by the end of the year, a spokeswoman said. The product will continue to be available abroad, for example, in Europe and Australia.

Coca Cola had launched the energy drink in the US last year, hoping to break into the fast-growing market dominated by Red Bull and Monster Beverage. But sales were disappointing. By the end of 2020, Coca-Cola Energy had only a 0.7 per cent market share, according to data from Beverage Digest.

Monster Beverage had opposed Coca-Cola launching an energy version of its popular soft drink in the US. Monster accused the Atlanta-based company of violating a 2015 agreement that the two companies would not compete. At the time, Coca-Cola had taken a 16.7 per cent stake in Monster Beverage. The two companies reached a settlement, and Coca-Cola got the right to launch Coca-Cola Energy in North America in 2018.

“We are pleased with our partnership with Monster,” the spokeswoman said. The monster did not immediately respond to a request for comment.

Adidas about to sell Reebok?

Adidas has received offers for its Reebok subsidiary, according to a newspaper report. Authentic Brands Group, along with Wolverine World Wide, has bid just over US$1 billion for the Adidas subsidiary, the New York Post reports, citing a source. Wolverine World Wide is best known for its Merrell brand. In addition, Apollo Global Management has submitted a non-binding bid. Final bids could be submitted by the end of June. 

Adidas had acquired Reebok at the beginning of 2006 for around 3.1 billion euros to strengthen its position vis-à-vis world market leader Nike. In February, the sporting goods group officially initiated the sale process for Reebok. In the future, the Herzogenaurach-based Group intends to strengthen the leading position of the Adidas brand in the global sporting goods market.

In the morning, a trader referred to a press report according to which the companies of Authentic Brands and Wolverine World Wide are apparently planning a joint offer for the US brand Reebok in the amount of slightly more than one billion US dollars. The trader added that one billion was the price the German sporting goods manufacturer was hoping to receive for Reebok.

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On Friday, Adidas shares led the DAX 30 stocks with an ultimate gain of 1.3 per cent to 288.55 euros. At the peak of 290 euros, they reached a high since mid-March. 

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