Latest news with #Rottweil
Forbes
01-07-2025
- Business
- Forbes
GENIUS Act Supporting Stablecoins Offer Opportunity During Instability
11 July 2022, Baden-Wuerttemberg, Rottweil: The logo of the stablecoins Tether USDT and USD Cohn ... More USDC can be seen on the screen of a computer in an office. Photo: Silas Stein/dpa (Photo by Silas Stein/picture alliance via Getty Images) dpa/picture alliance via Getty Images The U.S. Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins ('GENIUS') Act in June 2025, regulating stablecoins and the Act is now headed to the House of Representatives to be reconciled with the House's Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act. GENIUS represents a landmark milestone not only for the cryptocurrency industry, but also for the U.S. tax system. While the GENIUS Act establishes a tight regulatory framework for a novel use of digital currency in the U.S. market and it is backed by the U.S. dollar, enforcement will be challenging. The act establishes significant penalties for unlicensed issuance but tracking the movement of stablecoins may need additional monitoring and regulatory systems. Determining tax implications with the rapid movement of stablecoins will also require further guidance. Stablecoins being backed by the U.S. dollar is especially powerful and lends to the international reliance on U.S. backed currencies. In the same month that stablecoins hit the Senate floor under the GENIUS Act, the Israel-Iran conflict surged. Stablecoins have, historically, flourished where there is economic instability and global crisis may further support the cross-border reliance on the stability of the U.S. currency. Stablecoins are accepted globally because they are pegged to the U.S. dollar. flow of assets moves rapidly, outpacing the rate at which the law can adapt. Stablecoins are a class of cryptocurrency designed to maintain a stable value by tying their worth to traditional assets, such as fiat currencies, specifically, the U.S. dollar. This backing aims to reduce the volatility that is associated with other cryptocurrencies, such as Bitcoin (BTC), which have shown to be increasingly volatile because of their magnetic response to supply and demand, user sentiment, and government regulations. More specifically, the stablecoin is capable of maintaining stability by pegging its value on a 1:1 basis to an underlying asset, meaning that for every stablecoin in circulation, there is an equivalent amount of that asset held in reserve to back it. These coins are housed and exchanged on decentralized networks, blockchains, which act as a transparent ledger to account for all transactions. Unliked traditional payment systems, such as credit cards or wire transfers, the decentralized structure does not need intermediaries, enabling consumers to move funds rapidly and without the additional intermediary and exchange fees. Stablecoin allows for reduced transaction costs, increased speed, and the expansion of investment opportunities and integration, without a reporting trail. Regulation Of Stablecoins Widens Trust But Clarity Is Needed The GENIUS Act provides a regulatory framework to mitigate the risk associated with digital currency, especially cryptocurrency. to do exactly that. The bill outlines a federal regulatory framework that provides clearer rules for operation, issuance, and reserve requirements. Some of the bill's requirements include 100% reserve backing with U.S. dollars, or similar assets along with disclosure and audit requirements including prohibilitions on misleading representations on whether the stablecoin is government-backed or insured. For foreign issued stablecoins, the legislation requires the Federal Reserve to conduct a study regulatory reciprocity, which signals a broader interest in aligning international frameworks. Further guidance on applicable fees on transactions, cross-border use, tax implications and applicability especially with use in non-treaty countries, and privacy considerations will need to be further detailed. While the GENIUS Act brings clarity for regulatory matters, issues concerning consumer protection remain unanswered. Future legislation may need to address necessary consumer protection measures, such as deposit insurance, dispute resolution, and limited oversight to all regulators. Significant treasury regulations may be necessary to fully address tax implications, particularly in the estate and gift tax area on transfers of and by stablecoins and similar digital currency. The GENIUS Act is the beginning of signaling acceptance of a currency system that is increaseing being globally embraced but will need significant additonal provisions to address the implications of transactions made with stablecoins. Additonally, while stablecoins have gained favor for cross-border payments, the Foreign Account Tax Compliance Act ('FATCA'), Report of Foreign Bank and Financial Accounts ('FBAR'), and Statement of Specified Foreign Financial Assets ('Form 8938') imposing significant reporting obligations on foreign holdings and transactions add additional layers of complexity and the need for clarity in the application to stablecoins. Under FACTA, for instance, foreign banks must identify U.S. account holders and report their financial details to the IRS, making compliance and enforcement dependent on institutional cooperation, which may be inapplicable due to stablecoins being built on public blockchains. With stablecoin, users are able to download a wallet, receive stablecoins, and move funds globally without triggering institutional reporting requirements. This is where the institutional gap begins to widen. An individual who is equipped with financial and legal advisors would be able to shift assets to the stablecoin network or decentralized finance ('DeFi') protocols swiftly, limiting IRS visibility by not holding assets in reportable institutions. For those who do not fall within the crypto-savvy elite or do not have sophisticated advisors, they will find themselves facing mandatory disclosure and also full exposure of their assets. Digital tools promise access, but in practice, the lack of reporting standards in the crypto universe tends to favor those who are already positioned to navigate around friction. The Hidden Opportunity During Instability With Stablecoins In a situation where a country is facing an economic and political collapse and is liquidating national assets, such as foreign exchange reserves, government-held equities, enterprises, and commodities, including oil reserves and gold, at steep losses, a wealthy investor may be able to profit from the buy opportunity especially when they have access to moving funds quickly using stablecoins. In this scenario, a strategic buyer may be able to use stablecoins to invest through holding companies, to buy ports, land, or tech infrastructure. This transaction would move quickly and be difficult to trace fully In the current regulatory landscape of cryptocurrency, the GENIUS Act may live up to its name as a first smart stepintegrating with the global, fast-paced, economic landscape but enforceable oversight and additional regulations to address reporting, compliance, and taxation as the stablecoins move through transactions will be vital to its longterm success. Future regulations may address wallet level transparency thresholds, stablecoin transaction reporting triggers, and most importantly, international coordination to make the use and U.S. participation in the global market with stablecoins effective and seamless.
