Ripple Responds to SEC Lawsuit Over XRP Sales

Ripple Responds to SEC Lawsuit Over XRP Sales

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A few months ago, I began prodding around the idea of, “What are the future FAANG stocks?” We’ve seen Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and other tech stocks swell from modest winners to worldwide behemoths. These stocks went from $100 billion to $1 trillion in market capitalization. So many people talk about what it would be like if we had bought Apple in the 1980s or Amazon in 1999. While anyone who did and was able to hold on until now is ridiculously rich, they also sat through a ton of volatility. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Further, investors could have waited until after Apple’s iPhone moment or Amazon’s clear dominance of e-commerce and still made a 10x or more return on their investment. Don’t believe me? Apple is up over 1,000% over the past decade, while Amazon is up 1,760%. Over just the last five years — when it was absurdly clear these two were established leaders — Apple and Amazon are up 463% and 442%, respectively. That led me to ponder, what are the next tech stocks that could become new FAANG leaders? Specifically, I am looking for companies in the $50 billion to $300 billion market cap range that can go to $400 billion to $1 trillion or more. It’s an admittedly wide range, but who cares — these winners are right under our noses. Let’s look at seven tech stocks: 7 Safe Stocks to Buy for Solid Returns in Tumultuous Times PayPal (NASDAQ:PYPL) Salesforce (NYSE:CRM) Nvidia (NASDAQ:NVDA) Advanced Micro Devices (NASDAQ:AMD) Roku (NASDAQ:ROKU) Shopify (NYSE:SHOP) Adobe Systems (NASDAQ:ADBE) Tech Stocks to Buy for Future Gains: PayPal (PYPL) Source: JHVEPhoto / Shutterstock.com Current Market Cap: $295 billion Many investors have continued to underestimate PayPal. When it comes to FAANG tech stocks in their younger years, that seems to be a staple observation of them as well. However, PayPal has found a way to become a payment juggernaut. While sending money to friends and family is free and convenient, that’s simply one part of the ecosystem. The company also makes a sliver of sales when involving another business or merchant. It’s become a safe, trusted and convenient way for businesses to sell online or to make subscriptions a piece of cake. PayPal’s acquisition of Venmo and Honey have only added to those layers of engagement, while e-commerce will continue to be the main catalyst behind its growth. For those looking at tech stocks, the power and trend of e-commerce doesn’t need to be explained. Lastly, PayPal’s now in the cryptocurrency game, allowing customers to buy and sell Bitcoin, Bitcoin Cash, Etherium and Litecoin. Maybe PayPal won’t be able to collect its current “fee” — read: commission — on these transactions forever, based on how stock commissions vanished almost overnight in the brokerage industry. However, for now it should act as an additional growth catalyst. Bonus: At a $100 billion market cap, Square (NYSE:SQ) could also be a consideration as a member of new FAANG tech stocks in this respect. Salesforce (CRM) Source: Bjorn Bakstad / Shutterstock.com Current Market Cap: $206 billion. It should go without saying that given the massive gains the stock market has registered over the past nine months, the ideal scenario would be a sizable correction for several of the stocks on this list. However, that doesn’t apply to all of them. Take Salesforce for example. This company keeps on printing money as revenue continues to chug higher. For all the doubt that Salesforce has endured over the years, it has done quite well. It doesn’t seem like management plans on stopping, either. For instance, management is looking to generate $60 billion in revenue by 2034. Most recently, it aims to scoop up Slack (NYSE:WORK), growing its workstation presence and scaling up its fight against Microsoft (NASDAQ:MSFT). 8 Cheap Stocks to Buy With Your Next Stimulus Check As we are talking about pullbacks, Salesforce is a great example. At the recent low, shares were 25% off the highs. That seems like a great opportunity for a company that continually sports 20%-plus revenue growth. Nvidia (NVDA) Source: Sundry Photography / Shutterstock.com Current Market Cap: $335 billion Admittedly a bit larger than what we were looking for, Nvidia needs to be included on this list. Almost every major technological trend is growing in demand. More internet traffic is creating strain in the cloud, increasing demand for edge-cloud computing. More data is creating more need for datacenters. Increasing self-driving vehicle capabilities demand more computing power. Better computers demand better graphics. The list goes on and on and Nvidia is there at every turn. The company’s products cater to multiple end markets with impressive secular growth. That’s why, despite the pandemic, Nvidia saw such an extreme acceleration in both earnings and revenue. Its savvy M&A strategy has allowed it to add high-quality names like Mellanox at reasonable valuations. Now Nvidia is going after Arm, a massive $40 billion deal. Nvidia is already nearing an unstoppable state, but with Arm it would be a juggernaut. From a pure antitrust perspective, Nvidia should be fine. However, this “juggernaut” position might cause some hiccups. Either way, this is a high-quality name that will only grow in size over time. Advanced Micro Devices (AMD) Source: Sundry Photography / Shutterstock.com Current Market Cap: $111.5 billion For Nvidia’s smaller sibling, we have Advanced Micro Devices. At about one-third the size, AMD has quickly climbed the ladder while drastically improving its financials. CEO Lisa Su has orchestrated one of the most impressive comeback stories in the stock market. Once left for dead, AMD was trading firmly below the $2 mark in 2016. Now sporting a 52-week high of $99-and-change, the leadership has been stellar. Like Nvidia, AMD is situated in multiple secular growth themes as rising demand in technology results in rising demand for AMD. Also like Nvidia, AMD saw a massive rise in revenue and profit during the pandemic. In one last final comparison to Nvidia, AMD is also working to close a large acquisition. In October, the company agreed to acquire Xilinx for $35 billion. 