Category: Stocks

Alibaba IPO Hits the Market

The most anticipated IPO (Initial Public Offering) in years hit the market yesterday. Alibaba (BABA), the company that seemingly exploded out of nothingness, went public on September 19, 2014. A date that many investors will remember for a long time.

Alibaba had so much buzz built up over the past few months, the valuation of the company was higher than it would have been otherwise. Alibaba was set to open yesterday at $68 per share, in trying to raise about $22 billion. This price values the company at nearly $170 billion. To give you a perspective, Google (GOOGL) is worth about $400 billion. Alibaba came out of no where and worth nearly 43% of what the internet giant, Google is worth. Now that’s what I call an explosion.

The shares of Alibaba rose very quickly. Speculation on what the opening price would be started going from the mid $70s to mid $90s. And because of complications, the share didn’t actually become available for public trading until after 11:30 am, about 2 hours after the stock market begins to trade. And before the stock even went on the public market for public trading, it was worth about $99 per share. That’s a $31 increase of the $68 IPO. If you didn’t have deep pockets, if you weren’t family or worked for Alibaba, you were out of luck. There is no way you could have gotten Alibaba for $68, which is seemed as dirt cheap at the moment. And I know the founder and creator of Alibaba, Jack Ma, is very very happy.

The price of Alibaba shares quickly started to drop. Before you knew it, the stock dropped to just below $90 a share. That’s extremely volatile for any stock. Alibaba shares finished with  a price of $93.89, more than 38% over the $68 IPO price. I know the company and its investors are very happy, including Yahoo (YHOO) who had a very big stake in Alibaba for a long time. A very good investment on their part.

You should expect Alibaba to be very volatile over the next few weeks as investors sell and buy shares based on the hype they collected over the past few months. There is no doubt that Alibaba shares will hit $100 and it may happen sooner than later.

What you need to know about Alibaba shares is that you’re not actually purchasing shares of the company itself. Instead you are purchasing Alibaba Group Holding Ltd. This is a company set up in the Cayman Islands because Chinese law forbids foreigners to own any part of a company based in China. So to get around that, they found this loophole. This is something you need to keep in mind if you decide to invest in Alibaba.

Originally, I planned on investing in Alibaba. And I actually set aside some money to buy the shares, but the price went up so quickly, I didn’t want to risk losing money so I’m holding off for now until the volatility goes down and the price stabilizes. It’ll make predicting the price easier which makes for smarter investing.

Have you invested in Alibaba? Do you plan on investing?

Should We Buy Apple’s Stocks?

Apple’s stock briefly broke the $100 barrier in previous trading session before falling back. Considering that its stock had reached more than $700 in 2012, this fact may not look too surprising. However, we should consider the fact that Apple implemented a “7 for 1” split this summer. The increase in price is fueled by a couple of products, the iWatch and iPhone 6 smartphone. The company hasn’t provided any confirmation about these devices and we can’t even be entirely sure that the company’s next flagship will be called iPhone 6.

Although less frequently mentioned, investors should also add the effect of iWatch into their calculation. However, some analysts say that the smatwatch won’t debut until 2015.

At the moment, experts advise investors to load up before Apple launches its new devices. It is believed that the stock could go until up to $120 sometime next year. Investors are clearly enthusiastic about this fact and Apple’s mojo is usually back on September each year, the most probable time of release for new iPhone model. By market cap, Apple is the largest company in the world and it still dominates the mobile market.

It’s clear that Apple’s investors will have a wonderful 2014 and probably a better than expected profit. Apple has shown itself as a fantastic opportunity again and again. Rumors say that there will be two iPhone 6 models released next month, a standard 4.7-inch model and a phablet-sized 5.5-inch model. The release of two premium models will potentially drive the company’s finances and ultimately its stock price at the latter months of the year. Here are things to consider before we purchase Apple’s stock:

