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GameStop short squeeze impacts on Toronto stock market

GameStop short squeeze impacts on Toronto stock market

Toronto, Feb 2, 2021Large hedge funds have been short-selling stocks, betting that their loss-making business will completely fail. At the same time, with the help of recent low-priced or even free trading tools, millions of small stock buyers have been guided through online forums to buy stocks.

In January 2021, there was a brief run on the shares of American video game retailer GameStop and other securities, which caused significant financial consequences for certain hedge funds, and short sellers suffered huge losses. 

The short squeeze unfolded in January 2021 and peaked uncontrollably

Approximately 140% of GameStop’s public holdings were sold short, and the rush to buy shares to fill these positions due to rising prices led to further increases. The short run was initially triggered by users of sub-reddit, an Internet forum on the social news site Reddit, although many hedge funds also participated in the event. 

At its peak on January 28, the short-term depression caused the retailer’s share price to reach a pre-market price of more than $500 per share, which is almost 30 times the $17.25 valuation at the beginning of the month. The prices of many other heavily shorted securities have also increased.

On January 28, some brokerage firms, including Robinhood, stopped buying GameStop and other securities, and later stated that they were unable to post enough collateral in the clearing house to execute their customers’ orders. 

This decision aroused criticism and accusations from prominent politicians and businessmen in various political fields. Dozens of class-action lawsuits were filed against Robinhood in US courts, and the US House of Representatives Financial Services Committee held a congressional hearing on the incident. As brokers stopped buying GameStop and other securities, the total market value of cryptocurrencies and metal futures also increased.

GameStop short squeeze and Toronto stock market

In Canada, securities regulations in many provinces contain provisions prohibiting market manipulation. The main regulation in Ontario is the Securities Act (RSO 1990).

Accordingly, individuals or companies shall not directly or indirectly engage in or participate in any acts, practises or processes related to securities, derivatives or basic rights and interests of derivatives that the person or company knows or should reasonably know.

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It is worth noting that this provision prohibits actions that individuals or companies should know fall into one of the two categories in paragraph. This means that although individuals or companies have no actual intention to conduct artificial prices or misleading transactions, they may still be liable.

Normal transactions between buyers and sellers are conducted in a fair manner, reflecting actual demand and supply; regardless of the impact on prices, it can be said to be a real market impact. However, if demand or supply is distorted, then prices may also be distorted-no longer reflecting real market demand and supply, which will be artificial.

A variety of trading strategies can be used to artificially generate high (or low) security prices. Some are listed below. Some people doubt whether the broker intends to restrict securities trading on its online platform and artificially lower the stock price, and whether it also meets the conditions.

Pearson leading education, schooling, and training sector

Pearson leading education, schooling, and training sector

Toronto, Jan 26, 2021Pearson is the world’s largest publisher and synonymous with education. This self-financing world learning company has operations in more than 70 countries and regions, providing content, evaluation and digital services to government educational institutions. 

Pearson’s diversified development in all areas of the education sector has enabled the company to flourish. It performs very well in digitizing the entire product suite (including mastery courses, teaching materials and real-time assessment tools). 

Pearson has always been at the forefront of the industry with its innovative AI technology (such as Aida Calculus) and intends to personalize its AI experience by creating fully customizable learning materials.

A race in higher education sector

The education publishing industry includes courseware, including textbooks and other learning materials, and is mainly designed for students in K-12 schools and higher education institutions. Today, in terms of revenue, Pearson has become the largest education publisher in the United States, with a 40% market share. 

Pearson is followed closely by Cengage and McGraw-Hill, with 24% and 21%, respectively, while smaller competitors such as Wiley, Macmillan and Oxford University Press account for the remaining 15%.

Traditionally, education publishers earn most of their courseware income through physical textbook sales, supplemented by other digital products, such as video representations of textbook concepts. However, recent technological trends are shifting learners and educators from physics textbooks to “online classrooms,” where most of their learning is done through digital exercises.

In addition, technological advancements have allowed companies to focus more on personalized services, and organizations such as Khan Academy allow individual students to learn at their own pace through customized modules. 

The two trends of digitization and personalization are the main developments in the higher education sector today, and will continue to shape space in the foreseeable future.

A need for change in education sector

For decades, as the United States fell from sixth in education and healthcare in 1990 to 27 in 2016, education reforms are widely needed across the United States. Regarding the issue of educational inequality, they claimed that in 2016, the average reading ability of fourth-grade students in the United States was worse than five years ago. 

