Tech Stocks Bounce Back

Catch Up Quick

• Trump's legal advisor hopes court challenges will be done within “next 2 weeks”

• Beyond Meat ($BYND) shares recently took a ~27% dive after missing earnings

• Georgia will recount presidential election ballots by hand as Biden’s lead grows

• Pfizer CEO sold $5.6M of stock the day he announced recent promising news

• Spotify agreed to acquire Megaphone, a podcast-tech provider, for $235M

• GM plans to hire 3K workers to bolster its engineering & software teams

• 86% of S&P 500 companies have reported a positive EPS surprise for Q3

• The Justice Department has cleared Uber’s acquisition of Postmates

• Facebook’s pause on political ads is expected to last another month

(Extended) Thought of the Day

• Recently, Pfizer and BioNTech published results suggesting their vaccines are robustly effective in preventing new COVID-19 infections

• Pfizer’s announcement sent the broader equity market (especially stocks depressed by the virus) soaring, as investors began to price in a near-term recovery

• That being said, an issue that is being heavily overlooked is Pfizer’s ability to manufacture and distribute the vaccine at large

• Mass producing a vaccine is extremely difficult, expensive, and timely, requiring lots of infrastructure and time to grow, purify, and test batches

• For this reason, Pfizer is only expected to have at most 20M vaccines distributed by the end of the year, which isn’t a lot (just ~10M a month) given they’ve already agreed to distribute doses to entire countries such as the U.S., those in the European Union, and Japan, among many others

• Thus, the vaccine race likely won’t have a singular winner, as the goal here is not to create a monopoly for one company, but to identify and accelerate all of the most promising candidates into production

• And given cultivation and logistics challenges, it is extremely likely that there will be multiple (slightly different) variations of a vaccines in circulation, all from different companies

• With traditional drug development, winners are essentially awarded monopolies; however, given unrivaled demand / limited supply causing distribution challenges, the race for a COVID-19 vaccine is not a zero sum game, in which many companies can reap the benefits of helping the world

The Bottom Lines

• From an investors perspective, allocating capital among those in the latest stages of development ($NVAX, $AZN, $JNJ, $MRNA) offers a unique opportunity for short-term profit, as all could theoretically offer a vaccine due to the above

• Additionally, it's very possible that the market rally spawned by Pfizer’s vaccine announcement will repeat itself as more companies round out their phase 3 trials and announce vaccines that beat the 50% efficacy threshold set by the FDA

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