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Release – Vectrus Shareholders Approve Combination with Vertex

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Vectrus Shareholders Approve Combination with Vertex

Research, News, and Market Data on Vectrus

Following Transaction Close, Newly
Combined Company Will be Renamed V2X, Inc.; to Trade on NYSE under New Ticker:
VVX

COLORADO SPRINGS, Colo., June 15, 2022 /PRNewswire/ — Vectrus, Inc. (NYSE: VEC) today announced that based on voting results from the Special Meeting of Shareholders held today, Vectrus shareholders voted to approve the combination with Vertex. Following the close of the transaction, the combined company will be renamed V2X, Inc, and its common stock will trade on the NYSE under a new ticker symbol, “VVX”.

“Today’s overwhelming approval marks a significant step toward completing our merger with Vertex, and creating one of the leading providers of critical mission solutions and support to defense clients globally,” said Chuck Prow, Chief Executive Officer of Vectrus. “Vectrus and Vertex – together as V2X – will be better positioned to meet the mission-essential needs of our clients while delivering cost efficiencies, increased security and resiliency, with more strategic use of resources. We thank all of our stakeholders for their continued support and look forward to completing the pending combination so we can begin unlocking the incredible potential of our combined platform.”

As previously announced, under the terms of the merger agreement, Vertex shareholders will own approximately 62% of the combined company on a fully diluted basis, while Vectrus shareholders will own approximately 38%. The merger is expected to close early in the third quarter of 2022, and remains subject to satisfaction of customary closing conditions, including receipt of regulatory approvals.

The final voting results will be reported in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission after certification by Vectrus’ inspector of elections.

About Vectrus
For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair, and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of approximately $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

FORWARD-LOOKING STATEMENTS
Certain material presented in this press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, conditions to the closing of the Transaction may not be satisfied; the possibility that anticipated benefits of the Transaction may not be realized or may take longer to realize than expected; the possibility that costs related to Vectrus’s integration of Vertex’s operations may be greater than expected and/or that revenues following the Transaction may be lower than expected; Vectrus’s business may suffer as a result of uncertainty surrounding the Transaction and disruption of management’s attention due to the Transaction; the outcome of any legal proceedings that are related to the Transaction; Vectrus may be adversely affected by other economic, business, and/or competitive factors; the risk that Vectrus may be unable to obtain governmental and regulatory approvals required for the Transaction, or that required governmental and regulatory approvals may delay the Transaction or result in the imposition of conditions that could reduce the anticipated benefits from the Transaction or cause the parties to abandon the Transaction; the impact of legislative, regulatory, competitive and technological changes; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the effect of the Transaction on the ability of Vectrus to retain and maintain relationships with both Vectrus’s and Vertex’s customers, including the U.S. Government; other risks to the consummation of the mergers, including the risk that the mergers will not be consummated within the expected time period or at all; responses from customers and competitors to the Transaction; the risk that the integration of Vertex may distract management from other important matters; results from the Transaction may be different than those anticipated; statements about Vectrus’s 2022 performance outlook, five-year growth plan, revenue, DSO, contract opportunities, the impacts of COVID-19, and any discussion of future operating or financial performance.

Whenever used, words such as “may,” “are considering,” “will,” “likely,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “could,” “potential,” “continue,” “goal” or similar terminology are forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

Vectrus undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact Information

Mike Smith, CFA
michael.smith@vectrus.com
(719) 637-5773

Or

Jim Golden / Scott Bisang / Tim Ragones
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449


June’s Fed Meeting Concludes With a Big Step Toward Lowering Inflation

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Image Credit: Federal Reserve (Flickr)


The FOMC’s Big Decision on Rates

The Federal Open Market Committee (FOMC) voted to raise overnight interest rates from a target of 0.75%-1.00%. to the new level of 1.50% – 1.75%. The monetary policy shift in bank lending rates was greater than originally telegraphed by the Fed, but in line with many Fed watchers’ expectations that were swayed after the CPI release last Thursday. The Wall Street Journal and many primary bond dealers increased their forecast on Monday of this week to a 75bp increase from 50bp (nearly double the target rate at the time). The early reaction from the US Treasury 10 year was to increase by 2 basis points to yield 3.43% after trading 8bp lower most of the day (2:15pm EST).

The statement accompanying the policy shift also included a discussion on U.S. economic growth being stronger in the second quarter compared to the first. The central bank said overall economic activity appears to have picked up after edging down in the first quarter. Also, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.

The release discussed inflation risk and shaped an understanding of the many places higher prices are coming from. The release stated, “The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The invasion and related events are creating additional upward pressure on inflation and are weighing on global economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions.” It added, “The Committee is highly attentive to inflation risks.”

There was no change in quantitative tightening. It will follow the exact schedule outlined earlier. For Treasury securities, the cap of securities allowed to roll off the balance sheet will be set at $30 billion per month and, after three months, will increase to $60 billion per month. The decline in holdings of Treasury securities under this monthly cap will include Treasury coupon securities and, to the extent that coupon maturities are less than the monthly cap, Treasury bills.

For agency debt and agency mortgage-backed securities, the cap will initially be set at $17.5 billion per month beginning June 1, and after three months will increase to $35 billion each month.

Take-Away

Higher interest rates can weigh on stocks as companies that rely on borrowing may find their cost of capital has increased. The risk of inflation also weighs on the markets. Additionally, investors that would prefer the “known” result of investing in the bond market or other interest rate products may pull assets out of stocks if they are attracted by the fixed income alternative. Investor money leaving the stock market reduces demand.

The next FOMC meeting is also a two-day meeting that takes place July 26-27. If the pace of employment and overall economic activity is little changed, the Federal Reserve is expected to again raise interest rates.

Paul Hoffman

Managing Editor, Channelchek

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Cannabis Tourist Destinations Growing

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Image Credit: Teodor Savin (Pexels)


Cannabis Tourism: How a New Travel Trend is Taking Off

Legal cannabis consumption rose in the US and Europe during the COVID pandemic, with some people turning to marijuana to help them cope with lockdowns and broken routines. Meanwhile, fewer people today view the drug as harmful compared to previous decades.

These factors may have contributed to a trend toward cannabis-related tourism, with destinations developing new holiday products to tempt customers and rising travel bookings to destinations where cannabis is legal. But there are risks for both destinations and tourists in embracing this trend.

