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If you haven't heard of the "Google patent scandal," that's not too surprising. The discovery that the $1.7 trillion juggernaut was infringing on the patents of a small, $3.4 billion California audio-tech firm in the manufacture of some of its phones, home audio systems, laptops, and a few other Google-gadgets wasn't exactly earthshaking news.
There were essentially zero fireworks, even inside Silicon Valley. The whole process played out as it should, in front of the U.S. International Trade Commission, with each company making its case before a judge.
Google didn't make its case - it lost - and, as we speak, the company is pushing "downgraded" updates to impacted devices to get compliant. This resolution will be, for all intents and purposes, a non-event as far as GOOGL shares go.
But for the small company that won the case... well, that's a different story. I think this $27 stock could see new highs in a hurry.
That's why this firm "No. 1 with a bullet" is on the shortlist of stocks I'm following this week...
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Sonos Inc. (NASDAQ: SONO) is the "David" in this "David vs. Goliath" story. It develops and manufactures all kinds of cool, multi-room-capable audio tech products for audiophile consumers. Sonos alleged that Google got a peak at some of its privileged tech patents during partnership talks years back, and this week an ITC judge agreed, once and for all, that Google was in the wrong.
As I said, Google is currently pushing updates to remove the infringing functionality from its own gadgets, which will, for the moment, sidestep the issue of royalties. But I think it won't be long before we're talking "water under the bridge," and the two companies come to some agreement about royalties for the use of Sonos' technology; when there are billions of dollars to be made, disagreements have a way of working themselves out.
This isn't bad news for Google stock - it's good news for SONO shares. This $27 stock could use a sentiment boost like this, and I think it's worth sticking around to find out.
At this point, let's buy the SONO April 14, 2022 $30 call and SONO April 14, 2022 $35 call spread for $2 or less. Plan on selling the spread for a 100% profit or if shares of SONO close below $27.
BlackRock Inc. (NYS: BLK), is a legendary New York City-based asset manager that helped break financial records last year. As of October 2021, the company had more than $2.3 trillion worth of assets under management, making it the largest provider of exchange traded funds (ETFs) in the United States.
In November 2021, for the first time ever, annual global net inflows into ETFs topped $1 trillion. That brought ETF-invested assets close to the $9.5 trillion mark - more than twice the sum at the end of 2018, according to Morningstar data.
Naturally, these inflows were like rocket fuel for BlackRock, and the stock gained more than 45% between March and November last year. Those inflows were great for BLK and the stock gained more than 45% from March 2021 to Nov. 2021, when share prices topped $971. In the meantime, though, the stock has pulled back. It's been consolidating, trading sideways, and rangebound ever since.
But I think this stock could be about to go ballistic. BlackRock is reporting what will undoubtedly be stellar fourth-quarter results this Friday morning, before the markets open. This presents us with an attractive trade setup because, right now, traders seem content to wait and see how BlackRock's numbers play out.
That's fine by me - the lower volatility means options are less expensive, which of course, translates into higher potential profits.
BLK shares are trading below $868 right now, which makes a BLK March 18, 2022 $880 call and BLK March 18, 2022 $890 call spread look really attractive right now. Pay up to $4.95 for this, and plan to close the spread for 100% profits or if BLK should close down below $860.
The last stock on my watch list is more speculative in nature.
This Play Could Be Well Worth the Wait
I'm talking about Alibaba Group Holdings Ltd. (NYSE: BABA), the Chinese online retail giant. Early last Friday, shares of BABA had gained 21.1% over the previous seven sessions after dropping nearly 42% since its high a year ago.
It was just a matter of time before the buy-the-dip bargain-hunting crowd turned its sights on Alibaba, but to be clear, I think there are too many uncertainties right now to take a long position on BABA.
For one thing, as one of China's biggest tech stocks, the company is still facing tremendous regulatory uncertainty as China's central government takes steps to rein in high-flying Chinese tech firms. China's economy is slowing, too, and omicron outbreaks draw "zero-COVID" government crackdowns and shutdowns regularly. I think Alibaba might have a hard time growing its key gross merchandise sales volume (GMV), which could in turn lead to revenue and earnings misses on the Alibaba's earnings call later this month.
The profit opportunity in BABA shares is therefore in put spreads. If BABA trades up to $140 by Jan. 21, grab a BABA March 18, 2022 $125 and BABA March 18, 2022 $120 put spread for $2.25 or less. Plan on selling the spread for a 100% profit or if shares of BABA close above $155.
That's my stock watch list, but maybe the most potentially lucrative investment I know of right now isn't a stock at all...
It's something called "pre-IPO rights," and you can get them in some of America's freshest, most innovative companies for basically pennies on the dollar right now. There's a crypto business I know of where you can get these rights for $0.70. I've seen projections showing these hitting $7 over the next year. That's partly because cryptocurrency doesn't have to go up for these folks to turn a profit. Growth potential like this means $100 invested right now could turn into $1,000 by the time it's all said and done - take a look at how.
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About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.