9 Stocks Selling at a Discount Right Now While it would require years worth of more growth, it’s not hard to imagine AMD growing to the size of Nvidia ($300 billion). Eventually clearing this level could put it on the lower end of the FAANG status in terms of its size. Roku (ROKU) Source: jejim / Shutterstock.com Current Market Cap: $53 billion Roku is a tough one, because it’s certainly the smallest name on this list (by a lot) and it just went on a massive rally. Shares are up 90% over the past three months, as Roku has climbed from a market cap of just $28 billion to where it is today. Additionally, investors just don’t understand this company. They still think it’s going head-to-head with Amazon with its stick players. While that’s kind of true, the story behind Roku isn’t the hardware — it’s the platform. Roku doesn’t care if it’s making money on the hardware. Instead, its focus is on the platform, where it collects fees from content providers and on ad revenue from its free Roku channel. In that respect, growth continues to explode. Analysts expect roughly 50% revenue growth this year, followed by 40% growth in 2021 and 36% growth in 2022. Respectfully, I believe that may be conservative. Bulls will acknowledge that a pullback may be in order (and a potentially large one at that). However, I don’t think the top is in for Roku. For AMD I mentioned the “lower end of the FAANG status,” which would be Netflix (NASDAQ:NFLX). Currently, that’s a $250 billion market cap and remember, NFLX is at a new high. I could see a scenario where Roku pulls back 20% to 25% — giving it a roughly $40 billion market cap — and ultimately roaring on to a $200-plus billion entity. Shopify (SHOP) Source: justplay1412 / Shutterstock.com Current Market Cap: $145 billion There is one problem with Shopify and several other names on this list: The rallies. While the massive rallies great for long-term investors, it makes the stocks susceptible to large pullbacks as well. If and when we get those declines, that’s investors’ opportunity to pounce. For Shopify, the bullish reasoning is multifold. First, Shopify is riding a much large trend — e-commerce — and therefore will continue to benefit from robust growth. When the coronavirus hit, sales were not negatively impacted. Instead, merchants flocked to its platform, driving Shopify’s revenue higher. Second, it’s building out the anti-Amazon business platform — giving merchants big and small power and control of the customer experience. Now the reward here is massive, as Shopify builds out multiple business segments likes shipping, credit, Shopify Pay and others. However, the risk is present as well. That is, can these companies that crave independence from Amazon delivery quality experiences for the customer? In the end, businesses and merchants are at least willing to try. In December 2019 I said investors could buy Shopify despite its lofty valuation. My argument centered on its valuation, saying this name could go from a $40 billion market cap to a $100 to $120 billion market cap in a decade. 7 Safe Stocks to Buy for Solid Returns in Tumultuous Times It was not obvious that the more than tripling in its value would take place in just a few months. In the long, long run, it’s not hard to imagine this name being significantly higher. Adobe Systems (ADBE) Source: r.classen / Shutterstock.com Current market cap: $228 billion Last but not certainly not least is Adobe. This company does a lot more than just Flash or Photoshop. It’s become a mainstay in e-commerce while also becoming a beacon in the graphics, digital and creative landscape. Find me a freelance graphic designer who’s not using Adobe. The stock has quietly racked up enormous gains as well. Adobe is up 140% over the past three years and 430% over the past five years. Over the last decade, the stock has rallied more than 1,300%, as its market cap was around $16 billion just 10 years ago. That’s some impressive action and Adobe doesn’t show many signs of letting up. Analysts expect double-digit earnings and revenue growth this year and next year, while the company gross margins remain solidly above 85%. While its top-line margins have been steady, its bottom-line profit margins have been soaring. Adobe is quickly yet quietly becoming a technology juggernaut right in front of us. Like some others on this list, the stock has been consolidating nicely over the past six months or so. Let’s see if this name can resolve to the upside. On the date of publication, Bret Kenwell held a long position in AAPL, ROKU, CRM and NVDA. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post 7 Tech Stocks That Could Be the Future FAANGÂ appeared first on InvestorPlace.