Work by MMGY Travel Intelligence found that 29% of leisure travelers are interested in cannabis-related tourism. A study by the Dutch government revealed that 58% of international tourists choose Amsterdam in order to consume drugs. And business in Dutch coffee shops has increased since the start of the pandemic.

Nine months after Illinois legalized recreational cannabis in January 2020, nearly 30% of purchases were by non-residents. Thailand has just announced it has legalized cannabis and is hoping this will boost tourism.

The tourism sector and specific destinations have reacted quickly to the demand for cannabis, hemp, and CBD-related products by designing experiences that include those elements. They are also responding to the expected economic potential related to increased hotel occupancy, tax revenues, increased land values, business expansion, jobs, and public health and safety benefits that could be connected to cannabis sales.

Yet, although tourism to other destinations with legalized cannabis is growing in popularity, data is only beginning to be collected. And so far, no destination is ready to be labeled as the “next Amsterdam”.

Big Potential

While cannabis-related travelers are believed to be high-spending and well-educated, authorities don’t want to replicate the Dutch model, which led to a massive concentration of cannabis coffee shops in Amsterdam and raised concerns over hard drug use and criminality.

New business models are focusing on agri-tourism (meet-the-farmer sessions) and culinary tourism, and events such as cannabis festivals. Tourists can choose from farm tours, “bud and breakfast” hotels, city tours, cannabis festivals, cannabis trails, food, wine and marijuana pairings, “ganja yoga,” and packages that combine accommodation and cannabis experiences.

The potential for cannabis tourism is widespread around the world. More than 19 US states and Washington DC have now legalized recreational cannabis, along with Canada, Mexico, Uruguay, and others. In Europe, Luxembourg allows the consumption of personally cultivated cannabis, while Switzerland is trialing cannabis sales from pharmacies for recreational purposes.

Malaysia and Thailand have made initial steps toward legalizing recreational use. Costa Rica and Morocco have also approved legalization for medicinal purposes.

Risks for Tourists

However, few countries have clarified the legality of cannabis use by tourists with legislation directed at recreational use by residents. This means tourists risk breaking the law unintentionally by interacting with street dealers and police as well as the health implications of consuming real and fake drugs.

There is some evidence cannabis can improve some mental health conditions and provide pain relief. But tourists with pre-existing mental health disorders, for example, may risk their physical and psychological wellbeing. Cannabis-related mental health events, including depression, can also occur among those who have not been diagnosed with mental health issues.

A patchwork of complicated laws and regulations regarding recreational cannabis use by overseas tourists means questions remain about the legality of consumption, the transport of cannabis vape pens overseas as well as issues of insurance cover and health care during and after travel.

While Uruguay is planning to allow consumption by tourists, countries like Portugal, where cannabis has been decriminalized since 2001, still doesn’t allow them to buy it legally. In Spain, cannabis clubs allow visitors to donate to the club instead of purchasing a product. But Spain and other large markets like South Africa are focused on domestic cannabis tourism rather than international visitors.

Few countries have carried out a cost-benefit analysis around legal cannabis and tourism or fully discussed issues of land and water use, police powers, and benefits to local communities. While cannabis tourism can generate tourism and jobs, and reduce the power of organized crime, the goal of sustainable development is threatened by theft, racism, and a market stacked against small local operators who often can not secure funding or insurance. There are also possible increases in pollution and public health and safety concerns.

Mexico and Canada have promised funding for indigenously owned businesses to aid social and racial equality, while New York plans to create a US$200 million (£162 million) public-private fund to support social equity goals. Resident support and continual conversations with communities on how to plan the sustainable development of cannabis tourism should be a vital part of the development of the sector.

While it appears that the COVID pandemic helped stimulate and legitimize the use of marijuana, with dispensaries declared an essential service in parts of the US during the pandemic, tourism could expand and normalize acceptance of its use.

Perceived risks may fade and tourist guilt may dissipate. Cannabis tourism is likely to become just another segment of the holiday industry.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of Michael O’Regan, Senior Lecturer in International Tourism Management, Swansea University.


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A Primer on the Fed’s Efforts to Extinguish Roaring Inflation

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Image Credit: Pixabay (Pexels)


Five Things to Know About the Fed’s Interest Rate Increase and How it Will Affect You

The Federal Reserve is expected to raise interest rates for the third time this year, on June 15, 2022, as it seeks to counter inflation running at the fastest pace in over 40 years. The big question is how much it will lift rates. Before the latest consumer prices (CPI) report on June 10, most market watchers and economists expected a 0.5-percentage-point hike (50 basis points). But now, more are anticipating a 0.75-point increase – which would be the largest in nearly 30 years. The risk is that higher rates will push the economy into a recession, a fear aptly expressed by the recent plunge in the S&P 500 stock index, which is down over 20% from its peak in January, making it a “bear market.”

What does this all mean? Brian Blank, a finance scholar who studies how businesses adapt and handle economic downturns, was asked to explain what the Fed is trying to do, whether it can succeed and what it means for you. His thoughts and advice are packaged neatly in answers to five questions many people are asking.

 

1. What is the Fed Doing and Why?

The Federal Open Market Committee, the Fed’s policymaking arm, is currently pondering how much to raise its benchmark interest rate. The stakes for the U.S. economy, consumers and businesses are high.

In recent weeks, Fed Chair Jerome Powell has signaled that the U.S. central bank would likely increase the rate by 0.5 percentage point to a range of 1.25% to 1.5%. But markets and Wall Street economists are now anticipating a larger 0.75-point hike because the May consumer price data suggest inflation has been unexpectedly stubborn. Some Wall Street analysts suggest a 1-percentage-point hike is possible.

Since the latest consumer price index data came out on June 10, the prospect of a faster pace of rate hikes has led to financial markets plunging 5%. Investors worry the Fed may slow the economy too much in its fight to reduce inflation, which if left unchecked also poses serious problems for consumers and companies. A recent poll found that inflation is the biggest problem Americans believe the U.S. is facing right now.

 

2. What is the Fed Trying to Achieve?

The Federal Reserve has a dual mandate to maximize employment while keeping prices stable.

Often policymakers must prioritize one or the other. When the economy is weak, inflation is usually subdued and the Fed can focus on keeping rates down to stimulate investment and boost employment. When the economy is strong, unemployment is typically quite low, and that allows the Fed to focus on controlling inflation.

To do this, the Fed sets short-term interest rates, which in turn help it influence long-term rates. For example, when the Fed lifts its target short-term rate, that increases borrowing costs for banks, which in turn pass those higher costs on to consumers and businesses in the form of higher rates on long-term loans for houses and cars.

