NEWS
Traders Embrace A New “Strategy”

Lukewarm labor market data and decent earnings continue to provide a tailwind for bulls to keep buying amid Trump’s occasional geopolitical tirades. Meanwhile, MicroStrategy and other names with cult-like followings made their way back into the news. And investors anxiously await more big tech earnings tomorrow and nonfarm payroll data on Friday to close out a busy first week of February. 👀

Today's issue covers MicroStrategy leading the meme stock move, a pro trader’s analysis of the semiconductor sector, and other noteworthy pops and drops. P.S. today’s issue will be slightly shorter than normal, as we’re facing technical difficulties. We’ll be back with our usual coverage tomorrow. 📰

Here’s the S&P 500 heatmap. 8 of 11 sectors closed green, with real estate (+1.57%) leading and consumer discretionary (-1.13%) lagging.

And here are the closing prices: 

COMPANY NEWS
MicroStrategy Makes Its Latest Move 🧐 

Software company turned leveraged Bitcoin holding company was slated to report earnings after the bell, but decided to distract the market temporarily with a midday announcement.

The big news? MicroStrategy has rebranded to “Strategy,” fully embracing its pivot as “the world’s first and largest Bitcoin Treasury Company,” among other things… Michael Saylor and team continue to put on a master class in corporate finance and marketing that will go down as case study of what to do (or not do) to drive “shareholder value.” Time (and Bitcoin’s price) will tell. 😬

Meanwhile, this headline from IBD sums up the actual earnings report quite well “MicroStrategy Rebrands, Posts Major Loss, Pauses Bitcoin Buying Spree.” 🙃

The company’s adjusted loss was $0.09 per share on $122.4 million in revenue. Subscription services revenue fell 48% YoY, while product licenses and subscription services revenue rose 18.3%. Overshadowing that was the continued execution of its larger capital strategy to buy $42 billion in Bitcoin over the next three years via a 21/21 structure (half debt and have equity offerings).

Shares were down marginally after the bell, with Stocktwits sentiment sitting in ‘bearish’ territory’ as investors digested the news. 🐻

Speaking of stocks with questionable fundamentals but cult-like followings, take a look at Aurora Cannabis and Blackberry, both of which blasted off today.

Aurora Cannabis shares soared 45% after reporting positive free cash flow, sparking hopes for a longer-term turnaround. So far, roughly half of the 1,100 Stocktwits users polled view this as a fundamental shift and turnaround story, while about a quarter of respondents see this as another temporary pop. 🤷

Meanwhile, BlackBerry is back in the spotlight, rising to a 15-month high after closing the sale of its money-losing Cylance cybersecurity unit.

While the stock still has some work to do long-term, its recent momentum remains to the upside and Stocktwits users are expecting that trend to continue. With earnings not scheduled until early April, we’ll see if the technical trade can continue. 📈

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