Magazine shop – Continental Mag http://continentalmag.com/ Wed, 29 Jun 2022 10:37:11 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://continentalmag.com/wp-content/uploads/2021/10/favicon-2-120x120.png Magazine shop – Continental Mag http://continentalmag.com/ 32 32 Here’s why Callaway Golf (NYSE:ELY) has significant debt https://continentalmag.com/heres-why-callaway-golf-nyseely-has-significant-debt/ Wed, 29 Jun 2022 10:37:11 +0000 https://continentalmag.com/heres-why-callaway-golf-nyseely-has-significant-debt/ Howard Marks said it well when he said that, rather than worrying about stock price volatility, “the possibility of permanent loss is the risk I worry about…and that every practical investor that I know is worried”. So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very […]]]>

Howard Marks said it well when he said that, rather than worrying about stock price volatility, “the possibility of permanent loss is the risk I worry about…and that every practical investor that I know is worried”. So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing a company’s risk. We can see that Callaway Golf Company (NYSE:ELY) uses debt in its operations. But the more important question is: what risk does this debt create?

Why is debt risky?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. If things go really bad, lenders can take over the business. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. By replacing dilution, however, debt can be a great tool for companies that need capital to invest in growth at high rates of return. The first step when considering a company’s debt levels is to consider its cash and debt together.

Check out our latest analysis for Callaway Golf

What is Callaway Golf’s debt?

As you can see below, at the end of March 2022, Callaway Golf had $1.31 billion in debt, up from $1.22 billion a year ago. Click on the image for more details. However, since it has a cash reserve of $245.0 million, its net debt is lower, at around $1.06 billion.

NYSE: ELY Debt to Equity June 29, 2022

How strong is Callaway Golf’s balance sheet?

The latest balance sheet data shows Callaway Golf had liabilities of $1.16 billion due within the year, and liabilities of $3.22 billion due thereafter. In return, it had $245.0 million in cash and $468.4 million in receivables due within 12 months. It therefore has liabilities totaling $3.67 billion more than its cash and short-term receivables, combined.

This shortfall is sizable relative to its market capitalization of US$3.93 billion, so it suggests shareholders should monitor Callaway Golf’s use of debt. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet quickly.

In order to assess a company’s debt relative to its earnings, we calculate its net debt divided by its earnings before interest, taxes, depreciation and amortization (EBITDA) and its earnings before interest and taxes (EBIT) divided by its expenses. interest (its interest coverage). The advantage of this approach is that we consider both the absolute amount of debt (with net debt to EBITDA) and the actual interest expense associated with that debt (with its interest coverage ratio ).

While Callaway Golf’s debt to EBITDA ratio (2.6) suggests it uses some debt, its interest coverage is very low at 1.8, suggesting high leverage. It seems clear that the cost of borrowing money is having a negative impact on shareholder returns lately. Above all, Callaway Golf has increased its EBIT by 68% over the last twelve months, and this growth will make it easier to manage its debt. There is no doubt that we learn the most about debt from the balance sheet. But ultimately, the company’s future profitability will decide whether Callaway Golf can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free analyst earnings forecast report interesting.

Finally, while the taxman may love accounting profits, lenders only accept cash. We therefore always check how much of this EBIT is converted into free cash flow. Over the past three years, Callaway Golf has actually had a cash outflow, overall. Debt is much riskier for companies with unreliable free cash flow, so shareholders must hope that past spending will produce free cash flow in the future.

Our point of view

At first glance, Callaway Golf’s EBIT to free cash flow conversion left us hesitant about the stock, and its interest coverage was no more appealing than the single empty restaurant on the busiest night in the year. But on the bright side, its EBIT growth rate is a good sign and makes us more optimistic. Looking at the balance sheet and taking all of these factors into account, we think debt makes Callaway Golf stock a bit risky. This isn’t necessarily a bad thing, but we would generally feel more comfortable with less leverage. When analyzing debt levels, the balance sheet is the obvious starting point. But at the end of the day, every business can contain risks that exist outside of the balance sheet. For example – Callaway Golf has 1 warning sign we think you should know.

If, after all that, you’re more interested in a fast-growing company with a strong balance sheet, check out our list of cash-flowing growth stocks without further ado.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Globe Fintech to boost the range of financial services https://continentalmag.com/globe-fintech-to-boost-the-range-of-financial-services/ Mon, 27 Jun 2022 11:36:49 +0000 https://continentalmag.com/globe-fintech-to-boost-the-range-of-financial-services/ Digital wallet operator Globe Fintech Innovations Inc. (GFII) announced last Monday that it was “strengthening its range of financial services”. The company 45% owned by Jack Ma’s Alipay Singapore Holding Pte. said in a statement last Monday that it was doing so “to help individuals achieve financial freedom while giving micro and small entrepreneurs the […]]]>

Digital wallet operator Globe Fintech Innovations Inc. (GFII) announced last Monday that it was “strengthening its range of financial services”.

The company 45% owned by Jack Ma’s Alipay Singapore Holding Pte. said in a statement last Monday that it was doing so “to help individuals achieve financial freedom while giving micro and small entrepreneurs the lifeline they need to keep their businesses afloat or the extra funds to support their expansion.

GFII, the operator of the GCash app, said it is “also maximizing the use of social media in its drive to educate and engage young people on the benefits of using the app and ‘learn more about its financial services’.

The company added that its host of services will help users manage their wealth and gain financial security.

