– Earnings Call Scheduled for 8:00 a.m. ET on August 31, 2020 – K12 is growing fast — but it’s growing its debt load, too. What if I told you the fastest stock market recovery in history is just about a misunderstanding? In fact, most stocks are near correction levels.
BEIJING, Aug. 27, 2020 (GLOBE NEWSWIRE) — 36Kr Holdings Inc. (“36Kr” or the “Company” or “We”) (NASDAQ: KRKR), a prominent brand and a pioneering platform dedicated to serving New Economy participants in China, today announced that it will report its second quarter 2020 unaudited financial results, on Monday, August 31, 2020, before the open of U.S. markets.
The Company’s management will host an earnings conference call at 8:00 AM U.S. Eastern Time on August 31, 2020 (8:00 PM Beijing/Hong Kong Time on August 31, 2020). Details for the conference call are as follows:
All participants must use the link provided above to complete the online registration process at least 20 minutes in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in number, a passcode and a unique access PIN number, which will be used to join the conference call.
Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.36kr.com.
A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until September 7, 2020, by dialing the following telephone numbers:
About 36Kr Holdings Inc.
36Kr Holdings Inc. is a prominent brand and a pioneering platform dedicated to serving New Economy participants in China with the mission of empowering New Economy participants to achieve more. The Company started its business with high-quality New Economy-focused content offerings, covering a variety of industries in China’s New Economy with diverse distribution channels. Leveraging traffic brought by high-quality content, the Company has expanded its offerings to business services, including online advertising services, enterprise value-added services and subscription services to address the evolving needs of New Economy companies and upgrading needs of traditional companies. The Company is supported by comprehensive database and strong data analytics capabilities. Through diverse service offerings and the significant brand influence, the Company is well-positioned to continuously capture the high growth potentials of China’s New Economy.
For more information, please visit: http://ir.36kr.com.
For investor and media inquiries, please contact:
36Kr Holdings Inc.
Tel: +86 (10) 5825-4188
The Piacente Group, Inc.
Tel: +86 (10) 6508-0677
In the United States:
The Piacente Group, Inc.
Author: 36Kr Holdings Inc.
Why K12 Stock Just Dropped 11.5%
Shares of e-learning specialist K12 (NYSE:LRN), which develops curricula and software for students studying at home, dropped 11.5% through 10:10 a.m. EDT.
It’s not immediately clear why.
Image source: Getty Images.
K12 made two announcements last night after close of trading. The good news is that, through Friday, the company says it has enrolled 170,000 students in its managed public school programs, a 39% year-over-year increase. That number could still go up through September as the school enrollment season continues, but already 39% growth in enrollments appears to be running ahead of analyst estimates for 25% growth in revenue this year. If enrollments translate directly into revenue, then it would appear K12 is in the advanced class this year.
And yet, the stock is down, not up. Why?
I can only imagine that the falling stock price has more to do with K12’s second piece of news from last night, in which it announced its intention to raise $300 million from the sale of convertible senior notes due 2027.
On the one hand, K12 says it intends to use the proceeds from this capital raise to pay off “all of the outstanding balance under K12’s credit facility” (i.e. roll over its debt). On the other hand, though, some of the new money will be used “for general corporate purposes,” and so it seems the idea is to increase K12’s overall debt load, at least modestly. Moreover, because this is convertible debt we’re talking about, it has the potential to convert into common stock at some point, diluting existing K12 shareholders.
This, at least, seems to be what’s unsettling K12 investors today.
Author: Rich Smith
The Stock Market Is Near Correction Levels
What if I told you the fastest stock market recovery in history is just about a misunderstanding?
You’ve probably seen headlines like this one:
Headline about stock market in media
Or this one:
Headline about stocks in media
Doesn’t it seem off that the stock market is blazing past record highs while the economy is in freefall? And at the same time a record 50 million Americans are sitting around without a job?
