Day: September 17, 2024

• MicroStrategy proposed to issue $700 million of convertible senior notes, with $500 million to be used to redeem a previous tranche of notes.

• The remainder of the money could be used to buy additional bitcoin.

Nasdaq-listed bitcoin development firm MicroStrategy (MSTR) announced Monday that it intends to offer $700 million aggregate principal amount of convertible senior notes due 2028.

The company plans to use the proceeds of the offering to redeem $500 million worth of senior secured notes with 6.125% annual yield maturing in 2028, the press release said. It will use the rest of the proceeds to purchase more bitcoin {{BTC}} and for general corporate uses.

The firm also plans to grant to the initial purchasers of the notes an option to buy up to an additional $105 million aggregate principal amount of notes within a 13-day period starting on the issuance date of the first notes. The company said it may redeem for cash all or a portion of the notes on or after December 20, 2027, subject to certain conditions.

The company, led by Executive Chairman Michael Saylor, started purchasing bitcoin in 2020, adopting it as a reserve asset for its treasury. Since then, it has become the largest corporate buyer of bitcoin, accumulating 244,800 BTC, worth roughly $14.2 billion at current prices. Only days ago, MicroStrategy disclosed the purchase of an additional $1.1 billion worth of bitcoin, leaving it with $900 million available under a previous offering.

Recently, other public companies such as Semler Scientific and Japanese investment adviser Metaplanet have followed MicroStrategy’s footprints to issue debt to accumulate bitcoin.

MSTR shares slid 4.9% during regular trading today alongside a sizable decline in the price of bitcoin. Shares are down another 1.6% in after hours trading. They remain higher by about 300% on a year-over-year basis.

There’s a massive $22.6 trillion crisis looming over American workers, and surprisingly, it’s barely making a ripple in the presidential debates. Social Security and Medicare – the lifelines of millions of Americans – are hanging by a thread, yet the candidates seem more interested in catchy sound bites than addressing this financial catastrophe.

Don’t Miss:

In Tuesday’s debate between Vice President Kamala Harris and former President Donald Trump, much was said about various issues, but not a word about the crumbling state of the U.S. federal budget. Trump’s outlandish comment, “They’re eating the pets,” went viral, but what millions of Americans care about more is how they’ll survive when Social Security runs dry.

According to the Social Security Administration trustees, the fund faces a $22.6 trillion shortfall. That’s not just a number – it’s the equivalent of $172,000 for every household in the country. Without significant changes, the Social Security Trust Fund is expected to run out of money by 2035. At that point, benefits could be slashed by 24.6%, leaving retirees in a serious bind.

Trending: The average American couple has saved this much money for retirement — How do you compare?

“The reality is, if we don’t act soon, Social Security will be a thing of the past,” warned one financial expert. And the numbers back that up. The Committee for a Responsible Federal Budget (CRFB) estimates that an average dual-income couple could lose about $16,500 a year in benefits if nothing is done.

According to Google Trends, Social Security was the most-searched issue during election week. One would expect this topic to be front and center during the debate, but the candidates didn’t dive into it. Harris and Trump insist they want to protect Social Security, but the specifics remain unclear.

See Also: IRS Finalizes 10-Year Rule For Retirement Withdrawals, Making Things ‘Even More Insanely Complicated’

Harris advocates for higher taxes on the wealthy, saying, “We need to ensure millionaires and billionaires pay their fair share.” The Biden administration has also pushed for a Social Security tax on incomes up to $400,000 for individuals and $450,000 for married couples filing jointly.

Trump, on the other hand, has been less specific. He denies Democrats’ accusations that he plans to cut benefits while vowing to cut taxes if reelected.

Story continues

But Social Security isn’t the only elephant in the room. Medicare is facing its crisis, with a $2.4 trillion shortfall in the fund that pays for Medicare Part A benefits covering hospital bills – and that’s just the tip of the iceberg.

Trending: Teens may never need wisdom teeth removed thanks to this MedTech Company – Be an early investor for just $300 for 100 shares!

