Blackstone Mortgage Trust (BXMT) looks like a good dividend company to invest in. It has an exciting dividend yield of almost 10%, trades below book value, and is part of Blackstone, the biggest private equity company in the world.

The BXMT stock price was trading at $18.55 on Friday, the same level it has been at in the past few weeks. It remains 35% above its lowest point in 2023, giving it a market cap of $3.31 billion, much lower than its $19.3 billion loan portfolio.

What is Blackstone Mortgage?

Blackstone Mortgage is a leading company that dividend-focused investors love for its long track record of dividend growth. It is a real estate finance company that provides senior loans collateralized by commercial real estate in the US, Europe, and other countries. 

The idea behind BXMT is relatively simple. It provides loans to developers and real estate companies and uses the same property as collateral. This is an important business since its manager is Blackstone, the biggest real estate investor in the world. 

Companies like BXMT have become more popular in the real estate industry after the Global Financial Crisis (GFC) of 2008/9 since banks have lowered their exposure because of strict regulations. 

BXMT’s portfolio is made up of loans across most areas in the real estate sector. Most of these loans are in the multifamily segment, followed by offices, hospitality, industrial, and non-US office. 

High interest rates

BXMT has also benefited recently from the high interest rates in the United States and its other markets. The Federal Reserve pushed interest rates to between 5.25% and 5.50% to deal with the post-Covid-19 inflation. Similarly, the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) all hiked rates. 

BXMT often benefits when interest rates are higher because most of its portfolio is on floating interest rates. 

However, higher rates can be affected by higher default rates as maturities near. In the past few years, this has been talk about the wall of maturities as over $1 trillion of loans tied to the commercial real estate (CRE) sector mature.

The fear explains why BXMT stock remains about 24% below its 2021 highs. However, there is a light at the end of the tunnel as the CRE industry has avoided a 2008/9 implosion that some analysts were expecting.

There are also signs that more companies are forcing their staff to go back to the office, which is a good thing. 

Read more: Blackstone Mortgage (BXMT) stock could crash by 21% soon

Blackstone Mortgage earnings

The most recent catalyst for the BXMT stock price was its earnings for the three months to September. 

These results were fairly weaker than what it reported last year. Its interest and related income dropped to $430 million from $519 million a year earlier. Its nine-month interest income also dropped from $1.5 billion to $1.3 billion. 

Blackstone Mortgage also reported a loss during the quarter as its net loss came in at $55 million from a profit of $30.5 million. 

This loss was mostly because of credit quality, which led to higher loan losses. Worse, the management expects the losses to continue, as it added $132.5 million to its current expected credit loss (CECL). Its total CECL reserve this year has moved to over $1 billion.

These results explain why BXMT trades at a big discount to its book value. It has a price-to-book ratio of 0.8, while Starwood Property Trust (STWD), which has a better credit quality has a multiple of 1.01x. Ladder Capital Corp has a multiple of 0.95.

BXMT stock return challenges

The other thing to consider when investing in BXMT is that you should mostly ignore the 10% dividend yield and consider the total return. Ideally, in most cases, you should consider investing in a company that, at least, beats the S&P 500 index.

Blackstone Mortgage Trust has a poor record of doing that. Data shows that its total return this year was minus 4.4%. In contrast, the VOO ETF returned about 23%. As shown above, the company’s total return in the last five years was minus 18.8% compared to VOO’s 107%.

This is notable since the S&P 500 index pays a minimal dividend because of its historical performance. 

A point can also be made on investing in government bonds instead of BXMT for now since the ten-year is yielding over 4%. This means that it is doing better than BXMT.

BXMT chart by TradingView

On the positive side, the BXMT stock has formed a triangle pattern on the weekly chart, meaning that it could stage a strong comeback in the coming months. If this happens, the stock will climb from $18.7 to $24.5, its highest level in 2022, which is about 32% above the current level.

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Shares of Lilium, the electric vertical take-off and landing (eVTOL) vehicle manufacturer, plunged by more than 61% on Thursday after the company announced in a regulatory filing that its two main subsidiaries would likely file for insolvency in the coming days.

The dramatic drop in stock price comes as the aerospace startup faces a severe financial crunch, unable to secure the state guarantees it desperately sought from the German government.

In a regulatory filing with US authorities, Lilium, which is listed on the Nasdaq, revealed that it had been unable to secure enough additional funding to maintain operations at its two main subsidiaries, Lilium GmbH and Lilium eAircraft GmbH.