At the moment, the economy is quite strong, unemployment is

low, and the Fed is able to focus primarily on reducing inflation. The problem is, inflation is so high, at an annualized rate of 8.6%, that bringing it down may require the highest interest rates in decades, which could weaken the economy substantially.

And so the Fed is trying to execute a so-called soft landing.

 

3. What’s a ‘Soft Landing’ and is it Likely?

A soft landing refers to the way that the Fed is attempting to slow inflation – and therefore economic growth – without causing a recession.

In order to stabilize prices while not hurting employment, the Fed is expected to increase interest rates rapidly in the coming months – and it currently forecasts rates to be at least 1 percentage point higher by 2023. It has already lifted its benchmark rate twice this year by a total of 0.75 percentage point.

Historically, when the Fed has had to raise rates quickly, economic downturns have been difficult to avoid. Can it manage a soft landing this time? Powell has insisted that its policy tools have become more effective since its last inflation fight in the 1980s, making it possible this time to stick the landing. Many economists and other observers remain uncertain. And a recent survey of economists notes that many anticipate a recession beginning next year.

That said, the economy is still relatively strong, and I’d say the the odds of a recession beginning next year are still probably close to a coin flip.

 

4. Is there Any Way to Tell What the Fed Might do Next?

Each time the Federal Open Market Committee meets, it seeks to communicate what it plans to do in the future to help financial markets know what to expect so they aren’t taken by surprise.

One piece of guidance about the future that the committee provides is a series of dots, with each point representing a particular member’s expectation for interest rates at different points in time. This “dot plot” has previously indicated that the Fed will raise interest rates to 2% this year and 3% soon.

Given the inflation news since the last meeting, investors are now forecasting an even faster pace of rate hikes and expect the target rate to be over 3% by 2023. Long-term interest rates, such as U.S. Treasury yields and mortgage rates, already reflect these rapid changes.

And so investors and economists will be watching to see how the Fed’s dot plot changes after it announces its rates decision on June 15, which will determine how quickly committee members expect to lift interest rates in the coming months.

 

5. What Does this Mean for Consumers and the Economy?

Interest rates represent the cost of borrowing, so when the Fed raises the target rate, money becomes more expensive to borrow.

First, banks pay more to borrow money, but then they charge individuals and businesses more interest as well, which is why mortgage rates rise accordingly. This is one reason mortgage payments have been rising so rapidly in 2022, even as housing markets and prices start to slow down.

When interest rates are higher, fewer people can afford homes and fewer businesses can afford to invest in a new factory and hire more workers. As a result, higher interest rates can slow down the growth rate of the economy overall, while also curbing inflation.

And this isn’t an issue affecting just Americans. Higher interest rates in the U.S. can have similar impacts on the global economy, whether by driving up their borrowing costs or increasing the value of the dollar, which makes it more expensive to purchase U.S. goods.

But what it ultimately means for consumers and everyone else will depend on whether the pace of inflation slows as much and as quickly as the Fed has been forecasting.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It was written by and represents the research-based opinions of D. Brian Blank, Assistant Professor of Finance, Mississippi State University.


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Release – Cypress Development Progress on Feasibility Study

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Cypress Development Progress on Feasibility Study

Research, News, and Market Data on Cypress Development

June 15, 2022 –
Vancouver, Canada – Cypress Development Corp. (TSXV: CYP) (
OTCQX: CYDVF) (Frankfurt: C1Z1) (“Cypress” or “the Company”) is pleased to provide an update on the progress of the ongoing Feasibility Study for the Company’s Clayton Valley Lithium Project, in Nevada, USA. The Feasibility Study is under the direction of Wood PLC (“Wood”) and Global Resource Engineering (“GRE”) and all related work is proceeding well, and it remains on track for completion in late 2022.

Activity Highlights:

  • Geotechnical study in progress
  • Continued operation of the Pilot Plant
  • 500-ton bulk sample collected for further metallurgical material
  • Sonic drill program completed consisting of 580 meters in eight drill holes
  • Resource model updated with data from recently acquired property

Geotechnical Program

Wood personnel conducted on-site visits in supervising the collection of geotechnical data for the foundation design of the Company’s processing plant site and tailings storage facility. The samples collected for Wood’s geotechnical program were shipped to materials testing laboratories, and additional on-site work is planned in the next month.

GRE personnel conducted site visits in preparation to work on the Project’s resources and reserves. GRE personnel supervised the collection of a suite of large-diameter core samples for assay and geotechnical testing, which will provide further information for GRE’s work on the mine design.

Lithium Extraction
Facility (“Pilot Plant”)

Testing continues at Cypress’ Pilot Plant in Amargosa Valley, 100 miles southeast of the Clayton Valley Lithium Project site. The Pilot Plant is now working in its 12th cycle of continuous 24-hr per day testing. The tests are ongoing to examine efficiencies in processing, testing various configurations in equipment and operating conditions, and the plant continues to produce concentrated lithium solutions for use in downstream product testing.

Wood’s process engineering team is working with Continental Metallurgical Services and the data from the Pilot Plant, to develop mass balance and equipment sizing. Wood’s engineers are also working on the overall project infrastructure, including selection and design of access roads, plant equipment, power, and water supplies.

Bulk Sample

To support continued testing, a 500-tonne sample of claystone was excavated in late April from an engineered test-pit and transported to the Company’s operations headquarters at the Tonopah airport, where it will be crushed, screened, and bagged in preparation for treatment at the Company’s Pilot Plant. The sample was collected near DCH-1, and in the vicinity of the planned starter-pit for mining in the Feasibility Study.

“We are pleased with the bulk sampling work. The size of the bulk sample may be larger than necessary for the Pilot Plant to provide adequate information for the Feasibility Study” said President and CEO Bill Willoughby. “This sample, however, allows us to examine lithium grade and other properties in the claystone over a larger volume. It also ensures we have material on hand, should we need it, for future tests or continued operations.”

Sonic Drill Program

Cypress is continuing to log and sample core from a sonic drill program which commenced and was completed in May. The purpose of the drill program was to obtain large-diameter (6-inch) continuous core. Eight locations were selected for metallurgical, geotechnical, lithological purposes. Each hole yielded 1.9 to 2.3 tonnes of claystone which will be used in metallurgical testing at the Company’s Pilot Plant to examine if there are any variations in performance due to depth, location, or material type in the deposit.

