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Globe and Mail
11 hours ago
- Business
- Globe and Mail
Prediction: Wall Street's Latest Stock-Split Stock -- Up 60,120% Year-to-Date -- Is Going to Implode... It's Just a Matter of Time
Since the S&P 500 's bull market began in October 2022, no trend has provided a bigger lift to equities than the evolution of artificial intelligence (AI). In Sizing the Prize, the analysts at PwC estimated AI would bolster the worldwide economy to the tune of $15.7 trillion come 2030. However, AI isn't the only reason Wall Street's major indexes keep climbing. In addition to the long-term potential AI brings to the table, investor euphoria surrounding stock splits in high-flying companies has kept the stock market's engine humming along. Stock-split euphoria has helped power the broader market higher A stock split is a mechanism publicly traded companies have at their disposal which allows them to cosmetically alter their share price and outstanding share count by the same magnitude. These adjustments are surface-scratching in the sense that stock splits don't affect a company's market cap or its operating performance. Although splits can increase (reverse split) or decrease (forward split) a company's share price, there's a clear delineation as to which variety of split investors typically gravitate to. Reverse splits that boost a company's share price and concurrently reduce its outstanding share count by the same factor are often avoided by investors. This type of split is usually undertaken by companies that are struggling on an operating basis and completing their split in an effort to avoid delisting from a major U.S. stock exchange. On the other hand, companies that conduct forward splits are generally sought after by investors. If a company has to lower its share price to make its stock more nominally affordable for retail investors who can't purchase fractional shares with their broker, it's often doing something right. This "something" comes in the form of superior operational execution and top-tier innovation. But as you're about to see, not all forward stock-split stocks are necessarily great businesses. Non-tech stock-split stocks have taken center stage in 2025 Last year, more than a dozen prominent stocks announced and completed a forward split, many of which can be traced to the technology sector and the artificial intelligence revolution. This includes the face of the AI movement, Nvidia, as well as one of the newest members of the trillion-dollar club, Broadcom. In 2025, only a small number of high-profile companies have announced and completed stock splits. But the one factor they all have in common is they don't hail from the tech sector. Wholesale industrial and construction supplies company Fastenal (NASDAQ: FAST) was the first to actually complete its split (2-for-1) following the close of trading on May 21. It's the ninth time Fastenal has split its stock over the last 37 years. The reason splits have become part of Fastenal's corporate culture is because its stock, including dividends, has increased in value by more than 210,000% since its initial public offering in 1987. This is a reflection of Fastenal's strong cyclical ties to the U.S. economy, as well as its innovation, which has allowed it to become ingrained in the supply chains of America's leading industrial companies. Following Fastenal's lead was auto parts supplier O'Reilly Automotive (NASDAQ: ORLY), which effected a 15-for-1 forward split following the end of trading on June 9. O'Reilly's split reduced its nominal share price from nearly $1,400 to around $90. On top of having one of Wall Street's most-effective share-repurchase programs -- O'Reilly Automotive has spent $25.9 billion to buy back more than 59% of its outstanding shares since the start of 2011 -- the company is benefiting from the aging of America's cars and light trucks. In the latest annual report from S&P Global Mobility, the average age of cars and light trucks on U.S. roadways hit a record 12.8 years in 2025. As vehicles age, drivers and mechanics are becoming more reliant on auto parts chains like O'Reilly. The other preeminent company that announced and completed a forward split in 2025 is electronic automated brokerage firm Interactive Brokers Group (NASDAQ: IBKR). It effected its first-ever split (4-for-1) after the closing bell on June 17. Interactive Brokers' aggressive investments in technology and automation, coupled with the positive impact long-lasting bull markets have had on investors, have virtually all of its key performance indicators pointing higher by a double-digit percentage. It's enjoying double-digit year-over-year growth in total accounts, equity on its platform, and trading activity. While all three of these businesses have proven their worth to Wall Street, the same can't be said about Wall Street's latest stock-split stock, which is eventually going to implode. Wall Street's newest stock-split stock is chock-full of red flags Following the close of trading on Friday, June 13, clinical-stage traditional Chinese medicine (TCM) company Regencell Bioscience Holdings (NASDAQ: RGC) put a 38-for-1 forward stock split into effect. This split was designed to reduce Regencell's share price from $595 to less than $16 per share, all while increasing its outstanding share count by a factor of 38. The magnitude of this split (38-for-1), coupled with Regencell's year-to-date gain of 60,120% (that's not a typo!), as of the closing bell on June 17, would suggest that it's an operating marvel -- but this couldn't be further from the truth. Since commencing its operations in 2015, Hong-Kong-based