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What is a Spin-off?
A spin-off is when a division or subsidiary of a company is separated from the parent corporation and starts to offer its own shares. The term can also colloquially refer to a situation where a group of talent leaves the larger company to start their own firm doing similar work as they used to do. As far as the SEC is concerned, the definition of a spin-off must include the shareholders of the parent corporation being offered a substantially proportionate amount of shares in the new company. Continue reading...
What is a Reverse Stock Split?
A reverse stock split consolidates stocks at a certain ratio and reduces the number of shares outstanding while increasing the value of each share, as opposed to a regular stock split, which divides existing stocks into more shares which are worth less apiece. A normal stock split, which increases the number of shares an investor owns without increasing the total value of his or her interest in the company, has the benefit of increasing liquidity with the shares and possibly narrowing the bid/ask spread. A reverse stock split reduces the number of shares in circulation by effectively combining the existing shares at a certain ratio (such as, 2 shares now equals 1 share). Continue reading...
What is a Bitcoin Fork?
The code for most cryptocurrencies is open-source, and the community operates by consensus, so sometimes newly modified code is released that is adopted by some, creating what’s called a fork. A Bitcoin Fork is when the blockchain, made up of interconnected computers holding a distributed and permanent record of all bitcoin transactions up to that point, is offered a modified currency protocol that is adopted by some of the Bitcoin community, which creates a “fork” in the previously longitudinal history of the ledger (i.e. “a fork in the road”), where one ledger continues to grow based on the changed protocol, and one ledger continues to grow with the old protocol still intact. Continue reading...
What is Off-Balance-Sheet-Financing?
A company might use this maneuver in order to keep their debt to equity levels in check. The most frequently used types of off-balance-sheet-financing are joint ventures, research and development partnerships, and operating leases. Continue reading...
What is a foreign currency swap?
These are generally referred to as currency swaps or cross-currency swaps , since “foreign” is a little redundant (currencies are from different countries anyway). Central banks and large institutions sometimes swap principal amounts and loan interest in their domestic currency in exchange for a foreign currency, to provide liquidity and a hedge. Currency swaps are where banking institutions, particularly central banks, exchange a loan in one currency for a loan in another currency. Continue reading...
What is the Dow Jones Industrial Average?
The Dow Jones Industrial Average (DJIA) is an index comprised of 30 'significant' U.S. stocks, typically the biggest and most frequently traded. The Dow Jones Industrial Average was created in 1896 by Charles Dow, as a way to track the general trend of U.S. stocks. The index is price-weighted versus cap-weighted, meaning that if a company splits 2 for 1 its contribution to the index will drop by half (even though the company's value did not change). Continue reading...
What is Operating Cash Flow (OCF)?
Operating cash flow is the amount of cash a company is able to generate from its operations - i.e., how much real cash flow is being generated after accounting for expenses. It is calculated by adjusting net income for items like depreciation and changes in inventory. A company’s OCF is an important metric in determining whether it can generate cash flow without requiring external financing. The timeliness and frequency of cash flows is important as well, in that a company ideally produces consistent and favorable OCF. Continue reading...
What is the Operating Cash Flow Ratio?
The operating cash flow ratio, or OCF ratio, is used to measure whether a company’s cash flows are sufficient to cover current liabilities. It essentially measures how many times a company can use cash flow from operations to cover debt expenses. It can be measured by dividing a company’s cash flow from operations by its current liabilities. Companies with high (relative to their peers or other companies in the sector OCF ratios are generally in good financial health, meaning they can adequately cover ongoing liabilities with cash flow from operations. Continue reading...
What Is a Stock Split?
A stock split is a corporate maneuver that might seem complex, but it's quite simple at its core. In essence, a stock split occurs when a company decides to increase the number of its outstanding shares, effectively dividing each existing share into multiple new ones. Although the total number of shares increases, the overall value of the company remains unchanged. In this article, we'll delve into the details of stock splits, their implications, and why companies choose to implement them, all while using an example to illustrate these concepts. Continue reading...
What Drives a Company to Execute a Reverse Stock Split?
In the world of finance and investment, a reverse stock split is a strategic move that often piques the interest of market watchers, investors, and financial analysts alike. Understanding the mechanics and implications of a reverse stock split provides insight into a company's operational strategies and potential outlook. Continue reading...
What Is the Significance of Stock Splits in Investing?
A stock split is a corporate action in which a company increases the number of its outstanding shares by issuing more shares to current shareholders. This decision is made by the company's board of directors and can have several significant implications for investors and the company itself. Continue reading...