Four of the holes (CSV-1 through CVS-4) were completed in the central portion of the project in the vicinity of the proposed starter-pit and the 500-tonne bulk sample.  Four other holes (CVS-5 through CVS-8) were completed in the northeast portion of the project on and near the parcel of property recently acquired from Enertopia Corporation (“Enertopia”). In addition to providing metallurgical sample material, these latter four holes will provide confirmation of the data from Enertopia’s previous drilling.

“The drilling program proceeded better than expected and was very successful in this first application of sonic drilling in Clayton Valley” stated Daniel Kalmbach, Cypress Manager, Geology and QP. “The quality of the large-diameter core samples are excellent and will provide further valuable data for the Feasibility Study.”

Resource Model

The recent addition of land acquired from Enertopia (see news release dated May 5, 2022) resulted in the addition of five core holes which were drilled by Enertopia in 2018. This property comprises 17 unpatented mining claims totaling 160 contiguous acres immediately adjacent to Cypress’s Project. A March 2020 NI 43-101 compliant technical report (published by Enertopia) on the property shows an Indicated resource of 82 million tonnes (mt) of 1,121 parts per million (ppm) Li and an Inferred resource of 18 mt of 1,131 ppm Li using a cutoff grade of 400 ppm Li. Cypress has not independently confirmed the resource indicated in the March 2020 NI 43-101 report.

All data received from the property acquisition has been incorporated into the project database and is expected to be used by GRE to generate the resource and reserve estimates and develop the mine plan for the Feasibility Study

Qualified Person

Daniel Kalmbach, CPG, is the qualified persons as defined by National Instrument 43-101 and have approved of the technical information in this release.

About Cypress Development
Corp

Cypress Development Corp. is a Canadian based advanced stage lithium company, focused on developing its 100%-owned Clayton Valley Lithium Project in Nevada, USA. Cypress is in the pilot stage of testing on material from its lithium-bearing claystone deposit and progressing towards completing a feasibility study and permitting, with the goal of becoming a domestic producer of lithium for the growing electric vehicle and battery storage market.

ON BEHALF OF CYPRESS
DEVELOPMENT CORP.
WILLIAM WILLOUGHBY, PhD., PE
President & Chief Executive Officer

For further information,
please contact:

Spiros Cacos | Vice President, Investor Relations
Direct: +1 604 764 1851 | Toll Free: 1 800 567 8181 | Email scacos@cypressdevelopmentcorp.com
www.cypressdevelopmentcorp.com

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.

Cautionary Note Regarding
Forward-Looking Statements

This release includes
certain statements that may be deemed to be “forward-looking
statements”. Forward-looking statements are subject to risks,
uncertainties and assumptions and are identified by words such as “expects,”
“estimates,” “projects,” “anticipates,” “believes,” “could,” “scheduled,” and
other similar words. All statements in this release, other than statements
of historical facts, that address events or developments that management of the
Company expects, are forward-looking statements. Although management believes
the expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future
performance, and actual results or developments may differ materially from
those in the forward-looking statements. The Company undertakes no obligation
to update these forward-looking statements if management’s beliefs, estimates
or opinions, or other factors, should change. Factors that could cause actual
results to differ materially from those in forward-looking statements, include
market prices, exploration, and development successes, continued availability
of capital and financing, and general economic, market or business conditions.
Please see the public filings of the Company at www.sedar.com for
further information.

 


The Only Person Not Talking 75bp is Chairman Powell – Why?

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Image Credit: Federal Reserve (Flickr)


The Fed May be Orchestrating for Both Rates and Stocks to Climb Following the FOMC Meeting

Fed Chair Jerome Powell is following in the footsteps of the two Fed heads that came before him. That is to say, he is very transparent about his future actions. The Fed hasn’t made a surprise move in over 20 years. Remarkably they have telegraphed most everything in advance. So it came as a surprise to see broker-dealer shops like Goldman Sachs and Jeffries say they expect the Fed to tighten by 75bp rather than the 50 bp that Powell reiterated just a week ago. Do they know something, or is this conversation part of orchestrating an orderly return to 2% inflation without roiling the stock market?

We all want the Fed to succeed. Annual consumer price increases of 6%-9% would put a lot of households in jeopardy. While the stock market is not a direct mandate of the Fed, a market decline of an additional 10% would place retirement portfolios and businesses in harm’s way hurting even more households.

Since the FOMC last met and raised rates 50bp on May 2nd, Powell has consistently indicated that we should expect 50 basis points following the June meeting (June 15th). In the last set of minutes and through public engagements of other Fed Governors, there are indications that some would prefer a more aggressive pace of tightening. I’ve been paying close attention to FOMC meeting outcomes since the end of Paul Volcker’s last term, this is what I know; the Fed Chair does not get outvoted by other members. And, this Fed Chair hasn’t ever acted to surprise the markets. There have been times when Powell could have moved sooner or more aggressively than previously stated, especially in the early days of the pandemic, but he has instead given lead time for the markets to adjust. He showed the same patience with tapering.

After new inflation data was released last Thursday in the form of a CPI report, a likely 75bp rather than 50bp hike is being reported on all the major financial outlets. This would not seem very likely, even if the FOMC members feel they are behind the curve. The reason is simple; they want the market to trust what the Fed tells them. However, the other tool the Fed uses to control markets and even interest rates is very strong. It’s referred to as jawboning.

A more likely outcome of tomorrow’s meeting is a 50bp rate move with a much firmer message. If the desired outcome is to apply the economic brakes more firmly, not scare the stock market, and keep to its word, the FOMC is more likely to go 50bp and talk about 75bp in the message and messages following the meeting.

Consider this, a 50bp move after the market now expects 75bp is likely to cause investors to rejoice. Perhaps even cause a substantial rally.  A more hawkish verbal stance going forward would cause the bond market to take heed and move up in yield, and the door would then be open to go 75bp in late July after the stock market already becomes accustomed to the idea. In fact, market participants would remember the rally after the June meeting and be less fearful of future tightening moves.

Is this just a fantasy? It’s another forecast to consider; in my experience, it makes more sense than anything else. It does imply the Fed may have intentionally let a 75bp expectation slip to accomplish a goal – it would not be the first time.