  • Availability of higher tier model: The iPhone 6 with 5.5-inch display is likely a more expensive model than the smaller 4.7-inch version. The larger model will be more appropriate for multimedia consumption and playing games. It means, users would likely need to purchase variants with higher internal storage to store all the content and apps. iPhone units with higher internal storage are known for their higher margins and this contribute significantly to Apple’s profitability. It should also be noted that Apple finally has the ability to stand up against Android manufacturers that have released so many phablet models in the market. This fact should bode well for higher selling prices and increased unit shipments.
  •  iPhone 5S and iPhone 5C will be attractive low-cost models: With the release of two iPhone 6 models, Apple will designate the Apple iPhone 5S as a mid-range model. It will be available on-contract for $99 with a new 2-year contract agreement. The iPhone 5C will be a low-cost alternative of the other more powerful models and carriers may soon offer it for free also with 2 year contract. Regardless of its older design and smaller display, the Apple iPhone 5S is still attractive for consumers this holiday season with its Touch ID scanner and premium metal chassis.
  • Price reductions: Although Apple continues to sell high number of mobile devices, the company often drives sales growth through price cuts. In recent quarter, Apple made the iPhone 5S $20 cheaper at $561. This strategy may decelerate sales growth and this could be reflected by the slight reduction in stock price. For this reason, investors should be aware about when Apple will lower the price of both iPhone 6 models and this could take place on spring/summer 2015.

Throughout 2015, Apple will be able to consistently increase its iPhone, tablet and probably, smartwatch shipments. This will ensure near-consistent increase of stock price. It’s also interesting to know that Apple still offers a huge buyback program, so we should be rather enthusiastic for things that may lie ahead.

Do you currently invest in Apple Stocks? Do You plan to invest? Answer the poll below:

Top Video Game Stocks

by Naypong

I’m sure you’ve seen other sites telling you what they believe the top 5 video game stocks are in the market today. I’ve done my own research and I believe the companies below are some of the best to invest in. And I am speaking from an unbiased point of view, meaning, I have no financial interest in any of the companies. Even though I invest in the stock market, I don’t own stocks from any companies that create video games or consoles. Of course I’m speaking for the “now,” things may change in the future. I’m not a big investor so I can’t invest in everything I research. But one day, I hope to own a few of these stocks, but in the meantime, let me share some of what I’ve learned about these 5 Video Game companies.

Before I start talking about these stocks, I would like to point out that they are not in any specific order, just in the order that I’m speaking about them. And these 5 video game stocks are not the only VG Stocks out there. There are plenty others, both publicly and privately traded. So first up is, Microsoft.

Microsoft Corporation (MSFT)

Microsoft, with ticker symbol MSFT, is one of the largest companies in the world. Years ago, the name “Microsoft” wouldn’t trigger “video games” in anyone’s mind. But over the past decade, Microsoft has pushed its way into the Video Game Industry and has taken over a good portion of the entire video game market with their Xbox and Xbox 360 console. We can most definitely expect more consoles by Microsoft in the future, whether they are portable systems or a new generation of the Xbox.

Microsoft Stocks have been very steady over the past 2 years. The low level of volatility shows just how stable Microsoft is as a company. Microsoft hasn’t changed much over the past 2 years in price, so why invest in them? One word, Dividends. If you don’t know what dividends are, I recommend you read up on the post titled “What are Stock Dividends?” right here on Stocksicity.

Microsoft’s Dividend has also been pretty steady. In the past 2 years, Dividends from Microsoft has actually risen about 12 cents per share a year. This is partly due to all the innovations Microsoft has done, including their developments in the Video Game Sector. Their current dividend is set at $0.64 per share, or a 2.5% Yield. Microsoft Stocks are cheap, under $30 at an average over the past 2 years. The Dividend payouts have been steady and stable and is a great investment because of the dividend. And of course, you could reap the benefits of what Microsoft does in the Video Game, Computers, and other technology sectors of the market.

Take-Two Interactive Software (TTWO)

Take-Two Interactive Software, with ticker symbol TTWO, has been around for a while. They have created blockbuster games like the Civilization Series, Grand Theft Auto Games, Borderlands, Bioshock, NBA 2k Series, Midnight Club Series, Do I need to keep going?

Take-Two Interactive has created some of the greatest games in our time and they will continue to create awesome games in the future. This is why TTWO is a great investment. Currently, Take-Two Interactive costs $12.50 per share. It is near its 52 week low of $9.23. It’s 52 week high is over $17.50. I always recommend buying low and selling high and now, Take-Two Interactive is in the perfect place for investors to buy low and possibly sell high in the near future.

