Big Tech’s Latest IPO Shows It To Be The Pump & Dump Scheme It’s Always Been.

Did you hear the one about the “cabdriver and the rich tourist?” If not, it goes something like this…

A very wealthy looking business person arrives fresh off the airplane and hops in the first available taxi and asks the driver to take them to the financial center of the city. The driver says nothing, hits the button to start the meter, hits the gas and off they go.

They drive around busy city streets for an exorbitant amount of time, dodging and weaving through traffic. The passenger asks “Are you sure this is the way?” multiple times and with each one comes the same response “Absolutely, trust me, I know what I’m doing.” He continues on, undeterred.

Finally the driver pulls up to what appears to be a nondescript building and states, “Here we are, that’ll be (fill in any amount that would make you furious.) The passenger pays the fee and exits when all of the sudden realizes they can see the airport and could probably walk back to it faster than the time it took to get there in this cab.

Furious the passenger screams at the driver behind the rolled up window in a profanity laced tirade and finishes with “…and there isn’t even a name on this building, where the he## am I?!”

The driver rolls down his window about an inch and with a cold straight face says “You said to take you to the ‘financial center of the city,’ which I did just that. For you see, I am the financial center and you were just shown precisely how I make my money. As far as the building is concerned, let me assure you, it is the finest and most well maintained building in this city. I should know, I own it and paid for it via the model you just experienced. If you want to go to another ‘financial center,’ such as those containing banks and more? That’ll cost you another fare. Besides, where did you think I or anyone else would take you if you didn’t give me a specific location? Are you not a professional traveler?”

And so is the current story of IPO’s and the so-called “professional investment community.” i.e., If you’re dumb enough to buy in to “We’ll maybe make money, someday,” well your “professional” status allows for them to take your money, legally. Even if the entire thing is basically nothing more than what appears to be a legal scam.

And yes: legal scam. Sure, it’s only my opinion, but I’ve stated such from the beginning, and with every iteration, I’ve been proved more right than wrong. Hint: see Snapchat™ for clues.)

I invented the above scenario to coincide with Friday’s latest IPO debut concerning the ride/cab hailing service known as Lyft™. The demand for this latest “tech wonder” was supposedly “oversubscribed.” It appears (for remember this is all my own conjecture) that the oversubscribed part was just how many could dump-out to the highest bag-holder bidder.

But speed was of the essence, because as the day went on – the bidders were fewer and fewer.

The only thing that appears to have allowed the final bid to be as high as it was – was – the trading ended almost as fast as it started.

Between the hours of 12:00ish ET and the markets close just four hours later, all the hyped up “21% pop” those initial “getting in first!” buyers morphed into 10% bag-holding losses, again, from the first trade and for nearly the entire four hours it seemed as if Lyft couldn’t lift itself off the selling floor. For it went in nearly a straight line down until the mercy of the closing bell was sounded.

“If every picture tells a story…” as crooned by Rod Stewart, let’s use one as they say in Silicon Valley to show the story of this latest IPO darling. To wit:

(Chart Source)

The above is a chart of Lyft from its opening trade to the close of the day represented by one hour bars/candles. (it shows five because of the few minute start right before Noon)

The real takeaway with the above is, as I said prior “…it went in nearly a straight line down until the mercy of the closing bell was sounded.” For as you can clearly see, there was no “off the lows” respite into the end.

Could it surge into oblivion on Monday? Sure, but the above does not sport a very promising start for what has been deemed the “IPO to show that IPO’s are back!” As a matter of fact, it may show that they are as dead-and-buried as their business model will become once any remaining investor cash is burned through.

This farce of stating a company is worth $Billions upon $Billions when it couldn’t even purchase a ride across the street using its own service via its net profits (for there are none and maybe never will, think about that) is an abomination to everything once considered business, never-mind business ethics.

This is not capitalism. This is pump-and-dump chicanery wrapped around a legal business construct that only the most naive and stupid of “professionals” could ever endorse. This is what central bank interventionism has wrought. i.e., the legal ability for V.C. snake-oil-producers to sell their scheme to an unsuspecting public via their “professional investment managers.” You know, as to make sure one has some “growth” companies in their portfolios.

It’s disgusting. Period, full stop. And it’s going to end, but probably not before it’s true tale of devastation gets revealed.

You see the issue with all of the above is that reference I continue to make as “professional” is precisely the term used in court as to show the people “buying in” were of the sophisticated type. e.g., they have their “shingles” as the saying goes.

