QuantumScape ($KCAC) is developing next-generation battery technology for electric vehicles based on Lithium-Metal technology. Lithium-Ion batteries are fast approaching their theoretical capacity limits, and QuantumScape is boasting “disruptive” batteries that increase capacity (to 450 miles), allow for 15-minute fast charges, and increase power by 50 percent.

It was founded in 2010 by an impressive roster of Stanford Ph.D.’s and counts Bill Gates, Volkswagen, and Lightspeed as early investors. Volkswagen has already begun testing QuantumScape batteries, has become the company’s largest shareholder, and plans to launch 70 electric vehicle models by 2029 across its many brands (Volkswagen, Porsche, Audi, Bently, etc).

As far as pre-revenue companies go, it certainly looks like it has the credentials and institutional backing to be legitimate (unlike Nikola from even the very beginning). My biggest question is how long this technology can stay differentiated from Tesla ($TSLA) or other battery manufacturers. For reference, Tesla’s Battery Day announcements estimate a 16 percent range increase with a 14 percent cost reduction.

***For clarification, I stated Tesla's projected improvements from this article, but if you look at the deck, it looks more like Tesla wants to increase battery range by 31% and cost by 40%.***  https://tesla-share.thron.com/content...

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Redball Acquisition Corp., a SPAC formed by Billy Beane and Gerry Cardinale, is discussing a potential merger with Fenway Sports Group, owner of the Boston Red Sox, in an $8 billion deal.

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Twilio announced its biggest acquisition to date, acquiring a company called Segment for $3.2 billion, and Twilio stock (TWLO) is up over 6%! Should you buy this high-growth cloud software stock?

Twilio is a company that makes software that enables software developers to make and receive phone calls and text messages and integrate that customer communication ability into their businesses. Now it's buying Segment, which is a startup that lets organizations pull customer data from multiple data sources into a consolidated view. This allows for Twilio to truly become a platform and also allow for a lot of cross-selling of its API products from the consolidated view.

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What will the stock market do next? Here's how to prepare your portfolio for it.

The S&P 500 is on track for its best week since August. I had talked about how we should expect a volatile, but relatively sideways stock market, which has been playing out as expected. The stock market doesn't like uncertainty, so it has liked new stimulus package negotiations and Biden’s increased lead in the polls. But for the market to make another meaningful move higher, we will need to see another stimulus package to support consumer spending and a weak job market.

Large-cap stocks are trading at around 22x forward price-to-earnings (P/E), which remains about 20 percent to 25 percent elevated compared to where it usually has traded. But small-to-mid cap stocks are trading closer to historical valuations at around 19x forward P/E.

I believe we’re in a spot where the market makes big moves up or down based on if a stimulus package gets done and if it is comprehensive enough to support the economy. Given this position, I am still comfortable with our Target Allocations. We are exposed meaningfully to the upside but are also prepared to buy on a potential drop.

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Playboy CEO Ben Kohn on Playboy's big brand transformation and huge momentum behind the business' growth. Playboy plans on going public via SPAC Mountain Crest Acquisition Corp (MCAC).

From Morning Cents (October 1, 2020): Playboy’s biggest strengths are in its brand recognition globally and its massive social media reach. They mostly license and sell Sexual Wellness and Style & Apparel products, and a little Gaming & Lifestyle and Beauty & Grooming products as well. They’re shooting for revenues of $296 million and EBITDA of $104 million by 2025, which seems pretty reasonable given their momentum. In fact, they might have a shot at overshooting that goal by a lot. A bet on Playboy would require them to gain traction in pop culture, which is impossible to predict. But given their brand assets and recognition, I'd imagine it would be pretty easy to gain traction by getting some very famous people (like Cardi B) to integrate the brand into their content. I also think that branding Sexual Wellness products with Playboy branding is pretty easy pickings. If you believe in the newly focused Playboy brand and opportunities, MCAC looks like it could be a good stock to own while the business puts up strong numbers.

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Analysis on Ant Group & Tencent, Dollar General, Target, and Albertsons, and the real estate market!

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AT&T’s journey from telecom giant to “Hollywood heavyweight” has beaten down the stock, but CEO John Stankey reiterates that their acquisitions were the right choices long-term.

From Morning Cents 10/7/20:

AT&T ($T) is a very stable business, and most of its profits come from recurring wireless, fiber broadband and B2B wireline services. Its wireless business has faced some COVID-related challenges (losing roaming and overage fees) but remains very strong. Broadband also remains strong, with growth in its home fiber product (I have also now switched to AT&T Fiber).

A risk to the business is declining television volumes as people move towards streaming services. The critical thing to watch is if they can recapture a lot of this through a big push with HBO Max. Another risk is that they have a lot of debt, but the company has committed to reducing it and has paid down over $20 billion in debt since the Time Warner acquisition.

It’s a really stable business that does have some long-term pressures but also has return-from-COVID upsides as well. AT&T should see more robust broadband and wireless profits after COVID is over and has some upside potential with 5G, Fiber, and (maybe) HBO. It is also targeting cost savings and operational efficiencies of $6 billion over the next two years. It’s possible AT&T’s EBITDA is more likely to grow in the next two to three years versus consensus estimates of being negative to flat.

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Opendoor filed its financials as it seeks shareholder approval to merge with Chamath Palihapitiya’s SPAC Social Capital Hedosophia Holdings II (IPOB), and the books don’t paint a pretty picture, revealing revenue drops alongside significant losses. Opendoor’s revenue decreased by 12 percent in the first half of 2020 compared to the same period last year. The outbreak of Covid-19 resulted in a slower housing market. The company said it expected the decline to run through the early part of 2021.

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Clover Health, a medical insurance start-up, is going public in a $3.7 billion deal with Chamath Palihapitiya’s SPAC Social Capital Hedosophia Holdings Corp. III. Clover Health, founded in 2013, sells Medicare Advantage in the U.S. and boasts more than 57,000 members across seven states. The company uses “patient-centered analytics and a dedicated care management team to identify potential risks a member may face and directly provide preventive care.” Clover will receive $1.2 billion in cash proceeds from the deal, $400 million of which are coming from a Palihapitiya-led private investment.

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Say goodbye to movie-going. Cineworld, the world's second-largest movie theater chain, is suspending operations at all 663 of its U.S. and U.K. locations due to pandemic-driven uncertainty, WSJ reports. Varying state and local guidelines allowed roughly two-thirds of U.S. theatres attempted to reopen in August, but studios don't want to risk a low turnout on some of their most lucrative projects.

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