Paul Hoffman

Managing Editor, Channelchek

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Microstrategy’s Bitcoin Position and the Past, Present, and Future of Crypto

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Image Credit: Pixabay (Pexels)


Cowboys and Cryptocurrency

Is Michael Saylor of MicroStrategy ($MSTR) a “cowboy?” Many entrepreneurs are. But, the founder mindset often has blinders to risk; some only see possibilities. As CEO of the publicly traded software company he founded, Saylor is responsible for the purchase of $3.97 billion in bitcoin ($BTC.X), much of it by employing leverage. Bitcoin ownership is well outside of the software business realm. Since 2020, when MSTR first speculated on the cryptocurrency, it rose by 700% and Saylor’s company’s value rose in tandem. It must have been an exhilarating ride for management and investors. But the same “horse” that took them on that ride, may hurt them this go-around.


Source: Koyfin

Before engaging or enraging cryptocurrency believers, here’s another recent example of a company CEO rolling the dice: AMC Theaters spent
$27.5 million to buy 22% of a goldmining company. Since $AMC’s purchase, gold has declined 6.35%, and the company they purchased Hycroft Mining Holdings (
HYMC), is down 8.70%.

Bitcoin, over the last five days, is down 28.5%. Stepping back from the crypto hype, it’s worth exploring and understanding what Michael Saylor, and so many others have placed so much faith in. Specifically, at its most basic, what is cryptocurrency?

The Lure and Lore of Bitcoin

The seeds of bitcoin and other cryptocurrencies were first planted on Halloween in 2008. On that day a nine-page theoretical paper published by an unknown author named Satoshi Nakamoto was released. The impact of this theory was brought to life and has since caused some to become billionaires, even more people, to become millionaires, and quite a few to lose tens of thousands or much more through their speculation. It’s like trick-or-treat via blockchain.

Human behavior is not always rational. There are few people that can be in a crowd where  “everyone is doing it” and not feel peer pressure to take part in whatever “it” is they’re doing. This is/was especially true when there have been big rewards for some, but certainly not all involved. Sometimes you’re late for the game and have to recognize the game may be over. It would have been nice to have speculated and then attained billionaire status in just a dozen or so years. But you may have to find another avenue for that. The crypto-zillionaires will always be part of the lore and mystique of bitcoin. But looking under the hood, and forgetting any previous hype, the idea of any large investment in crypto should leave most people scratching their heads in confusion.

Let’s discuss the author’s credentials. No one had ever heard of Satoshi Nakamoto when it was published. Even today, no one can identify this person. It is unknown whether the theory was created by a group of people, one person, or even a government entity. It is a mystery that remains unsolved. Does that sound like something worth investing $1,000 or more in?

The paper was called Bitcoin: A Peer-to-Peer Electronic
Cash System. It described for the first time a decentralized digital “currency” without central bank administration. Essentially what the paper proposed and later helped create was something that could possibly be used as currency instead of greenbacks or any other traditional currency. To date, it has barely become used as a currency, even in El Salvador where it is one of the national currencies. Each bitcoin that enters the blockchain is created by solving complicated math problems known as “Bitcoin mining.” Solve the math problem, and you have created a Bitcoin. Alternatively, you may exchange your native currency (hard-earned dollars) for this new currency that is barely accepted by any retailer and exists only on a ledger in cyberspace.

Up until 2010, the price of a Bitcoin, expressed in U.S. dollars, was under a penny. It jumped to 8 cents that year. Had you purchased Bitcoin after this huge leap, let’s say $0.80 worth, you’d have had something valued at over $600,000 in early 2021. This is because the price of one Bitcoin had jumped to over $60,000 a piece in just over ten years. So $10 in Bitcoin purchased back then would have provided you with well over a million if exchanged back to dollars in 2021.

Bitcoin and Cryptocurrency Today

Late last year, it would have cost you $64,000 for a single bitcoin; six months later (today), about $22,500. Is the current price a bargain, will the trend continue, and will MicroStrategy get a margin call that requires them to dump a billion worth of the asset into the market? How many other companies have crypto on their balance sheets may be weighing down their Net-Asset-Value (NAV)? The MicroStrategy story is probably causing people who sit on corporate boards to reevaluate whether it’s responsible to be holding or accepting payment in bitcoin, ether, Doge, or any other non-legal tender.

Bitcoin is currently trading at $22,400, MicroStrategy’s crypto holdings are now worth $2.9 billion. That translates to an unrealized loss of more than $1 billion. But, the company may face a required margin call, they’d then have to commit more funds to avoid losses on holdings that they enhanced with borrowed cash (margin).

Bitcoin and Cryptocurrency’s Future

Bitcoin is undergoing a brutal sell-off which has it approaching exchange rates not seen since December 2020. The market conditions have become erratic, with the crypto lending firm Celsius halting withdrawals on Monday (June 13). Celsius cited “extreme market conditions.” Also worth remembering is that a stablecoin recently broke the buck.

This is not intended to be a eulogy for bitcoin or any other cryptocurrency. As with most markets, stocks, real estate, gold, beany babies, etc., what lies ahead is never certain. Early investors are usually the bigger winners or losers in anything. But crypto now seems to have its back up against the ropes, central banks are coming down on it, regulators like the SEC are exploring ways to tighten what they see as the potential to abuse it, and those that are invested in it are questioning their own holdings. This all started as a theoretical paper, it is only backed by the belief that it is worth something, if that belief fades, so will its value.

Please leave any comment or discussion under this article on our Twitter Account.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://twitter.com/elonmusk/status/1501449525831081987

https://www.cnbc.com/2022/06/14/bitcoin-plunge-spells-trouble-for-michael-saylors-microstrategy.html

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Release – Gevo’s Northwest Iowa RNG Project Hits Major Milestone; Begins Injecting Dairy RNG into Natural Gas Pipeline

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Gevo’s Northwest Iowa RNG Project Hits Major Milestone; Begins Injecting Dairy RNG into Natural Gas Pipeline

Research, News, and Market Data on Gevo

ENGLEWOOD, Colo., June 14, 2022 (GLOBE NEWSWIRE) — Gevo, Inc. (NASDAQ: GEVO) announced that its renewable natural gas (“RNG”) project in Northwest Iowa (the “RNG Project”) has been producing biogas and is now upgrading and injecting RNG into the natural gas pipeline. The RNG Project generates renewable natural gas captured from dairy cow manure. The manure for the RNG Project is supplied by three dairy farms located in Northwest Iowa totaling over 20,000 milking cows. When at full operational capacity, the RNG Project is expected to generate approximately 355,000 MMBtu of RNG per year, which will be transported and sold in California. BP Canada Energy Marketing Corp. and BP Products North America Inc. (collectively, “bp”) will market the RNG in California on behalf of Gevo, and Gevo expects that the RNG Project will generate between $16 and $22 million of Project EBITDA1 per year beginning by 2023 depending on a variety of assumptions, including the value of credits under the federal Renewable Fuel Standard Program (“RFS”) and the Low Carbon Fuel Standard (“LCFS”) in California. Gevo expects to be able to get approval for Renewable Identification Numbers (“RINs”) through RFS and carbon credits from LCFS later this year or next year.