What is the Risk/Return Trade-Off
There are investments which have the potential for very high returns, but they will always be that much riskier than the lower-yielding alternatives, and this is part of the risk/return trade-off. The relationship between risk and return is a positive linear relationship in most theoretical depictions, and if an investor seeks greater returns, he or she will have to take on greater risk. This is called the risk/return trade-off. For more stability and less risk, an investor will have to sacrifice some potential returns. Continue reading...
Investment Tactics for Weathering a Market Sell-Off
Face market fluctuations with confidence and strategic insight. This guide unveils the key to weathering the storms of investing, emphasizing the power of a solid plan, diversification, and the long view over the allure of quick gains. Delve into the wisdom of seasoned investors and the role of AI in crafting a resilient portfolio. Whether you're bracing for volatility or seeking opportunities in downturns, discover how embracing patience and informed decision-making can transform challenges into triumphs. Join the journey to mastering market dynamics, supported by the latest AI advancements from Tickeron. Continue reading...
What are Bitcoin Mining Pools?
Individuals who do not have the computing power to compete with large bitcoin mining operations can join a mining pool and split the rewards. Mining pools allow individuals with insufficient computing power to join a mining pool and split the rewards proportionally to the amount of computer power that they contributed. If a user contributes 3% of the computing power that it took for the pool to solve a block, that user will receive 3% of the reward. Continue reading...
How Long Will It Take Me to Pay Off Debt?
Paying off debt depends on a variety of factors, like the total amount of debt, your payment schedule, the principal amount, and interest rates. There are plenty of financial calculators you can access on the web, which would allow you to calculate your payment schedule. Your financial advisor should also have software available to run these numbers for you, or in the very least, a financial calculator to run the numbers quickly. The 'inputs' you need to complete the calculation are: the size of your debt, your planned payments, and the interest rate you’re paying. Continue reading...
What are 3x ETFs and How Do They Work?
Triple-leveraged ETFs (3x ETFs) promise thrice the returns, but with that promise comes a maze of risks. These unique investment instruments amplify gains and losses, making them a double-edged sword in the financial world. From the nuances of daily resets to the pitfalls of compounding, 3x ETFs are not as straightforward as they seem. This article delves deep into the world of 3x ETFs, shedding light on their construction, the role of derivatives, and the lurking dangers. Whether you're a seasoned trader or a curious investor, this comprehensive guide offers invaluable insights into the triple-leverage game. Continue reading...
How Do You Mine Ethereum?
When mining on the Ethereum blockchain, you are rewarded in Ether, but you may need to do some calculations to find out it if will be profitable for you. Ethereum mining can still be done profitably, as of the time of this writing, by individuals on their home computers, as long as they have decent hardware. This is no longer the case for Bitcoin, Litecoin, and a few other coins, due to the development of ASIC (application-specific integrated circuits) mining rigs used by the nascent mining industry, which have rendered home computers obsolete and have begun to present a significant centralization threat on the decentralized blockchain. Continue reading...
What is Tokenization?
Tokenization is a concept that can take several forms, but essentially it means to create a tradeable item which holds value anchored in an asset which is not itself readily tradeable. If something of value is not easily traded, it is natural that a token is created which represents part or all of such value, which can then be held until redemption or circulated as currency. Historically, some things, such as hours of labor, could not easily be accounted for without a physical token. Continue reading...
What is Dividend Adjusted Return?
An accurate historical return calculation for an investment should be done with the dividends in mind, such as assuming all dividends were reinvested, which is the most common way they are used. Accurate historical information concerning prices and return should take the stock splits, dividends, and so-on into account. In a lesser-known context, dividend adjustment means a payment of accrued but yet-unpaid dividend amounts to the bearer of convertible preferred stock at the time that he or she converts them to shares of common stock. Continue reading...
What is a Ponzi Scheme, and what are the key red flags that might indicate an investment is one?
Dive into the shadowy realm of Ponzi schemes, the infamous financial scams that have ensnared countless investors. This comprehensive exploration delves into the mechanics, history, and red flags associated with these deceptive investment strategies. From the tales of Charles Ponzi and Bernie Madoff to the differences between Ponzi and pyramid schemes, this guide offers a deep understanding of a persistent financial menace. Whether you're a novice investor or a seasoned financial professional, this exploration equips you with the knowledge to navigate the treacherous waters of financial fraud. Arm yourself with insights and stay one step ahead of the swindlers. Continue reading...