These are: a digital savings account that offers a higher savings rate of up to 2.6% per annum than traditional banks; a one-stop shop for insurance products; an easy pay later option worth up to P50,000 at 85,000 partner stores nationwide; and, easy and fast cash loans up to P50,000 repayable for up to 12 months with low interest rates.

“Young professionals are becoming more independent, budget-conscious and open to trying simple ways to earn more while MSME owners struggle to find accessible funding to grow their business and reach more customers,” said the society.

Since launching GCash in 2004, GGII said its users have grown to more than 60 million, covering 83% of the Filipino population. Among them, at least five million merchants use the mobile app to accept digital payments from customers.

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Gold has held up well against a strong dollar and rising bond yields https://continentalmag.com/gold-has-held-up-well-against-a-strong-dollar-and-rising-bond-yields/ Sat, 25 Jun 2022 18:02:12 +0000 https://continentalmag.com/gold-has-held-up-well-against-a-strong-dollar-and-rising-bond-yields/ OWe are almost halfway through 2022, and so far gold has been the big winner after oil, coal and other commodities. The yellow metal has managed to remain positive year-to-date, skirting pressure from soaring yields and a strong US dollar. Meanwhile, nearly every other asset class — from large and small cap stocks to bonds, […]]]>

OWe are almost halfway through 2022, and so far gold has been the big winner after oil, coal and other commodities. The yellow metal has managed to remain positive year-to-date, skirting pressure from soaring yields and a strong US dollar. Meanwhile, nearly every other asset class — from large and small cap stocks to bonds, from real estate investment trusts (REITs) to cryptocurrencies — fell into correction or bear market territory.

I think this shows that gold has retained its perceived role as a store of value through decades of high inflation and economic and geopolitical uncertainty. As I often say, investing in gold won’t make you a billionaire, but it could help stabilize your portfolio when everything else is crashing.

Dollar at 20-year highs

I’m very impressed that gold has stayed afloat even as the US dollar strengthened to 20-year highs against a basket of other major currencies. Since the price of gold is in dollars, the two assets have historically shared an inverse relationship, with one falling when the other rises, and vice versa. At the start of the pandemic, the dollar soared as investors sought a safe haven, putting pressure on gold. The value of the dollar is now very high due to rising interest rates, and yet the yellow metal has continued to trade above $1,800 an ounce.

It is for this and other reasons that I agree with Newmont CEO Tom Palmer who said last week that the floor price of gold has likely risen from previous support in ‘about $1,200 to between $1,500 and $1,600 currently.

The price of gold has been very resilient against a high dollar

While I’m on this topic, a stronger dollar is mixed news. On the one hand, it can contribute to limiting the effects of inflation by offsetting the price of imports. On the other hand, it makes US exports more expensive for foreign buyers. As a result, we are likely to see weaker earnings in the fourth quarter for companies with international exposure. Earlier this month, Microsoft joined Coca-Cola, Procter & Gamble and a host of other American multinationals in lower the forecast for the rest of the year due to a stronger greenback.

Will S&P 500 companies increase their dividends to compete with Treasury yields?

As I mentioned earlier, government bonds have sold off steadily this year, pushing yields to multi-year highs. (Bond yields rise when prices fall.) The two-year yield was trading up 3.45% last week, a substantial increase from 0.78% at the start of the year.

Treasury yields jumped.  Can dividends keep up?

This may attract investors looking for yield, but I urge them to keep in mind that inflation is running at an annual rate of 8.6%. This means that they are effectively paying the government for the privilege of holding its debt.

At the same time, dividend investors may find it difficult to pick stocks that are yielding at a competitive rate. As of this month, the S&P 500 has a dividend yield of just 1.68%, up slightly from the start of 2022 but down from June 2020, when it was closer to 2.0%. .

It’s well known that gold earns no income, but with stocks and bonds at a disadvantage, the metal might be a better bet to potentially stay ahead of inflation right now.

Originally job by US Global Investors on June 21, 2022.

For more news, insights and strategy, visit VettaFi.


Want to know more about gold and inflation? Watch our YouTube video by by clicking here!

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be suitable for all investors. By clicking on the link(s) above, you will be directed to third-party website(s). US Global Investors does not endorse all information provided by such website(s) and is not responsible for its/their content.

The S&P 500 is a stock market index that tracks the performance of the stocks of 500 major publicly traded companies in the United States. The Nasdaq-100 is a stock market index composed of 102 equity securities issued by 101 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index. The Russell 2000 Index is a US equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small cap index. The MSCI US REIT Index is a float-adjusted market capitalization-weighted index that is comprised of equity real estate investment trusts (REITs). The MSCI Emerging Markets Index is a selection of stocks designed to track the financial performance of key companies in fast-growing countries. The S&P US Treasury Bill Index is a broad, comprehensive, market value-weighted index that seeks to measure the performance of the US Treasury bill market. The S&P US High Yield Corporate Bond Index is designed to track the performance of US dollar-denominated high yield corporate bonds issued by companies whose risk country uses the official currencies of the G-10, excluding member countries of the United Nations for the East. European Group (EEG). The Bloomberg Commodity Index is a broadly diversified commodity price index distributed by Bloomberg Index Services Limited.

Holdings may change daily. Holdings are reported at the end of the most recent quarter. The following securities mentioned in the article were held by one or more accounts managed by US Global Investors as of (03/31/2022): Newmont Corp.