Public officials’ opinions clearly indicate that people’s confidence in the public school system is declining, and the root cause It is considered to be the decline in the affordability of textbooks, the reduction of school funding, the inadequacy of the common core standards, and the focus on exam learning rather than wide application.

Several systems have been proposed in the last century to try to reform the American education system. However, no one has gained enough appeal to become a viable alternative nationwide. The Montessori education method is such a system. 

Montessori method is an older system. It reconsidered the essence of developmental learning and proposed a discovery-based model. In this course, students can learn concepts by processing materials, exploring their uses and understanding their interconnections. 

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Although this method is considered effective under certain conditions, it requires high investment costs and provides students with too much educational independence, so it has received strict scrutiny from the public. In addition, the Montessori method provides a limited potential source of income for educational publishers, and therefore lacks important support from industry leaders.

Pearson project based learning

A more feasible alternative system is project-based learning (PBL). Edutopia defines PBL as “a dynamic classroom method in which students can actively explore real-world problems and challenges and gain deeper knowledge.” PBL does not isolate courses from other courses and strictly abide by textbooks. Instead, it provides students with a project work environment that can integrate multiple skills at the same time. 

For example, in the PBL system, one of the projects students may be working on is building a hypothetical spaceship. The educator will guide students to complete the project and learn several key modules in related fields. For example, to build a spacecraft, in addition to other topics, students also need to understand mathematics, physics, and chemistry. Since tasks are organized around projects rather than specific topics, students are encouraged to think more when solving problems.

Framing education in this way gives meaning to classroom activities and often builds skills that can be directly transferred to the workforce. In the PBL dynamics, teachers become less like authority figures, and more as a guide to students, participatory teaching. 

As a result, the classroom becomes more fascinating and boring. Indeed, PBL educators believe that absenteeism is lower, participation is higher, and test scores are higher. Research on the implementation of PBL has recorded countless examples, in which the performance of PBL schools in standardized tests exceeded the overall progress score of the statewide by three to ten times.

Leading digitalisation in education sector

Combining popular digitization and personalization trends, the online PBL platform provides a cheaper alternative to physics textbooks. The Common Core process has been revised through tailored education and focused on learning for wider applications rather than exams. 

These factors corrected the major problems facing the American education system today. However, leading industry players have not yet chosen PBL. Traditionally, traditionally relying on the sales of physical textbooks, incumbent operators had to cannibalize their original business when pursuing expensive alternative models. 

In other words, industry leaders insist on using their profitable bread and butter and have no incentive to pursue large-scale alternatives like PBL.

Nestlé to lead global consumer goods manufacturing industry

Nestlé to lead global consumer goods manufacturing industry

Toronto, Jan 25, 2021Consumer inventories from the spread of COVID-19 helped increase Nestlé’s sales in the first quarter. The company reported a 4.3% increase in organic sales in the first quarter, but Nestlé CEO Mark Schneider adjusted the news to remind people that the consumer goods industry is facing great uncertainty.

As the market slows and competition in the FMCG market increases, companies need to discover new factors to attract more consumers. This should be done by analyzing the different elements of the marketing mix and investing in sustainable market development strategies. 

Nestlé is the world’s largest food company with a market value of approximately $231 billion. As of May 2020, it had a market value of more than $247 billion. Nestlé’s products include baby food, medical food, bottled water, cereal breakfast, coffee and tea, sweets, dairy products, ice cream, frozen food, pet food and snacks.

Striving in a competitive consumer goods industry

To be part of a consumer packaged goods company means to be part of a very large family, a group of sister companies and various subsidiaries that sell everyday brands to people every day. The Nestlé family consists of more than 300,000 people in 150 countries and regions, produces more than 10,000 different products, and sells more than 1 billion products every day. 

From morning to night, from birth to old age, Nestlé produces products every day. This is billions of dollars in annual revenue, thousands of employees and various other industries that are positively affected.

Compared with mature markets in Europe and North America, there is still huge potential for buyer base growth for many brands in the East Asia and Southeast Asian regions.

In addition, as the process of urbanization continues, many rural families will move to cities, thereby expanding the urban consumer base. Encouraging to try new categories, develop new products to capture more consumption opportunities, and further explore in low-end cities will effectively help Nestlé attract more consumers.

