Feelings Of FOMO

After several months of failing to secure funding, Virgin Orbit has confirmed that its last-ditch effort to team up with investor Matthew Brown has failed. ❌

The satellite launching company had furloughed its roughly 750 employees on March 15th as it looked to secure funding. Last week, it slowly brought back some of its 750 employees as funding prospects improved. However, executives announced today that they’re ceasing operations “for the foreseeable future” and will lay off 90% of their workforce. 🛑

Virgin Orbit was spun out of Sir Richard Branson’s Virgin Galatic in 2017, with him maintaining 75% ownership. The company’s system of using a modified 747 jet to send satellites into space was met with much optimism. However, the challenging funding environment caused the company to raise less money than expected via its SPAC merger in 2021. And operational issues, including a mid-flight failure of its last launch, have investors doubting the company’s long-term viability.

With its largest shareholder unwilling to provide more funding and its stock plummeting to fresh all-time lows, it’s running out of options. So it recently hired bankruptcy firms to pull together contingency plans if it cannot find a buyer or investor. 📝

Overall though, it appears the shareholders and outside debt holders will be hurt the most. Richard Branson has first priority over the company’s assets. And the Board of Directors recently approved a “golden parachute” severance plan for the company’s top executives in the event they’re terminated.

As with many revolutionary ideas, they don’t always pan out. The idea will likely live into the future, but probably not in its current form. So we’ll have to wait and see whether the company’s prospects change in the coming days. 🤷

In the meantime, $VORB shares hit fresh all-time lows on the news. 💥

As we’ve discussed in the past, investors tend to use a 20% rise/decline from a market low/high to signal the start of a new bull/bear market. 🧭

While that method certainly has its downsides, it does tend to get a lot of attention. And right now, with the Nasdaq 100 rising over 20% from its October lows, investors are once again asking whether a new bull market has begun.

Now, skeptics will point to previous rallies, like in August, that reached 20% but ultimately continued lower. But the believers will point out that the current market environment is different.

For example, the Nasdaq 100’s 200-day moving average, often used to indicate its long-term trend, was falling in August. But since late last year, it’s flattened out and begun rising again. 📈

They suggest this indicates a much more supportive environment for stocks today than before. And as a result, they’re giving this signal more weight than they had in the past. ⚖️

Whether this is the start of a new bull market is a question being asked by investors all over the globe. And if prices continue to rise in the face of constant bad news, some hypothesize that the fear of missing out (FOMO) could take hold and push the market even higher. 😨

Only time will tell which side of the argument is correct. But the current environment definitely has some folks changing their tune. Just ask Michael Burry, who tweeted:

I was wrong to say sell.

— Cassandra B.C. (@michaeljburry) March 30, 2023

Guess this market has even the brightest investors unsure of what’s next. 🤷

As always, that’s the conversation happening today. We’ll leave it to you to analyze what you think is coming next. 

Two stocks were on the move from both a price and message volume perspective after they reported earnings. Let’s recap. 📝

First up is the EV charging network operator EVgo. 🔋

The company reported a fourth-quarter loss per share of $0.06 on $27.3 million in revenue. That topped the expected $0.16 per share loss and $21.8 million in revenue. 👍

Executives say they added about 59,000 new customer accounts, grew network throughput by 76% YoY to 14.4 GWh, and ended the year with 2,800 fast-charging stalls in operation. Its eXtend unit saw sharp growth, rising to 61% of the company’s total revenue. The program has attracted customers like General motors, Pilot, and JPMorgan Chase.

However, its 2023 guidance came with a caveat, given it’s unsure how many U.S.-made chargers it will be able to procure. As a result, it expects revenue of $105 to $150 million, an adjusted EBITDA loss of $60 to $78 million, and roughly 3,400 to 4,000 fast-charging stalls in operation or under construction. ⚡

Revenue guidance was slightly less than the $153.7 million expected. But investors appeared to look past that shortfall. $EVGO shares rose 22% on the day. 📈

Next is the online video platform and popular YouTube alternative, Rumble. 💻

The company reported a breakeven fourth quarter, while analysts expected a $0.06 per share loss. Revenue of $20 million also topped the $10.2 million expected by analysts. Executives say the platform’s global monthly active users grew 142% YoY to 80 million. 

$RUM shares rose 30% on the news, still up about 15% as of writing this. 👍