Moderna’s Covid Vaccine 94.5% Effective | Airbnb Files To Go Public

MarketBites Investment Newsletter for 11/17/2020

Your daily dose of stock market commentary and most important investment and business news. written by investment professionals at Taylor Hoffman Capital Management.

Quote of the Day
“It always seems impossible until it is done.”
– Nelson Mandela

Today’s Top Investment Stories
  1. Moderna’s Covid Vaccine 94.5% Effective
  2. Airbnb Files To Go Public
What is driving the stock market today? – November 17th, 2020

– The Dow and S&P 500 closed at all-time highs after Moderna’s vaccine was shown to be 94.5% effective. Shares tied to an economic reopening led the rally, while stay-at-home tech companies lagged. The vaccine news seemed to accelerate the rotation into value and cyclical stocks.

– Benchmark 10-year Treasury yields held steady and the dollar slipped. Crude oil traded higher as vaccine news boosted the outlook for demand.

Coronavirus tracker: Per Johns Hopkins, the U.S. reported 146,000 new cases yesterday, while Europe had 221,000 new cases. United States Covid hospitalizations is at 69,993. Per Bloomberg, California will put more than 94% of its population in its most restrictive tier for lockdowns. France seems to be regaining control over the epidemic, after their latest lockdowns.

– By Raymond Kanyo

Top Story 1: Moderna’s Covid-19 Vaccine Shows 94.5% Effectiveness

What is Happening?
Moderna’s Covid-19 vaccine showed 94.5% effectiveness in a late-stage trial. The company expects to have emergency-use authorization from the FDA within weeks. Moderna stock rallied 9.6% on the news. Just last week, Pfizer announced its own 90% effective vaccine trial.

Why does this Matter?
Moderna’s vaccine trial is the most promising yet. The vaccine also appeared to be effective in preventing the most serious Covid-19 infections. This prompted Anthony Fauci to call the findings “truly striking.” Interestingly, both Moderna’s and Pfizer’s shots rely on messenger RNA technology that has never been used in a vaccine. Once injected, the vaccine instructs cells to make copies of the coronavirus’s spike protein, stimulating the creation of protective antibodies.

Moderna already signed a $1.53 billion vaccine contract with the U.S. government. The company expects to vaccinate 10 million U.S. citizens by year-end. It seems that Moderna’s vaccine has the upper-hand over Pfizer’s in terms of transportation. While Pfizer’s shot must be stored at ultra-cold temperatures, Moderna’s vaccine is stable at refrigerator temperature for 30 days.

The Takeaway:
Moderna’s vaccine trial results are auspicious. Despite the positive news, Moderna executives have drawn criticism for selling stock amid a 409% increase in the company’s shares this year. The CEO alone sold $41 million worth of stock.

– By Raymond Kanyo

Top Story 2: Airbnb Files To Go Public

What is Happening?

Airbnb has announced its plans to go public under the ticker $ABNB, on the Nasdaq. This public offering has been highly anticipated, and specific details began to leak Monday, after hours.

Why does this Matter?

Airbnb is one of the most exciting companies to emerge in recent years. The firm has turned the lodging and hospitality industry completely on its head. Rentals and travel has been disrupted to the point that “Airbnb” has become more of a verb, in a similar manner as Uber or Venmo.

The company has taken quite the hit since the beginning of the pandemic. State-wide lockdowns caused many forced cancellations, and Airbnb had a difficult public relations problem to solve. The firm also had to shed approximately 20% of its workforce earlier this year, due to virus-related financial shortfalls.

The company stresses the importance of its community of property owners, and Airbnb claims that is what separates it from competitors. Upon IPO, Airbnb plans to set aside 9.2M shares for a ‘host endowment fund,’ further solidifying that the company sees its users as more than a profit.

The total valuation for Airbnb has been speculated to be around $31B. As more information comes forward, that may change. The firm had $219M in net-income last quarter, from $1.34B in revenues.
The Takeaway:
Airbnb will be a hot IPO for investors everywhere. It will be interesting to see how analysts consider the changing environment of “work from home” vs “work from any home” in their due diligence for $ABNB.

– By Jack Dunne

What else is happening:
JetBlue to hit ‘refresh’ on its marketing – (read here)
Walmart adding ‘Pop-Up’ centers for online sales – (read here)
Central banks will exhaust all options to stimulate the economy – (read here)
HBO Max is coming to Amazon devices – (read here)
Deals & IPOs:
Earnings Calendar:
Nio ($NIO), Home Depot ($HD), Kohl’s ($KSS), Walmart ($WMT), La-Z-Boy ($LZB), Sea ($SE)
Jack-in-the-Box ($JACK), L Brands ($LB), Lowe’s ($LOW), Nvidia ($NVDA), Target ($TGT)
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