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As we pass the noonday mark, the Voo is down only about 0.3% right now, but the crypto selloff is accelerating. Bitcoin prices have fallen below $85,000, down more than 7%. Strategy Inc. (Nasdaq: MSTR), whose business “strategy” at this point consists of little more than buying and owning Bitcoins, is down 12%.
Barclays analyst Brendon Lynch also downgraded shares of cellphone tower REIT and S&P 500 component company American Tower (NYSE: AMT) to equalweight today, this time with a $200 price target.
Lynch cited all the same factors affecting its more muted outlook on Crown Castle, when downgrading its rival. The analyst further noted the risk that EchoStar will cease making rental payments, and warned of “customer churn.”
American Tower stock is down nearly 3% today. The Voo has cut its losses to just 0.2%.
Barclays analyst Brendon Lynch downgraded shares of cellphone tower REIT and S&P 500 component company Crown Castle (NYSE: CCI) to equalweight with a $101 price target this morning.
“Both AMT and CCI remain on solid footing in their lawsuits against EchoStar,” notes the analyst, but “the larger challenge remains the ability to collect. … EchoStar may have already transferred the spectrum in question to a subsidiary that is protected by the statute of limitations on attempts to claw back value by the TowerCos. Also, EchoStar may have other financial obligations, including intra-company loans, that may have a higher claim on available cash then tower leases, to the extent there is cash available.”
Crown Castle is suing EchoStar over the latter’s attempt to terminate long-term cell-tower and infrastructure leases after EchoStar’s sales of much of its wireless spectrum. Lynch believes although Crown Castle’s case is strong, it may ultimately recover as little as 50% of the money it is owed.
Crown Castle stock is down more than 1% premarket. EchoStar stock is down nearly 3%.
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The Vanguard S&P 500 ETF (NYSEMKT: VOO) gained 3% over the final, holiday-shortened, three-and-a-half-day-long trading week last week, but as December trading opens on Monday the momentum seems spent. Shares of the ETF look set to open down 0.7%, as Wall Street adopts a “risk-off” posture — and Bitcoin is falling 6% to less than $86,000.
Rival cryptocurrencies Ethereum and Solana are doing even worse, both down more than 7% at $2,807.86 and $126.29, respectively. People’s Bank of China warned Saturday against unspecified illegal activities involving digital currencies, spooking investors in the asset class.
CNBC blames this news, as well as investors who used leverage to buy crypto on its way up — and now have to sell even more to cover their super-sized losses on the way down — for the magnitude of the slide.
One rare bit of good news this morning: Synopsys (Nasdaq: SNPS | SNPS Price Prediction), which makes the software that controls the equipment that manufactures semiconductor equipment, is gaining more than 7% after Nvidia (Nasdaq: NVDA) announced this morning it has bought $2 billion-worth of Synopsys stock. The companies say they are partnering to develop “next-generation intelligent systems” integrating “electronics and physics, accelerated by AI capabilities and compute.”
And handful of analysts are upgrading equities this post-Thanksgiving Day week, but there’s not a lot of detail yet on why:
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Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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