The key to success in the industry is inevitably being able to respond flexibly to competition and flexibly adapt to the latest and greatest consumer trends. The needs and demands of consumers are undergoing tremendous changes, and the markets in which we operate daily are also changing. 

Therefore, many large consumer good manufacturing organizations (such as Nestlé) have designated teams responsible for generating market research, insights, and consumer behavior analysis. Ultimately, big data and research push our products to a top-notch level. 

However, it is the talents behind our brand that bring expertise, ideological diversity and innovative ideas that provide impetus to our daily processes.

Consumer goods in demand for Nestlé in 2021

In the first quarter, demand for products deemed daily necessities was strong, including cooking products, Purina PetCare, coffee (driven by Starbucks demand), and Nestlé Health Sciences. At the same time, sales of sweets and ice cream have fallen because of reduced impulse purchases and gift-giving demand.

All markets have undergone a major shift from outdoor consumption to household consumption. The companies most affected include Nestlé Professional, Nespresso boutiques (98% closed by the end of March), and outdoor water channels. These businesses account for about 10% of the company’s sales.

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Most of Nestlé’s markets (especially North America and Europe) have experienced short-term consumer inventory storage-in EMENA in March and the Americas in the second half of March. 

Although the Americas grew organically by 7.4% during the reporting period, sales in China dropped sharply due to travel restrictions and limited consumer inventory, high exposure of outdoor channels, and supply chain challenges related to the Chinese New Year.

Nestlé strategic growth through M&A developments

In terms of mergers and acquisitions, the company is exploring the potential sales of its Lulu peanut milk and canned rice porridge business in China, but it will retain and develop its Nescafé ready-to-drink coffee business, which also operates on the Lulu supply chain platform .

Its sale of its US ice cream business to Froneri for $4 billion ended on January 31, and the sale of a 60% stake in Herta’s deli business to Casa Tarradellas is expected to be completed in the first half of 2020.

The company is expanding its medical nutrition business by acquiring Zenpep gastrointestinal drugs from Allergan, which is expected to close in the second quarter, and in April it acquired the pet food business Lily’s Kitchen.

As a manufacturer of consumer packaged goods, there is fierce competition for retail shelf space and consumer shelf space in consumer homes. The industry has become increasingly market-driven to promote connections between people and the brands they wish to love. Moreover, in recent years, innovation has become a key element in all areas of the industry to produce high consumer satisfaction results and attract brand loyal customers.

Israel Chemicals leading chemicals and petrochemicals industry

Israel Chemicals leading chemicals and petrochemicals industry

Toronto, Jan 24, 2021Israel Chemical Co., Ltd. develops, produces and sells fertilizers, metals and other special-purpose chemical products used in agriculture, food and engineering industries.The company’s refinery division is responsible for refining crude oil and producing fuel and raw materials for the plastics industry. 

The company was established in Tel Aviv in 1968 and has grown into one of the world’s largest suppliers of phosphate fertilizers, bromine and other minerals and chemical compounds.

Israel Chemicals (Israel Chemicals) is divided into three parts: fertilizer, industrial products and performance products. The fertilizer department is engaged in the production of standard, granular, fine red and white potash fertilizers from different sources, as well as the production of phosphates such as phosphate rock, phosphoric acid, fertilizers and animal feed additives. 

The industrial products sector produces flame retardants such as bromides and organophosphorus, elemental bromine and other chemicals. The High Performance Products division produces specialty phosphates, such as industrial grade, food grade and electronic grade phosphoric acid, phosphates, food additives and wildfire safety products, as well as alumina and other chemicals.

It accounts for more than 9% of the magnesium consumed in Western markets, and 60% of its output comes from the Dead Sea and the Negev Desert. Originally created to merge many state-owned mining companies, a series of acquisitions and mergers aroused people’s interest in the 70s, 80s and 90s. In 2016, annual sales reached 5.36 billion US dollars.

The leader of public chemicals in the 21st century

As another step towards full privatization, the company continued its reorganization in 1995, dividing Israel Chemicals into three main divisions: the Dead Sea Plant. The company took over the company’s Dead Sea minerals, pharmaceuticals, cosmetics and energy products. 

Dead Sea Bromine was separated from the Dead Sea plant and formed the core of a new bromine business unit that also merged Dead Sea Periclase and Rami Ceramics; and a new company, Rotem, which took over not only Rotem Amfert Negev but also Giulini Chemie and various other companies and businesses, including many international holdings of Israel Chemicals.

