🗞️The Wrap: Twitchy

E-athletes outearning Pogba, honey bees prepare their IPO and the inner workings of an ETF.

5 new inclusions to our Top 50 Most Traded

    • Fastly (FSLY) +2.7% in the last week.
    • Livongo Health (LVGO) +5.9%
    • Lemonade (LMND) +0.0%
    • DocuSign (DOCU) +3.7%
    • Innovation ETF (ARKK) +2.7%

Twitchy 

There’s a class of athletes (athletes?) quietly making their way up the top earners list. With a salary that makes Mbappe, Brady and McIlory’s yearly income look like a Christmas Bonus, Tyler “Ninja” Bevins is one of the world’s top video gamers and was estimated to earn up to US$30m last year for access to his streaming rights alone. That’s right, paid to play video games.

It’s no secret Esports is a growing industry. It’s not just playing games that are appealing to the youth, it’s watching them. It makes sense; we spend more time watching sport than we do playing it.

In 2018, 380m people had spent time streaming video games; a total of 6.6b hours worth in fact. Revenues from advertising, merch sales, media rights and sponsorships are expected to top US$1.25b in 2021.

How can you hop on this trend?

There’s an ETF aptly called $GAMR; the video games ETF. Up 48.5% in the last year, they have an interest in around 40 global companies focused on gaming; some public, some private.

As with a lot of emerging industries, Amazon has some commercial interest. Amazon owns streaming service Twitch which they acquired for US$1b in 2014. Last year it was estimated to be worth around US$4b. In 2019, there were 1.2million people concurrently viewing a stream at any one time on average.

Microsoft also offers a service called “Mixer”. They just poached Ninja away from Amazon’s Twitch to stream on their service.

Then there are the game producers themselves. Activision (ATVI), ElectronicArts (EA) and TakeTwo (TTWO). These companies were also exceptionally resilient during the February crash.

Top 5 Gainers

  • Owens & Minor (OMI) +87.9% in the last week
  • TherapeuticsMD (TXMD) +50.3%
  • Opko Health (OPK) +47.4%
  • Virgin Galactic (SPCE) +35.3%
  • Bloom Energy (BE) +30.5%

Top 5 Fallers

  • Acadia Pharma (ACAD) -16.8% in the last week
  • Cytokinetics (CYTK) -14.4%
  • Selectquote (SLQT) -11.9%
  • Sleep Number Corporation (SNBR) -11.9%
  • PTC Therapeutics (PTCT) -11.6%

Birds and the Bees 

If Honey Bees were a public corporation, they would be worth around US$20b. This figure was estimated by the American Beekeeping Federation when dissecting the impact that bees have on our global economy. As pollinators, between US$235b and US$577b in annual food production is reliant on the survival of bees in a study by Bayer.

All the sweet tooths reading this have to be thankful for the humble midge. Cacao crops across the world are reliant on the midge pollinating their fields. With honey bee populations under the spotlight, it’s no question that the natural world is an economic issue.

Let’s look at it from another angle. As a whole, Oceans would be the world’s 7th largest economy with an annual GDP of US$2.4t a year. The WWF estimated that the total value of oceans topped US$24t; Almost 15x as large as Amazon. The company that is, the rainforest is far more valuable. The jungle adds US$8.2b to Brazil’s economy annually. Not to mention the innumerable value it brings as the lungs of the earth.

What We’re Listening To | Inner Workings of an ETF Manager

By the time The Wrap hits your inbox, we will know if Tesla is eligible for S&P inclusion. By posting positive net income, some of the biggest index ETFs may be forced to add Musk’s millionaire-making stock to their books.

This episode of Chat With Traders covers the inner workings on an ETF. How exactly does an ETF track and index? When is it rebalanced? The risks and hedges the manager takes up to ensure investors receive an accurate return. Host Aaron chats with the co-founder of Australian ETF issuer BetaShares Ilan Israelstam to find out.

One question I always had was how I can invest in a Nasdaq ETF on the ASX if the trading hours differ. Ilan covers the complexities surrounding funds that track futures prices.

Find it on Spotify here.

Trader Teaser

Patrick Mahomes signed a US $500m contract over the net 10 years. He is 24 years old. Say he received all the money today and his fund manager invested it in an S&P Index averaging an 8% return. How much would it be worth on his 70th birthday after a 15% performance fee and 1% of all assets are taken each year as a management fee?

Best Buy | $YRCW

You make your money selling not buying! Halfway through Monday’s session $YRCW dropped 29%. This trader sold just after open. Good fortune or intuition? A win is a win.

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