The future costs for Medicare Part B and Part D – covering doctor visits and prescription drugs – are rising even faster, and those costs are largely funded through taxes and government borrowing.

Last year alone, Medicare taxes brought in $367 billion, but the program spent $1 trillion. By 2048, taxes are projected to cover only one-fifth of the program’s costs. Where’s the rest of the money going to come from? More borrowing and even more taxes.

The U.S. national debt is already a staggering $34 trillion, and it’s expected to keep growing. For perspective, in 2000, the debt was $3.4 trillion – yes, it’s grown tenfold in just a generation.

Read Next:

UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets.

Get the latest stock analysis from Benzinga?

This article The $22.6 Trillion Crisis Neither Harris Nor Trump Mentioned, But It’s The Top Concern For Millions Of Working Americans originally appeared on Benzinga.com

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

September has been an exciting time for investors with their fingers on the pulse of cancer drug development. In a nutshell, it looks like the world’s top-selling cancer therapy could have a serious competitor.

Sales of Keytruda from Merck reached $25 billion last year thanks to its position as a standard first line of treatment for most patients newly diagnosed with the most common form of lung cancer.

Biotech investors have been buzzing with enthusiasm for Summit Therapeutics (NASDAQ: SMMT) and its lead candidate, ivonescimab. Recently announced results from a clinical trial with frontline lung cancer patients showed ivonescimab reduced their risk of disease worsening by 49% compared to Keytruda monotherapy. That’s a big deal for Summit and a pair of companies that are also developing candidates similar to ivonescimab, Instil Bio (NASDAQ: TIL) and BioNTech (NASDAQ: BNTX).

Why Instil Bio and BioNTech are along for the ride

Keytruda is an antibody that binds to programmed death receptors (PD-1) on the surface of immune cells. This checkpoint is supposed to keep those cells from destroying healthy tissue, but tumor cells often hijack the system. By displaying a programmed death ligand (PD-L1) on their surface, tumor cells often shut down immune systems before they can do their job.

Keytruda is sometimes dosed in combination with a vascular endothelial growth factor (VEGF) inhibitor called Avastin. Instead of delivering two therapies, ivonescimab from Summit Therapeutics, IMM2510 from Instil Bio, and BNT327 from BioNTech are all bispecific antibodies that inhibit VEGF and the PD-1 checkpoint simultaneously.

Table by author. Data sources: Summit Therapeutics, Instil Bio, and BioNTech.

Shares of Instil Bio and BioNTech have risen sharply since Summit shared phase 3 results that show a strong progression-free survival benefit versus Keytruda. While their candidates are similar to Summit’s, there are significant differences that could make them more or less effective.

In terms of market value, Instil Bio was circling the drain when Summit began announcing success with its bispecific PD-1/VEGF drug. Since Instil started from such a low point, the clinical-stage biotech’s stock price was able to shoot more than 500% higher in response to Summit’s news.

Story continues

Time to buy?

Summit Therapeutics acquired rights to ivonescimab outside of China and Australia. With Keytruda sales up around $25 billion annually, it’s not hard to imagine blockbuster sales for a therapy that outperformed it in the important lung cancer setting.

There are a lot of expectations for ivonescimab already baked into Summit Health’s stock price. At last glance, it boasted a $22.7 billion market cap that could come crashing down if subsequent data for ivonescimab is anything less than spectacular.

While ivonescimab outperformed Keytruda monotherapy, Merck’s drug is usually combined with chemotherapy to treat lung cancer. We still don’t know how well ivonescimab stands up to Keytruda and other PD-1 drugs when they’re combined with chemotherapy.

Another important uncertainty regarding Summit is ivonescimab’s performance versus Keytruda plus Avastin. In theory, a bispecific antibody should be more effective than two traditional antibodies dosed simultaneously, but we can’t be certain without another clinical trial.