This way when it all goes “poof” they can say to the judge and jury, “These people claiming losses from their investment are professionals by trade and understand inherently any and all of the underlying risks. And may I remind them, those risks, as in ‘we openly stated we may never make any money’ were posted in all of our paperwork, so we can hardly be of any blame for them losing their investment.”

And there is where it will be shown that that is entirely correct. The problem?

Those “professionals” more often than not are only professional at one thing: Investing your money, Or worse, for your pension fund, you know…

Because you have to have exposure to “growth.” Regardless if it’ll be around at all in said future – or not.

© 2019 Mark St.Cyr

Just Sayin’

On the show the other day I received a few notes on if I may have been a little harsh on the latest Apple™ rollout and presentation earlier this week. For those that might have thought the same, I was just sent the following from a colleague that pretty much puts any “over criticism” speculation to rest. Below is a side by side from a 2011 presentation to today.

Clicking on the image will bring you to YouTube for viewing. To wit:

(Image Source: screen capture YouTube™

And as they like to say during these presentations, “Oh, just one more thing…”

Is it me? Or did anyone else seem perplexed that in what should be one of the greatest stages for both Apple innovation and more. e.g., “The Steve Jobs Theater” that the presenters were all curiously tethered via their cables?

I mean: nothing displays product presentation “brilliance” more than showing your devices are superior in both wireless technology and battery life in every way – as to then display every presenter tethered via a cable and restricted for movement within the very building, which for all intents and purposes, should be the very place where everything should work flawlessly!!

I think the latest tremors in California don’t have anything to do with Mother Nature, and everything to do with that theater’s namesake spinning in his you know what.

Then again, maybe it’s just me.

© 2019 Mark St.Cyr

Why This Time – It’s Different

The real problem with most tropes is they contain their future warnings without changing a single word. The problem lies within where most never consider the flip-side, as in: what made you believe in the magic of “it’s different this time” rationale – the exact opposite is what will tear that once coveted narrative apart for explaining the former irrational.

In other words: once the magic of “it’s different this time” is no longer believed? That’s precisely what you’ll hear used to explain why the former is no longer relevant. And on Friday of last week the “markets” seemed to make very clear that it now is using the trope in it’s flipped position.

And that has the potential for some very troubling manifestations.

The Federal Reserve’s complete and utter capitulation of not only ending the balance sheet run-off (QT) as soon as September, along with signalling no further rate hikes in 2019 and the possibility for only one in all of 2020, was more than just absolutely stunning. It also proved to be a complete, self-inflicted repudiation of their entire credibility for both gauging the economy, as well as their adulteration of it.

To be clear: The Fed admitted via dint of their policy actions that – they are trapped – and can not get out. And now everyone, repeat, everyone now knows it.

I have been stating ad nauseam that once the process of QT came to light and the “markets” had to deal with the reality of less and less “free money” that they would falter. And: they have done precisely that with near Swiss-watch precision, as well as the size and scope of the accompanying sell-offs.

The term “autopilot” has now been jettisoned for a new, different reality, which is: hard brake, full stop and mothball. I’ll just add that belief in the Fed’s credibility has now joined a similar sequence. Talk about, “it’s different this time.”

As stunning as the reversal for both the Fed’s prior stance and reading of the economy was. What was different was the reaction to it. i.e., the “markets” propensity seems to be sell rather, than buy.

That is very, very, very (did I say very?) different reaction than past episodes.

Sure there’s been the rally since Christmas Eve when a phone call from Cabo was needed to assure the world that the banks were “well funded and liquid” via a vacationing Treasury Secretary. But that rally has been for all intents and purposes best described as “unloved.” The reason?

The accompanying volume has been pathetic. The Fed’s new stance should have been the wind beneath the “markets” wings to soar ever higher, proving all the BTFD (buy the F’n dip) genius correct. However, that has not materialized. At least not yet, to be fair.

Although, to prove just how “unloved” the term fits: when the Fed announced it’s plans to go from “Hawks-R-U.S.” into “Super-Doves” the “markets” typical reaction was not only absent, but rather, it actually closed lower.

Yet, on the following day, the “markets” surged. But why? Easy…

The massive buy-back programs led by Apple™ and others to buy before the blackout period of earnings allowed for the HFT (high frequency trading) front-running parasites to gorge, and gorge some-more, pulling the indexes up.

But a funny thing happened the very next day: They sold off just as hard, and just as fast, as they went up. Can you say, “It’s different this time?”

