Yahoo Finance's Jared Blikre takes a look at GM's last 100 years and some of the struggling SPACs of 2021.
Video Transcript
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- Well, we are almost two years into the 2020s and to celebrate the new year we thought we'd take a look back at the other roaring 20s back in 1920, turning our clocks back 100 years to see how some of the New York Stock Exchanges oldest residents are stacking up after a century.
And today, Yahoo Finance's chart master Jared Blikre, let's jump in, in the driver's seat with a company that's credited with kicking off the roaring 20s bull market. And that would be General Motors, Jared.
JARED BLIKRE: That's right. We did General Electric yesterday so why not General Motors today. And let's take a look at the WIFI Interactive because the 1920s, they were a boom decade for automobiles. In 1921, 9.2 million cars were registered but eight years later in 1929, that number had grown, more than doubled to 23.1 million.
And Ford didn't go public until the 50s so it was GM that hit the gas for the automobile industry on the New York Stock Exchange. Now in 1921, GM was trading around $9.63 per share, you can see on your screen right there. And by 1925, that figure had grown to $22 per share, kept rising and finally peaked at $111 in 1929. And by the end of the bull market, GM was worth $3.9 billion.
And to give you an idea of how much they increased production, in 1921 GM reported total car sales of 215,000, seems pretty impressive for a start up back then. By 1929 it was selling 1.9 million automobiles, annually that's an increase of over 765% for that decade. Now, I've got to bring it current here and this is going to be our vehicle heat map, mainly electric vehicle but also the traditional automakers here.
This is what's happening today, let's check out what's happened in the year that was here. A lot of the bigger players, especially the legacy players, looking at some nice games. Ford, by the way, up 135%, GM up 37%, you can see it's trading at $57.17 per share. Now, I do want to bring up a Max chart because this only goes back to, I believe, 2011.
That's because GM declared bankruptcy, they had to reorganize, they finally got their ticker back a couple of years later but that was early on in the global pandemic-- global pandemic, global financial crisis. Mixing up my crises here. But back here in good old 2021, despite a chip shortage causing supply issues, GM has had a pretty good year, topping earnings estimates for Q3 with total revenue of $26 billion.
And, of course, GM is still making cars but unlike the 1920s, they're expanding their EV business. General Motors announced earlier this month that it's opening its third US base factory based on manufacturing EV batteries in Michigan, Zach.
- Yeah, that 500% increase over a century, Jared, just putting into context the 1000% returns for AMC investors who got in at the beginning of all this year, still after its come down. A century of gains versus a year, pretty wild. Just, it is--
JARED BLIKRE: Well, the stock went into bankruptcy so you couldn't have traded the stock, it's kind of like one of those things. But, you know, the apple's growing. We do our best, you know.
- And they're still. You know, it's weird though, there's still a lot of people calling for bankruptcy for AMC too, so you got that picture still kind of playing out here as well, we'll see.
JARED BLIKRE: There you go.
- Well, it was a record year for SPACs in 2021. No shortage of names to highlight on that list when you think about more than $150 million brought in by those SPACs this year, according to SPAC insider.
And Jared, taking a look back on some of those SPACs would reveal some that haven't delivered all of that extraordinary returns. Specifically when you look at some on that list, including Talkspace, they're off by about 80% and Crunchbase just kind of put together a list of some of those, including Alight that have also followed in those footsteps, not showing great returns.
And, of course, it's brought a lot of attention back to the space. When you think about the SEC and what they've done to crack down on SPACs in company disclosures, choosing to go public that way via reverse merger rather than the traditional IPO route. And I'm not sure if bad returns by themselves are exactly reasons to really crack down on some of these companies but it's what we're highlighting here in looking back on those names.
JARED BLIKRE: Yeah, I'll tell you what? There's a saying in trading that I really like, price precedes narrative, and the same thing goes to the regulatory space. The regulators are going to apply 2020 hindsight anytime they see an industry or a space where they're just seeing a lot of losses, and that's kind of what's happening this year. It's not specific to SPACs by the way, there are a lot of different industry groups.
If we go to the WIFI Interactive here, I'm going to pull up my Leaders Index. And this is something I look at to kind of gauge sentiment, I'm going to put a year to date view on so you can see. Now, up at the top we've got homebuilders, those are up 47% but I'm looking at the losers down at the bottom. KWEB, that's a Chinese internet ETF, China is its own story so let's just put that out the window for now.
Solar ETF TAN, that's down 26%, Ark Innovation Fund down over 20, so is a cannabis EPS-- ETF. And even the IPO, the Renaissance IPO ETF, not performing that well, it's traded mainly sideways and now it's down 10% at the bottom end of this range. So I think the SPAC deals, SPACs are kind of like the second class citizens of new listings. The IPOs and the direct listings, those tend to be at the top but even those are having some problems.
I interviewed Cathie Donnelly from time to time in front of the program, she wrote the book on IPOs and how to trade them. 90% of IPOs are going to cut below their first day, trading low sometime in their first year and that applies to SPACs with an even greater percentage. So there are some good ones out there, there's some bad ones.
If you're just playing the industry as a whole, you're probably going to get burnt a little bit but we have to see where the hot money flows in the new year because high value stocks, stocks trading with high multiples have gotten absolutely slammed in all market cap bases over the last couple of months. No reason to think that SPACs are going to be immune.
- Yeah, I'm not sure if we can quickly pull up, Jared, on that interacting there, boxed.com, how they've been performing here since we had Tony Xie on the show talking about that too because that was a SPAC that came out. And, you know, it's actually up still 30% since we chatted with him about that debut, up by about 35% I think since then.
But it's interesting to kind of go through some of these names and look at their performance because, of course, as he said, there are still plenty of IPOs that really haven't fared that well either. So clearly, I guess, reasons to really dive deeper into some of these disclosures, whether it's a SPAC or IPO. That's why we highlight these things on debut day as we get into the numbers, try and get investors the best picture.