Learn more at ETFtrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Where is the liquidity? Crypto lending explained https://continentalmag.com/where-is-the-liquidity-crypto-lending-explained/ Tue, 21 Jun 2022 21:32:00 +0000 https://continentalmag.com/where-is-the-liquidity-crypto-lending-explained/ Crypto lenders offer returns on crypto deposits, such as stablecoins, by lending them with interest – similar to traditional banking practices Crypto lending platforms are divided into two broad categories: non-custodial (decentralized) and custodian (centralized). On June 13, 2022, Celsius investors woke up to an alarming statement from the crypto lending platform: “Celsius suspends all […]]]>
  • Crypto lenders offer returns on crypto deposits, such as stablecoins, by lending them with interest – similar to traditional banking practices
  • Crypto lending platforms are divided into two broad categories: non-custodial (decentralized) and custodian (centralized).

On June 13, 2022, Celsius investors woke up to an alarming statement from the crypto lending platform: “Celsius suspends all withdrawals, exchanges and transfers between accounts.”

For a platform that prides itself on its high returns without the issues of traditional finance, it left many wondering, “How does crypto lending really work and where did all the liquidity go?”

What is crypto lending and how does it work?

Let’s start with the basics. At first glance, crypto lending works the same as traditional banking, but for digital assets. Crypto lenders offer returns on crypto deposits, such as stablecoins, by lending them out with interest. The main distinction is in the type of deposit and the type of lender.

There are two very different categories of crypto lending platforms: non-custodial (decentralized) and custodian (centralized). Noncustodial lending is a new approach, while custodial lending uses the traditional model with slight variations. Celsius is an example of the latter. To understand why problems arise in the custodial loan model, we need to explain the differences in liquidity supply and collateral requirements.

Crypto Loan Categories Explained

Crypto loans on deposit (centralized)

Crypto lending on deposit looks and feels like a bank for cryptocurrencies – without the same regulatory oversight and consumer protections. It manages all deposits and loans on a centralized platform and an internal balance sheet. Anyone wishing to earn interest on their crypto savings sends their tokens to a custodial wallet address where they lose direct control of the asset. In return, the platform invests the assets at its discretion, whether through interest-bearing loans or alternative yield farming.

Noncustodial (Decentralized) Crypto Lending

A noncustodial lending platform enables peer-to-peer or peer-to decentralization-bowl ready. Unlike its traditional counterpart, it allows depositors (lenders) to retain ownership of their tokens – and the source of return is clear. Lenders earn interest and borrowers pay interest. Platforms can automate functions traditionally handled by banks or custodians using blockchain smart contracts.

Defined Crypto Liquidity

Crypto liquidity, as in traditional markets, is the efficiency with which any digital asset can be converted into cash or token equivalent – ​​without affecting the market price. Consider the total liquidity of the asset as a pool of water and the price of the asset as the level of the water. The larger the pool, the slower the level changes.

Stock markets traditionally measure cash liquidity, but crypto markets measure it across an ever-growing list of token pairs. This website can be difficult to follow, but it is essential to understand how crypto lending platforms maintain liquidity.

Where and how cryptocurrency lending platforms source liquidity

Noncustodial (Decentralized) Crypto Lending

Decentralized crypto lenders, such as Aave, source liquidity through a network of different liquidity pools. So, instead of lenders and borrowers setting the terms of their peer-to-peer loans, the protocol works by using automated smart contracts to set each pool’s interest rates.

Aave’s Liquidity Pool Protocol aims to incentivize outside lenders to keep liquid pools and borrowings functional.

For example, if an ether (ETH) pool is illiquid, these smart contracts will automatically raise interest rates to attract lenders to that pool and encourage borrowers to repay their loans. When lenders add ETH, they receive the token equivalent of Aave in the form of aETH. This asset is different from a wrapped token because there is no central custodian. Smart contracts hold ETH deposits and automatically reward the lender with loan interest.

Crypto Lending (Centralized)

In contrast, centralized crypto lenders such as Celsius source their liquidity from their centrally controlled total deposit pool. They manage interest rates and approve loans on a case-by-case basis. Unlike decentralized non-custodial lenders, centralized lenders return returns from various sources aside from interest payments. For example, Celsius invests customer deposits in what is called liquid staking.

Liquid Staking (stETH)

Because ETH staking on Ethereum’s Beacon chain locks ETH up to a future date – not yet set but expected to be mid-2023 – after the merger, Lido Finance offers stETH, a liquid derivative for ETH holders interested in staking rewards. The token allows holders to accumulate staking rewards while maintaining the flexibility to sell or transfer the asset. If they trade the token with someone else, the new owner can claim future staking rewards. Nansen Research reported that Celsius has a wallet containing more than $450 million in stETH.

Differences in Crypto Loan Collateral Requirements

Cryptographic guarantee is a borrower’s pledge of token assets or currency to a lender – in case he cannot repay his loan. The borrower retains ownership of the collateral as long as the loan is repaid with interest.

Traditional banking services typically require a small fraction of the loan as collateral and use borrowers’ credit scores to assess loan risk. Because crypto loans pride themselves on providing fast credit with no minimum credit score, they require liquid collateral in order to automate liquidations. So, instead of using your house as collateral, you would need to use stablecoins or other crypto-assets – although perhaps in the future it will be easier for anyone to tokenize the property. Since crypto markets are exceptionally volatile, lenders demand a higher loan-to-value (LTV) ratio (not to be confused with total value locked, or TVL).

