David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Barrick Gold Meets Output Guidance in 2021

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    Barrick Gold Corp. said Wednesday that it has met its production targets for 2021.

    The Canadian mining giant said preliminary gold production for the full year was of 4.44 million troy ounces, within its target range of 4.4 million to 4.7 million.

    Barrick said the Africa and Middle East, Latin America and Asia Pacific regions performed particularly well, at the upper end of their regional gold guidance ranges.

    Preliminary copper production reached 415 million pounds for the year, toward the lower end of Barrick's target range of between 410 million and 460 million pounds.

    In the fourth quarter, the company said it sold about 1.23 million ounces of gold and 113 million pounds of copper, with average market prices reaching $1,795 an ounce of gold and $4.40 a pound of copper.

    Barrick is scheduled to release its fourth-quarter and full-year results on Feb. 16.

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    Biggest Bitcoin Fund Sinks Toward 30% Discount in Crypto Selloff

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    One of the biggest casualties of the cryptocurrency selloff is the Grayscale Bitcoin Trust. 
    The $27 billion fund (ticker GBTC) has plunged nearly 17% so far in 2022, outpacing Bitcoin’s nearly 9% decline. As a result, GBTC’s price closed 26.5% below the value of the Bitcoin it holds on Tuesday, widening GBTC’s so-called discount to record levels, according to Bloomberg data.

    It’s a dynamic that’s plagued GBTC for months. The trust doesn’t allow for share redemptions in the same manner as an exchange-traded fund, meaning that the supply of shares can’t be created and destroyed with shifting demand. Grayscale Investment LLC applied to the Securities and Exchange Commission in October to convert GBTC into an ETF -- which is expected to quickly repair the discount -- but regulators have yet to approve a physically-backed Bitcoin fund.

    “GBTC keeps breaking hearts as the discount widens,” Brent Donnelly, president of Spectra Markets, wrote in a report. “GBTC is basically a binary bet on a physical ETF at this point. Tempting but tempting the way value traps can be tempting.”

    GBTC first fell into a discount last February as the number of shares outstanding skyrocketed, after years of trading at a premium to Bitcoin. However, the launch of Bitcoin ETFs in Canada and the first U.S. derivatives-backed Bitcoin ETFs eroded GBTC’s competitive advantage. Grayscale’s parent company,
    Digital Currency Group, has sought to repair the discount by buying back GBTC shares.

    GBTC’s price has dislocated from Bitcoin to an even greater degree than the ProShares Bitcoin Strategy ETF (BITO), which is vulnerable to tracking errors given that it holds futures contracts. While Bitcoin rallied 1.6% on Tuesday, BITO and GBTC fell 3.3% and 6.4%, respectively. 

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    Commodities Boom Sends Industry Titan Glencore to Decade High

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    Commodities giant Glencore Plc hit the highest in almost a decade, driven by rallies in everything from metals to coal and optimism for a years-long supercycle.

    The world’s biggest commodity trader surpassed its 2018 intraday peak on Tuesday, valuing the Swiss company at about $74 billion. Like its mining rivals, Glencore has benefited from massive global stimulus measures that have stoked demand for raw materials, and has also been a big winner from an energy crunch that sent coal prices to a record high. 

    A Bloomberg gauge of spot commodities has doubled since early in the pandemic -- reaching an all-time high in October -- as government measures to bolster economies underpinned demand while supply curbs further tightened metals markets. At the same time, a green revolution is boosting long-term prospects for metals including cobalt and nickel for products like batteries.

    Glencore is expected to deliver record profits and a bumper dividend when it reports earnings in February. And as the boom draws more investors into commodities, many analysts forecast prices to remain high. Goldman Sachs Group Inc. said that a commodities supercycle has the potential to last for a decade.

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    Email of the day on biotech

    I enjoyed your feedback from your Saudi Arabia Conference. Question: could you please give me your opinion on Moderna and Biotech, do you see potential? I made good profit, then bought these stocks again and sit now on a position down 45%. Take the loss and run? thank you for your attention.

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    Microsoft to Buy Activision Blizzard in $69 Billion Gaming Deal

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    Microsoft Corp. said it’s buying Activision Blizzard Inc. in a $68.7 billion deal, uniting two of the biggest forces in video games.

    In its largest purchase ever, Microsoft will pay $95 a share in cash for one of the U.S.’s biggest gaming publishers, known for titles like Call of Duty and World of Warcraft but which is also grappling with a cultural upheaval over its treatment of women. Activision Chief Executive Officer Bobby Kotick will continue to serve in that role, Microsoft said. Once the deal closes, the Activision Blizzard business will report to Phil Spencer, who heads Microsoft Gaming.

    Adding Activision’s stable of popular titles will help Microsoft expand its own offerings for the Xbox console and better compete with rival Sony Corp.’s PlayStation. Activision has a long history with the Xbox. The publisher’s largest franchise, Call of Duty, became successful largely due to Microsoft’s innovative online platform Xbox Live, which allows players to connect for multiplayer matches. Most of Activision’s games are published on Xbox consoles.

    “This acquisition will accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and will provide building blocks for the metaverse,” Microsoft said in a statement Tuesday.

    One of the industry’s most legendary publishers, Activision has been mired in controversy for months amid several lawsuits over allegations of gender discrimination and harassment. Kotick, who has led the company for three decades, has been under pressure from employees to resign. The scandal has taken a toll on a company already struggling to adapt to the end of a pandemic-fueled video game boom. In November, Activision delayed two of its most anticipated games and gave a sales forecast for the fourth quarter that fell short of Wall Street’s expectations, sending the shares plunging. 

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