23. December 2020 | 09:15 CET
Alibaba, Upco International, Palantir - the next boom!
Topics such as data mining, artificial intelligence or blockchain technology, not only as the technical basis for cryptocurrencies such as Bitcoin or Etherum, are on everyone's lips and will continue to accompany us in everyday life as well as on the stock exchange in the coming years. The potential for these novel technologies is enormous. More and more young companies with innovative business models are entering the capital market. However, the digital transformation is also an opportunity for established companies to reposition themselves, thereby achieving a significantly higher valuation in the future.
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ISIN: CA9152971052 , US69608A1088 , US01609W1027
Business model at the end
The business model of telecom service provider Upco International was dead as a doornail until May 2020, when the entire management team was replaced and Andrea Pagani, a CEO with a career spanning more than 20 years in the telecommunications industry, was appointed. The first goal was to split the general store into two independent business units. The first is the Wholesale Telecom unit which corresponds to the classic telecommunications wholesale business. Here, better contract terms with international telecommunications providers are achieved by pooling many smaller customers for cross-border telephone traffic.
Wholesale Telecom is coordinated by Upco International but operationally managed by dedicated companies. These companies will be integrated into the Upco group of companies over time. About four weeks ago, the first acquisition was successful. Equinox is a niche operator based in the Dominican Republic that provides telecommunications services to immigrants from Central and South America and the Caribbean to the United States.
Everything from a single source
Although the two segments are separate, customers are free to use any of the Upco Group's services. This option increases the customer base to monetize digital services with the second segment. Here, the Canadians are positioning themselves to respond efficiently to digital transformation by focusing on two key areas: Voice and Data Services and Digital Payments and Money Transfers. Voice and data services such as voice over IP and chats will be handled by UpcoNet, while UpcoPay will handle digital payments.
From telecom provider to blockchain
Initially, UpcoPay will run as an innovative, highly secure, based on a blockchain, direct payment method between individuals or people and merchants. Building on this, after implementing an e-wallet, it will be possible to top up money, process payments, or even transfer foreign exchange without setting up an account or entering sensitive banking information.
From 2021, Upco users in Europe will then be able to use UpcoPay to send and receive money quickly, securely, and without using a credit or debit card, but much more cheaply than competitors such as Western Union or PayPal. This service will be expanded over time to other areas such as retail and hospitality. Upco International has a unique starting position from the mix of telecom provider and international digital payment services.
That's what investors thought when Chinese authorities put the kibosh on the planned IPO of Alibaba subsidiary Ant Group two days before the launch date. Initially, the IPO was expected to raise more than USD 35 billion, making it the largest ever. Now insiders assume that the IPO will not be achieved until 2022. The regulatory changes demanded by the authorities are too great. Yesterday, the Wall Street Journal reported that Jack Ma, CEO of Alibaba Group, even tried to change the Chinese government's mind with a block of shares in Ant Group, which, however, they declined with thanks.
Shares before comeback
Much negativity is already priced into the chart of the tech giant. Thus, after the horror news announcement, the value plummeted from its all-time high of USD 319.32 to currently, USD 256.00. In recent weeks, the stock has been able to establish a broad stabilization zone around USD 252.00. Should Alibaba, whose long-term uptrend remains intact, reach the first resistance at USD 260.00, price gains up to USD 304.00 will soon be possible. In the long term, we remain positive on the stock.
The data octopus is growing
It is undoubtedly one of the most controversial Companies on the capital market. Nevertheless, customers are flying to the data analytics Company Palantir in droves. In addition to cooperating with intelligence agencies such as the CIA and the NSA and the US military, last week the US Company announced the signing of a three-year contract worth millions with the US Food and Drug Administration. The day before, closer cooperation with Greece was agreed upon. As a result, the Company said revenues are expected to pick up to about USD 1.07 billion this year, a 44% year-on-year growth. For 2021, the data-mining Company is targeting 2020 revenue growth of more than 30%.
Big Brother about to break out
Chart-wise, Palantir is on the verge of a breakout. In recent weeks, the chart formed a triangle formation. A breakout above USD 28.54 would quickly lead towards the all-time high at USD 33.50. Looking at the indicators, the overbought condition could be reduced in recent weeks. Based on this, the share should have enough strength after a successful breakout to reach the next price target of USD 42.00.