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BenzingaEditorial

COVID-19 Outperformed the Olympic Games

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Olympics Stocks

It’s official- Tokyo Olympics have been moved to 2021 in order to fight the spread of COVID-19 as ⅕ of the world is in isolation, hoping to avoid the tragic scenario in Italy which lost more lives than China. During the 124 years-long history of the Olympic games, humankind has been witnessing some pretty unique events. Some memories were more than positive: medals, world records and great vibrations spreading all over the globe and these are all reasons why we love them so much as they bring the world together But, there were also some very sad moments and we now have a new one. The Olympics have been canceled three times because of the World Wars, terrorist attacks, political wars and doping scandals. Everything connected with the world’s most lovable event which brings together more than 200 nations in one place is beyond special and creates lifelong memories. That is why all the major companies want to be a part of this show. Now, Coronavirus has just found its place in history, because for the first time since the Olympic games were established, have they been postponed for a whole year. The impact of this unforeseen health crisis is only getting stronger each day as Europe, UK and the US are doing their best to fight back.

Who will be impacted?

Olympic games have fourteen main sponsors and partners which support this event and without whom the games cannot be organized. The list of main partners includes companies such as The Coca-Cola Company (NYSE: KO), The Procter & Gamble Company (NYSE: PG), Toyota Motor Corporation (NYSE: TM), Visa Inc. (NYSE: V), General Electric Company (NYSE: GE), Intel Corporation (NASDAQ: INTC), and many others. Even though we do not have all the information on the content of the contracts, it is known that sponsors pay a part of the sponsorship in advance (when they sign the contract) while the rest is paid in installments. Initial thoughts were that this would be a problem with main sponsors, but right after the announcement, Coca Cola, Procter & Gamble and Intel immediately supported the decisions as the main goal is to make it safe for everyone involved. Still there is an amount of concern if some others will ask for termination of the contract, while it is unknown in which circumstances will it be possible at all.

How big (bad) can this get?

Now it is hard to anticipate how this will impact the main sponsors and broadcasters, but we can elaborate on some facts and attempt to reach a conclusion. According to some sources, the number connected with advertising, sponsorship agreements and promotional events is above 10 billion dollars and that is huge, to say the least. Surely, all companies will be forced to change their cycle plans which are created for four years, and to adapt their expectations and goals. But this year is everything except normal so their plans will be changed based on further development of the situation. The main question is whether revenue goals connected with the Olympics will be reached in the postponed event having in mind that it is still unknown for how long and how much will COVID-19 pressure the global economy and how damaging will its consequences be.

Conclusion

Games will be organized next year, and still it will be the most-watched event in the world, so it is rational to conclude that main sponsors will make their primary goal to be seen as partners of the number one event on the Earth. Speaking about the financial impact, it is hard to make any sort of estimation. If there’s a global brand, those are the Olympics and their sponsors will get their desired next year. But, the image is entirely different if we look at 2020. Many analysts fear that stimulus measures won’t be enough to prevent a recession that could be as severe as The Great Depression. Luckily, the stock market won’t influence the talent of the world’s best athletes and we can surely all benefit from their motivation, strength and team spirit now!

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Automotive Outlook – A Road to Hell?

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Ford News

The automotive industry was hit hard by COVID-19. Automakers were forced to shut down approximately  95% of plants across Europe and the US. In most cases, those measures were supposed to last only two weeks. Now it looks like factories will remain silent for much longer. Reopening dates are being postponed, while some auto producers like General Motors (NYSE: GM) decided not to give any reopening targets at all. Uncertainty is present everywhere these days.

Beating the invisible enemy

The COVID-19 is the new virus, an invisible enemy, that you cannot catch or hit back. The number of infected people is constantly increasing. The average growth rate is moving between 10% and 15% per day. According to the latest data, it can be said that the virus is not showing any signs of slowing down. It looks like COVID-19 has just started its horror show. So far, until the end of March that is, approximately 4.000 people died, but public health officials recently said that between 100.000 and 240.000 deaths can be expected until the end of this year. President Trump decided not to lift the restrictions as planned on Easter but to extend them. He warned that the US is facing “very, very painful two weeks” ahead.