I know, that’s a lot to take in – so let’s review:

LTV — A loan-to-value ratio is the proportion of the value of a loan represented by collateral. A 100% LTV ratio is a 1:1 ratio, which means the borrower is putting up the full value of the loan as collateral.

TVL — Total Value Locked is the total value of cryptocurrency locked in a smart contract and represents the health and liquidity of any decentralized exchange or crypto lending protocol.

Both categories of crypto loans require a high LTV, but they differ in how they measure, report, and enforce liquidations.

Crypto Lending (Centralized)

Centralized loans can use a variety of methods to monitor LTV. If a borrower’s LTV falls below the safe threshold, the centralized lender will notify the borrower that part of their collateral may be liquidated through a margin call. If the value continues to fall, the lender will automatically trigger a partial or full liquidation of the borrower’s collateral.

But with centralized lending, this collateral requirement does not directly protect depositors. Since centralized lenders mix deposits between various investments such as stETH and stablecoins such as Tether (USDT), depositors have little information about the total liquidity available on a centralized platform.

Celsius’s announcement suspending withdrawals on June 13, 2022 increased the selling pressure on stETH, pushing the price even lower than the price of ETH. Many have speculated that this discrepancy is what prompted Celsius to freeze the accounts. But because their total liquidity value is not public, there is no way to gauge what triggered the scare.

Noncustodial (Decentralized) Crypto Lending

Decentralized loans, on the other hand, are completely transparent. Any liquidity provider can view a platform’s TVL to gauge total liquidity and overall health. There are no alarming tweets that the core team has suspended withdrawals. There are oracle pricing and smart contract risks, but decentralized lending, in principle, is not exposed to the risks of a centralized custodian.

For example, when a lender deposits ETH into an Aave ETH liquidity pool, smart contracts make the liquidity exclusively available to ETH borrowers. No central entity can pick up the deposit and play with it off-chain.

Blockchain price oracles continuously monitor each borrower’s LTV ratios so that if there is risk of default, the protocol automatically liquidates collateral to protect the lender.

Liquidity Risks of Crypto Lending

Both categories of loans carry liquidity risks. In decentralized lending, price oracles can fail during market-wide liquidity crises, exposing liquidation to a price crash and forcing lenders to recover only part of their deposit. And in centralized lending, central players can invest clients’ deposits on leverage with the risk of draining too much liquidity from the platform.

In fact, liquidity issues on one side of the crypto lending world will often hurt the other. This contagion results from a complex interaction between wrapped tokens, staked ETH and stablecoins on decentralized exchanges such as Curve Finance.

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  • John Gilbert

    blockages

    Editor, Evergreen Content

    John is the Evergreen Content Editor at Blockworks. It manages the production of explainers, guides, and all educational content for all things crypto. Prior to Blockworks, he was a producer and founder of an explainer studio called Best Explained.

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Can Pay Later avoid the pitfalls of other Buy Now Pay Later services? https://continentalmag.com/can-%ef%a3%bfpay-later-avoid-the-pitfalls-of-other-buy-now-pay-later-services/ Fri, 17 Jun 2022 19:43:00 +0000 https://continentalmag.com/can-%ef%a3%bfpay-later-avoid-the-pitfalls-of-other-buy-now-pay-later-services/ Apple’s new foray into “buy now, pay later” (BNPL) services is an interesting move on the company’s part, and while it has some of the same pitfalls as any other BNPL service, it is also Apple-only. Apple Pay Later was one of the smallest announcements to come out of this year’s Worldwide Developers Conference (WWDC). […]]]>


Apple’s new foray into “buy now, pay later” (BNPL) services is an interesting move on the company’s part, and while it has some of the same pitfalls as any other BNPL service, it is also Apple-only.

Apple Pay Later was one of the smallest announcements to come out of this year’s Worldwide Developers Conference (WWDC). Even though rumors about Apple’s work behind the scenes have been been circulating since at least last summerit still came as a bit of a surprise when it was unveiled as part of Apple’s iOS 16 preview.

Perhaps the most magical part of Apple Pay Later is that, the Apple way, it works. Everything is handled on the customer’s iPhone, and merchants don’t need to know that a customer is using Apple’s BNPL service.

The retailer receives his money in the same way as he usually would; it is transferred as a Mastercard payment from a virtual card, and Apple takes care of collecting payments from the user’s original debit or credit card.

The potential dark side of  Pay Later

Unfortunately, there is an argument to be made that it could be too easy. As The edge noted last week, BNPL services can become a trap for consumers, perhaps even more so than other forms of credit. People drawn in by the lure of splitting a large purchase into smaller payments might find themselves overwhelmed and unable to make those payments.

According to a report by SFGateBNPL’s services are particularly appreciated by Generation Z (those born between 1997 and 2012) and many of them are going into debt.

For instance, SFGate notes that spending through BNPL’s point-of-sale services has increased by 925% since January 2020. This is largely due to an “influencer-driven social media culture” that normalizes debt and encourages the crowd of the Generation Z to get everything they want in “just four easy payments.”

These “Buy Now, Pay Later” programs encourage people to spend beyond their means, because they’re like, “Oh, well, it’s only that amount over four months. People almost like to brag or joke that “oh, it was only 24 payments of $20” or “I got it with Afterpay, so it’s technically free”.TikTok fashion influencer @itscelesta

SFGate notes that the fashion industry appears to be driving the increase in the use of BNPL services more than any other area. According to Afterpay, a heavily promoted BNPL service on TikTok, 73% of its Gen Z consumer spending was on fashion – from high-end couture to H&M.