XRP Surges 50% After Ripple Files SEC Response

The last few months have been very challenging for XRP holders. The cryptocurrency plummeted in price while the other top cryptocurrencies by market cap experienced price growth not seen in years.

XRP’s price collapse was due to charges brought against Ripple Labs and two of its executives in December. The SEC charges include the sale of over $1 billion in unlicensed security based on their sales of XRP. The SEC alleges that XRP is a security, a designation not assigned to the top two cryptocurrencies, Bitcoin and Ether.

This announcement led to an over 50 percent price decrease as many platforms that utilized RippleNet and XRP suspended operations over these allegations. These platforms are unregulated by the SEC and want to remain that way. As such, these allegations might bring them under US jurisdiction if they participate in the sale of securities to users. Even regulated firms like Grayscale, the largest digital asset manager in the cryptocurrency space, reduced XRP holdings following this announcement.

Ripple is Fighting Back

Many stakeholders in the XRP ecosystem were extremely upset with these allegations. Some filed petitions filed alongside lawsuits. Some were against the SEC for waiting seven years after the launch of XRP to take action. Others sued platforms like Coinbase for allowing the unregistered sale of securities.

Aside from all the drama surrounding these charges in late 2020, Ripple has legally responded to the accusations. In the filing, they claimed that the charges are based on ‘an unprecedented and ill-conceived legal theory – with neither statutory mandate nor congressional authorization”.

Ripple Says XRP is Not a Security

The Ripple Labs legal team states that XRP is not a security. They ground this on the fact that ‘XRP performs a number of functions that are distinct from the functions of “securities” as the law has understood that term for decades. For example, the token functions as a medium of exchange […] It is not a security and the SEC has no authority to regulate it as one”. Ripple Labs, Brad Garlinghouse and Christian Larsen claim that since the token functions as ‘currency’ providing a means to store and transfer value, the SEC does not have jurisdiction over it as a security.

However, Ripple Labs and the two other defendants allegedly sold over $1 billion of XRP to fund their operations and for personal reasons. This has never traditionally been possible from a privately issued ‘currency’. For now, XRP will remain in limbo, but it should be very interesting to see how the SEC responds.

The crypto community, however, seems glad to see Ripple responding officially, if the price is any indication.

GameStop copycat rally drives up Dogecoin, Ripple XRP & other cryptos

While retail investors high-tailed it out of GameStop after regulators stepped in to stem the bleeding from hedge fund pockets, over in crypto, another bubble emerged overnight.

The currency in question was Dogecoin, and the band of retail investors looking to pump — and it seems, dump the project — was a WallStreetBets copycat subreddit called SatoshiStreetBets.

Yesterday, the community that boasts 86,500 users started discussing emulating the explosion in the price of GameStop stock on Dogecoin.

WallStreetBets spoof sends meme coin Dogecoin price soaring. Image: SatoshiStreetBets

The coin, which started the day at US$0.007, reached highs of US$0.035 as redditors took to exchanges to push up the price and help the project go viral.

The rise and fall of DOGE. Image: Nomics

In 24 hours, trading volume went from a flat US$230 million to US$17.5 billion, pushing the project’s market cap north of US$9 billion, according to data company Nomics. Dogecoin became a trending topic on Twitter globally, beating out news of the death of American actress Cicely Tyson.

Everyone is talking about DOGE. Image: TwitterTrends

But no sooner had the price shot up and everyone was celebrating Dogecoin’s price surge, money started flowing out of Dogecoin into other projects, according to Luke Martin, an analyst on Twitter.

It pains me to say this….it really does…but it looks like the hot ball of money that pumped $DOGE has started to move into $XRP.$XRP is up 20% in the last 2 hours while the rest of the market is flat. pic.twitter.com/ck3ityU7rd — Luke Martin (@VentureCoinist) January 29, 2021

He noticed that money appeared to be siphoned away from DOGE into Ripple’s XRP, which saw a 20% rise in a couple of hours. The price at the start of the day on Friday has collapsed back down to US$0.008, to roughly where it had started 24 hours before. Some weren’t very happy.

Reddit user expresses displeasure. Image: Reddit

While the boom was short lived, asset prices across crypto have turned green, with Ripple up 7.6%, and Stellar up a whopping 23%. Bitcoin and Ethereum ticked up but didn’t seem to get caught up in the DOGE hysteria.

The moral of the story? Anything fiat can do, crypto can do better.

It has been a topsy turvy week for Wall Street. Yesterday the markets recorded their biggest losses in months, but today things are back in the green.

The Dow, S&P and Nasdaq all closed up as U.S. joblessness figures dropped below 900,000 for the first time in weeks and the U.S. economy gears up for a recovery. But while that was happening, the investors that had pushed up GameStop were at it again.

Nokia’s rise and fall. Image: TradingView

Shares of AMC soared in late trading after a regular-session slide, as did shares of BlackBerry, Express, Bed Bath & Beyond, and Nokia.

While many opinion pieces as well as news reports have pointed out that the real story is about inequality — wealthy people have long gotten even richer off the back of distressed companies and cutting jobs, and the little guys are now finally banding together to fight back — others are mad as hell.

Hedge fund billionaire Leon Cooperman took to CNBC to tell everyone how unfair it was that new retail investors were upsetting the order of things.

Listen to this incredible crybaby pic.twitter.com/KmJvZpBQ59 — Timothy Burke (@bubbaprog) January 28, 2021

Whatever side of the fence you sit, the whole saga is now being dubbed “investor-tainment.”

This story originally appeared in Decrypt, a Forkast.News syndication partner, and appears here with additional updates by Forkast.News.