Lockdowns are here to stay

Thus, it can be expected that lockdowns will continue. It is the only available option in the fight against the virus. China showed to the rest of the world that this strategy works. Yes, it is hurting everyone mentally, physically and financially, particularly the automotive industry. But it is an inevitable cost that we all must pay. For automakers, it means that there will be no production nor car sales any time soon and for much longer than they previously anticipated.

Crisis is only getting momentum

Because the crisis is getting momentum, analysts are now giving new forecasts and warning us not only about an upcoming recession but something even worse – economic depression in the automotive industry. Investors are worried, as they are starting to realize that unemployment rates could skyrocket and that factories may remain closed for the next two months or even longer. Even after the crisis is over, it is hard to avoid the upcoming economic downturn. People will probably try to postpone some bigger purchases until they are convinced that the situation is back to normal.

The question on everyone’s minds is: “Where is all this going?”. And we are all hoping that the answer is not: “ Down the road to nowhere.”

What do analysts expect?

Average expectations are that Detroit’s Big 3 automakers will all show sales declines in the first quarter of 2020. It is expected that General Motors , Ford (NYSE: F) and Fiat Chrysler (NYSE: FCAU) auto sales will drop somewhere near 6%, 16%, and 10% respectively compared to last year’s results.

And what about the whole year forecast?

Well those numbers are even worse. JP Morgan Chase & Co. analysts predict that approximately 10.3 million automobiles could be sold in 2020 and that is 40% down compared to last year. If this ends up being the case, sales would be even lower than in 2009, when only 10.4 million vehicles were sold. Just remember, it was the year when General Motors and Chrysler filed for bankruptcy. But, if the crisis continues, those forecasts can be even worse. In that case, sales may go even down – and that means literally down, 6 to 7 million vehicles to be exact. Best of all is that many analysts are relying on the last quarter when they expect a bounce-back. But what if the virus strikes again, like the second wave China is so scared of? This fear is making the country have to close up again just shortly after lifting its restrictions. This all seems like a road or even highway to hell, doesn’t it?

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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BenzingaEditorial

Don’t Worry European Automotive Industry – The Government and Banks Have Got Your Back!

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Automotive industry Stocks Coronavirus

European automakers have shut down their factories due to the COVID-19 outbreak. All key industry players, like Volkswagen AG (OTC: VWAGY), Peugeot S.A. (OTC: PUGOY), Renault SA (OTC: RNLSY) and other industry peers decided to lockdown plants in order to protect the health of their workers. The virus has already caused a lot of damage to the European automotive industry. And the situation is only becoming more severe so help is more than needed.

Liquidity concerns

World’s biggest auto producer Volkswagen recently announced it is burning approximately 2.2 billion USD per week. This is approximately 40% of its last year’s average weekly revenues. The longer the crisis lasts, the bigger the losses will be. Volkswagen’s chief financial officer said recently that passenger car sales are expected to drop approximately 40% in March.  Considering the not-so-optimistic outlook by the World Health Organization, what will happen as this health crisis continues? How big will those cash drains be? It is hard to imagine the consequences at this point.

Driving without cash fuel?

The automotive industry is a classic example of a highly capital intensive and cyclical industry. Fixed costs are relatively high compared to other industries. Thus, capacity utilization is one of the key performance indicators. But in these times, when plants stand still, losses are growing every day. Liquidity issues are currently avoided thanks to previously formed cash reserves and available credit lines. But liquidity concerns are only getting amplified in CFO’s minds. Bank managers as well as investors are only getting more worried and afraid too. They are quite reluctant to lend money or invest in loss-making companies. It is not surprising that share prices and credit ratings are falling like a rock. Everyone is wondering how will the automotive industry continue to drive without any “cash fuel”?

It’s time for central and investment banks as well as the government to jump in. And they did just that as European Central Bank (ECB), European Investment Bank (EIB) and European Commission (EC) announced that they are ready to support the automotive industry and protect their employees.

The financial injection is coming – ECB

ECB has launched a 750 billion EUR Pandemic Emergency Purchase Programme (PEPP). Asset purchases will last until the end of 2020. ECB will inject money into the European financial system and it will increase its liquidity. Corporate bonds are also eligible for purchasing. And it is a chance for all reputable carmakers to secure funding until the situation settles down. According to ECB President, Christine Lagarde, ECB will be even willing to increase this monetary package should this be considered necessary.

