Coursera soars 23% in trading debut following $4.3 billion IPO

trader nyse celebrate happy fist bump

Investors warmed up to the future prospects of Coursera and bid the stock higher in its first day of trading on Wednesday.

Shares of the online education company surged as much as 23%, hitting a high of $40.53. Coursera had priced its IPO at $33 per share, which was at the high end of its target range, giving it a valuation of $4.3 billion.

The share sale raised $519 million in proceeds for the company. Coursera’s previous funding round in July was at a $2.6 billion valuation.

Coursera saw a surge in business in 2020 as the COVID-19 pandemic forced students out of physical schools and into remote learning mode. The company recorded revenue of $294 million in 2020, representing a year-over-year increase of 59%.

But the company is not yet profitable, as it saw losses of $67 million last year. And it remains to be seen whether the jump in business it saw amid the pandemic is sustainable as schools begin to hold more in-person classes as the COVID-19 vaccine rolls out.

Coursera was founded in 2012 by Daphne Koller and Andrew Ng and currently counts more than 3,700 colleges and universities as customers.

Shares of Coursera trade on the New York Stock Exchange under the ticker symbol “COUR.”

Read the original article on Business Insider

US stocks fall after a $30 billion wave of selling tied to hedge-fund Archegos rattles traders

NYSE trader worried
  • US stocks fell on Monday as traders braced for the after-effects of a selling-spree tied to hedge fund Archegos.
  • Archegos is the family office of former Tiger Management trader Bill Hwang.
  • Nomura and Credit Suisse shares tumbled after the banks warned of large losses linked to the fire-sale.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US futures edged lower on Monday after an extraordinary $30 billion selling-spree by the hedge fund of Tiger Management trader Bill Hwang rattled investors around the world, while the refloating of a giant container ship stuck in the Suez Canal weighed on oil.

Futures on the Dow Jones, S&P 500, and Nasdaq fell between 0.4% and 0.6%, suggesting a lower open for US indices at the start of trading later in the day.

The sell-off appears to have been caused by Archegos Capital, run by the South Korean billionaire Hwang, which uses a long-short equity strategy that reduces exposure to movements in the overall market.

Typically under such a strategy, if long positions decline in value by more than the shorts, this puts them in a risky situation because they won’t have enough money to cover their shorts. The fund’s brokers, including Goldman Sachs and Morgan Stanley, realized this was about to happen, and so initiated margin calls. When Archegos couldn’t make them, the banks then forcibly sold off large holdings in the fund to stop the bleed.

Archegos had large long positions in Chinese and US stocks, including media firm ViacomCBS and Discovery. Both stocks saw their largest-ever daily declines on Friday, with each falling by more than 27%. Traders are now scrambling to figure out whether these fire-sales are over and seeing how much more the hedge fund has to offload.

A number of banking stocks tumbled after Nomura and Credit Suisse warned of large losses following Archegos’ extraordinary fire-sale. Nomura fell 16%, Credit Suisse fell 9.5%, Deutsche Bank fell 5%, and UBS fell 4%.

Wall Street’s VIX Index – popularly known as the ‘fear gauge’ – rose 10% to 20.78 on Monday, signalling a rise in the market’s expectations of volatility in the coming 30 days. The higher the index, the more nervousness is in the market.

Separately in the US, President Joe Biden is due to deliver a speech on Wednesday unveiling his new $3 trillion infrastructure plan that is part of his “Build Back Better” agenda.

Investors are still worried over concerns of rising number of COVID-19 cases in multiple regions in Europe, raising the prospect of further restrictions and curbs on economic activity. The continent is faced with a potential third wave driven by new variants. German Chancellor Angela Merkel said in a Sunday interview she would use federal law to take control of the pandemic response.

Lockdown restrictions in the UK have now eased slightly as groups of up to six people are allowed to meet outdoors. But markets displayed a lack of enthusiasm. “This early reticence may be tied to the Archegos Capital situation,” Connor Campbell, a financial analyst at SpreadEx, said. It remains to be seen which companies might be the next to announce they too have been stung, he said.

The UK’s FTSE 100 fell 0.4%, the Euro Stoxx 50 rose 0.1%, and Germany’s DAX rose 0.2%. The VDAX-New, the German equivalent of the VIX, was last up nearly 6% on the day.

Oil prices fell after the Ever Given container ship blocking the Suez Canal was successfully refloated, according to Inchcape Shipping Services. The ship, which has been stuck for almost a week, is currently being secured. Brent crude futures fell 0.6% to $63.99, while West Texas Intermediate dropped 1.2% to $60.27. The vessel, which is said to be longer than the Eiffel Tower, had obstructed the canal – one of the world’s most important shipping passages – since Tuesday.

Asian equity markets rose despite Chinese geopolitical worries and the forced liquidations on Wall Street, perhaps from the boost that the container ship has been refloated. Roughly 12% of total global trade passes through the canal, a large portion of that is from Asia’s big exporters to their customers in Europe. China’s Shanghai Composite rose 0.5%, Japan’s Nikkei rose 0.7%, and Hong Kong’s Hang Seng was about flat.

Read the original article on Business Insider

Stocks are vulnerable to a near-term pullback as the market overestimates a 2021 recovery, CFRA says

NYSE Trader worried red
A trader works on the floor at the New York Stock Exchange (NYSE) in New York, U.S., February 28, 2020.

  • Investors should brace for a near-term pullback in the first quarter of 2021, according to CFRA’s Sam Stovall. 
  • Domestic equity markets appear to us to have over-discounted a second-half 2021 economic and EPS recovery…and as a result may be vulnerable to a Q1 pullback,” the chief investment strategist said in a note to clients on Wednesday.
  • Stovall also sees the S&P 500 reaching 4080 by the end of 2021, a 9.5% upside from current levels.
  • Visit Business Insider’s homepage for more stories.

Investors should brace for a near-term pullback in the first quarter of 2021, according to CFRA’s Sam Stovall. 

Positive vaccine news has left many investors hopeful that the economy will reopen and recover during the summer of 2021. Stovall explained that the market now is showing signs that investors are overestimating a recovery in the economy and earnings in the second half of 2021. 

“Domestic equity markets appear to us to have over-discounted a second-half 2021 economic and EPS recovery…and as a result may be vulnerable to a Q1 pullback,” the chief investment strategist said in a note to clients on Wednesday. 

Read more: JPMorgan unveils its 50 ‘most compelling’ stock picks to buy for 2021 – and details why each one will be a top performer

Stovall noted that the Russell 2000 is currently more than 30% above its 200-day moving average, and the 12-month return differential for the S&P 500 growth-value indices remains at a level not seen since December 1999, shortly before the “Dotcom” bubble burst. 

However, the chief strategist sees the S&P 500 gaining 9.5% in 2021. He reiterated his 12-month price target for the benchmark index of 4080, a sign that 2021 will be a positive year for stocks.

Stovall recommends investors stay overweight consumer discretionary stocks, health care, industrials, and materials. He recommends investors are underweight utilities, real estate, and consumer staples.

Read more: Wall Street’s biggest firms are warning that these 7 things could crash the stock market’s party in 2021

Read the original article on Business Insider