Regencell hasn't generated a cent in revenue, nor does it have in any products remotely close to being commercialized, based on its regulatory filings. But this hasn't stopped the company's valuation from soaring to nearly $39 billion. During fiscal 2024, which ended on June 30, Regencell had $4.74 million in operating expenses, no sales, and ultimately reported a comprehensive loss of $4.32 million. It ended its fiscal year with (drum roll) 12 employees, only four of which are involved with research and development and one tied to sales (despite a complete lack of products). Here's a snippet of one of the more pertinent risk factors for the company: Our operations to date have been limited to organizing and staffing our company, partnering with the TCM Practitioner to conduct research studies, identifying potential partnerships and TCM formulae candidates, acquiring TCM raw materials, and conducting research and development activities for our TCM formulae candidates. We have not yet demonstrated the ability to successfully complete large-scale, pivotal research studies. We have also not yet applied for or obtained regulatory approval for, or demonstrated an ability to manufacture or commercialize, any of our TCM formulae candidates. Furthermore, Regencell's risk factors point to there being no guarantees that the company can successfully patent and/or protect its TCM products from third-party claims or even breaches of intellectual property agreements (not covered by patents) with its own employees. But wait -- there's more! With the company extremely early in its development process, sporting no sales, and having no virtually no possibility of sustained positive operating cash flow anytime soon, it also brings a going concern warning to the table. A "going concern warning" effectively means the company's current assets aren't expected to be sufficient to cover its current liabilities over the next 12 months. If you're wondering how a clinical-stage healthcare company with no sales or products skyrockets more than 60,000% in less than six months and executes one of the largest forward splits we've witnessed this decade, your guess is as good as mine. Though borrow rates to short-sell (i.e., bet against) Regencell stock have shot into the stratosphere in recent days, overall short interest has been muted, which removes the notion of this move being propelled by a short squeeze. More than likely, we've witnessed momentum-based risk-takers pile into what had been (prior to its 38-for-1 split) a relatively low-float stock. With more than 494 million shares now outstanding and the company's abysmal fundamental picture in plain sight, it's simply a matter of time before this fairy tale bubble implodes and shares plummet back below $1. Caveat emptor! Should you invest $1,000 in Regencell Bioscience right now? Before you buy stock in Regencell Bioscience, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Regencell Bioscience wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor 's total average return is995% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2027 $175 calls on Interactive Brokers Group and short January 2027 $185 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.
Yahoo
3 days ago
- Business
- Yahoo
Bitcoin's $112K Peak Under Pressure: Is the Bull Run Taking A Breather Or Hitting the Brakes?
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Bitcoin's remarkable 2025 rally has hit a significant speed bump, with the cryptocurrency experiencing a sharp 6.61% decline to $104,369 by weekend trading. This retreat from its all-time high of $112,000 has left investors questioning whether this is merely a healthy correction in an ongoing bull market or a sign of deeper headwinds ahead. The immediate catalyst for Bitcoin's decline stems from escalating Middle East tensions. Israeli airstrikes on Iran overnight Thursday into Friday sent shockwaves through global markets, with Bitcoin falling sharply from $108,000 to around $103,000 at one point. This pattern mirrors previous geopolitical events where Bitcoin has initially sold off alongside other risk assets during periods of uncertainty. Don't Miss: — no wallets, just price speculation and free paper trading to practice different strategies. Grow your IRA or 401(k) with Crypto – . The broader market reaction underscores how interconnected global assets have become during crisis periods. The Nasdaq's 1.31% decline and West Texas Intermediate crude's 7.26% surge highlight the classic 'risk-off' trade, where investors flee to traditional safe havens like gold and government bonds while dumping cryptocurrencies and growth stocks. From a technical analysis perspective, Bitcoin's recent price action presents a more concerning picture than the geopolitical noise might suggest. The formation of a lower high from the all-time high represents a potential shift in momentum, with the cryptocurrency now testing critical support levels. The key battleground sits at $100,300 – a significant swing low established on June 5. This level carries particular importance as it represents the confluence of technical support and psychological significance. A sustained hold above this threshold could allow Bitcoin to consolidate and potentially resume its upward trajectory. However, a breakdown below $100,300 could trigger more aggressive selling, potentially targeting the yearly opening price of $93,548. Such a move would represent a nearly 20% decline from current levels and could signal a more substantial correction in the broader cryptocurrency market. Current market conditions reveal thin liquidity and weak demand – a common occurrence