As a consequence, the management of these subsidiaries concluded that they are “overindebted” and will soon be unable to meet their financial obligations.

“The management of the Subsidiaries has informed the Company that they have to file for insolvency under German law and in doing so will apply for self-administration proceedings in Germany,” the company said in the filing.

After filing for insolvency, the subsidiaries will not be required to repay any debts incurred before the application, Lilium noted, and creditors will generally be “prohibited from foreclosing against the companies on any claims they may have.”

The planned insolvency filings by the subsidiaries could lead to Lilium’s delisting from the Nasdaq Global Select Market or suspension of its shares.

German government refuses loan to company

The company had requested €50 million from the German federal government to remain solvent.

However, the budget committee of the Bundestag declined the request, leaving Lilium scrambling to find alternative funding sources.

In a statement released last week, Lilium confirmed that it “received an indication that the budget committee of the parliament of the Federal Republic of Germany will not approve a €50 million guarantee.”

The proposed loan would have been provided by KfW, and the rejection left the company in a precarious financial position.

The German government’s refusal to support Lilium has sparked criticism from some industry voices.

Bavaria’s economy minister, Hubert Aiwanger, described the decision as “regrettable,” emphasizing the importance of supporting innovative industries like electric aviation.

Danijel Višević, co-founder of climate technology investors World Fund, expressed his disappointment, suggesting that the German government’s stance reflects a narrow view of eVTOL vehicles.

Višević argued that lawmakers incorrectly see air taxis as a luxury product for the wealthy when in reality, they represent a crucial step in the transition to zero-emission transportation.

The fall of Europe’s flying car hope

Lilium’s current struggles mark a dramatic fall from grace for a company once hailed as Europe’s most promising player in the future of air mobility.

The startup, founded in 2015, aimed to revolutionize short-distance travel with zero-emission electric aircraft designed to operate like flying taxis.

The concept of eVTOL vehicles captured imaginations worldwide, with Lilium attracting early support from notable investors such as Atomico, Earlybird, and Chinese tech giant Tencent.

In 2021, Lilium capitalized on the Special Purpose Acquisition Company (SPAC) boom and went public on the Nasdaq through a merger with Qell Acquisition Corp.

At the time of its listing, Lilium projected aggressive growth, including €240 million in revenue by the end of 2024 and profitability by 2025.

However, since its IPO, Lilium’s share price has plummeted by more than 95%, and the company has struggled to meet its ambitious milestones.

Lilium’s jets can cost as much as $9 million. The company also had a six-seater version in development, which would have set a buyer back about $7 million.

Lilium’s challenges are not unique. The eVTOL industry, while promising, has proven financially demanding, and many competitors have also faced difficulties.

Volocopter, another German electric aviation startup, was on the verge of insolvency earlier this year and had sought similar state guarantees from two German states and the federal government.

While Volocopter has secured new funding, it too remains in a vulnerable position.

In the US, eVTOL companies have fared slightly better, with Joby Aviation receiving $600 million in state support from the American government.

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Elon Musk, the world’s richest person, saw his net worth soar by $33.5 billion on October 24, after Tesla Inc. recorded its largest share jump in over a decade.

Tesla’s stock rose by 22% following the announcement of the company’s third-quarter earnings, which revealed the electric vehicle (EV) giant’s most profitable quarter since mid-2023.

Musk’s net worth now stands at $270 billion, according to the Bloomberg Billionaires Index, placing him $61 billion ahead of Amazon founder Jeff Bezos.

This surge puts Musk on track to potentially become the world’s first trillionaire by 2027, according to a report by Informa Connect Academy, thanks to Tesla’s market dominance and future-focused initiatives.

Tesla’s rally sparks trillionaire speculation

Tesla’s recent performance has fueled speculation that Musk may reach the trillion-dollar milestone within the next few years.

Informa’s report notes that Musk’s wealth has grown by an average of 110% annually, making him the leading candidate to achieve trillionaire status.

Tesla’s value, now estimated at $710 billion, plays a central role in Musk’s financial success.

With a 13% stake in the automaker, Musk’s Tesla holdings are currently valued at $93 billion.

Additionally, Musk holds 303 million stock options linked to a controversial compensation package that has faced legal and shareholder scrutiny.