“The success that Gevo is achieving in Northwest Iowa right now is the result of the team of dedicated people who are working to change the world by converting waste into useful energy, animal bedding, and soil fertilizer,” says Dr. Chris Ryan, President and Chief Operating Officer of Gevo, Inc. “These talented people have been tasked with an important, complex job, and work every day to identify issues, formulate solutions, and execute their plan to achieve our goals. As this renewable energy supply becomes reliable, the entire circular economy model can grow and prosper. Supplying value added animal feed to dairies and to other animal feed operations, capturing the manure, then converting the manure to make RNG for use in the production of transportation fuels, more animal feed, and later, jet fuel when our Net-Zero 1 plant operates. This is an example of the circular economy in action.”

“In addition to being good for us, California and the world, our dairy partners are also expected to reap benefits from the RNG Project over the long term,” Ryan said. “The manure digesters are expected to improve the farms’ sustainability and lay the groundwork for more efficient recycling of nutrients and better soil health. It’s important that they share in the value,” Dr. Ryan said.

About Gevo
Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel, that when burned have potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their life cycle). Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, Gevo’s technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients. Gevo’s ability to penetrate the growing low-carbon fuels market depends on the price of oil and the value of abating carbon emissions that would otherwise increase greenhouse gas emissions. Gevo believes that its proven, patented technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low-carbon products such as gasoline components, jet fuel and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion-dollar business.

Gevo believes that the Argonne National Laboratory GREET model is the best available standard of scientific-based measurement for life cycle inventory or LCI.

Learn more at Gevo’s website: www.gevo.com

Forward-Looking
Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to a variety of matters including, without limitation, the development and construction of the RNG Project, the ability of Gevo to realize production of RNG by the RNG Project, Gevo’s ability to generate cash, revenue and Project EBITDA from the RNG Project, use of RNG at Gevo’s Net-Zero 1 project, benefits to Gevo’s dairy partners, and other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Gevo and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Gevo undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Gevo believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Gevo in general, see the risk disclosures in the Annual Report on Form 10-K of Gevo for the year ended December 31, 2021, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the U.S. Securities and Exchange Commission by Gevo.

Investor
and Media Contact
Heather L. Manuel
303-883-1114

IR@gevo.com

1 Project EBITDA is a non-GAAP financial measure that we define as total operating revenues less total operating expenses for the project.

 

 


Release – Sierra Metals Announces Appointment of New Chair & Addition to the Board

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Sierra Metals Announces Appointment of New Chair & Addition to the Board

Research, News, and Market Data on Sierra Metals

TORONTO–(BUSINESS WIRE)– Sierra
Metals Inc. (TSX: SMT) (BVL: SMT) (NYSE AMERICAN: SMTS) (“Sierra Metals” or “the Company”) is pleased to announce that Oscar Cabrera has been appointed as Chair of the Board of Directors of the Company (the “Board”). Mr. Cabrera joined the Board in October 2021 and replaces Mr. Jose Vizquerra as Chair.

Additionally, the Board appointed Miguel Aramburu as its newest member. Mr. Aramburu has over 25 years of professional experience with 15 years dedicated to the mining sector, currently serving on the Board of STRACON S.A.C, a mining contractor, and Minsur S.A., a Perú based mining company.

“We welcome Miguel to the Sierra Metals Board. His senior leadership at large Peruvian mining operations as well as his significant board experience will provide important insight as a member of our Board. The strong combination of expertise of our Board members will help strengthen the execution of the Company’s current initiatives, as well as provide guidance for its next phase of development and growth. We look forward to working together,” commented Luis Marchese, CEO.

Bios

Oscar Cabrera has over 20 years of experience as an equity analyst, covering the metals and mining industry for bulge bracket investment banks and Canadian financial institutions, including Goldman Sachs, Merrill Lynch Canada and CIBC World Markets. He obtained recognition for industry thought leadership, fundamental commodity analysis and strong industry relationships, which has led to advisory roles for public mining companies, including Nexa Resources S.A. He also participated in the vetting of and advising on primary and secondary offerings in Canada, the U.S. and Europe. Mr. Cabrera holds an MBA from York University, an M Eng. in Structural Engineering from the University of Toronto and a B. Sc in Civil Engineering from the Instituto Tecnológico y de Estudios Superiores de Monterrey. Mr. Cabrera is a Canadian Citizen, originally from Mexico.

Miguel Aramburu currently serves on the Board of Directors of Stracon S.A.C., a mining contractor; Fibra Prime, a Peruvian REIT; Minsur S.A., a Peru-based mining and exploration company; and IEduca, an education conglomerate. He has previously held positions on the boards of Enfoca Investments, Andino Investment Holding, El Comercio, Neptunia, Fenix Power, GyM, Stracon GyM, Maestro Peru, Castrovirreyna and Pacifico Vida. Prior to committing himself to serving on corporate boards, Mr. Aramburu held the position of CEO (2008-2010) and COO (2006-2008) of Hochschild Mining Plc. In addition, he has held progressive positions with Mauricio Hochschild Y Cia, including CEO (2004-2006), CFO (2002-2004) and General Manager for various segments of operations (1995-2002). Mr. Aramburu holds an MBA from Stanford University and obtained his Industrial Engineering degree from Pontificia Universidad Católica del Peru.

About Sierra Metals

Sierra Metals Inc. is a diversified Canadian mining company with Green Metal exposure including increasing copper production and base metal production with precious metals byproduct credits, focused on the production and development of its Yauricocha Mine in Peru, and Bolivar and Cusi Mines in Mexico. The Company is focused on increasing production volume and growing mineral resources. Sierra Metals has recently had several new key discoveries and still has many more exciting brownfield exploration opportunities at all three mines in Peru and Mexico that are within close proximity to the existing mines. Additionally, the Company also has large land packages at all three mines with several prospective regional targets providing longer-term exploration upside and mineral resource growth potential.