during weekend trading but exacerbated by geopolitical uncertainty. This environment can amplify price movements in both directions, making technical levels even more critical as potential inflection points. The weekend trading dynamic typically sees reduced institutional participation, leaving retail traders and algorithmic systems to drive price action. In such conditions, large orders can create outsized moves, potentially triggering cascading effects if key support levels break. Trending: New to crypto? on Coinbase. While the current decline feels significant, it's worth contextualizing this move within Bitcoin's broader historical patterns. Bull market corrections of 15%-30% are not uncommon for Bitcoin, and previous geopolitical events have often provided temporary buying opportunities rather than permanent trend reversals. The 2024 Israel-Iran conflict provides a relevant comparison point. During that episode, Bitcoin initially sold off sharply but recovered relatively quickly once the immediate crisis passed and damage appeared limited. Market participants should monitor whether similar dynamics play out in the current situation. Bullish Scenario: If Bitcoin maintains support above $100,300 and geopolitical tensions ease, the cryptocurrency could resume its upward trajectory. Strong institutional adoption trends, potential regulatory clarity, and continued macroeconomic support could drive renewed buying interest. Bearish Scenario: A break below the June 5 swing low could trigger technical selling, potentially pushing Bitcoin toward the $93,548 yearly open. This scenario would likely coincide with broader risk asset weakness and could test the resolve of newer institutional investors. Sideways Consolidation: Bitcoin could trade in a range between $100,000-$108,000 while digesting recent gains and awaiting clearer directional catalysts. This outcome would represent a healthy pause in the broader uptrend. Several variables will likely determine Bitcoin's near-term direction: Geopolitical Developments: The evolution of Middle East tensions will significantly impact risk sentiment and Bitcoin's correlation with traditional markets. Institutional Flow: Large-scale buying or selling by institutional investors, particularly through Bitcoin ETFs, could provide directional momentum. Technical Levels: The $100,300 support level remains critical, while any move back above $108,000 could signal renewed strength. Market Liquidity: Improving liquidity conditions as institutional traders return could help stabilize price action and reduce volatility. For retail investors, this correction presents both risks and potential opportunities. Those with existing positions should consider their risk tolerance and investment timeline, particularly given Bitcoin's inherent volatility. New investors might view any further weakness as a potential entry point, though timing such moves remains challenging even for experienced traders. The current environment underscores the importance of proper position sizing and risk management when investing in cryptocurrencies. While Bitcoin's long-term trajectory remains compelling for many investors, short-term volatility can test even the most conviction-driven investment thesis. Bitcoin's retreat from its $112,000 peak reflects the complex interplay between geopolitical events, technical factors, and market structure. While the immediate catalyst appears geopolitical, the technical framework suggests this correction could have legs if key support levels fail to hold. Investors should prepare for continued volatility while monitoring the critical $100,300 level that could determine whether this represents a mere pause or a more significant shift in market dynamics. Read Next: A must-have for all crypto enthusiasts: . Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Image: Shutterstock This article Bitcoin's $112K Peak Under Pressure: Is the Bull Run Taking A Breather Or Hitting the Brakes? originally appeared on Sign in to access your portfolio
Bloomberg
4 days ago
- Business
- Bloomberg
South Korea's Equity Rally Boosts Market Value Above $2 Trillion
South Korea's stock market value has regained the $2 trillion mark after a three-year setback, the latest in a series of bullish milestones amid enthusiasm for corporate reforms and AI chip trades. The Kospi entered a technical bull market two weeks ago and is now up 23% for the year, making it Asia's best-performing equity benchmark. The index is about 10% away from a record high set in 2021.
Bloomberg
11-06-2025
- Business
- Bloomberg
Recession Risk Looms Over a US Stock Market That Wants to Rally
In financial circles, there's an old adage: 'Don't fight the Fed.' That framing makes it seem like the Federal Reserve dictates and the market falls in line. I'd like to change the saying to: 'Don't fight the bull market,' to reflect the current zeitgeist. Sure, investors can de-risk tactically — by changing sector and country allocations, for example. But unless they're Warren Buffett, money managers are going to underperform if they try and fight for too long against a market that simply wants to go up. This is more true of stocks today than of bonds. But there too, it's hard to make the case for a severe bear market even as the US government's debt pile swells.
Bloomberg
11-06-2025
- Business
- Bloomberg
Chanos Sees 'Bipolar World' With Wall Street and DC
"This bull market is going to go until it doesn't," Chanos & Co. founder Jim Chanos says while discussing the state of markets and his concerns about the lack of oversight in the crypto market. He speaks with Scarlet Fu on Bloomberg Television. (Source: Bloomberg)