“Musk has positioned himself to achieve new heights as Tesla capitalizes on self-driving technology, robotaxis, and future EV developments,” said Dan Ives, senior equity analyst at Wedbush Securities.

Rising competition and setbacks ahead

Despite Tesla’s impressive performance, challenges remain. The company faces increasing competition, particularly from lower-cost rivals in China.

Tesla’s stock experienced a significant decline in 2022 due to softening demand and multiple vehicle recalls, including a software issue with its Autopilot feature.

Musk also recalled past difficulties, highlighting Tesla’s near-bankruptcy in 2008.

“We were days away from insolvency before securing a critical loan,” he shared.

His controversial actions, such as the “funding secured” scandal in 2018, have further complicated Tesla’s journey.

Musk continues to diversify his ventures, with stakes in SpaceX, tunnel-digging firm The Boring Company, AI startup xAI, and Neuralink, a brain-chip implant company.

Tesla’s outlook and Musk’s future vision

Tesla’s positive Q3 earnings have renewed investor optimism.

Musk anticipates 30% growth in vehicle sales and revealed that the company’s much-anticipated Cybertruck project generated its first quarterly profit.

Speaking after the earnings release, Musk forecasted the rollout of Cybercab robotaxis in 2026, with plans to manufacture 2-4 million units annually.

“My prediction is Tesla will become the most valuable company in the world, and probably by a long shot,” Musk told investors via webcast.

Meanwhile, Musk’s ownership of SpaceX, valued at $210 billion, adds further weight to his financial empire.

His ventures also extend to the controversial social media platform X (formerly Twitter), which has drawn criticism for its content policies and Musk’s erratic posts.

Path to a trillion-dollar fortune

While Tesla’s growth positions Musk as a frontrunner in the race to become the first trillionaire, the future remains uncertain.

In addition to competition from Nvidia’s AI boom and potential challengers like Meta’s Mark Zuckerberg and Indian billionaires like Gautam Adani, and Mukesh Ambani, Musk’s wealth will largely depend on Tesla’s continued success.

“It’s much harder to restart operations than to shut them down, so doing this right is critical,” Musk emphasized regarding Tesla’s future.

With a big backlog of orders, the company remains optimistic but cautious in its strategy.

Though Musk has faced numerous obstacles over the years, including regulatory challenges and operational hurdles, his determination has helped Tesla and his other ventures thrive.

As Ives noted, “Musk has faced setbacks, but he has a knack for turning things around—he’s the Teflon kid.”

The coming years will determine whether Musk can sustain his momentum and reach unprecedented financial heights, cementing his legacy as both an industry pioneer and potentially the world’s first trillionaire.

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Morgan Stanley (MS) stock has been firing on all cylinders this year, helped by the strength of its franchise amid challenges in its key markets. It has risen in the past six consecutive weeks, moving to a record high of $120, giving it a market cap of over $194 billion. 

It has jumped by over 30% this year, beating other popular Wall Street banks like JPMorgan, Citigroup, and Wells Fargo. It has also beaten the closely-watched the SPDR S&P Bank ETF (KBE), which has risen by over 24%.

Morgan Stanley background

Morgan Stanley is one of the biggest banks in the United States. Unlike JPMorgan, Citigroup, and Bank of America, it does not provide most of its banking solutions to retail customers. 

Instead, it mostly does business with large companies, endowments, and other large institutions. Its business is divided into key segments like wealth management, investment management, and institutional securities. 

Over time, it has become the second-biggest wealth manager in the world with over $4.5 trillion in assets. It is second only to UBS, the Swiss banking giant that merged with Credit Suisse in 2023. Some of these assets came from its acquisition of Eaton Vance and E-Trade. 

The company makes money from investment banking, where it advises and underwrites transactions. This industry has been under pressure in the past few years as the amount of deals in the country have dried up.

There are signs that the industry is doing well now after some large transactions were announced. For example, Synopsys acquired ANSYS in a $35 billion deal, while Home Depot bought SRS Distribution for $18.3 billion. 

Other large deals were Capital One’s buyout of Discover Financial, Cisco’s buyout of Splunk, and HP Enterprise’s purchase of Juniper Networks.

Business is doing well

The most recent financial results showed that its revenue in the last quarter rose to $15.4 billion in the third quarter, up from $13.2 billion in the same period in 2023.

The results showed that its institutional securities revenue rose to $6.8 billion last quarter from $5.6 billion. This growth was mostly because of the strong surge of its investment banking business whose revenue jumped by 56%. 

