David Shapiro on US giants Moderna and Peloton’s fall from grace

As is customary for a Monday, Sasfin Securities David Shapiro gives us his insight on the latest developments taking place across local and international markets. The conversation starts by focusing on the price action in New York, where Moderna and Peloton have nosedived, as the world returns to normality. Shapiro notes the tailwinds that both companies had as a result of the pandemic and demand is unlikely to be sustainable as Covid-19 eases. Harry Smit, the representative of the Ascendis Activist Investors, was recently added to the board as a non-executive director. A big win for activism in South Africa and hopefully, the precedent has been set. Speculation surrounding MTN’s rumoured buyout of Telkom was also discussed, with Shapiro outlining it is unlikely the Competition Commission would allow this on anti-competitive grounds. The infrastructure drive implemented by the government seems to be well underway; construction group Raubex has posted good numbers. Lastly, small-cap retail investor favourites Renergen and the Purple Group are discussed. – Justin Rowe-Roberts

David Shapiro on Moderna’s sell-off:

Just disappointing results from Moderna. I think the market has built in far better delivery of vaccines, but that whole space is becoming very competitive with Pfizer, the leader. It’s a matter of who gets the vaccines out, how effective these vaccines are – and I’m not criticising the Moderna – but also now that Pfizer has announced a pill; in other words, treatment for Covid-19. The results have been very good. I think that can be a game-changer because it’s going to make people feel confident. If I get it, I know I’ve got a pill. So, a lot is happening in that area and it’s difficult to know who the winners are. But at the moment, Pfizer is leading by a long way.

On Peloton’s sell-off: 

Peloton was the ideal company for lockdown. Gym at home, great online classes and wonderful equipment. But all of a sudden, when people start getting out again, it’s very difficult to maintain that. I think the fact that people want to go out, means they want to go to gyms. Don’t ignore the gym as a place where you gather, where you see other people, etc. Being at home can be very, very boring. And they have these wonderful competitions among each other, etc. You still want to go out and see mates and those kinds of things. It was disappointing; I hope they come back because it’s a good company with a good product.

On the rumours of MTN buying out Telkom: 

They won’t allow it. I think the competition authorities won’t allow it. It just gives them too much power. I like where MTN is going and it’s never been a great favourite of mine. I’m on record, saying it’s a utility with no growth there. But now that we’re seeing fintech, we’re seeing payment systems that put it into a new game. Yes, it’s small at the moment, relative to the overall income. A good move. Why they want Telkom, I’m not too sure. I hope they’re not after the fixed-line business. I can’t see that going through, with only three viable competitors. 

On Purple Group (EasyEquities) trading update:

You know EasyEquities has done a brilliant job, and we use them as an example to highlight that there are still thousands of people out there – investors who want to buy shares – and they’ve made it very easy and available. It’s something that brokers don’t do, that we should be doing. I like to promote it because I like to promote private ownership, instead of buying a passive instrument.

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