Since BNPL services allow users to defer most of the pains of “sticker shock”, which also results in their willingness to spend more. For example, the average spend for a single purchase using the BNPL Affirm service is $365. This is 3.5 times more than the average basket size of online shoppers who do not use BNPL services.

Unsurprisingly, many people who use BNPL find themselves unable to make payments after the fact. According to an analysis of debt hammer, customers spend more than they can afford and end up paying later in other ways. As debt hammer Remarks:

  1. More than 45% of US consumers have subscribed to at least one BNPL plan, an increase of 41% from a year ago.
  2. More than 50% of survey respondents indicated that they often pay for multiple BNPL plans at the same time. Six percent juggle five or more simultaneously.
  3. 30% of consumers said they had to skip paying an “essential bill” such as a car payment, utility bill, rent, mortgage, or alimony to avoid missing a BNPL payment.
  4. More than 65% of consumers said they couldn’t have purchased the items without an BNPL plan, and 42% said they simply couldn’t afford it. Other reasons given were promotional offers, wanting to have the item now instead of waiting until later, or not being able to put it on a credit card because they were already sold out.
  5. The price of BNPL purchases covers the entire spectrum from under $30 to over $5,000. Most consumers (54.4%) only use BNPL’s services for purchases under $300, although 15% have financed purchases of $1,000 or more.

Despite the growing popularity of BNPL services with Gen Z, debt hammer notes that older generations are still ahead of the pack. 35% of BNPL usage is Gen X (born between 1965 and 1980), while Millennials (born between 1981 and 1996) account for 27% and Baby Boomers (born between 1946 and 1964) account for 22% .

How will he pay the fare later?

Although Apple’s BNPL service has yet to go live – and likely won’t until iOS 16 arrives this fall – there’s been no indication so far that it will do anything. different to mitigate the risk of irresponsible spending. This leads some people to wonder if Pay Later is the right fit for a brand like Apple.

Tying something as risky as BNPL to the Apple brand puts Pay Later at odds with the company’s goal of providing customers with technology and services they can generally feel good about. Emma Roth, The Edge

Apple is a company that promotes itself as “[doing] the right thing, even when it’s not easy. It’s unclear exactly what this means for Apple Pay Later in terms of how it might help its customers use credit more wisely, but the good news is that Apple seems to be taking a few steps in the right direction.

Although first reports suggested that Apple would work with Apple Card partner Goldman Sachs to roll out Apple Pay Later, it turns out Apple decided to set up its own financial services for this one – likely to avoid trade-offs which would come by aligning its BNPL service with a more traditional lender.

According The Financial TimesApple will offer direct-to-consumer loans from a new wholly-owned subsidiary, Apple LLC Funding.

This is not the first time that Apple has created a new independent company to handle financial matters. When Apple launched Apple Cash in 2017, it partnered with Green Dot Bank to handle the banking side of things, but payment processing was handled by another Apple subsidiary, Apple Payments Inc.

Goldman is still partially involved, because The Financial Times note that it is necessary to provide access to the Mastercard network as Apple is not authorized to directly issue payment credentials. However, all loan and loan underwriting is handled directly by Apple’s new subsidiary.

This arrangement gives Apple full control over customer data, which will ensure it can keep Apple Pay Later aligned with its core privacy policies. This is particularly important among BNPL services, whose standards do not seem to be as high as those of traditional credit cards. According fast companyone of the reasons retailers are embracing traditional BNPL services is the amount of customer data they can glean from them.

Many retailers probably won’t be big fans of Apple Pay Later. Luckily, that doesn’t matter, because the retailer isn’t involved in the process – they just see the customer make a Mastercard payment.

Apple hasn’t applied for a banking license yet, and it said The Financial Times that he does not see the need to do so now. With $73 billion in net cash at the bank, Apple can afford to lend money directly from its own balance sheet, though it didn’t share details about how its funding mechanism works.

More importantly, however, Apple also plans to “restrict access to short-term credit”, implying that Apple Pay Later customers may be limited in the number of BNPL agreements they can conclude simultaneously.

Meanwhile, Apple is also working to improve how it determines creditworthiness. In March, it acquired Credit Kudos, a UK-based fintech start-up that uses machine learning as an alternative to traditional credit scores.

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Jokr ceases fast delivery in the United States to focus on LatAm https://continentalmag.com/jokr-ceases-fast-delivery-in-the-united-states-to-focus-on-latam/ Wed, 15 Jun 2022 22:39:46 +0000 https://continentalmag.com/jokr-ceases-fast-delivery-in-the-united-states-to-focus-on-latam/ Jokr, a fast-delivery startup that bills itself as “the future of supermarkets,” is ceasing operations in New York and Boston and refocusing on the Latin American market, which company executives say is expected to be more profitable. “We have decided to halt our business activities in the United States for the time being, which lately […]]]>

Jokr, a fast-delivery startup that bills itself as “the future of supermarkets,” is ceasing operations in New York and Boston and refocusing on the Latin American market, which company executives say is expected to be more profitable.