The Company’s common shares trade on the Toronto Stock Exchange and the Bolsa de Valores de Lima under the symbol “SMT” and on the NYSE American Exchange under the symbol “SMTS”.

For further information regarding Sierra Metals, please visit 
www.sierrametals.com.

Continue to Follow, Like and Watch our progress:

Web: www.sierrametals.com | Twitter: sierrametals | Facebook: SierraMetalsInc | LinkedIn: Sierra Metals Inc | Instagram: sierrametals

Forward-Looking Statements

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and U.S. securities laws (collectively, “forward-looking information”). Forward-looking information includes, but is not limited to, statements with respect to the execution of the Company’s current initiatives and the next stages of the Company’s development and growth. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential” or variations thereof, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking information.

Forward-looking information is subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the risks described under the heading “Risk Factors” in the Company’s annual information form dated March 16, 2022 for its fiscal year ended December 31, 2021 and other risks identified in the Company’s filings with Canadian securities regulators and the United States Securities and Exchange Commission, which filings are available at www.sedar.com and www.sec.gov, respectively.

The risk factors referred to above are not an exhaustive list of the factors that may affect any of the Company’s forward-looking information. Forward-looking information includes statements about the future and is inherently uncertain, and the Company’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors. The Company’s statements containing forward-looking information are based on the beliefs, expectations, and opinions of management on the date the statements are made, and the Company does not assume any obligation to update such forward-looking information if circumstances or management’s beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, one should not place undue reliance on forward-looking information.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220613005789/en/

Investor Relations
Sierra Metals Inc.
+1 (416) 366-7777
info@sierrametals.com

Ed Guimaraes
CFO

Sierra Metals Inc.
+1(416) 366-7777

Luis Marchese
CEO

Sierra Metals Inc.
+1(416) 366-7777

Source: Sierra Metals Inc.

 

Release – Voyager Digital Provides Update on Asset and Risk Management

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Voyager Digital Provides Update on Asset and Risk Management

Research, News, and Market Data on Voyager Digital

NEW YORK, June 14, 2022 /CNW/ – Voyager Digital Ltd. (“Voyager” or the “Company”) (TSX: VOYG) (OTCQX: VYGVF) (FRA: UCD2), one of the fastest-growing consumer cryptocurrency platforms in the United States, and one of the first public companies in the crypto industry, today provides an asset and risk management update in light of changing market conditions. As a public company, Voyager operates with a consistently high level of transparency, providing regular quarterly financial statements detailing the company’s financial position and financial statement disclosure surrounding risk management practices and counterparty exposure.

Voyager differentiates itself through a straightforward, low-risk approach to lending and asset management by working with a select group of reputable counterparties, which are all vetted through extensive due diligence by its Risk Committee. The company does not participate in DeFi lending activities, algorithmic stablecoin staking and lending, or derivative assets, such as stETH. One of Voyager’s important objectives is to make crypto as simple and safe as possible for consumer use. With that mission in mind, safeguarding customer assets is a top priority.

Although Voyager announced a prior partnership with Celsius in 2019, due to the company’s ongoing due diligence and risk management process, Voyager currently has no customer assets at Celsius.

“Voyager holds a strong position in the crypto industry. Not only were we among the first to go public and provide full balance sheet transparency, our leadership also has deep financial expertise across the sector and has led companies through multiple market cycles,” said Steve Ehrlich, Chief Executive Officer and co-founder of Voyager. “The company is well capitalized and in a good position to weather this market cycle and protect customer assets. It is Voyager’s goal to continue to build secure products and services, as well as build trust and leadership in the cryptocurrency industry.”

About Voyager Digital Ltd.

Voyager Digital Ltd.’s (TSX: VOYG) (OTCQX: VYGVF) (FRA: UCD2) US subsidiary, Voyager Digital, LLC, is a fast-growing cryptocurrency platform in the United States founded in 2018 to bring choice, transparency, and cost-efficiency to the marketplace. Voyager offers a secure way to trade over 100 different crypto assets using its easy-to-use mobile application. Through its subsidiary Coinify ApS, Voyager provides crypto payment solutions for both consumers and merchants around the globe. To learn more about the company, please visit https://www.investvoyager.com.

The TSX has not approved or disapproved of the information
contained herein.

SOURCE Voyager Digital (Canada) Ltd.

For further information: Press Contacts, Voyager Digital, Ltd., Voyager Public Relations Team, pr@investvoyager.com


Cypress Development (CYDVF) – Keeping an Eye on the Next Big Test

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Tuesday, June 14, 2022

Cypress Development (CYDVF)
Keeping an Eye on the Next Big Test

Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Lithium from Nevada claystone. Cypress Development is advancing its 100%-owned Clayton Valley Lithium Project near Silver Peak, Nevada. Cypress intends to mine Nevada claystone, produce a high-grade lithium concentrate solution and apply a licensed lithium extraction process based on ion-exchange to produce lithium carbonate or lithium hydroxide. Clayton Valley could go into production as early as 2025, following the completion of a feasibility study by year-end 2022, a two-year permitting period which could begin mid-year 2022, and one-year construction period. We have assumed commercial production commences in 2026.

Testing the production of lithium products. Approximately 4,000 liters of concentrated lithium chloride solution have been delivered from the company’s pilot plant to two Canadian laboratories. Each laboratory will further treat the solutions, one to produce lithium carbonate, and the other to produce lithium hydroxide. The results, which are expected within the next 4 to 5 weeks, will be used to assess if additional steps are needed to attain battery-grade standards and evaluate alternatives for producing these products in the feasibility study. The goal is to eventually produce lithium carbonate and/or lithium hydroxide on site….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Cathie Wood and the Risk of Trying to Get Someplace Fast

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Image Credit: Kindel Media (Pexels)


Should ARK Invest Apply a Little More Caution?

Individual fund managers come in as many different risk types as there are types of highway drivers. Some will try to get where they are going as fast as possible, even if this risks everything, and others will always drive cautiously slow. Others change their driving based on perceived conditions at the time. ARK Invest was reportedly founded by Cathie Wood after she regularly disagreed with her former employer over her lack of caution. Her boss at Alliance Bernstein recently told the Financial Times that “her biggest blind spot is managing risk and volatility.” In fairness to them both, there are two ways to run managed funds, the first is to always stay fully invested in your advertised style and let those that enter and exit change their exposure based on their own risk tolerance, and the second is to occasionally take your foot off the accelerator if there appears to be the potential to crash. Like the little old lady from Pasadena, Cathie Wood can’t take her foot off the accelerator.


