Your Tuesday Blip 8/11/20

Your Tuesday Blip 8/11/20

Stocks started the day significantly up, and with excitement that the S&P might hit a new high, then traded off in the last hour and ultimately finished down 104 points at 27,686. The end of the day faced some political headwinds as there has been no movement yet on the next economic stimulus bill, and Joe Biden was set to announce his running mate. Biden chose Kamala Harris, the Big Ten and Pac-12 chose not to play football, which is probably good news for Netflix, because who’s going to want to watch three months of political ads without at least getting a little football sprinkled in.
Tesla stock has been full battery ahead this year, and after the bell, they announced that they will be doing a 5 for 1 stock split. This saw their shares trade up as much as 8% in after hours trading, much like we recently saw with Apple when they announced their 4 for 1 split. A stock split doesn’t provide any extra value for investors, as they have the rights to the same amount of profits as before, it just provides a lower buying price for retail investors that want to buy a share of Tesla but don’t have $1,400.
Airbnb still plans to move forward with going public this year. This will be an interesting one to watch unfold considering their corporate valuation is about half of what it was prior to COVID-19, which makes sense considering their revenue is less than half of what it was before the virus. Additionally, Airbnb has had to lay off 25% of its workforce to cut costs. It could be a play to raise additional money as they try to make it out of the pandemic – they’ve already raised a billion dollars this year from Fidelity, T. Rowe Price, and Blackrock.

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