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February 8th, 2022 | 13:59 CET

Meta Platforms, PayPal, Triumph Gold - The turnaround is coming in really hard!

  • Gold
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Never before in stock market history have there been several billion-dollar corrections in technology companies in succession without the NASDAQ collapsing significantly. After the halving of Netflix, it now catches two other showpieces of the NDX, namely Meta Platforms (ex-Facebook) and PayPal. Last week, after the announcement of their figures, they experienced a severe sell-off of almost 30% each. In total, assets of over USD 300 billion were incinerated. A former bank executive would probably no longer call that peanuts, especially since the Lehman crisis in 2008 triggered a veritable conflagration because of skewed loans worth more than USD 400 billion. But today, everything is different. After this sell-off, who can soon rise again?

time to read: 4 minutes | Author: André Will-Laudien
ISIN: FACEBOOK INC.A DL-_000006 | US30303M1027 , PAYPAL HDGS INC.DL-_0001 | US70450Y1038 , TRIUMPH GOLD CORP. | CA8968121043

Table of contents:

    Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
    "[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.

    Full interview


    Meta Platforms - Facebook & Co. experience the sell-off

    The big bubble at Meta Platforms has now burst. A whole USD 250 billion in market value has vanished into thin air within 24 hours. The quake was triggered by much lower-than-expected user growth on all of the group's social media channels. The number of daily active members fell by around one million within three months; previously, it had consistently increased. Facebook thus missed the expectations of experts, who had assumed an increase to 1.95 billion daily active users.

    Facebook probably also has a TikTok problem because the (still) world's largest online network hardly gained any new users for the first time in the past quarter. TikTok is growing ever faster and is particularly appealing to the younger generation. Facebook, on the other hand, is becoming increasingly unattractive because many older users also expect a higher level of data protection. The messaging service WhatsApp is having a hard time attracting new customers in this environment.

    Founder and chief executive Mark Zuckerberg referred to competition from video app TikTok. "People have lots of choices about how they want to spend their time - and apps like TikTok are growing very quickly," he said in a conference call. From now on, his platform will also focus even more on short videos, the 37-year-old web pioneer said, indicating the strategic direction of travel. To get the relation right: Meta has lost a good 5 times more in share value in one day than its rival Snapchat is currently even putting on the stock exchange scales.

    Technically, things are now getting exciting for the FB share. The long-term upward trend from 2013 is only threatened below a level of around USD 200. However, analysts currently see Meta in a poor position to catch up in the fast-growing short video segment. Current revenue growth is thus estimated at only 3%. It could therefore be that the correction is not yet over; however, expectations are now also low. Keep watch!

    Triumph Gold - Freegold Mountain project moving forward

    Rising interest rates are currently boosting the gold sector. The resistance area of USD 1,820 is approaching more and more, and the high inflation makes investments in value-preserving precious metals seem sensible again. Only the technical attack on the USD 1,860 mark is missing, and then it can go up very quickly with the spot prices.

    In Triumph Gold, we are not looking at a NASDAQ stock but a very promising gold investment. The junior explorer, hailing from Canada, has focused on a few properties in the Yukon Territory. The Company's 100%-owned Freegold Mountain flagship project is located in the Dawson Range copper-gold belt and hosts three mineral deposits called Nucleus, Revenue and Tinta Hill.

    With a budget of CAD 2.75 million, drilling has been ongoing since the end of June 2021 and, to date, has identified over 20 mineralizations. The latest drill reports are from December, and to date, gold equivalents of 0.76 grams per tonne have been detected over a length of 106.5 meters. As of early 2022, results are now awaited for the Nucleus deposit, the Big Creek South fault zone, the Orbit zone and other regional exploration activities.

    A guarantee of the quality of the surrounding zones is also provided by Newmont Mining, the world's largest gold producer. As a well-known shareholder of Triumph Gold, Newmont operates its Coffee Creek project in the immediate vicinity. Excitement is now building on the exploration of the new Big Creek property. It was acquired in 2021 and is expected to host industrially recoverable copper and gold. With a share price of CAD 0.11, the current market capitalization is a low CAD 15.5 million. Speculatively, one can bet on good drill results at Triumph.

    PayPal Holdings - Less growth leads to Mega shortfall

    In contrast to Google parent Alphabet, PayPal could not persuade shareholders to increase their investment with the 2021 annual figures. On the contrary, the share experienced its strongest one-day correction since its listing on the NASDAQ with a crash of almost USD 40 or 27%. A total of USD 50 billion in market capitalization vanished into thin air in the last 3 trading days.

    What was viewed so negatively? Above all, growth did little to convince investors. Sales rose by only 13% to USD 6.9 billion, significantly less than analysts had expected in advance. Only very few people were aware that profits would fall by around 50% to USD 801 million. The outlook was also not very convincing.

    In addition to the poor fundamental data, the price also tore important chart support at USD 160 and USD 140 in one go. The psychology is thus heavily burdened, as the price is rapidly approaching the correction level of March 2020, when the Covid pandemic led to worldwide stock market collapse. Because of the good development of the online business, PayPal had been able to more than double in the subsequent period. Now it is probably time for many investors to take profits.

    Our tip: Watch the value closely and pay attention to the remaining support at USD 125 and USD 100. If it does not break through to the bottom, one could cautiously make the first buybacks. If it falls below USD 100, we would advise against PayPal, and then we would expect even more disappointment in growth in the medium term.

    The stock market has taken its cue from the statements of the major central banks and is pricing in rising interest rates. That weighs especially on the interest rate-sensitive growth stocks on the technology exchanges, such as the NASDAQ. For gold stocks, however, this scenario could mean a turnaround from the long consolidation.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
    For this reason, there is also a concrete conflict of interest.
    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    André Will-Laudien

    Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.

    About the author

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