The advisory revenue rose to $546 million, while its equity underwriting and fixed income underwriting jumped to $362 million and $555 million, respectively.

Meanwhile, Morgan Stanley’s wealth management revenue rose to $7.2 billion, as its assets under management surged. It investment management division had over $1.5 billion in revenues during the quarter. 

Catalysts remain

Morgan Stanley stock has numerous catalysts ahead. First, the Federal Reserve has already delivered one rate cut this year. However, the bond market signals that the pace of rate cuts will continue moving downward at a slower pace in the next few months. 

The 10-year yield has risen to 4.20%, while the 30-year and 2-year yields jumped to 4.45% and 4.05%, respectively. This is a sign that the market expects that rates will remain higher for longer. Indeed, the CME FedWatch tool estimates that rates will remain above 3% in December next year.

Moderately higher interest rates will be positive for Morgan Stanley because of its higher net interest margin. 

Soaring stocks and the upcoming election

At the same time, the ongoing robust performance in the stock market will lead to more wealth among the wealthy. Just this week, Elon Musk has added over $35 billion in wealth after the company surged. People like Jeff Bezos, Mark Zuckerberg, Larry Elison, and Bill Gates have all added over $20 billion in wealth. Therefore, the company will likely see more assets move to its wealth management business. 

A dovish Federal Reserve coupled with a potential Donald Trump administration will be a boom to the deal-making industry. Trump has pledged to deregulate the US, a move that could lead to more deals. Biden’s administration has in the past blocked several deals, including Capri’s merger with Tapestry.

The other potential catalyst is that private equity companies hold hundreds of companies that will need to be taken private. Morgan Stanley will likely benefit because it is one of the biggest players in the advisory industry.

Morgan Stanley stock analysis

MS chart by TradingView

The weekly chart shows that the MS share price has been in a strong bull run in the past few months. It has risen above the important resistance point at $100, its highest swing in February 2022. 

The stock has remained above the 200-week and 50-weeek Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) has continued rising and has moved to the overbought level.

The MACD indicator has continued rising. Therefore, the stock will likely continue rising, with the next point being at $150. However, before then, the stock could retreat and retest the support at $100 and then bounce back.

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Paik Jong-won, a chef turned restaurateur with newfound global fame, is set to take his restaurant franchise public this week, offering hope for South Korea’s struggling IPO market.

The IPO of Theborn Korea, the restaurant chain founded by Paik, comes at a critical time as South Korea’s IPO activity has dwindled over recent years.

This IPO is expected to raise up to 84 billion won ($61 million) at the upper price range, potentially valuing the company at 405 billion won.

The listing provides a rare opportunity for investors to tap into the growing appeal of Korean cuisine, driven by the global wave of K-culture.

Paik Jong-won: From celebrity chef to business mogul

Paik, known as the “Gordon Ramsay of South Korea,” gained international recognition through his appearance on Culinary Class Wars—a Netflix show that topped the streaming platform’s global non-English TV chart.

His growing media presence, along with his YouTube channel boasting 6.6 million subscribers, has solidified his status as a cultural icon and culinary innovator.

Founded in 1994, Theborn Korea operates more than 2,900 restaurants under 25 brands, including popular names like Paik’s Coffee and Hong Kong Banjum.

The company’s diverse portfolio and affordability-focused strategy have made it a staple in South Korea’s dining scene.

Can Paik’s IPO turn the tide for South Korea’s IPO market?

The IPO arrives at a crucial moment for South Korea’s equity market, which has struggled in recent years.

So far in 2024, IPOs in the country have raised $1.23 billion—more than the total amount raised in 2023, but a far cry from the $15.2 billion raised in 2021.

The listing of Theborn Korea could inject life into the market, which recently saw a setback after online lender K Bank withdrew its IPO due to weak demand.

Analysts believe Paik’s IPO offers a unique appeal by connecting with both domestic and international trends in the food industry.

“This IPO taps directly into the surging popularity of Korean cuisine, which has become a cultural export thanks to the K-culture wave,” said a market analyst.

IPO targets funds for expansion and acquisitions

Theborn Korea aims to use the IPO proceeds to develop new menus, invest in other companies, and pursue mergers and acquisitions.

The IPO price is set within a range of 23,000 to 28,000 won per share, with Korea Investment & Securities Co. and NH Investment & Securities Co. managing the sale.