Unlike Microsoft, Take-Two doesn’t offer a dividend. Although it used to in the past, it stopped due to the economic meltdown we experienced a few years ago. But I’m sure if the gaming industry starts to boom again, they will start their dividends again. And the holidays are coming up in just a few months, and Take-Two Interactive has always spiked during the Thanksgiving and Christmas breaks so now would be a great time to invest. If I had money to invest at this moment, Take-Two Interactive would be near the top of my list.

Activision Blizzard Inc. (ATVI)

The most played MMORPG (Massively Multiplayer Online Role Playing Game) is World of Warcraft. Activision Blizzard launched World of Warcraft (also known as just WoW) years ago and it took off like a rocket. The game has given Activision the capital to become one of the largest Video Game Companies in the world. Like Microsoft, Activision has been very steady in the stock market. It has been above $10 and below $13 for at least the past 2 years. This stability gives investors reliability that it will continue to stay steady.

So why invest in a company that doesn’t look like it’ll spike in price? The same reason you would invest in Microsoft. Activision Blizzard gives out dividends just like Microsoft. They pay $0.17 per share a year, or a 1.5% yield. This may not be much but the price of ATVI Stocks is cheap compared to other stocks which allows you to buy more stocks so that your dividend payouts are much higher. As long as World of Warcraft (and the many other games created by Activision) dominates the market, ATVI isn’t going anywhere, that’s why investing in this company is a smart idea.

THQ Inc. (THQI)

THQ Inc is a great investment. But recently you may have noticed that THQ has had financial issues, mostly due to lower sales. This isn’t the first time THQ has had issues. THQ is a great company who has created many games, most notably the World Wrestling Entertainment’s (WWE) Smackdown Games (more recently Smackdown Vs. Raw). I believe that THQ will bounce back soon because the holidays are coming and the holidays always mean a great time for the video game industry.

Currently, the price per share of THQ is $1.80. It is just 9 cents above its 52 week low which makes it a great investment. Many stocks that approach their 52 week lows bounce back very quickly because investors use the opportunity to buy a stock low to sell high in the future. What makes it more attractive is that this stock is less risky than many other companies. If there is loss, the loss is very little compared to a company that goes from $100 per share to $10. I definitely don’t see that happening for THQ and that’s why I believe that THQ would be a great investment right now.

Majesco Entertainment Company (COOL)

And finally, the last stock on the list is COOL, well actually, COOL is their Ticker symbol, and their name is Majesco Entertainment Company. The one thing I love about this company is the ticker symbol, it’s definitely a cool one. Majesco isn’t as well known as the other four companies, nonetheless, it has made a big impact in the video game sector of the stock market. I have kept my eye on this stock for some time but I never got around to investing. Earlier this year, the price per share of Majesco was just $0.49. And at one point, it went up and kept going up. It reached its 52 week high of $4.53 per share back in June. If I had invested when it was pretty much a penny stock, I would have made 10 times my money. Although I regret not investing when it was low, I am kind of happy that I didn’t when it was going up.

What I’ve learned about this stock is that it’s very volatile. It has gone up and down drastically over the past few months so it is very volatile. Currently, the stock is priced at $2.38 per share. It dropped below $2 per share during the Early August meltdown but it has bounced back up. Even though the stock is very volatile, it is much easier to make money from a volatile stock than a steady stock if you can predict how a stock will act.

If you’re looking for something very volatile to invest in and if you want to take the risk to see if you can profit off a gaming company, then Majesco Entertainment Company is a company you should look into. There is a lot of potential for making a lot of money with this company, you just have to do it right.

 

 

These are the top 5 video game stocks on my list. Your list may differ or you may not have a list at all. But before you invest in any of the stocks mentioned, be sure to do your own research to really know what you’re getting into. Stocks can be heavily influenced by how the rest of the stock market is doing as well as how the consumers feel. Everything can change in the blink of an eye.

If you are an investor, do you own any shares of the companies I’ve mentioned today? If you don’t own any shares, do you plan to purchase any of these stocks? Share your feelings by commenting!