Market Morning: IPO Losers, Impeachment Begins, Yamaha Warning, Southwest Cancels More 737 Flights

Market Morning

Losing IPO Companies Match Dot Com Bubble Record

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The Wall Street Journal reports that the initial public offering market is showing serious signs of bubble territory. Over three quarters of all companies that conducted an IPO over the last two years are money-losing companies. That is a record high matched in 1999 at the peak of the dot com bubble era, not to say that a new record can’t be reached since monetary policy since 2008 has been much looser than anything in the years leading up to 1999.

42% of the companies in the red are healthcare firms, and 17% from tech. This could point to a specifically biotech-related bubble with a side of tech frothiness. In an interview with WSJ, one analyst was quoted as saying this is happening because investors are “losing their sense of reality.” Those interested in doing IPOs are conducting them and banks are financing them because money is record cheap and if the money is there for the taking, those who reach out and grab it can’t really be blamed. In a related matter, the tech-heavy Nasdaq  (NASDAQ:QQQ) keeps climbing without a break in what looks to be a melt-up, continuing to yet new record highs as this is being written.

General Motors To Fire Up Battery Factory at Former Assembly Line

General Motors (NYSE:GM) is returning to Ohio. The car company is building a new electric battery factory at an assembly factory that it shut down last year in Lordstown. The assembly line was in operation for 50 years before GM closed it down and sold it to an electric car company. GM will also working together with LG Chem on battery technology at the new plant, which will be one of the largest battery factories in the world. 4,500 people were employed at the old plant and either retired or were transferred to other locations. GM is down 1.3% on the year so far.

Yamaha Warns Not to Pull a Ghosn and Hide in Cases

Carlos Ghosn copycats are making Yamaha (OTCMKTS:YAMCY) nervous and wanting to avoid lawsuits. People are trying to copy Carlos Ghosn’s successful escape from Japan by hiding in a Yamaha audio equipment case, and Yamaha doesn’t want this to end in a lawsuit in case somebody gets asphyxiated or otherwise injured by using the cases in ways that they weren’t designed for, such as crossing international boundaries undetected. Yamaha is asking customers not to climb into these cases, which is becoming a viral phenomenon called the “Ghosn Escape Challenge” which, thankfully, isn’t quite as stupid as eating Tide pods at least. Posts have been showing up on social media demonstrating how it can be done. “We will not mention the reason, but many tweets have been scattered about stories of people entering large instrument cases,” the company wrote on Twitter over the weekend. “Musical instrument and audio equipment cases are designed to hold musical instruments and audio equipment. Please use them correctly.” Wise words from a wise company.

After Nearly 4 Years Impeachment Party Set to Officially Kick Off

The Senate will today take formal steps in beginning the impeachment trial against President Donald Trump today on charges of abuse of power because he allegedly held up taxpayer money to Ukraine on a quid pro quo basis. Assassinating the head of a foreign army, a cassus belli, without Congressional consent, is not being considered in this case. There is a bit of opacity regarding whether potential witnesses in the case will actually show up, such as perhaps former Vice President Joe Biden and his son Hunter, who was allegedly the subject of Trump’s inquiry in holding up the money to Ukraine. Biden Jr. is a well known playboy alcoholic drug addict who sat on the board of a Ukrainian gas company in exchange for $50,000 a month, allegedly selling access to the White House, and it is unclear if either of the Bidens will show up to the trial to detail the reasons why Biden the younger was on the board of directors of said company. In the event that they don’t, eyebrows will be raised. In the event that they do, eyebrows will still be raised. The Articles of Impeachment will be presented at 12pm EST. Supreme Court Chief Justice John Roberts will be presiding over the trial. The Republican Senate will almost certainly acquit Trump since none of the 53 Republicans in the chamber has expressed his intention to vote for removal.

Southwest Airlines Extends Boeing 737 MAX Cancellations

Southwest Airlines (NYSE:LUV) will extend cancellations of its 737 MAX flights through June 6, extending the Boeing (NYSE:BA) flight drought into the summer and pushing prices higher than otherwise as the supply of flights is constricted. Southwest is the biggest operator of 737 MAX flights in the world. All told, 330 weekday flights will be removed out of a total of 4,000, an 8.25% reduction in flights for the carrier. The move follows American Airlines (NASDAQ:AAL) cancelling its own 737 MAX flights through June 3. According to Reuters, the FAA will keep the 737 MAX grounded until February at the earliest and possibly March or later.

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