Israel Chemicals merger and acquisition initiatives during the 90s and 2000s

Israel Chemicals continued its acquisitions into the second half of the decade. In 1995, the company acquired ClearonCorp of the United States, which specializes in water treatment products. 

In 1996, Rotem consolidated its position in the German phosphate market by acquiring BK Ladenburg Gesellschaftfür Chemische Erzeugnisse. The company was founded in 1967 and was controlled by Hoechst AG in 1990 to produce phosphates for food additives, detergents, water treatment and other markets. 

After the acquisition, Rotem reorganized its German operations and merged BK Ladenburg with Giulini Chemie to create BK Giulini.

The Israeli company exercised its option to further acquire shares in Israel Chemicals, increasing its shareholding ratio to 41.9%. The Israeli government reduced its shares in Israel Chemicals to only 31.5%, and finally completed the privatization of the company in 1999 when it placed all its shares on the Tel Aviv Stock Exchange

The Israeli company took the opportunity to increase its stake in Israel Chemicals to 52%, defeating Canadian competitor Saskatchewan’s Potash Corporation (PCS), which had been seeking international expansion in the late 1990s.

Israel Chemicals subsidiary Dead Sea Magnesium to invest $450M in China

At that time, Israel Chemicals acquired the Spanish potash company Grupo Potasas in Barcelona, ​​Spain, and Spain’s largest potash producer through Dead Sea Works, thus surpassing PCS. The company subsequently changed its name to Iberpotash. The Dead Sea plant is also expanding to other places, investing $450 million to build a plant in China, using Israel Chemicals’ cold crystallization process, which is expected to produce 800,000 tons of potash per year. 

The Dead Sea Works (Dead Sea Works) also developed in a new direction, the establishment of Dead Sea Magnesium (Dead Sea Magnesium), and invested about 420 million US dollars to build magnesium production facilities. The company correctly guessed that the automotive industry will increasingly use magnesium alloys, which are both lighter and less harmful to the environment than traditional metals.

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Beginning in 1999, Israel Chemicals began a plan to delist its publicly listed subsidiaries from its fertilizer company. The following year, Israel Chemicals acquired all the outstanding shares of Dead Sea Works, Dead Sea Bromine and Dead Sea Periclase. 

At the same time, when Israel’s largest private company, Ofer Brothers Group, acquired a controlling stake in Israel Corporation for $330 million, Israel Chemicals itself gained new ownership and defeated the PCS bid.

The expansion of Israel Chemicals continues into the next decade. In 2000, Rotem, through Rotem Amfert Negev, purchased Turkish phosphate producer Opal, which specializes in the production of products for the feed market. The subsidiary was renamed Rotem Turkey. 

At the same time, the company began to reduce many non-core businesses, including a stake in Dead Sea Laboratories, which sold cosmetics and skin care products under the Ahava brand and sold it in 2001.

Israel Chemicals lays the foundation for China’s balanced fertilizer strategy

A series of field activities organized by Israel Chemicals China for the growers of specialty crops in Guangxi Province was warmly welcomed by farmers, who had the opportunity to see the results of balanced crop nutrition and help them develop improved fertilizer strategies.

According to Li Guohua, a Chinese agronomist at Israel Chemicals, many crops such as mangoes and edible grapes ignore the role of medium and micronutrients. As a result, the yield has been reduced and the quality has been worse than expected. 

The Israel Chemicals team chose to hold activities in the field to prove that the farmers’ orchards and vineyards are more nutritious and invite growers to meet with Israel Chemicals agronomists and local agricultural experts.

For a long time, fields or demonstration days were considered beneficial to farmers. The contemporary version benefits from digital technology to invite participants, suggest what they will see and get suggestions. In addition, farmers can record content in photos and movies for later viewing, and organizers can share the output with those who cannot participate through the movies made on the day.

High-tech agreement reveals a new era for Israel Chemicals fertilizer development

Israel Chemicals has signed a cooperation agreement to use the latest sensor-based technology to test the proposed fertilizer. The agreement was reached with the Hebrew University School of Agriculture, Food and Environment, and the technology is called Plantarray.

The process is developed by Plant-DiTech, which can quickly analyze and quantify the response of plants to different fertilizers. The use of Plantarray is expected to increase accuracy and greatly reduce the timetable for developing new fertilizer solutions. The test will be conducted in the iCORE greenhouse of the Hebrew University. The most promising formulations and applications will be determined for further development and commercialization.

