Author Archives: Scalper1

Does Tsinghua’s Western Digital Exit Threaten A Micron-China Tie?

Regulators’ decision to investigate Tsinghua Holdings’ now-defunct $3.8 billion investment in Western Digital ( WDC ) could signal “a heightened sense of scrutiny on all Chinese investments in U.S. technology,” a Macquarie analyst wrote Tuesday. That’s sure to frustrate Micron Technologies ( MU ) which, analysts say, could be examining a joint venture with a Chinese partner. Last year, Micron reportedly rebuffed a $23 billion bid from Tsinghua Holdings’ chip-arm, Tsinghua Unigroup. MKM analyst Ian Ing says Micron could seek to become a “ local supplier ” for the Chinese memory market by entering a JV. A JV stands a better chance of getting approval from the Committee on Foreign Investment in the United States. But the CFIUS is increasingly wary of Chinese investments in U.S. technology, Macquarie analyst Deepon Nag wrote in a research report. Tsinghua Unigroup plans to invest $47 billion to oust Apple ( AAPL )-supplier Qualcomm ( QCOM ) from its No. 3 chipmaking slot. “We see increased risk that Chinese investment in U.S. semiconductor assets won’t be allowed to take place, which we believe is an incremental negative for Micron,” Nag wrote. Unisplendour Playing For SanDisk? Early Tuesday, Tsinghua Holdings subsidiary Unisplendour pulled its $3.8 billion funding in Western Digital after CFIUS regulators decided to investigate the investment. Nag sees little chance of IP theft in such a “passive investment,” but other analysts have suggested that Unisplendour was making a play for SanDisk ‘s ( SNDK ) coveted Nand technology. Western Digital announced its plan to acquire SanDisk a month before Unisplendour was to invest the $3.8 billion for a 15% stake in Western Digital. “Tsinghua put $3.8 billion in Western Digital so they would have SanDisk technology,” Summit Research analyst Srini Sundararajan told IBD in December. On Wednesday, Sundararajan said the Western Digital-SanDisk deal would proceed without Unisplendour. It’s a marriage of “necessity and convenience,” he wrote in a report. Western Digital investor Alken Asset Management opposes the transaction , claiming the price is too high and SanDisk faces an uphill Nand battle, but the objection “comes a bit late.” Toshiba and SanDisk have made rapid progress in 3D Nand, Sundararajan says. And SanDisk has “gobs of Nand IP” plus licensing sales to justify the price. Western Digital cut the price Tuesday after Unisplendour’s exit to about $78.50 per share. Shareholders are set to vote on the transaction March 15. If it fails, Western Digital will have to pay a $184 million fee. “We find that net-net most of the objections expressed by Alken, while legitimate, ignore the strategic importance to Western Digital of having a captive Nand source as well as in-house Nand IP and a well-trained group of Nand experts,” Sundararajan wrote. Will Western Digital Cut Its SanDisk Bid? But Nag says the Unisplendour exit gives Western Digital the opportunity to reduce or completely drop the SanDisk deal. Out of 280 tech M&A deals in the past 30 years, nearly 10% were ultimately revised downward, he wrote. And considering Western Digital’s slough in stock price — down 43.5% since the deal was announced — the acquisition will likely be dilutive, Nag wrote. On Tuesday, RBC Capital Markets analyst Amit Daryanani estimated that the transaction would be 34% dilutive without the Unisplendour investment. “As a result, we believe that Western Digital will be highly motivated to renegotiate the price of SanDisk lower,” Nag wrote. On the stock market today , SanDisk stock rebounded 4.9% to close at 69.90, after closing down 1.6% on Tuesday. Western Digital stock rose 2.7% vs. a 7.2% decline Tuesday.

