Stocks were lower to start Monday with the Dow dropping 360 points, or 1.2%. The S&P 500 slid 0.9%, while the Nasdaq dipped 1%.
GameStop shares are soaring this morning. The stock rose as much as 140% to $159.18 early today and is up nearly 60% at the time of writing after being briefly halted due to volatility. GameStop shares are up more than 600% so far in January and have risen 1,300% over the last twelve months. “The sudden, sharp surge in GameStop’s share price and valuation likely has been fueled by a short squeeze, given the high short interest, and, to a lesser degree, speculation by retail investors on forecasts for the new gaming cycle and the involvement of activist RC Ventures,” said Telsey Advisory Group analyst Joseph Feldman in a note where he double downgraded the stock. “We believe the current share price and valuation levels are not sustainable, and we expect the shares to return to a more normal/fair valuation driven by the fundamentals.”
President Joe Biden is escalating appeals for Congress to back his $1.9 trillion pandemic relief package, even as a bipartisan group of lawmakers question the high price tag. Economic advisor Brian Deese discussed the proposal on a call with lawmakers yesterday, where some asked the White House to further justify what would be the second-largest emergency spending measure in U.S. history and expressed interest in a narrower bill that would focus on accelerating coronavirus vaccine distribution instead. “We were going to move fast and we’re going to move bipartisan,” said White House Chief of Staff Ron Klain, expressing optimism that stimulus will be passed. “I don’t think bipartisanship and speed are enemies of one another. The need is urgent. Americans, both Democrats and Republicans, are dying. Kids’ schools that take care of both Democratic and Republican kids are closed. People are on unemployment. People are in food lines. That’s not a party issue.” Still, Senator Mitt Romney, R-UT, said the $1.9 trillion price tag was “shocking” considering the $900 billion stimulus package passed in late December, and called for more targeted relief measures focused on ending the pandemic rather than another major stimulus deal.
As Washington squabbles over pandemic relief, the U.S. surpassed 25 million COVID-19 infections, or roughly 8% of the population. Experts say the 25 million figure is almost certainly an undercount, as many people are asymptomatic or untested. The grim milestone comes as the world nears 100 million confirmed cases of the potentially deadly virus. The U.S. count is more than double that of India, which has the world’s second-highest number of infections. In other COVID news, Moderna said its coronavirus vaccine is effective against new strains of the virus found in the U.K. and South Africa, and is accelerating work on a booster shot for its vaccine to guard against the South African variant that may cause immunity to wane more quickly. In a study, Moderna found that its coronavirus vaccine generated a weaker immune response against the South African strain, but the antibodies remained above levels that are expected to be protective against the virus, suggesting “a potential risk of earlier waning of immunity to the” South African strain. “Out of an abundance of caution and leveraging the flexibility of our mRNA platform, we are advancing an emerging variant booster candidate against the variant first identified in the Republic of South Africa into the clinic to determine if it will be more effective to boost titers against this and potentially future variants,” Moderna CEO Stephane Bancel said in a statement.
AMC Entertainment shares are up nearly 30% this morning after the movie theater chain disclosed that it has secured enough financing to remain open and operational well into 2021. “This means that any talk of an imminent bankruptcy for AMC is completely off the table,” said CEO Adam Aron. Since December 14, the company has raised $917 million of new equity and debt capital, with around $500 million of the fundraising coming from the issuance of new common shares, and an investment deal with Mudrick Capital Management. AMC also executed commitment letters for $411 million of incremental debt capital from upsizing and refinancing its European revolving credit facility. “Looking ahead, for AMC to succeed over the medium term, we are going to need for much fo the general public in the U.S. and abroad to be vaccinated,” Aron said. “We welcome the commitment by the new Biden administration and of other governments domestically and internationally to a broad-based vaccination program.”
And bitcoin has risen more than 6% this morning to above $34,000 after last week’s brutal sell-off that saw the world’s biggest cryptocurrency briefly fall below $30,000, while altcoin Ethereum—the second biggest cryptocurrency—hit an all-time high today of $1,476. “Ethereum’s current rise cold shoulder the septics, many of whom were quick to denounce crypto when bitcoin recently fell from its $40,000 high,” said Simon Peters, crypto asset analyst at online investment platform eToro. “With a whole range of logistical improvements to the Ethereum network in the works, increased institutional inflows, and more and more developers building on the platform, the future is bright for Ethereum. I believe that a price of $2,500 by the end of the year is very feasible. As with all crypto, however, there will be bumps along the way.”
Stocks We’re Watching
VolitionRX Ltd (OTC: VNRX): VolitionRX shares are up more than 12% this morning after the company announced the opening of its “Silver One” 10,000 square foot dedicated manufacturing facility in Isnes, Belgium, that it plans to use to produce all the key raw materials for its Nu.Q products, including recombinant nucleosomes and antibodies, as well as to manufacture finished products including its newly launched Nu.Q Vet Cancer Screening Test and its recently CE-marked blood cancer test. “The opening of the new facility will not only bring the manufacture of key components in-house thereby securing our supply chain, but it will also significantly reduce the cost of production of all these components and in turn reduce the cost of both assay development and finished products,” said CEO Dr. Gaetan Michel in a statement. “The purchase and full fit out at a cost of just over $1 million was mostly funded by non-dilutive funding received from Namur Invest and the Walloon Region, demonstrating our continuing commitment to careful cash management. I am extremely proud that we are now a company manufacturing products as well as undertaking cutting-edge research and development.”