“We have decided to halt our business activities in the United States for the time being, which lately accounted for only about 5% of our business,” Chief Executive Ralf Wenzel said in a statement prepared Wednesday, June 15, as quoted by Bloomberg. News. “Latin America is particularly under-reached and underserved, which is why Jokr has focused on the Latin American opportunity from the start.”

The company also said it plans to close nine fulfillment centers, leaving about 190 worldwide, and cut 50 workers, or about 5% of its global workforce.

According to Jokr’s website, the company has a base in New York in addition to its headquarters in Luxembourg. Bloomberg reported that Jokr will keep some New York employees even if it stops serving customers in the city.

Bloomberg reported that Jokr had also ended its delivery service in Europe earlier, but continued to do business in Brazil, Chile, Colombia, Mexico and Peru.

TechCrunch reported in March that Jokr had raised $260 million in Series B funding at a valuation of $1.2 billion.

See also: Fast food delivery companies are taking advantage of the publicity fuss to make ends meet

In May, Jokr sought to increase its revenue by selling advertising on its app and on driver delivery bags.

Super-fast grocery delivery companies like Jokr are struggling with the economics of their model. One report estimated that these on-demand delivery services were losing up to $20 per order.

Some of the challenges facing online grocery services are outlined in a May 31 PYMNTS report titled “The Tailored Shopping Experience: Meeting Consumers’ Online Expectations.”

See report: Grocers must offer personalized e-commerce experience, data shows

——————————

NEW PYMNTS DATA: THE CUSTOM PURCHASING EXPERIENCE STUDY – MAY 2022

About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are succeeding and where they need to up their game to deliver a personalized shopping experience.

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It was fast: the 30-year fixed mortgage rate climbs to 6.18%, the 10-year Treasury yield to 3.43%. Door-to-door sellers face a new reality https://continentalmag.com/it-was-fast-the-30-year-fixed-mortgage-rate-climbs-to-6-18-the-10-year-treasury-yield-to-3-43-door-to-door-sellers-face-a-new-reality/ Tue, 14 Jun 2022 03:47:00 +0000 https://continentalmag.com/it-was-fast-the-30-year-fixed-mortgage-rate-climbs-to-6-18-the-10-year-treasury-yield-to-3-43-door-to-door-sellers-face-a-new-reality/ Something has to give. And that’s going to be the price. By Wolf Richter for WOLF STREET. The average 30-year fixed mortgage rate climbed to 6.18% today from 5.85% on Friday, according to the daily index for Daily Mortgage News. Besides the magnitude of the spike, it was also the highest mortgage rate since daily […]]]>

Something has to give. And that’s going to be the price.

By Wolf Richter for WOLF STREET.

The average 30-year fixed mortgage rate climbed to 6.18% today from 5.85% on Friday, according to the daily index for Daily Mortgage News. Besides the magnitude of the spike, it was also the highest mortgage rate since daily data collection began in April 2009. It was lightning fast, with mortgage rates nearly doubling since the start of the year (chart via Mortgage News Daily):

Mortgage rates follow the 10-year Treasury yield, but there is a gap between them, and the gap varies. The 10-year Treasury yield jumped 28 basis points today to 3.43% at the close, a huge move and the highest since April 2011:

But wait…

Back then, before QE and the interest rate crackdown, 6% mortgages were considered low, I mean super low, and I thought I got a good deal on my 15-year mortgage in 1989 at 8%! There are people here who remember the 15% mortgage rates. We didn’t even see 6% 30-year mortgages until 2002.

Freddie Mac’s data dates back to the early 1970s (although the June 9 release lags today’s daily measurement by about a week). This shows how quickly mortgage rates have rebounded from historic lows, and how relatively low they still are:

So let’s see. Greenspan’s Fed floated the idea of ​​cutting interest rates after the dotcom meltdown to create a housing bubble to take over from the imploded stock market bubble. It worked, and we had a housing bubble, which the Fed responded by raising interest rates again over 5%, which worked and imploded the housing bubble, which triggered the mortgage crisis, which pulled a rug under the most -leveraged banks, on which the Fed rolled out its new dual-weapon QE and 0% interest rate policy, which worked, and it has inflated all asset prices, bailed out bondholders and bank shareholders, and soon it triggered the next real estate bubble, but much more magnificent than before, etc. etc

You know the chorus. But this time we have a new trick: raging consumer price inflation the likes of which we haven’t seen in 40 years, and all bets are off. Rampant inflation is doing a lot of long-term damage to the economy, currency, businesses and people, and it’s time to get tough.

Well, not really a crackdown, just a slow increase in short-term policy rates from almost 0% to still very low levels, and finally the end of QE, and the slow start of QT.

So it’s not really a crackdown, but seeing how massively the markets reacted to this little political action shows how overinflated all assets have become, thanks to 12 years of QE and interest rate crackdowns – 12 years of policy mistakes by the Fed – and how hard it will be to unravel all this madness and return to some normalcy. But inflation is now raging and all bets on a Fed put are off.

After 12 years of printing money and suppressing interest rates, house prices have soared to the point that higher mortgage rates are having a very different impact than they did then.

Each time mortgage rates rise slightly at current prices, they drive a new layer of potential buyers out of the market. And the volume of transactions decreases, the houses begin to sit on the market and the inventories pile up. So it can’t happen here, they say, but it’s already happening, even in May, before the current mortgage rate spike, when stocks jumped amid price cuts and falling sales, as there is a way for sellers to make a deal: cut the price enough for future buyers to pay the mortgage.