If investors want to bet on a bispecific PD-1/VEGF antibody, Instil Bio could be the better option. IMM2510 is in a much earlier stage of development, but Instil’s market cap of about $456 million at recent prices is tiny for a company that could have a blockbuster lung cancer drug in its pipeline.

Should you invest $1,000 in Summit Therapeutics right now?

Before you buy stock in Summit Therapeutics, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Summit Therapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $729,857!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 16, 2024

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Summit Therapeutics. The Motley Fool recommends BioNTech Se. The Motley Fool has a disclosure policy.

Here’s Why Everyone’s Talking About Summit Therapeutics was originally published by The Motley Fool

The broader stock market might not have had a thrilling Monday, but there was plenty of action and interest in AT&T (NYSE: T) shares. The telecom company was the subject of hot speculation in the satellite broadcasting world, and investors bid up its share price by nearly 3% on the scuttlebutt. This was more than sufficient to crush the S&P 500 index’s performance, as the indicator closed only marginally higher.

An old merger idea revived?

After market hours Friday, Bloomberg reported that AT&T and its business partner TPG are holding discussions on a merger of their DirecTV satellite unit with Dish, currently owned by EchoStar. Citing unnamed “people familiar with the matter,” the financial news agency added that the talks are currently in an early stage.

Bloomberg said that unnamed spokespeople from both DirecTV and Bloomberg declined comment. TPG and EchoStar representatives also turned down similar requests.

DirecTV and Dish are the two largest satellite TV providers in this country. A merger would create a business with roughly 20 million customers, according to Bloomberg.

This is not the first time a tie-up of the two satellite entities has been floated. In 2002, the pair attempted a merger, but the U.S. Justice Department quashed it on antitrust grounds.

It’s a streaming world these days

These are not salad days for the satellite TV industry, as it’s largely been overshadowed by streaming video. Subscription plans in the highly competitive streaming space can be very inexpensive compared to traditional pay TV offerings like satellite; presumably, a marriage of DirecTV and Dish would result in synergies that could bring down costs (and reduce those subscription rates).

Should you invest $1,000 in AT&T right now?

Before you buy stock in AT&T, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AT&T wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $729,857!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 16, 2024

Story continues

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why AT&T Stock Was a Market-Beater Today was originally published by The Motley Fool

For the better part of two years, no trend has excited investors more on Wall Street than the rise of artificial intelligence (AI).

The lure of AI is twofold. First, there’s the ability for AI-driven software and systems to learn over time without human intervention. The capacity for software and systems to become more proficient at their tasks, or perhaps even learn new jobs/skill sets, gives this technology utility in almost every sector and industry around the globe.

The other reason investors can’t seem to get enough of AI stocks is the eye-popping addressable market attached to this game-changing technology. According to the researchers at PwC, AI is forecast to add $15.7 trillion to the global economy by 2030, with these gains coming from a combination of consumption-side benefits and productivity improvements.

With a seemingly limitless ceiling for AI and an addressable market that dwarfs pretty much every other next-big-thing innovation for three decades, it’s not a surprise to see investors flock to AI colossus Nvidia (NASDAQ: NVDA). Just be mindful that not everyone on Wall Street expects Nvidia to maintain its lofty valuation.

Nvidia’s ascent has been virtually textbook

When 2022 came to a close, Nvidia had a $360 billion market cap and was an important, but not critical, company in the tech sector. Less than 18 months later, it briefly became the largest publicly traded company in the world, with a peak market cap of $3.46 trillion.

Nvidia’s historic gains are a reflection of the otherworldly demand for its H100 graphics processing unit (GPU) used in high-compute data centers. Based on estimates from the analysts at TechInsights, Nvidia has accounted for a roughly 98% share of the GPUs shipped to data centers in 2022 and 2023. In other words, its hardware is being relied on as the undisputed preferred choice for training large language models (LLMs) and running generative AI solutions.

In addition to its hardware being in high demand, Nvidia’s CUDA software platform is doing its part to keep enterprises loyal to its ecosystem of products and services. CUDA is the toolkit developers use to build LLMs and maximize the computing capacity of their Nvidia GPUs.

