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Hey there Weekday Warriors,

Today we're talking Nikola's strong start and Apple investing in itself.

Enjoy the next 4 minutes and 21 seconds of blue-chip news and commentary.

Best,
Tyler

Let's check in on the markets...

Markets were mixed on Tuesday. The Dow saw its first loss in over a week and the Nasdaq hit an all-time high...

Dow 27,272.30 (-1.09%)
S&P 500 3,207.18 (-0.78%)
Nasdaq 9,953.75 (+0.29%)
10-year 0.86%

Today's big swingin' headlines...

Go truck yourself – electric truck company Nikola is more valuable than Ford

“That Nikola is so hot right now.” - Mugatu

How hot? Well, after Nikola’s stock surge this week, its $28.8B valuation is higher than Ford’s $28.794B and Fiat’s $20.5B…

You read that right… an EV company that hasn’t produced a single vehicle has a higher valuation than the company that invented the car.

So, who’s Nikola?

$NKLA is an electric truck startup founded by Trevor Milton in 2015. It produces, er, plans to produce, battery-electric and hydrogen-electric trucks and boasts over $10B in preorders already. Yeah, but did it ever make tequila?

The company's not expected to generate revenue until next year when it will start producing trucks for short-haul delivery. Trevor (because apparently his parents had already named his older brother Chad) tweeted out Sunday that the EV company will start accepting reservations for its zero-emission truck, the Badger, on June 29.

Hit the market

Nikola hit the public markets on June 4th following a reverse merger from a special purpose acquisition company (SPAC). WTF is that?

After splitting with VergeIQ and going public, shares doubled on Monday.

Then on Tuesday things got interesting. NKLA rose 28% immediately after the opening bell, then dropped 22%, which halted trading due to volatility. It eventually recovered to close the day up 8.8% but was down 8.4% after-hours. That’s what we call a wash, folks. I hope the trucks ride smoother than the stock trades.

Cooler Commentary

Investors are pitching tents at the mere thought that Nikola can become Tesla. And, sure, a company can try to disrupt the same industry and name itself after the same Serbian genius (Nikola Tesla for those of us still catching up), but will it ever be able to capture the same magic as TSLA?

Probably not. Why? Because of the mad man behind the wheel, Elon Musk.

We’re talking about a guy that actually builds cars, launches (manned) rockets into space, develops implantable brain-machine interfaces, builds underground tunnels for rapid rail transport, and still finds time to fire off dank *ss memes like a fourteen-year-old.

But, seriously, good luck, Trev.

Water Cooler Talking Point(s)

💧 "Oh and almost forgot to mention that Elon made a trap song about Harambe.” (Nikola, The Water Coolest HQ)

Chip off the old block Apple will start making its own chips

Apple is getting ready to part ways with long time chip-maker and partner in crime, Intel. It’s expected that Apple will announce at its WWDC 2020, which starts on June 22nd, that it’s cutting ties with Intel as it begins to produce its own processors.

Diversifying

Keep in mind, Apple already makes its own chips, not unlike a fancy burger joint, built on an architecture called ARM, which it uses in iPhones and iPads. Now, Macs could be joining the party.

The key difference between ARM and standard processors is that they can carry cellular connectivity without draining battery like current laptop chips do. That means your next Mac could be able to connect from anywhere that you can get a cell connection.

Apple waits for no one

What’s more, Apple wouldn’t need to wait on Intel to finish making new chips before it releases new products. Apple does work with Qualcomm to create the modems that connect its phones and iPads to wifi, but if they can just figure that out, all they have to do is build a shipping fleet and vertical integration will be achieved. *Six Sigma nerds have entered the chat*

Apple has an uphill battle ahead of it though. Just because you throw an ARM-based chip into a MacBook, doesn’t mean anyone wants it. Samsung, Qualcomm, and Microsoft have all tried to sell them, and fans were not impressed. But, hey, it can’t be any worse than the butterfly keyboard debacle.

Cooler commentary

On the news, Intel shares fell 1.5%, while Apple saw a spike of 3% on the day, to an all-time high. Apple wasn’t alone, however, so maybe it was (read: it definitely was) more than just a new chip source that sent stocks rising.

Facebook, Microsoft, and Amazon also hit all-time highs, showing that the tech industry has some real faith in that V-shaped recovery we’ve been talking so much about. Alphabet also rose but didn’t hit a new record. Sucks to suck.

Water Cooler Talking Point(s)

💧"The entire point of my laptop not being able to get cell service is that I can keep people from reaching me on it if I don’t have wifi. (AJ, The Water Coolest HQ)


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Power moves only...

Your daily snapshot of HQ's browser history.

"Beating" the market. Tyler is reading Robinhood traders cash in on the market comeback that billionaire investors missed via CNBC

Rest easy. Ian is reading More Companies Weigh Cutting 401(k) Match in Pandemic Pinch via Bloomberg

And in other news...

#trending

On Wednesdays, we wear pink. And when companies go into bankruptcy, we buy the stock… apparently.

According to data from Robinhood, hundreds of thousands of retail investors (read: WFH employees like you and me) have flocked to stocks like Hertz, Chesapeake Energy, and Whiting Petroleum in hopes of making a quick buck.

There are now a combined 247k people who own shares of the three, to be exact. That's up from roughly 56k at the end of April. Companies going into bankruptcy are too risky for institutional investors but no problem for Johnny Day Trader.

And the retail boom is helping the bankrupt companies’ stocks. The three above have gained 577%, 182%, and 152%, respectively after announcing their filings. This gives a whole new meaning to BTFD.

Back in stock

Macy’s isn’t as f*cked as we all thought it was going to be from the impact of coronavirus. After announcing a fresh round of financing Monday night, the retailer said that shoppers were coming back to stores quicker than expected.

As of June 1, the retailer had 450 locations open and plans to open its flagship New York City store for curbside pickup this week. Just in time for wedding season… assuming there is one.

With stores open and liquidity secured, Macy’s also gave a preview of its first-quarter earnings. The company expects $3.02B in sales, or a 45% decrease from the same quarter a year earlier. Earnings are expected to come in at a loss of $652M, or $2.10 per share.

Closing up shop

While Macy’s might be seeing a rebound, there’s a large number of stores that won’t be sticking around for the summer.

Experts estimate that 25k retailers will be closing by the end of the year, with about 55% to 60% of those being in America’s malls. I swear if Auntie Anne’s closes for good…

Obviously, this doesn't bode well for the malls themselves, who will have fewer stores to rent the space they offer. And it probably doesn’t help the situation that overall retail sales are expected to come in 10% lower for the year according to research company eMarketer.

Billion-dollar weasel

Jho Low is back on his bullsh*t. Despite having authorities on high alert, the mastermind behind the 1MDB scam is still on the loose. And is making shady deals in Kuwait.

Low made connections with Kuwait's PM’s son, Sheikh Sabah, and business associate Bachar Kiwan in 2016. Using their money, Low helped facilitate transactions with his connections in China that were used to pay off some of his debts related to the total fleecing he performed on the Malaysian sovereign fund.

After 2016, Kiwan himself fled Kuwait thanks to a soured relationship with Shiekh Sabah, who admitted no wrongdoing. The fact that Jho Low is running around Asia like some Stay Puft marshmallow supervillain is just hilarious. Low’s whereabouts are currently unknown but he was last seen six months ago… outside of Wuhan.


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