Pfizer CEO Sells 62% of His Stock | Alibaba’s ‘Singles Day’ Drives Massive Results

MarketBites Investment Newsletter for 11/12/2020

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
“You are what you believe yourself to be.”
– Paulo Coelho

Today’s Top Investment Stories
  1. Pfizer CEO Cashes In On Vaccine-Induced Stock Rally
  2. Alibaba’s ‘Singles Day’ Drives Massive Results
What is driving the stock market today? – November 12th, 2020

– In a quick reversal, investors seemed to favor big tech names and stay-at-home stocks, as Covid-19 surged worldwide. Apple and Amazon led big tech gains, surging as much as 3.04% and 3.37%. The stay-at-home darling, Zoom Video, jumped 9.93%. With the growth trade back in favor, banks slumped and value stocks underperformed.

– OPEC+ is considering delaying next year’s planned oil-output increase, by at least 3-6 months.

Coronavirus tracker: Per John Hopkins, the U.S. reported 142,000 new cases yesterday, while Europe had 239,000 new cases. United States Covid hospitalizations jumped to 61,964. Infections in New York City are approaching a threshold that would force another school shutdown. Governor Cuomo ordered New York bars, restaurants, and gyms to close at 10 p.m., and limited indoor gatherings to 10 people.

– By Raymond Kanyo

Top Story 1: Pfizer CEO Sells 62% of His Stock

What is Happening?
Pfizer CEO Albert Bourla sold $5.6 million worth of company stock on Monday. Bourla executed the sale after Pfizer surged 15% on news that its Covid-19 vaccine showed 90% effectiveness. Anthony Fauci, the top U.S. infectious-disease specialist, described the vaccine results as “extraordinary.” So why would Bourla sell?

Why does this Matter?
Bourla might be scrutinized, as he is not the first executive to cash out on the Covid-induced pharma stock surge. The top five executives at Moderna, which has another Covid-19 vaccine in development, have sold more than $80 million this year. Their company’s stock shot up more than 300% since January, but Pfizer’s stock is negative for the year.

Pfizer defended the CEO’s trade by stating that Bourla made the sale under a prearranged trading plan set up in August. Baird biotech analyst Brian Skorney also supported the CEO, citing that “there should be an incentive scheme for private industry to come up with drugs that meaningfully change the health-care dynamic in the country.”

While the SEC sees no wrongdoing here, the Chairman of the SEC did comment that “If you are an executive of a public company in a time like this, there may be idiosyncratic circumstances where you would be in the market, but, as we’ve said for a long time, in this volatile time, please practice good corporate hygiene.”

The Takeaway:
The media jumped on this story, but Bourla’s action seems like nothing out of the norm. Bourla continues to hold millions of dollars worth of Pfizer stock in multiple benefit packages.

– By Raymond Kanyo

Top Story 2: Alibaba’s ‘Singles Day’ Drives Massive Results

What is Happening?

Alibaba’s ‘Singles Day’ (the firm’s ‘Prime Day’ equivalent), raked in over 75B USD in sales by the evening of November 11. In line with U.S based vendors, Alibaba also spaced out the one day event, in order to alleviate pressure on the country’s logistical functions.

Why does this Matter?

The sheer volume of sales is astonishing. For comparison, the $75B estimate is ten times larger than Prime Day revenues, and almost three times larger than online orders from Thanksgiving through Cyber Monday.

Additionally, the record-setting numbers come at an important time for Alibaba and founder Jack Ma. His struggles with Ant Group and the firm’s delayed IPO have been dominating financial airwaves. In the coming days, some expect to see what percentage of Alibaba’s Singles Day sales were financed by Ant Group lending. Whether that news will be positive or negative is yet to be determined, as regulators apply pressure to Ant Group to take more financial responsibility for microlending.

An interesting marketing trend fueled Singles Day sales. Livestreaming influencers touted all sorts of products for hours on end, as users were able to purchase their favorite promoted items. It was determined that a specific influencer was personally responsible for nearly $500M in sales. Something to keep an eye on in the U.S. moving forward.

The Takeaway:
Singles Day is larger than any consumption event in the United States. The incredible sales numbers come at a much needed time for Alibaba and Jack Ma, as $BABA slides and Ant Group’s valuation tumbles.

– By Jack Dunne

What else is happening:
Kodak claims executives sold options they did not own – (read here)
Rubber prices make a rebound – (read here)
Facebook & Google extend bans on political ads – (read here)
L’oreal undergoes digital makeover – (read here)
Deals & IPOs:
Earnings Calendar:
Applied Materials ($AMAT), Cisco Systems ($CSCO), Energizer Holdings ($ENR), Palantir Technologies ($PLTR), Unity Software ($U), Walt Disney ($DIS)
DraftKings ($DKNG), Manchester United ($MANU), Spectrum Brands ($SPB), Vipshop Holdings ($VIPS)
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