Why did TSM nosedive 5%, and CIDM skyrocket 37% on Thursday?

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Why did TSM nosedive 5%, and CIDM skyrocket 37% on Thursday?

 Why did TSM nosedive 5%, and CIDM skyrocket 37% on Thursday?
Image source: Peshkova,Shutterstock

Summary

  • The stock of Taiwan Semiconductor (NYSE: TSM)nosedived more than 5% on Thursday.
  • Cinedigm Corp., (NASDAQ: CIDM) stock skyrocketed 37%.
  • Internal and external factor responsible for the baffling movement.

The stocks of Taiwan Semiconductor Manufacturing Company Ltd. (NYSE: TSM) and Cinedigm Corp (NASDAQ: CIDM) were trending on Wall Street Thursday but with opposite trajectories.

TSM nosedived 5.28% to US$117.82 at 3:47 pm ET, while CIDM skyrocketed 37.9% to US$1.49 at 4:00 pm ET. The former took a major hit a day after it declared strong Q2 results, possibly due to the ongoing geopolitical tensions between Taiwan and China. The later rallied after it announced the repayment of around US$3.5 million debt and positive preliminary quarterly results on July 14. 

Source: Pixabay

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TSM revenue for the second quarter was US$13.29 billion, a 28% increase year-over-year. Its gross margin was 50.0%, and operating margin was 39.1%. The company’s profit was up 11% to US$4.81 billion year-over-year, and the net profit margin was 36.1%.

It earned 18% of its total wafer revenue from 5-nanometer and 31% from 7-nanometer. Based on the Q2 (April-June) performance, TSM expects the revenue for Q3 to be between US$14.6 billion and US$14.9 billion and gross profit margin to be between 49.5% and 51.5%.  

The company plans to open a manufacturing facility in the United States and Japan. The increasing demand for chips compelled TSM to open new shops in these countries. According to Reuters, the company also has plans to expand production in China and Arizona, US. It also plans to set up a specialty technology wafer fabrication plant in Japan.

TSM’s market capitalization is US$ 611.3 billion, and the P/E ratio is 32.65. Its current dividend yield is 1.14%, and its annualized dividend is US$1.567.

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CIDM is an independent streaming entertainment company focused on providing content, channels, and services to companies from the technology, media, and retail sectors. 

For the fourth quarter ended March 31, fiscal 2021, its consolidated revenue was US$ 8.3 million, 6.9% up compared to the revenue of US$ 7.7 million in the prior-year quarter. Besides securing a revenue hike, the company has also been able to shed the debt burden from US$ 49.1 million in the previous year to US$ 11.9 million now. 

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CIDM achieved a 170% increase to 135 from 50 last year's quarter in its total streaming channel distribution deals, and its live-streaming enthusiast channel brands increased from 13 to 16 in this quarter. The company will be added to the Russell Microcap™ Index on June 28, 2021.

CIDM’s market capitalization is US$ 247 million and closed at US$1.08 on July 14, 2021.

Please note: The above constitutes a preliminary view and any interest in stocks/cryptocurrencies should be evaluated further from an investment point of view.

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