16 Highly Traded Leveraged/Inverse ETFs Of 2016

Thanks to heightened volatility in the stock markets, leveraged or inverse ETFs have been gaining immense popularity as investors are making a dash for big gains on quick market turns. This is especially true as the stocks logged their best gains last week on a year-to-date basis after seeing the worst-ever start to a year. However, the markets fell again in yesterday’s trading session, keeping the volatility levels high. Leveraged or inverse products either create a leveraged long/short position, an inverse long/short position or a leveraged inverse long/short position in the underlying index through the use of swaps, options, future contracts and other financial instruments. Due to their compounding effect, investors can enjoy higher returns in a very short period of time, provided the trend remains a friend. However, these funds run the risk of huge losses compared to traditional funds in fluctuating or erratic markets. Further, their performance could vary significantly from the actual performance of their underlying index over a longer period when compared to a shorter period (such as weeks or months). In spite of this drawback, investors flocked to these products for outsized gains in a short span. We have highlighted 16 leveraged/inverse ETFs that have seen massive trading so far this year. Most of these ETFs have delivered negative returns from a year-to-date look, yet have been investors’ darlings with abnormal returns piled up in a short period when the trend favored a specific corner of the world. ProShares Ultra VIX Short-Term Futures ETF (NYSEARCA: UVXY ) Leveraged Factor: 2x Inverse: No Benchmark Index: S&P 500 VIX Short-Term Futures Index YTD Volume: $48.38 billion This product provides two times (2x) exposure to the daily performance of the S&P 500 VIX Short-Term Futures Index, which reflects an implied volatility of the S&P 500 Index at various points along the volatility forward curve. It offers a daily rolling long position in the first- and second-month VIX futures contracts. The ETF has amassed about $378.4 million in its asset base while charging 95 bps in fees per year from investors. It is the most heavily traded ETF so far this year, with the highest trading volume of $48.38 billion. The fund has gained 3 1.3% in the year-to-date time frame. VelocityShares Daily Inverse VIX Short-Term ETN (NASDAQ: XIV ) Leveraged Factor: 1x Inverse: Yes Benchmark Index: S&P 500 VIX Short-Term Futures Index YTD Volume: $25.76 billion With an AUM of more than $ 1 billion, this ETN is popular and offers inverse (opposite) exposure to the S&P 500 VIX Short-Term Futures Index, charging a higher expense ratio of 1.35%. The note has seen total trading volume of $25.76 billion so far this year and has lost 23.7%. Direxion Daily Small Cap Bull 3x Shares ETF (NYSEARCA: TNA ) Leveraged Factor: 3x Inverse: No Benchmark Index: Russell 2000 Index YTD Volume: $14.54 billion This product provides triple (3x) leveraged play to the small-cap Russell 2000 Index, charging 95 bps in fees and expenses. It has been able to manage $787.7 million in its asset base with year-to-date trading volume of $ 14.54 billion. TNA is down 28.9% so far this year. ProShares UltraShort S&P 500 ETF (NYSEARCA: SDS ) Leveraged Factor: 2x Inverse: Yes Benchmark Index: S&P 500 index YTD Volume: $14.33 billion This fund seeks two times leveraged inverse exposure to the S&P 500 index, charging 89 bps in fees. It is relatively popular, having amassed $ 1.5 billion in AUM and having exchanged a total of $ 14.33 billion in volume so far. SDS is up 7.6% in the year-to-date time frame. VelocityShares Daily 2x VIX Short-Term ETN (NASDAQ: TVIX ) Leveraged Factor: 2x Inverse: No Benchmark Index: S&P 500 VIX Short-Term Futures Index YTD Volume: $13.86 billion Like UVXY, this note also offers two times exposure to the S&P 500 VIX Short-Term Futures Index, but comes with an additional expense ratio of 0.70%. With an AUM of $342.8 million, the fund has traded in massive volumes of $ 13.86 billion and has surged 30.7% this year. VelocityShares 3x Inverse Crude