EIB also jumped in

European Investment Bank (EIB), the lending arm of the European Union, also decided to help. It will finance companies with approximately 40 billion EUR. The money will be used for working capital and overall liquidity maintenance financing. Fiat Chrysler (NYSE: FCAU) already made some arrangements with EIB last week when a new 3.5 billion EUR credit facility was agreed. Most Fiat Chrysler factories around the globe are currently locked down. This kind of strong support is now more than needed. It does not only fortify the company’s cash position, but it also sends a clear “don’t be afraid” message to the financial market, investors and creditors.

EC even went a step ahead

Finally, the European Commission (EC) also announced that it will relax existing rules that limit EU member states to financially support their companies. Now, national governments can use the arsenal of available financial weapons like direct grants, tax advantages and various advance payments to boost liquidity and the overall economy.  But that is not all. EC also came up with an “Escape clause” activation proposal that will allow member states to forget the budgetary constraints which the EU normally imposes. Overall, the EU is determined not to let COVID-19 win.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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BenzingaEditorial

Solar Is Emerging As the Best Bet

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Solar Technology Companies

The renewable energy sector is one of the rare bright spots with a potential to recover in a global economy which has been put to a virtual standstill by the COVID-19 pandemics. Even in troubled Spain that is on absolute lockdown with its citizens not being able to leave their homes in an effort to stop the outbreak , the solar industry is expecting a rebound. Solar energy is expected to be among the first sectors that will pick up the pace after the crisis.

As for the US, the outbreak has emptied out workplaces across the US, the solar industry is making a case to  be exempt from mandatory shutdowns. As for Australia, its citizens are stocking up on renewable energy storage in response to the pandemic. So no matter where you are, solar technology seems to be the right pick despite the fact there is no guarantee during this unprecedented crisis the world is facing.

Working from home

The imposed measure of social distancing has crushed the already troubled airline industry. And it also has the potential to slow down even the shining solar industry. While certain aspects of this development can take place online as people are asked to work from home, project construction cannot be done this way. For now, the industry is carrying on with what tasks it can by being behind a laptop but delays are inevitable.

Some were hit less than others

First Solar, Inc.’s (NASDAQ:FSLR) has been heavily hit by CVODI-19 like its peers as it fell 37.5 % this year. And that is even worse than the S&P 500 drop of 21.3%. But First Solar can weather this storm thanks to a net cash balance of $1.8 billion. Also the company is planning to keep manufacturing going unless the government imposes more severe restrictions so it is not entirely unimaginable that the company’s results fall close to the projected tree. And although cash cannot cure all the wounds of the crisis, a strong balance sheet is surely an advantage over its competitors to amortise short-term blows at least.

Some were lucky- or smart enough to protect their supply chains

Franchise Holdings International (OTC:FNHI) got the best of solar but also some other worlds through its investment Worksport. By planning to launch the world’s first solar tonneau covers for pickup trucks, it has not only made solar technology affordable but it possibly helped the struggling automotive industry move forward to the next era as its TerraVis technology will transform any pickup truck you have in mind. Besides harvesting solar energy, Worksport is also promising a fast 30-min charge. Its rich portfolio of intellectual property and the fact it only shortly paused its factories during the outbreak amortized the COVID-19 blows and the company’s supply chain even managed to remain intact. Saved by the Sun it is! And there is Tesla (NASDAQ:TSLA) who is never behind as it’s about to make solar power a common feature on electric cars starting with its Cybertruck. After that launch, the flamboyant Musk even announced that Tesla’s new pickup truck will have a solar accessory on the roof that will add 15 miles of range per day.

Growth of renewables can’t be stopped even by COVID-19

Solar stock will surely be a haven for investors during these hard times. As the US government also considers how to aid airlines, as well as oil and gas, renewables are hoping for a place on that list and the solar industry surely hopes it can successfully lobby for sector-specific relief by being irreplaceable to the economy. It surely is to the future of anyone living on Earth.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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