Forbes
30-06-2025
- Business
- Forbes
Buy, Sell, Or Hold SNAP Stock At $9?
SYMBOL - 07 June 2025, Baden-Württemberg, Rottweil: The Snapchat app can be seen on the display of a ... More smartphone. Photo: Silas Stein/dpa (Photo by Silas Stein/picture alliance via Getty Images) dpa/picture alliance via Getty Images Snap's stock (NYSE:SNAP) rose 7% on Friday, June 27, following comments from a research institution regarding advancements in Snap's direct response advertising. This favorable news might enable Snap to surpass the consensus earnings estimate for the ongoing quarter. Nevertheless, despite this recent increase, SNAP's stock remains down 20% year-to-date. However, we think SNAP stock, which is currently valued at around $9, offers a good buying opportunity. While there are certain concerns, its moderate valuation seems to have already accounted for these risks, indicating potential for further growth. Our findings are based on a thorough evaluation of Snap's financial health and operational performance. We analyzed its current valuation in relation to its operating performance over recent years, as well as its historical and current financial situation. Our in-depth assessment, concentrating on Growth, Profitability, Financial Stability, and Downturn Resilience, suggests that Snap exhibits moderate operating performance and financial health. That being said, if you are looking for upside with less volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative — having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Separately, see – QuantumScape: 40x Upside For QS Stock? When considering the cost per dollar of sales or profit, SNAP stock appears inexpensive compared to the overall market. Snap has a price-to-sales (P/S) ratio of 2.6 compared to a figure of 3.1 for the S&P 500 Snap's Revenues have experienced significant growth in recent years. Snap's top line has increased at an average rate of 9.4% over the past 3 years (compared to an increase of 5.5% for the S&P 500) over the past 3 years (compared to an increase of 5.5% for the S&P 500) Its revenues have risen 16.4% from $4.6 Bil to $5.4 Bil in the last 12 months (against a growth of 5.5% for the S&P 500) from $4.6 Bil to $5.4 Bil in the last 12 months (against a growth of 5.5% for the S&P 500) Moreover, its quarterly revenues increased 14.4% to $1.6 Bil in the latest quarter from $1.4 Bil a year prior (compared to a 4.8% rise for the S&P 500) Snap's profit margins are significantly lower than those of most companies in the Trefis coverage universe. Snap's Operating Income over the last four quarters was $-787 Mil, representing a very poor Operating Margin of -14.7% Snap's Operating Cash Flow (OCF) over this time was $413 Mil, indicating a poor OCF Margin of 7.7% (compared to 14.9% for the S&P 500) (compared to 14.9% for the S&P 500) For the last four quarters, Snap's Net Income was $-698 Mil — demonstrating a very poor Net Income Margin of -13.0% (as opposed to 11.6% for the S&P 500) Does Snap Look Financially Stable? Snap's balance sheet seems robust. Snap's debt was $4.2 Bil at the end of the most recent quarter, while its market capitalization stands at $15 Bil (as of 6/29/2025). This results in a moderate Debt-to-Equity Ratio of 30.0% (versus 19.4% for the S&P 500). [Note: A low Debt-to-Equity Ratio is favorable] (versus 19.4% for the S&P 500). Cash (plus cash equivalents) accounts for $3.2 billion of the $7.6 billion in Total Assets for Snap. This results in a very strong Cash-to-Assets Ratio of 42.5% SNAP stock has performed worse than the benchmark S&P 500 index during certain recent downturns. While investors are hopeful for a soft landing for the U.S. economy, what might happen if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks performed during and after the last six market crashes . Inflation Shock (2022) SNAP stock decreased 90.7% from a high of $83.11 on 24 September 2021 to $7.76 on 21 October 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500 from a high of $83.11 on 24 September 2021 to $7.76 on 21 October 2022, compared to a peak-to-trough decline of for the S&P 500 The stock is still struggling to recover to its pre-crisis high The highest the stock has achieved since then is 17.45 on 6 February 2024 and currently trades around $8.70 COVID-19 Pandemic (2020) SNAP stock dropped 56.5% from a high of $19.25 on 23 January 2020 to $8.37 on 18 March 2020, while the peak-to-trough decline for the S&P 500 was 33.9% from a high of $19.25 on 23 January 2020 to $8.37 on 18 March 2020, while the peak-to-trough decline for the S&P 500 was The stock completely returned to its pre-crisis peak by 1 June 2020 In conclusion, Snap's performance across the mentioned parameters can be summarized as follows: Growth: Very Strong Profitability: Extremely Weak Financial Stability: Very Strong Downturn Resilience: Very Weak Overall: Neutral The company has shown moderate performance across critical financial metrics, which is mirrored in its current valuation. We expect an expansion of its valuation multiple from current levels, particularly in light of the recent acceleration in revenue growth alongside subscriber growth and the anticipated improvement in profitability driven by positive advertising trends. While it would likely be beneficial to acquire SNAP stock now, you may also consider the Trefis Reinforced Value (RV) Portfolio , which has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices), yielding strong returns for investors. What accounts for this? The quarterly rebalanced mixture of large-, mid-, and small-cap RV Portfolio stocks provided a flexible approach to capitalize on favorable market conditions while minimizing losses when markets decline, as outlined in RV Portfolio performance metrics .