Source: Koyfin

A couple of months ago, Ms.Wood was the keynote speaker at an investment conference in South Florida. Her company’s flagship fund ARK Innovation (ARKK) was down about 50%, and some of her better-known aggressive positions in future-looking tech companies like Coinbase and Robinhood had been proving themselves to be disappointments. Despite ARKKs huge fall-off in performance, she was greeted as a keynote with the kind of awe and adoration bestowed on rock stars. At the event, she doubled down on her support for her holdings. Wood had previously been forecasting that ARK Invest funds would deliver annualized returns of 15%; in April, from the podium, she told investors, “Now we think 50 percent.”

If you get in the car with a driver that insists on driving 110 mph regardless of the road conditions, you may get to where you’re going faster than driving with anyone else, you may also not ever make it.

Since her prediction of a 50% return by year’s-end, ARK Innovation is down another 34 percent.

The firm still has substantial assets under management (AUM), more than $16 billion. Her aggressive optimism and success, especially during the pandemic, had caused her AUM to have once grown to $60 billion. Almost all of her funds are full speed ahead in the riskiest investments on the market, including cryptocurrency and other new tech. Last fall, she put a $500,000 price target on bitcoin, a few months later, as bitcoin’s price sank, she raised her forecast to $1 million. In fairness, she could still be right, but her funds have lost ground over those that have been more cautious.

Wood still keeps her head down and continues pushing through any adversity, be it criticism or a market sell-off, as though she believes she’s fighting a righteous battle. “Truth will win out,” she repeatedly said on her firm’s monthly webinar in May.

For individual and even institutional investors, when investing in a fund, it’s important to recognize if the driving responsibility is on you, or on the manager. That is to say, don’t count on the manager taking risk-off in volatile markets, or putting risk on during bullish conditions. There are managed funds that hold completely true to their style and funds that try to create the best performance within the guidelines of their prospectus. The managed funds at ARK Invest would seem to be all in, all the time.

Take-Away

The benefit of placing money in a managed fund is you have a professional fund manager. One of the benefits of being active in selecting individual stock positions yourself is you can refine your portfolio more toward your own risk tolerance and adjust it at any time.

If you do place some of your assets in a fund, make sure you know what you’re buying. There are people who have watched the stock market take off only to realize their manager had been maxed out in cash and they missed the move and others that presume that their portfolio manager knew when the market was stormy and sidelined some riskier positions. 

It’s your money, know the driver, or be the driver.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://empirefinancialresearch.com/articles/rally-in-cathie-woods-fund-avoid-arkk-these-contrarian-indicators-suggest-the-bottom-is-in-my-35th-high-school-reunion

https://ark-invest.com/articles/market-commentary/innovation-stocks-are-not-in-a-bubble/

https://www.morningstar.co.uk/uk/

https://www.thestreet.com/technology/cathie-wood-makes-a-very-bold-prediction-about-tesla

https://www.cnbc.com/video/2022/04/29/watch-cnbcs-full-interview-with-ark-invests-cathie-wood.html

https://www.bloomberg.com/news/articles/2022-06-07/cathie-wood-s-asset-plunge-is-biggest-among-etf-issuers-in-2022

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Release – Ocugen, Inc. Announces Issuance of U.S. Patent for Treating Retinal Degenerative Diseases Using Gene Therapy

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Ocugen, Inc. Announces Issuance of U.S. Patent for Treating Retinal Degenerative Diseases Using Gene Therapy

Research, News, and Market Data on Ocugen

ISSUANCE OF U.S.
PATENT NO. 11,351,225 FURTHER ENHANCES OCUGEN’S GENE THERAPY INTELLECTUAL
PROPERTY PORTFOLIO

MALVERN, Pa., June 13, 2022 (GLOBE NEWSWIRE) — Ocugen,
Inc. (NASDAQ:OCGN), a clinical-stage biopharmaceutical company focused on discovering, developing, and commercializing novel gene and cell therapies, biologicals, and vaccines, today announced that on June 7, 2022, the United States Patent and Trademark Office (“USPTO”) issued U.S. Patent No. 11,351,225, which is directed to methods for preventing or treating an ocular disease or disorder associated with a retinal degenerative disease.

U.S. Patent No. 11,351,225 (the “‘225 Patent”) covers the use of a nuclear hormone receptor gene, such as NR2E3, RORA, NUPR1, and 
NR2C1, in treating retinal degenerative diseases as well as reducing the risk of developing such diseases. Additional issued claims pertain to using a nuclear hormone receptor gene to treat retinitis pigmentosa, age-related macular degeneration, and inherited retinal degenerative diseases. The ‘225 Patent contains 18 claims and expires in March 2034.

“We are pleased to have been granted this new U.S. patent through our exclusive license agreement with The Schepens Eye Research Institute, an affiliate of Harvard Medical School. We believe this patent significantly validates our modifier gene therapy platform developed by Dr. Neena Haider and augments our growing global patent portfolio,” commented Dr. Shankar Musunuri, Chairman, CEO, and Co-Founder of Ocugen.

This newly allowed patent is exclusive to Ocugen and is the latest U.S. patent issued in connection with Ocugen’s gene therapy program for treating retinal degenerative diseases.

About Ocugen,
Inc.
Ocugen, Inc. is a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies, biologicals and vaccines that improve health and offer hope for people and global communities. We are making an impact through courageous innovation, taking science in new directions in service of patients. Our breakthrough modifier gene therapy platform has the potential to treat multiple diseases with one drug and we are advancing research in other therapeutic areas to offer new options for people with unmet medical needs. Discover more at www.ocugen.com and follow us on Twitter and LinkedIn.

Cautionary
Note on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. We may, in some cases, use terms such as “predicts,” “believes,” “potential,” “proposed,” “continue,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from our current expectations. These and other risks and uncertainties are more fully described in our periodic filings with the Securities and Exchange Commission (“SEC”), including the risk factors described in the section entitled “Risk Factors” in the quarterly and annual reports that we file with the SEC. Any forward-looking statements that we make in this press release speak only as of the date of this press release. Except as required by law, we assume no obligation to update forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, after the date of this press release.

Contact
Tiberend
Strategic Advisors, Inc.
Jonathan Nugent / Daniel Kontoh-Boateng (Investors)
jnugent@tiberend.com
dboateng@tiberend.com

Dave Schemelia (Media)

dschemelia@tiberend.com