They called the deal a stinker…
Abbott Labs is a 129-year-old medical device company.
In the early 2010s, that company found itself mired in slow growth. Management was convinced that the problem laid with its drug division.
So in 2013, management decided to split the company in two and jettison the underperforming drug portfolio into a separate company.
In stock parlance, this is called a “spin-off.”
Abbott Labs’ stockholders received one share of the new entity called AbbVie for every share of Abbott Labs they held.
Traders, analysts, and management all pegged the spin-off a stinker and promptly sold it down.
At the time, corporate bonds research firm Gimme Credit said it was changing the outlook for Abbott to deteriorating from stable… a signal of a potential downgrade.
The gurus of Wall Street figured that if management didn’t want AbbVie, why should they?
After the spin-off, AbbVie’s stock dropped like a stone—10% in the first three days of trading. But once all the selling was out of the way, the stock started to soar.
By the end of 2013, AbbVie was up 30%. By 2014, it was up 100%. And by 2015, its market value was $50 billion bigger than its parent Abbott Labs.
Here’s why I’m telling you about this Abbott Labs spin-off of AbbVie…
These types of splits don’t just happen in the corporate world. We’re seeing “spin-offs” in the cryptocurrency space, too.
One of the biggest cryptocurrency “spin-offs” could soon involve the oldest and most popular cryptocurrency in the world: bitcoin.
If it happens, there are a couple of steps you’ll need to take to protect yourself… and potentially profit… from a possible separation.
But first, what’s causing this war?
Bitcoin’s Growing Pains Are Causing Divisions
Right now, there’s a full-scale “nerd war” going on in the bitcoin community…
Two factions of bitcoin developers are waging a battle over which direction the cryptocurrency should go.
Here’s the problem…
Bitcoin is becoming much more popular. But that comes with growing pains. The increased usage is slowing down transaction times on the bitcoin network.
Some bitcoin developers want to change the cryptocurrency’s code to allow for faster transaction times. This faction has been called Bitcoin Unlimited.
Another group of developers doesn’t want to change the code at all.
They argue that speeding up transaction times would concentrate the power of the network in the hands of people who could afford the much more expensive machines needed to process large amounts of data.
This faction has been called Bitcoin Core.
The Unlimited guys say if you don’t change bitcoin so it can process transactions faster, then bitcoin will be overtaken by other cryptocurrencies that can increase in scale.
Things are getting contentious. And we may reach the point where bitcoin splits, or “forks,” into two versions: Bitcoin Core (BTC) and Bitcoin Unlimited (BTU).
Let me be clear… No one knows for sure whether there will be a bitcoin fork. My job is to get you ready in case it does…
Two Steps You Need to Take Now
If bitcoin splits, you’ll receive equal amounts of BTC and BTU. And you’ll likely see price volatility in both versions. Don’t sweat it…
Another of our crypto plays split in July 2016 (Palm Beach Letter subscribers can read the full story here). After initially dropping 60%, it has gunned up 413% since then.
So, again, don’t sweat the potential bitcoin fork. We’ve seen this before.
But there are two important actions you need to take to make sure you profit from a potential fork.
- Hold on to both versions of bitcoin.
- If you store any bitcoin on Coinbase, immediately move it to a bitcoin wallet. We recommend using Jaxx. (Jaxx.io).
Here’s why you want to get your coins off Coinbase.
Coinbase has said it will not support Bitcoin Unlimited (BTU). If you use Coinbase and the fork goes through, you won’t receive “shares” in BTU.
That’s outrageous, and it’s the reason we are no longer recommending Coinbase.
If you are holding bitcoin on Coinbase, we recommend you immediately move your coins to the Jaxx wallet. You can use the app on your desktop computer and smartphone.
Like I said, we don’t know for sure if or when a split will take place… but we want you to be prepared if it happens.
Take action now and start moving your bitcoins from Coinbase to Jaxx.
And remember… hold tight and don’t sweat the volatility.
In less than a year from now, there’s a good chance we could see the eventual winner of this “nerd war” soar in price… Just like AbbVie did when it split from Abbott Labs.
Let the Game Come to You!
P.S. My top analyst Greg Wilson put together an excellent video that shows you how to easily transfer your bitcoin from Coinbase to Jaxx. Watch the free video below.
The world’s most important asset is declining in value…
And it’s at a very critical point right now.
As you can see in the chart below, the U.S. Dollar Index (DXY) has fallen about 3% from its December peak.
The dollar is also at the end of a very reliable technical signal: the head-and-shoulders top (the “neckline” in the chart above).
If the price breaks below the neckline, look for the index to fall another 3.5 points to 96. That’s the difference between the peak of the head and the neckline.
If the price bounces higher off the neckline, look for DXY to make new highs.
Watch the index closely… All the big traders will make their moves based off the dollar.
Bigger Than Virtual Reality: We’ve told you that virtual reality is a $90 billion megatrend. Now comes word from research firm IDC that another form of virtual reality, augmented reality (AR), could reach $50 billion in annual sales by 2021. Although AR headsets won’t be competing with their VR counterparts immediately, analysts expect AR headsets to become the much bigger market in terms of revenue.
No wonder every major player in the game, including Apple, Facebook, Google, and Microsoft, wants in on the party. This must-see chart shows how big the party could be.
Apple’s Fired Up: In the meantime, no company seems more excited about the AR party boat than Apple. CEO Tim Cook rarely reveals the tech giant’s secret plans, but he’s been talking up Apple’s flirtation with AR devices quite a bit lately. One analyst writes that Cook “has been more enthusiastic about AR than any other kind of potential game-changing initiative” that Apple has had out there. Regular Daily readers know when a new technology starts to take off, it soon hits its mass adoption point (MAP). Investors who get in early can make big gains.
(Palm Beach Letter subscribers can read about our safe way to get in on this trend right here. It’s already up 4.3% since we recommended it last month and yields 8.6%.)
Watch for Opportunities in This Sector: Every year, nearly 2 million Americans develop hospital-acquired infections resulting in 99,000 deaths. The vast majority of these deaths are due to antibiotic-resistant pathogens. This is a huge threat to our species…
But there is good news. Some biotech companies are developing new antibiotics that are able to stop these resistant bugs in their tracks. And it’s a great opportunity for investors. The global antibacterial drug market is currently valued at about $45 billion annually. If one of these new antibiotics captures just over 3% of market share, it could become a $1.5 billion-a-year drug.
Our friends over at Casey Research explain why this trend should be on your radar right now…