Globex Mining, Deutsche Telekom, Meta Platforms - Stormy times and a haven of calm

Globex Mining - worth a closer look

Commodities such as precious metals and rare earths are in hot demand in telecommunications, automotive and renewable energy industries. Due to the bear market, investors are looking for support in tangible assets like gold. But the global turnaround in interest rates is negatively impacting the price of gold, which, as recently as March, was priced at USD 2,000 per troy ounce (31.1 grams). Today, the price of gold is hovering around USD 1,706. Globex Mining offers the option for diversification in precious metals. With over 60 years of industry experience, the Canadian company owns more than 200 property packages, all of which have resources or reserves, mineralized drill intercepts, mineral occurrences, untested geophysical targets, or a combination thereof. The properties are located in Canada and the United States.

Globex Mining's business model enables its shareholders to generate value across the commodity value chain. This is done through the acquisition of properties, their exploration, related options or joint ventures. Globex Mining invests a minimum of CAD 1.5 million annually in the exploration of its properties. They also support their option partners by participating and investing in exploration. A look at the property directory gives an idea of how diversified the Company is with its 217 projects: including 111 precious metals projects with gold, silver, platinum, and palladium. 62 non-ferrous metals and polymetals with copper, zinc, lead, nickel, and 44 special metals and minerals that include lithium, cobalt, rare earths, and more. The current investor presentation from November 2022 gives a detailed overview of the Company portfolio. With this broad diversification in the commodities niche, Globex Mining is more than well-positioned to meet demand from each sector of the economy.

Deutsche Telekom: US business generates revenue

It is the strong US dollar that is benefiting Deutsche Telekom AG's US business. The Bonn-based Group's total revenue for the third quarter is EUR 19.3 million, up 15.9% compared to Q3 2021. In Europe, business is down slightly, with EUR 2.8 million in sales, down 1.1% compared to the same quarter last year. Like everyone else in Germany, the Company has to contend with sharply higher energy prices, which lead to higher energy, transport and manufacturing costs.

It is no wonder that the Company is increasingly focusing on operational measures in international markets outside Germany, primarily in expanding customer business at its mobile communications subsidiary T-Mobile US. This division added 1.6 million new contract customers in the third quarter, 854,000 of them telephony customers. The Company is also continuing to grow in the area of high-speed Internet, i.e. Internet access via mobile communications: A total of 578,000 customers opted for this service in the third quarter; a total of 2.1 million customers use the product. But relative to the user numbers of main competitor Verizon with 142.8 million users in Q4 2021, the German lion has roared well. Still, investors should always look at the listed peers in the industry and question the proportionality of the published figures.

T-Mobile US reported YOY service revenue of USD 15.3 billion in the third quarter representing an increase of 4.2%. Adjusted EBITDA AL was USD 6.7 billion, down 0.9% YOY.

One risk for the Group is user behavior in the USA. US citizens are used to changing rates and contracts like they change their homes. So they could switch to cheaper rates. There could also be more defaults on payments, as much in the land of unlimited opportunity is based on credit, and, in addition, the government's pandemic-related aid programs are coming to an end. Furthermore, interest rates are expected to rise in the US, Europe and Germany, which may lead to less consumption. Where inflation is rampant, people are saving or turning over pennies twice. It remains a mixed outlook for the Bonn-based company as supply chain failures may continue to impact business negatively.

Meta - Healthy shrinkage leads to 11,000 layoffs

Like a water-headed hydra, the former Facebook group has ballooned in recent years. The advertising-financed model, continuous user growth, and acquisitions such as Instagram and WhatsApp have enabled Zuckerberg to make increasingly bold plans. His virtual Metaverse is set to become the marketplace of unlimited possibilities, with its own currency and other wonderful advertising worlds for its B2B customers.

But investors reacted with concern to Meta's rising costs and expenses as the Company grew 19% YOY to USD 22.1 billion in the third quarter. When the Company issued lukewarm guidance for its upcoming fourth-quarter results in late October, investors reacted with a massive sell-off, and the stock fell nearly 20%.

Zuckerberg announced the layoffs in a digital message: "Today I am sharing some of the most difficult changes we have made in Meta's history," Zuckerberg said. "I have decided to reduce the size of our team by about 13% and lay off more than 11,000 of our talented employees. (...) I believe we are severely underappreciated as a company today. Billions of people use our services to connect, and our communities continue to grow. Our core business is one of the most profitable ever built, and we have huge potential for the future. We are leading the development of the technology that will define the future of social networking and the next computing platform. We are doing historically important work. I am confident that if we operate efficiently, we will emerge from this downturn stronger and more resilient than ever."

Analysts see the 13% headcount reduction as a drop in the bucket but a step in the right direction. Expanding AI and interconnected data is the focus. That also means more storage capacity, technology, and demand for raw materials used in server farms.

Word of the European model of employee benefits is spreading to the US: the affected ex-employees will receive 16 weeks of pay plus two additional weeks for each year of service, Zuckerberg said. Meta will cover health insurance for six months.

Meta is plugging its first output holes, which mostly start with the headcount. 11,000 employees will have to take their hats and look for new jobs. Investors welcomed CEO Zuckerberg's move, and the stock rose 7%. The expansion of AI still requires some effort. However, given the billions of users worldwide, Meta is still well positioned, despite fast-moving competition from TikTok & Co. Deutsche Telekom AG, on the other hand, reports very mild growth, mainly due to the new customer growth in the T-Mobile US division. In Europe, the Group continues to be exposed to high energy costs, and supply bottlenecks are also the order of the day. Globex Mining, on the other hand, radiates a pleasant sense of calm. The Company has 217 raw material sites with a wide variety of metal deposits in different exploration phases. Considering the sum of the projects and the shareholder value along the value chain, it is beneficial to take a look at your investor documents.