Apple had a near 4% gain the prior day – to watch it give back over half the very next. In other words (conjecture, of course) as long as Apple was buying, so too were the machines, and more than likely, other central banks. Or said differently: If Apple isn’t fueling the buying opportunity? It appears others are taking that same opportunity – to sell.

Cook-and-crew had better take that signalling to heart, because if there’s even the slightest “glitch” in the upcoming earnings release? Don’t say the “market” didn’t warn you. i.e., “It’s different this time” also applies to cause-celeb CEO’s, as well as sales numbers the “markets” deem appropriate.

“But wait, there’s more!” as they say on late-night TV. For “it’s different this time” has a myriad of ancillary side-effects that now must also be taken into consideration.

Again as I warned as far back as August of 2017, Mr. Cook’s decision for involving both Apple the company, its employees, as well as its customers into supporting his own preferred political entities, both publicly and vociferously, that it would come back to bite.

I believe that “bite” has now arrived.

It is now unfolding in a very public and disturbing manner that the Southern Poverty Law Center™ is imploding with disgraced leaders resigning and more – and – is being shown to be one giant scam of an charitable entity.

So much for Mr. Cook’s sense of judgement when it comes to the holier-than-thou CEO attitude, yes?

Here’s what I said back in August of 2017. To wit:

The reason why I say this comes from none other than the latest actions for political optics via Tim Cook, CEO of Apple™.

It was one thing to resign from the council, but Mr. Cook took it to 11 on the political scale when he announced not only his reasoning, but his declaration that not only was he donating via Apple $1million a piece to two civil rights organizations, but also – will match 2-for-1 any additional donations made via employees as an incentive to also donate.

The issue here is two-fold. 1) He’s doing this via company coffers. 2) What happens to those who don’t feel the same as Mr. Cook and don’t donate, for whatever their reasoning? Is there now implied peer pressure on the job? Will there be lists as to who did, and who didn’t? Do share holders agree or feel the same way about this political decree?

The list goes on, and on. And they’re fair questions because Mr. Cook is arbitrarily applying Apple’s stamp to his political views. That’s not business in my book. That’s pure politics and does not belong.

From my article: “Did CEO Grandstanding Further Seal The Market’s Fate”

By the looks of what took place in the price action last week for Apple-the-stock? Let’s just say – Mr. Cook had better be showing a far more focused view to Apple than any other cause-celeb inklings. If not? Stock holders just may vote to give all the time he wants or needs in the not so distant future.

Remember: it’s different this time.

How different? Well, let’s just say the anticipated Lyft™ IPO is getting ready to hit these “markets.”

All I’ll say is: Good luck with that. Remember?

It’s different this time.

© 2019 Mark St.Cyr


(For those who say I just don’t get it…get this)

Well… that didn’t take long. As I said in my article yesterday morning. To wit:

The problem? It looks like the Fed just proved the President correct.

Can you say “Uh Oh?”

The real issue now facing the Federal Reserve is not only may they have just crushed any remaining credibility with their complete and utter reversal of monetary policy going forward. But, they may have done it leaving one of the most unpleasant aftertaste they’ve ever considered.

From my article: “The Fed’s Real Unintended Consequence Problem”

The result? Here’s two screen shots. The first is on Drudge™ this morning to show it’s placement, and that placement is secondary only to being the front page headline. i.e., probably the most important spot to be on Drudge eclipsed only by being the center headline and story, I have it circled. To wit:

(Screenshot Drudge Report™)

Here’s the accompanying story via the Associated Press™. It is a screenshot and I have annotated the important, again, to wit:

(Screenshot AP™ article)

Can you say “Uh Oh?”

But then again, what do I know.

© 2019 Mark St.Cyr

Footnote: These “FTWSIJDGIGT” articles came into being when many of the topics I had opined on over the years were being openly criticized for “having no clue”. Yet, over the years these insights came back around showing maybe I knew a little bit more than some were giving me credit for. It was my way of tongue-in-cheek as to not use the old “I told you so” analogy. I’m saying this purely for the benefit of those who may be new or reading here for the first time (and there are a great many of you and thank you too all). I never wanted or want to seem like I’m doing the “Nah, nah, nah, nah, nah” type of response to my detractors. I’d rather let the chips fall – good or bad – and let readers decide the credibility of either side. Occasionally however, there are, and have been times they do need to be pointed out which is why these now have taken on a life of their own. (i.e., something of significance per se that may have a direct impact on one’s business etc., etc.) And readers, colleagues, and others have requested their continuance.