Oil ETN (NYSEARCA: DWTI ) Leveraged Factor: 3x Inverse: Yes Benchmark Index: S&P GSCI Crude Oil Index Excess Return YTD Volume: $13.59 billion This product provides three times inverse exposure to the daily performance of the S&P GSCI Crude Oil Index Excess Return. With an AUM of $490.2 million, it has traded in massive volumes of $ 13.59 billion and has gained 18.4% this year. The ETN is a bit pricey as it charges 1.35% in annual fees. ProShares Ultra S&P 500 ETF (NYSEARCA: SSO ) Leveraged Factor: 2x Inverse: No Benchmark Index: S&P 500 Index YTD Volume: $13.30 billion This is the most popular and liquid ETF in the leveraged space with an AUM of $ 1.6 billion. The fund seeks to deliver twice the return of the S&P 500 Index, charging investors 0.89% in expense ratio. It has seen solid trading volumes of $ 13.30 billion so far this year and is down 9.6%. ProShares Short VIX Short-Term Futures ETF (NYSEARCA: SVXY ) Leveraged Factor: 1x Inverse: Yes Benchmark Index: S&P 500 VIX Short-Term Futures Index YTD Volume: $12.64 billion Like TVIX, this fund offers inverse exposure to the S&P 500 VIX Short-Term Futures Index, but with no leveraged factor. It charges 95 bps in annual fees per year from investors and has exchanged about $ 12.64 billion in shares this year. The fund has accumulated $487 million in its asset base and shed 23.7% so far this year. Direxion Daily Gold Miners Index Bull 3x Shares ETF (NYSEARCA: NUGT ) Leveraged Factor: 3x Inverse: No Benchmark Index: NYSE Arca GoldMiners Index YTD Volume: $11.04 billion This product seeks to deliver thrice the daily performance of the NYSE Arca Gold Miners Index, which consists of firms that operate globally in both developed and emerging markets, and are involved primarily in the exploration and production of gold. It is rich in AUM of $946 million and has seen solid trading volume of $ 1 1.04 billion so far in the year. Expense ratio comes in at 0.95%. The fund has delivered robust returns of 1 12. 1% year to date. ProShares UltraPro Short S&P 500 ETF (NYSEARCA: SPXU ) Leveraged Factor: 3x Inverse: Yes Benchmark Index: S&P 500 Index YTD Volume: $10.88 billion This fund provides three times inverse exposure to the S&P 500 Index. It has an expense ratio of 0.93% and has seen a massive trading volume of $ 10.88 billion so far this year. It has amassed $548.6 million in its asset base and gained 10.4% year to date. ProShares UltraPro Short QQQ ETF (NASDAQ: SQQQ ) Leveraged Factor: 3x Inverse: Yes Benchmark Index: NASDAQ 100 Index YTD Volume: $9.91 billion Investors embracing this product made huge profits from the declining NASDAQ 100 Index in a very short period. The product has exchanged $9.9 1 billion in average daily volume this year. It offers three times inverse exposure to the NASDAQ 100 Index, charging 0.95% in annual fees. The fund has an AUM of $378.2 million and has added 19.9% in the year-to-date time frame. ProShares UltraPro S&P 500 ETF (NYSEARCA: UPRO ) Leveraged Factor: 3x Inverse: No Benchmark Index: S&P 500 Index YTD Volume: $9.55 billion This product also tracks the S&P 500 index, but offers thrice the returns of the daily performance with a bit higher expense ratio (by 2 bps) than SPXU. It has an AUM of $856.9 million and year-to-date trading volume of $9.55 billion. UPRO is down over 14.9% so far this year. Direxion Daily Small Cap Bear 3x Shares ETF (NYSEARCA: TZA ) Leveraged Factor: 3x Inverse: Yes Benchmark Index: Russell 2000 Index YTD Volume: $9.41 billion This product provides triple leveraged inverse play to the small-cap Russell 2000 Index, charging 95 bps in fees and expenses. It has been able to manage $444.2 million in its asset base with year-to-date trading volume of $9.4 1 billion. TZA is down 3 1.6% so far this year. VelocityShares 3x Long Crude Oil ETN (NYSEARCA: UWTI ) Leveraged Factor: 3x Inverse: No Benchmark Index: S&P GSCI Crude Oil Index Excess Return YTD Volume: $8.69 billion This is the popular leveraged fund targeting the energy segment of the commodity market through WTI crude oil futures contracts. It seeks to deliver thrice the returns of the S&P GSCI Crude Oil