It should. Because all the fuss about the stock market’s comeback comes down to a misinterpreted term.
As I’ll show, what all these headlines refer to is no longer the stock market as we know it. Most stocks have a long way to full recovery. And this confusion puts a lot of investors at risk without their even realizing it.
What is the “stock market” after all?
When you hear words like “the stock market” or “stocks” in the media, they are not referring to every single stock in America. They are usually referring to the S&P 500 (SPX).
The S&P 500 is an index that tracks the performance of America’s 500 biggest companies. The index contains 75% of all American stocks and is considered the key gauge of the overall market.
This term is so prevalent it has become a synonym for the entire stock market. That’s why people mindlessly throw it around when they talk about stocks.
So let’s take a quick look at how the index arrives at the figure you see in the headlines.
In short, the index calculates the total performance of all the 505 stocks it includes. But it’s not as simple as adding up the growth percentages and dividing by 505.
This formula is supposed to give us an accurate picture of how America’s entire stock market is doing. Problem is, it doesn’t work today.
The S&P 500 no longer represents the stock market
The 505 stocks in the index come from a range of sectors that used to have a proportionate weight in the index. From 2001 to 2019, the breakdown by sector looked more or less like this:
S&P 500 composition from 2001 to 2019
But that’s no longer the case. During the pandemic, investors flocked to tech in droves and tech stocks hijacked the S&P 500 big time—as you can see below:
S&P 500 composition in 2020
That’s the highest share of tech stocks in the S&P 500. Ever. Even in 2000 during the dot-com craze, tech stocks didn’t dominate the S&P 500 as they do right now.
Tech was a ballistic force driving the entire S&P 500
This year the S&P 500 soared 50% from its lows, blazing past its record before Covid. That has given investors the wrong impression that the entire stock market is booming. Reality is, most of this growth was driven by tech stocks.
And because tech stocks have a disproportionately higher weight than the rest of the stocks in the index, their performance has been greatly amplified. This is how tech stocks grew into a ballistic force pushing the entire S&P 500 to a historic record.
Take a look at this chart. It shows where the S&P 500 would be today if we took out communication (Facebook, Google, and Netflix inside) and tech sectors—along with Amazon:
S&P 500 YTD performance without tech
If it weren’t for tech stocks, the S&P 500 would be down around 8.6% from its highs by my calculations. That’s still near correction territory.
Don’t put your eggs in one tech basket
There are two problems with this.
First, the S&P 500 index gives a lot of investors the impression that America’s stocks are doing better than they are. But they are not.
Second, ETF funds that track the S&P 500 are one of the most popular investments. They are also one of the go-to retirement funds. In other words, there’s a hoard of Americans who are financially reliant on this index.
They are putting their money in the S&P 500 with the belief that they are well diversified. When in reality, more than one third of this money goes to gambling on high-flying tech stocks.
Of course, tech stocks have been a great investment so far. Covid has fast-forwarded a number of tech trends, such as online shopping. And a lot of money changed hands from “offline” stocks to tech stocks.
But this tech boom can’t go on forever. Trillion-dollar stocks nearly doubling in half a year is not a norm by any stretch of imagination. Chances are tech stocks will take a breather somewhere down the line.
And with tech stocks making up a record 37% of the S&P 500, the pullback could drag down the entire index. As such, it would be smart to spread your eggs a bit wider
You could look into classic anti-crisis investments like gold or blue-chip stocks. Another way to limit your reliance on tech stocks is to switch to an ETF fund that tracks the S&P 500 Equal Weight Index.
(The largest ETF of this kind is Invesco S&P 500® Equal Weight ETF [RSP].)
Unlike the standard S&P index fund, this one doesn’t take into account the stock’s weight. That means an ETF fund that tracks it will spread your investment over 505 stocks in equal parts, regardless of weight.
This way, you’ll invest in a more diversified basket of America’s top stocks without banking 37% of your money on tech stocks.
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Author: Dan Runkevicius