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We think TradeDoubler (STO:TRAD) can stay on top of its debt https://continentalmag.com/we-think-tradedoubler-stotrad-can-stay-on-top-of-its-debt/ Sun, 12 Jun 2022 06:55:18 +0000 https://continentalmag.com/we-think-tradedoubler-stotrad-can-stay-on-top-of-its-debt/ Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, […]]]>

Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, because too much debt can sink a business. Like many other companies TradeDoubler AB (publisher) (STO:TRAD) uses debt. But does this debt worry shareholders?

Why is debt risky?

Debt is a tool to help businesses grow, but if a business is unable to repay its lenders, it exists at their mercy. If things go really bad, lenders can take over the business. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. Of course, debt can be an important tool in businesses, especially capital-intensive businesses. The first thing to do when considering how much debt a business has is to look at its cash and debt together.

See our latest analysis for TradeDoubler

What is TradeDoubler Net Debt?

You can click on the graph below for historical figures, but it shows that TradeDoubler had debt of 93.4 million kr in March 2022, compared to 121.0 million kr a year before. However, as he has a cash reserve of 87.6 million kr, his net debt is lower at around 5.83 million kr.

OM:TRAD Debt to Equity History June 12, 2022

How healthy is TradeDoubler’s balance sheet?

According to the latest published balance sheet, TradeDoubler had liabilities of kr 477.7 million due within 12 months and liabilities of kr 109.8 million due beyond 12 months. On the other hand, it had a cash position of 87.6 million kr and 337.0 million kr of receivables due within one year. It therefore has liabilities totaling kr 162.8 million more than its cash and short-term receivables, combined.

This is a mountain of leverage compared to its market capitalization of 266.3 million kr. If its lenders asked it to shore up its balance sheet, shareholders would likely face significant dilution.

In order to assess a company’s debt relative to its earnings, we calculate its net debt divided by its earnings before interest, taxes, depreciation and amortization (EBITDA) and its earnings before interest and taxes (EBIT) divided by its expenses. interest (its interest coverage). Thus, we consider debt to earnings with and without amortization and depreciation expense.

Looking at its net debt to EBITDA of 0.16 and its interest coverage of 5.8 times, it seems to us that TradeDoubler is probably using debt quite sensibly. We therefore recommend that you closely monitor the impact of financing costs on the company. It should be noted that TradeDoubler’s EBIT has jumped like bamboo after rain, gaining 63% over the last twelve months. This will make it easier to manage your debt. The balance sheet is clearly the area to focus on when analyzing debt. But you can’t look at debt in total isolation; since TradeDoubler will need income to repay this debt. So, if you want to know more about its earnings, it may be worth checking out this graph of its long-term trend.

Finally, a business needs free cash flow to pay off its debts; book profits are not enough. So the logical step is to look at what proportion of that EBIT is actual free cash flow. Fortunately for all shareholders, TradeDoubler has actually produced more free cash flow than EBIT over the past three years. This kind of high cash conversion gets us as excited as the crowd when the beat drops at a Daft Punk concert.

Our point of view

The good news is that TradeDoubler’s demonstrated ability to convert EBIT into free cash flow delights us like a fluffy puppy does a toddler. But, on a darker note, we’re a bit concerned about his total passive level. Overall, we think TradeDoubler’s use of debt seems quite reasonable and we’re not worried about that. After all, reasonable leverage can increase return on equity. There is no doubt that we learn the most about debt from the balance sheet. But at the end of the day, every business can contain risks that exist outside of the balance sheet. To this end, you should be aware of the 3 warning signs we spotted with TradeDoubler.

If, after all that, you’re more interested in a fast-growing company with a strong balance sheet, check out our list of cash-flowing growth stocks without further ado.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Americans turn to credit cards as prices of goods continue to rise https://continentalmag.com/americans-turn-to-credit-cards-as-prices-of-goods-continue-to-rise/ Wed, 08 Jun 2022 02:12:00 +0000 https://continentalmag.com/americans-turn-to-credit-cards-as-prices-of-goods-continue-to-rise/ Americans miss fun events because of their finances. According to a *** study of 2000 Americans conducted by a survey on behalf of Beyond Finance, 66% have avoided social events because they cannot afford to go out and the prices of l gas and inflation don’t help. 56% feel extremely, visibly more stressed about their […]]]>

Americans miss fun events because of their finances. According to a *** study of 2000 Americans conducted by a survey on behalf of Beyond Finance, 66% have avoided social events because they cannot afford to go out and the prices of l gas and inflation don’t help. 56% feel extremely, visibly more stressed about their financial situation. They are also isolated due to their stress, with 61% saying they feel uncomfortable discussing their financial stress with others. However, that doesn’t stop people from spending beyond finance. A study found that 67% were still doing stressful shopping, with 80% saying they had additional debt. Shopping is probably not going to improve the situation. Mmh.

