TradeSmith Snippets for December 2

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Happy Friday, and welcome to the newest issue of TradeSmith Snippets.

We have another action-packed issue today, where we’ll be covering:

• What to make of Walt Disney Co. (DIS) after its old CEO became its new CEO.
• A crypto lender’s bankruptcy and what to remember each time someone says cryptocurrencies are dead.
• Two companies in China joining forces to capitalize on the autonomous vehicle market, which is expected to grow in value by 683% over the next two years.

I’ll let the team take it away from here.

Enjoy your Friday – Keith Kaplan, CEO, TradeSmith

Snippet No. 1: Bob Replaces Bob

Overview

Bob Iger, who served as Disney’s CEO from 2005 to 2020 and then as Executive Chairman until his retirement in 2021, has returned to Disney as the CEO, replacing Bob Chapek.

The Breakdown

Iger told employees during a town hall meeting that:

• He plans to keep a hiring freeze in place.
• The company should start “chasing profitability” instead of “chasing subs with aggressive marketing and aggressive spend on content.”
• His No. 1 priority is creativity.

From theme park guests being disappointed to the recent box office flop of Disney’s animated film “Strange World,” which cost $180 million to make and only brought in $24 million over a five-day period, many have questioned if Disney has lost its way.

Iger is being brought back to see if he can reignite the “magic.”

The TradeSmith Takeaway

Looking to what’s next, Disney’s new CEO wants the company to focus on creativity and on making its streaming business profitable instead of focusing on just adding subscribers.

“It’s not about how much we create; it’s about how great the things are that we do create,” Iger said.

What this means is that if Disney creates better films, it will naturally draw in people to go to the theaters and subscribe to — and stay subscribed to — its streaming service.

Iger has a successful track record at the House of Mouse, acquiring the content libraries of Marvel, Pixar, and LucasFilm, which gave Disney “Avengers: Endgame,” “Toy Story,” and “Return of the Jedi.”

But with the stock price down nearly 40% since the start of the year, if Iger can perform a turnaround, it won’t happen overnight.

And TradeSmith’s proprietary tools are saying that this is a stock more suited to be on a watchlist until it can trigger an Entry Signal.

Company	Health Indicator	Volatility Quotient (VQ)	Risk
Walt Disney Co.	Red Zone	27.03%	Medium

Snippet No. 2: Crypto Contagion

Overview

Cryptocurrency lender BlockFi filed for bankruptcy on Nov. 28, citing “significant exposure” to the exchange FTX and FTX’s sister hedge fund, Alameda.

The Breakdown

BlockFi made loans to customers using crypto assets as collateral, but with falling crypto prices in the summer, it had to turn to FTX CEO Sam Bankman-Fried for a $400 million lifeline.

BlockFi has more than 10,000 creditors, and one of its largest is owed $729 million.

The New Jersey-based cryptocurrency lender has roughly $257 million in cash on hand.

The TradeSmith Takeaway

This news has piled onto a rough year for crypto investors, with the price of Bitcoin (BTC) down 64% as of this writing.

While many like to write an obituary for crypto after events like this, Senior Crypto Analyst Joe Shew wants you to keep something in mind: Since 2010, news stories have declared that Bitcoin is dead 467 times, according to 99Bitcoins.com.


Bitcoin was declared dead at twenty-three cents in 2010.

It was declared dead at $281 in 2015.

It was declared dead at $8,700 in 2020.

And it was declared dead in 2022 at $16,000.

From all of that, one of Joe’s most important insights is to watch what people are doing in the crypto space, not what they are saying.

He has more to share on that here.

Snippet No. 3: Nio and Tencent Join Forces

Overview

Chinese tech giant Tencent Holdings Ltd. (TCEHY) and electric vehicle maker Nio Inc. (NIO) are joining forces to work on autonomous driving and high-definition mapping.

The Breakdown

Tencent will provide Nio with its cloud computing infrastructure for data storage, which will allow Nio to train cars for autonomous driving.

The companies will also work together on creating high-precision mapping systems for drivers.

This partnership can help Nio gain a competitive edge over its rivals.

For Tencent, which is primarily in the video game business and has previously invested in Nio, providing this technology infrastructure helps lessen its dependence on video game revenue.

The TradeSmith Takeaway

The global autonomous vehicle market was valued at $25.14 billion in 2021, and that number is expected to skyrocket 683% to $196.97 billion by 2030.

Having said that, our Health Indicator says TCEHY and NIO are not stocks to buy.

Company	Health Indicator	Volatility Quotient (VQ)	Risk
Nio Inc.	Red Zone	69.47%	Sky-High
Tencent Holdings Ltd.	Red Zone	37.01%	High

Fortunately, there are companies worth owning that are fueling the increase in car purchases in the electric vehicle and autonomous vehicle markets.

In this free report, we’ll share one company that is a chip supplier fueling autonomous vehicle technology, and another company that makes sure those electric vehicles stay charged.

One company is in our Green Zone, and although the other recently entered our Yellow Zone, the Relative Strength Index indicator suggests that the stock could be oversold and that now could be a good time to consider an investment.

Again, you can access that free report here.