There’s also plenty of excitement surrounding future innovation. Nvidia’s next-generation Blackwell chip, which will be far more energy-efficient than its predecessor, is set for its debut in the coming months. CEO Jensen Huang also teased the release of his company’s Rubin GPU architecture in 2026, which will run on a new processor, known as Vera. Investing in innovation makes it likely that Nvidia will maintain its No. 1 spot in terms of AI-GPU computing capacity.

Story continues

Despite this array of positives, big-time Nvidia bears do exist.

Could Nvidia plunge 98%?

Perhaps no Nvidia skeptic has been more vocal on Wall Street than financial writer and economist Harry Dent.

In an interview with Fox News Digital in June, Dent highlighted that the mammoth increase in money supply has set the U.S. economy and stock market up for disaster. He referred to the current market as the “bubble of all bubbles,” with Nvidia expected to be a victim of an upcoming crash. Dent pegged Nvidia’s potential decline at 98%. Dent further opined,

As an Nvidia bear myself, I don’t expect it to come anywhere close to a 98% downdraft.

Although we have witnessed a couple of next-big-thing market leaders eventually plummet by 98%, including Canopy Growth following the hype in cannabis stocks, and 3D Systems, which has lost just shy of 98% of its value after 3D-printing buzz failed to materialize, a 98% peak-to-trough loss for a market leader is rare.

Furthermore, Nvidia had other established sales channels in place prior to its AI revenue windfall. It’s a leading provider of GPUs used in gaming and cryptocurrency mining, and should enjoy steady gains from its virtualization software segment. While these now-ancillary operations won’t offset substantial weakness if the AI bubble were to burst, they’d almost certainly keep Nvidia from losing 98% of its value.

But even though a 98% decline isn’t in the cards, a sizable drop that could extend beyond 75% is quite possible.

Dent is right about one thing: History

Although Harry Dent’s call for a 98% plunge in Nvidia may be out in left field, he did hit the nail right on the head when discussing history. While history doesn’t repeat to a “t” on Wall Street, it does have a tendency to rhyme.

Since the advent of the internet roughly three decades ago, every highly touted innovation, technology, and trend has worked its way through an early stage bubble-bursting event. Though the timing of when the music stops will differ in every instance, the end result is always the same — market leaders getting pummeled.

Without fail, investors overestimate the utility and uptake of game-changing innovations and technologies. While artificial intelligence appears to have a bright long-term future, the fact that most businesses lack a well-defined game plan to profit in the near-term from their AI investments is a pretty clear indication that investor expectations are vastly outpacing real-world utility. In other words, it points to the formation of an AI bubble.

The vast majority of market-leading businesses for game-changing innovations over the last 30 years have shed 75% or more of their value on a peak-to-trough basis.

There are other potential concerns, too. For instance, insiders have been selling stock for 45 months without a single insider purchase. Though there are benign reasons for selling stock, such as for tax purposes, there’s only one reason to purchase shares on the open market — you think they’ll increase in value. No insider has bought shares of Nvidia on the open market since Chief Financial Office Colette Kress in December 2020.

It’s also logical to expect Nvidia’s monopoly like AI-GPU market share to come under pressure in the quarters that lie ahead. The interesting thing is that internal competition might be even more worrisome than the AI-GPUs its rivals are bringing to market.

Nvidia’s four largest customers by net sales are all internally developing AI-GPUs for use in their data centers. Even with Nvidia’s chips having superior computing capacity, these four customers will likely be incented to utilize their own hardware over Nvidia’s. This is a recipe for fewer orders in the future.

Although a 98% decline is highly unlikely for Nvidia, a steep drop still appears very likely.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $729,857!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 16, 2024

Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends 3d Systems. The Motley Fool has a disclosure policy.

Will Artificial Intelligence (AI) Colossus Nvidia Plummet 98%? was originally published by The Motley Fool