Despite the buzz, challenges remain. South Korea’s stock market has been one of the weakest performers globally, and attracting investor confidence will be key.

The IPO of Theborn Korea is seen as a bellwether for whether the country’s IPO market can rebound.

The Netflix effect: Global buzz and local impact

Paik’s rise in popularity coincides with the success of Culinary Class Wars, which has revitalized South Korea’s restaurant industry. The show has drawn attention to chefs like Paik and increased foot traffic at their restaurants.

Viral moments from the show, including unique recipes and cooking challenges, have further fueled public interest.

The timing of the IPO aligns well with this trend, providing investors a chance to capitalize on the newfound interest in South Korean food.

Looking ahead: Revival or fleeting opportunity?

While Theborn Korea’s IPO offers a glimmer of hope, South Korea’s equity market still faces challenges. Market volatility, sluggish economic growth, and cautious investor sentiment continue to cast a shadow.

Analysts suggest that the success of Paik’s IPO could inspire other companies to follow suit, helping revive the market.

“This IPO represents more than just a listing. It’s a test of whether the market can recover and attract new investments,” noted a market expert.

The IPO may also pave the way for South Korea’s food sector to receive greater international attention, further supported by Paik’s personal brand and the K-culture wave.

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Gold miners have been struggling to capitalise on higher demand for the yellow metal as higher input and operating costs weigh. 

The largest gold mining company in the world, Newmont Corp shares plunged 15% post its earnings results as profit and revenue missed analysts’ expectations. 

The US-based company said that the poor performance was due to high labour and diesel costs and other operating expenses. 

Other top mining companies from Canada, Barrick Gold and Agnico Eagle Mines also saw their shares slump. 

High labour costs plague the mining industry

Even as gold prices have surged since the start of the year, higher labour costs have plagued the operations of top mining companies. 

Gold prices have surged 30% since the start of the year on a favourable outlook on interest rates and increasing safe-haven demand due to geopolitical tensions. 

However, most mining companies have failed to capitalise on the upswing in prices. 

“But Newmont’s results revealed that big gold producers are still wrestling with inflationary pressures, especially regarding labour costs, that have lasted longer than expected,” Bloomberg News reported. 

Experts believe that if Newmont’s takeaways are accurate, then the risks would hold for the whole mining industry. 

Newmont spends more to dig up gold

The US-based company said that it had spent more money digging up gold at its mines in Australia, Canada, Peru and Papua New Guinea than in the previous quarter.

Capital expenses also rose 10% on the back of expansion projects in Australia and Argentina. 

Some of the company’s highest expenses were from major assets it picked up through last year’s $15 billion takeover of Newcrest Mining Ltd. 

The Denver-based company is the first major gold producer to post results in an earnings season where analysts expect bumper returns for the sector. 

Growing labour costs

Newmont’s growing labour cost could be a matter of concern for the broader mining sector. 

Chief executive officer Tom Palmer was quoted by Bloomberg News:

It’s the labor costs where we’re seeing that escalation.

“Whether that be maintenance shutdowns, maintenance that you use to supplement your workforce, costs of running camps, costs of flying people to and from the camps — that’s where we’re seeing some escalation beyond what we’d assumed at the start of the year.”

Barrick Gold Corp misses production expectations

Last week, Barrick Gold Corporation reported lower-than-expected gold production during the third quarter due to a fall in output at its Carlin and Cortez mines in Nevada. 

Barrick’s total preliminary gold output was 943,000 ounces in the third quarter ended September, compared with analysts’ estimate of 975,000 ounces. 

The company reported lower gold output amid a backdrop of higher operating costs for the whole mining industry. 

The second-largest gold producer in the world is expected to report its earnings results in early November. 

Despite a fall in shares, gold miners may get some relief from record prices

Despite a fall in shares of mining companies and disappointment among investors, mining companies may enjoy a better fourth quarter. 

Barrick said it expects a materially stronger fourth quarter to deliver 2024 production within the range of its full-year gold and copper guidance.

Additionally, Newmont posted its highest quarterly profit in five years, despite missing analysts’ expectations. This is mainly due to record high prices of gold. 

Carey MacRury, a mining analyst at Canaccord Genuity told Bloomberg:

The street expectations were too high. It was negative, no doubt, but I don’t think it’s as negative as what the market’s telling us today.

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