Index Excess Return and has amassed $9 10 million in its asset base. Though the fund charges a higher fee of 1.35% per year, its total trading volume of $8.69 billion year to date is incredible. UWTI is down about 6 1.8% in the same time frame. ProShares Short S&P 500 ETF (NYSEARCA: SH ) Leveraged Factor: 1x Inverse: Yes Benchmark Index: S&P 500 Index YTD Volume: $8.20 billion This is the most popular inverse ETF with an AUM of $2.6 billion, providing inverse exposure to the daily performance of the S&P 500 index. It has seen a massive trading volume of $8.20 billion so far this year and has returned about 5.4%. Expense ratio came in at 0.90%. Direxion Daily S&P 500 Bull 3x Shares ETF (NYSEARCA: SPXL ) Leveraged Factor: 3x Inverse: No Benchmark Index: S&P 500 Index YTD Volume: $8.12 billion SPXL makes an excellent pick for investors seeking to make large profits from the soaring stock market in a very short span. The fund creates a triple leveraged long position in the S&P 500 Index while charging 95 bps in fees a year. It has $635.2 million in AUM and has traded in a solid total volume of $8. 12 billion so far this year. The ETF has lost about 18% year to date. Original post

Google Fiber Heads To San Francisco; Faster Search Service Coming

Google Fiber, the super-fast Internet-access service spearheaded by Google’s parent firm Alphabet ( GOOGL ), is about to become available in San Francisco. Google Fiber’s Internet access will soon reach “some apartments, condos and affordable housing properties” in the tech-drenched Northern California city, using existing fiber networks rather than one built from scratch, wrote Michael Slinger, Google Fiber’s director of business operations, in a blog post on Wednesday. Using San Francisco’s existing fiber network will make the startup of the service come about more quickly, but it also means the service won’t be available everywhere in the city. Still, it’s a boost for tech-innovation hub San Francisco, where homes and businesses largely don’t have Web access that’s any better than in other parts of the country. Google Fiber started six years ago in Kansas City and the company has “committed to bring Fiber to a total of ten metropolitan areas,” said Slinger in the blog post. “To date, we’ve focused mostly on building fiber-optic networks from scratch. Now, as Google Fiber grows, we’re looking for more ways to serve cities of different shapes and sizes. That’s why we’re working with Huntsville, Alabama to tap into the city’s planned municipal fiber network.” Speed Needed For Mobile Web In other news, Google is also widening use of a technology that loads Web pages more quickly while consuming less data — in an aim to make it easier for people to navigate the Internet using their mobile phones. Google said Wednesday that it will display relevant pages in the Top Stories section of search-results pages that are built with its Accelerated Mobile Pages (AMP) technology. AMP is similar to efforts underway by Alphabet-rivals Facebook ( FB ), and its Instant Articles, and Apple ( AAPL ), and its Apple News service, which also aim to speed up how quickly articles load on mobile devices. Pages built with Google’s new technology load about four times faster and use 10 times less data than typical pages, Google said. The AMP technology improves how ads are seen. Stopping ads from slowing-down readers’ access to online articles could help deflect one of the main threats that the industry says could be facing digital ad companies — the growing use of ad-blocking software. AMP works by having developers rewrite their pages in a slightly simpler and more limited language, and hosts the pages on Google’s infrastructure, according to a Bloomberg report . “No matter how many ads you put on the page the content comes first,” Bloomberg quoted David Besbris, a Google vice president of engineering for search, as saying. “If a user taps on something they will get the content immediately.” Alphabet stock closed up 0.5% in the stock market today , at 720.90. Facebook stock and Apple stock both rose more than 1%. Image provided by Shutterstock .