GameStop: The Battle Continues
4 Customs Street: 1 Feb 2021
Good Morning 😃
Happy new month!
How was your weekend?
Welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.
Green White Green Last Week
Last week was a positive one on the Nigerian Stock Exchange as the All-Share index gained 3.44%. The index measures the average performance of stocks on the exchange. Some stocks will do better. Others will do worse.
Champion Breweries was the best performing stock last week. It gained 59.4% to close at ₦3.11. Veritas Kapital led last week’s losers. It fell 28.5% to close at ₦0.20. Veritas Kapital is an insurance firm.
Airtel Africa released its results for the nine months ended December 2020. Revenue grew by 18.6% from $2.5 billion in 2019 to $2.8 billion in 2020. Operating profit grew at an even faster pace from $657 million in 2019 to $800 million in 2020.
Airtel Africa is the parent company of Airtel Nigeria and is listed on both the London and Nigerian stock exchanges.
Airtel Nigeria also had great numbers. Its revenue grew by 21.6% from $995 million in 2019 to $1.1 billion in 2020. Operating profit grew at a smaller pace by 14.5% from $403 million in 2019 to $431 million in 2020.
Airtel Nigeria’s customer base grew by 11.5% from 39.9 million subscribers in 2019 to 44.4 million subscribers in 2020.
The data customer base grew at a faster rate of 23.6% from 15.2 million subscribers in 2019 to 18.8 million subscribers in 2020.
Guinness Nigeria released its unaudited H1 2020/2021 numbers. H1 2020 means results for the first half or first 6 months of the year. It made a ₦317 million loss, largely due to higher cost of sales and finance costs. A number of banks released their full-year 2020 unaudited results.
FBN Holding had a slight dip in profit for the year from continuing operations from ₦66 billion in 2019 to ₦65.9 billion in 2020. FBN Holdings is the parent company of First Bank.
Sterling Bank’s profit after tax grew by 10.2% from ₦10.6 billion in 2019 to ₦11.6 billion in 2020.
Stanbic IBTC Holdings profit after tax rose by 10.8% from ₦75 billion in 2019 to ₦83.2 billion in 2020. Stanbic IBTC Holdings is the parent company of Stanbic IBTC bank.
Green White Green This Week
LASACO shares will be placed on full suspension for two weeks beginning from today Monday, February 1, 2021 to Friday, February 12, 20.21 both days inclusive. The company will be reconstructing its shares. A share reconstruction means the company will be reducing the number of shares it has.
This week will be busy as more companies continue to release their unaudited results. We will also have a few companies drop audited numbers.
Star-Spangled Banner Last Week
Last week was a rough one for US stocks. The three major indices closed in the red. The Dow Jones Industrial Average commonly known as the Dow fell by 3.27%. The S&P 500 fell by 3.31%. The NASDAQ composite index fell by 3.49%.
What was behind the decline?
Part of it could be attributed to the tug of war between a group of retail investors under the WallStreetbets group and large companies known as hedge funds. The retail investors kept buying more and more shares, causing losses to hedge funds that had shorted the stock.
To short a stock means to borrow it and sell with the hope to buy back at a lower price, thus earning some profit. As the price of the stock kept going up, the hedge funds incurred more losses.
It also led to service outages across stock trading apps. Robinhood, one of the major US stockbrokers, had to limit purchases of the stock due to order flow issues. That, in turn, stirred the hornet's nest. Some of the retail investors felt they were being shut out. The US legislature has also promised to wade in. The Securities and Exchange Commission is also monitoring the situation.
Facebook, Apple, Tesla, and Microsoft released their Q4 2020 numbers during the week. Q4 2020 numbers mean results for the fourth quarter of 2020.
Facebook made $28 billion in revenue and had earnings per share of $3.88.
Apple had a blowout quarter. It crossed the $100 billion mark in terms of revenue. It made $111 billion in revenue and earnings per share of $1.68.
Tesla made $10.7 billion in earnings and had earnings per share of $0.80.
Microsoft made $43 billion in revenue and earnings per share of $2.03.
Star-Spangled Banner This Week
The battle between the WallStreetBets Reddit investors and hedge funds over GameStop shares will definitely continue this week. Neither side is willing to let go. The WallStreetBets camp has been emboldened and will bid up other shares that have been massively shorted.
We will begin our webinars for the month of February this Friday. We are breaking everything down about stocks, cryptocurrency, and agritech into simple and understandable bites. They are, however, only open to members of our community. What are you waiting for? It costs ₦10,000 for 6 months and ₦20,000 for a year to join our community.
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