Americans turn to credit cards as prices of goods continue to rise

Americans continue to rely on credit cards and loans as consumer credit jumped $38 billion in April amid the highest inflation in 40 years. The latest data from the Federal Reserve on outstanding consumer credit, released Tuesday afternoon, comes after March’s record $52.4 billion increase. This figure has since been revised down to $47.3 billion. Revolving credit, which primarily includes credit card balances, grew at an annualized rate of 19.6% and totaled $1.103 trillion in April, beating just a pre-pandemic record of $1.1 trillion, according to the report. But record revolving debt isn’t bad news, said Ted Rossman, senior industry analyst for Bankrate. “This partly reflects rising consumer spending, which of course is good for the economy, as well as things like population growth and increased use of cards (rather than cash).” the stimulus, because of the pandemic, because people spent less and they paid off their debts,” Rossman said. “And now we’re seeing an equally steep comeback – much faster than something like the financial crisis, it took five years to find the bottom and another five to come back up.” “This one has been fast forward,” he said. Despite some unease about the direction of the economy, consumers continued to spend. However, the goods they buy, especially basic necessities, have seen sharp price increases in a period of high inflation. These expenses, especially when they involve credit card debt, “can be a sign of confidence, or a sign of concern,” Matt Schulz, chief credit analyst for Lending Tree, previously told CNN Business. retailers have already noticed a split in the way people spend: high earners have continued to buy luxury and more expensive items, while lower income consumers are avoiding discretionary for the most part – and cheaper ones in The Fed’s monthly credit report doesn’t provide detailed breakdowns of how credit is used or whether outstanding balances are paid off before interest begins to accrue, so record levels of credit consumption might not be as negative as they seem, Rossman said.Usage, more e-commerce, more digital payments, people are using less cash e,” he said. “In some ways, higher credit card balances may reflect the growth of the economy. You just don’t want it to grow to the point where people are falling behind carrying expensive debt.”

Americans continue to rely on credit cards and loans as consumer credit jumped $38 billion in April amid the highest inflation in 40 years.

The latest data from the Federal Reserve on outstanding consumer credit, released Tuesday afternoon, comes after March’s record $52.4 billion increase. This figure has since been revised down to $47.3 billion.

Revolving credit, which primarily includes credit card balances, grew at an annualized rate of 19.6% and totaled $1.103 trillion in April, beating just a pre-pandemic record of $1.1 trillion, according to the report.

But record revolving debt isn’t bad news, said Ted Rossman, senior industry analyst for Bankrate. “Part of that reflects rising consumer spending, which is good for the economy, of course, and also things like population growth and increased use of cards (rather than cash).”

“We had a sharp and rapid decline in credit card balances because of the stimulus, because of the pandemic, because people spent less and they paid off their debts,” Rossman said. “And now we’re seeing an equally steep comeback – much faster than something like the financial crisis. [when] it took five years to find the bottom and another five to come back up.”

“This one was fast forward,” he said.

Despite some unease about the direction of the economy, consumers have continued to spend. However, the goods they buy, especially basic necessities, have seen sharp price increases in a period of high inflation.

These expenses, especially when they involve credit card debt, “can be a sign of confidence, or a sign of worry,” Matt Schulz, chief credit analyst for Lending Tree, previously told CNN Business. . Some retailers have already noticed a split in the way people spend: high earners have continued to buy luxury and more expensive items, while lower income consumers are shunning the discretionary for the most part – and the cheaper ones. Furthermore.

The Fed’s monthly credit report does not provide details on how credit is used or whether outstanding balances are paid off before interest begins to accrue, so record levels of credit at the consumption might not be as negative as they seem, Rossman said.

“Some of it just reflects more card use, more e-commerce, more digital payments, people using less cash,” he said. “In some ways, higher credit card balances may reflect the growth of the economy. You just don’t want it to grow to the point where people are falling behind. [and] get into expensive debt.”

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GCash gross transaction value exceeds P500-B in March https://continentalmag.com/gcash-gross-transaction-value-exceeds-p500-b-in-march/ Mon, 06 Jun 2022 03:22:00 +0000 https://continentalmag.com/gcash-gross-transaction-value-exceeds-p500-b-in-march/ MANILA, Philippines — Transactions made using mobile e-wallet GCash passed the 500 billion peso mark in gross value in March alone, the company announced on Monday, as more and more Filipinos are going digital for their everyday financial needs. The subsidiary of telecommunications giant Globe Telecom Inc. attributed the milestone mainly to its rapidly growing […]]]>

MANILA, Philippines — Transactions made using mobile e-wallet GCash passed the 500 billion peso mark in gross value in March alone, the company announced on Monday, as more and more Filipinos are going digital for their everyday financial needs.

The subsidiary of telecommunications giant Globe Telecom Inc. attributed the milestone mainly to its rapidly growing customer base, as the pandemic provided strong tailwinds for fintech companies. So far, there are 60 million active GCash users in the Philippines, which is 83% of the country’s population.

With so many customers using the platform, GCash said it was processing 19 million transactions from 29 million logins per day. Martha Sazon, the company’s president and CEO, said GCash expects to end the year “with positive profitability and even better levels than last year.”

“GCash remains the leader in terms of users, usage and the ecosystem around it. We are able to do this while achieving profitability through multiple revenue streams,” Sazon said in a statement.

Aside from its massive customer base, GCash’s diverse offerings – whose parent company achieved “double unicorn” status in November last year after receiving new capital from investors – have also helped the company cross the line. cap.

Its GSave savings account attracted 5.3 million depositors. GInvest, the fintech’s investment segment, has 3 million registered users within its ecosystem who, according to GCash, account for 77% of unit investment trust fund accounts across the country.

The digital lending segment of the fintech platform has granted 29 billion pesos of credit to qualified users since 2018. GLoan, the fast cash lending arm of GCash, has lent 2.2 billion pesos of loans during of its 10 months of existence.

“It’s a feat that only a handful of fintech companies in the world have been able to achieve,” Sazon said.

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