Novo Nordisk to lead global biotechnology and pharmaceutical industry

Novo Nordisk to lead global biotechnology and pharmaceutical industry

Toronto, Jan 23, 2021Novo Nordisk is a multinational biotechnology company headquartered in Denmark, with production facilities in seven countries, and branches or offices in 80 countries. 

Denmark’s Novo Nordisk is the world’s largest producer of insulin and industrial enzymes. It stated in its 1992 annual report that it intends to maintain this position while developing its health care team in order to gradually increase its value. Approximately half of Century’s turnover will come from therapeutic areas other than the insulin business.

The company’s main focus is diabetes care, hemophilia care, growth hormone therapy and hormone replacement therapy. The company produces multiple brands of drugs, including Levemir, NovoLog, Novolin R, NovoSeven, NovoEight and Victoza.

Innovative insulin delivery mechanisms from Novo Nordisk

Innovative insulin delivery mechanisms have also been introduced on the market, such as NovoPen. The two companies have also made significant progress in the treatment of other chronic diseases by discovering drugs such as Nano and Norditropin for growth hormone and Vagifem for atrophic vaginitis.

In 1989, the two companies merged to form Novo Nordisk A/S, the world’s leading insulin manufacturer. The combined company continues to innovate, including the world’s first pre-installed insulin syringe Novolet, NovoSeven for hemophilia patients, Activelle for postmenopausal women, and Novonorm for type 2 diabetes. With more than 90 years of experience and 39,700 strong employees in 75 countries/regions, the company continues to be a leader in diabetes care.

Novo Nordisk focuses on research and development to grow 15%

The healthcare group has a joint research and development department, ZymoGenetics (see below), which focuses on long-term projects and is dedicated to cultivating new therapeutic areas throughout the organization.

Novo Nordisk set a growth target of 15% for its healthcare business in 1993, with the small sector contributing the most. High-level capital expenditures will continue, and planned investments in laboratories and production facilities will exceed 1 billion Swedish kronor.

The group almost managed to complete the expansion of global clinical development to registration in 1992. This means that the company will recruit fewer new employees in 1993 than in previous years. The company’s healthcare department currently has 6,174 employees in 44 countries and regions around the world. Novo Nordisk has 10,733 employees.

Novo Nordisk cancels clinical development projects

Novo Nordisk said that research on insulin analogues continues, but it turns out that clinical development is much more difficult than originally expected. Therefore, the company abandoned certain projects, such as the preparation of intranasal insulin, which did not meet the expectations of the trial. However, its development project for the nasal application of glucagon will continue. 

In addition, the company is also committed to the development of new oral antidiabetic drugs and other type 2 diabetes research projects. A new preclinical project in the Type 2 study aims to identify new ways to induce insulin release from beta cells.

Novo Nordisk solves traditional HRT, including complex dosages

Novo Nordisk said that one of the key factors for its success in this area is that the company has focused on solving the problems women often encounter with traditional HRT, such as complex dosages, unacceptable side effects and lack of information. 

This year 2021, the company will introduce educational literature in other markets, and plans to introduce its products to new markets such as Europe and Canada. It is also undergoing development research with a view to registering in the United States.

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The antidepressant Seroxat (Paroxetine) was developed by the British and American drug company SmithKline Beecham in cooperation with Novo Nordisk. The company has the right to sell the product in the Nordic countries and collects royalties from sales in other markets. 

Seroxat was launched in the UK and Sweden in 1992, and Novo Nordisk has been approved to sell the product in Denmark, Norway and Finland. SB has obtained regulatory approval for this product.

Developmental projects in the Novo Nordisk biopharmaceuticals division 

Novo Nordisk said in its annual report that the development projects in the biopharmaceutical sector look promising. Preliminary studies have shown that growth hormone may have a positive effect on the treatment of several different diseases, and the company has established some projects that may lead to the approval of new applications of Norditropin.

In the short term, these projects will focus on treating children with short stature due to chronic renal insufficiency, treating adults who cannot produce their own growth hormone, and treating severe infertility.

In the long term, the company is investigating whether growth hormone may have a beneficial effect on patients suffering from metabolic diseases (such as cancer) and AIDS patients who cannot use nutritional intake. Although still in the early stages of development, the company has shown promising prospects for nasal administration of growth hormone.