Back when I was a kid, having some fun meant heading out on my bike and promising my parents I’d be back before dinner.
I’d play a pick-up game of basketball or maybe even wrangle up enough neighbors for kick-the-can. And the most high-tech I could get was bringing a pocketful of quarters to the arcade.
If you told my ten-year-old self that one day, people could put on a pair of goggles and be transported to an alternate universe, I’d never have believed you. In fact, the 54-year-old version of me wouldn’t believe you either – if I didn’t have the proof of it at my fingertips, that is.
It’s called virtual or augmented reality, and it’s completely transforming the world of entertainment. Really, we’ve never seen anything like this. The possibilities that this technology hands us has been one of Silicon Valley’s best kept secrets.
But not anymore. One of the biggest technology companies in the world just stepped into the new space, and it’s opening the door to this untapped industry.
They aren’t just constructing a new type of entertainment – this company is creating a place where your bank account can truly thrive as well.
Here’s how to cash in on the up-and-coming industry of augmented reality…
Augmented Reality Could Take Your Wallet Where It’s Never Been Before
Verizon Communications Inc. (NYSE: VZ) is the second-largest telecommunications provider in the world, behind just AT&T Inc. (NYSE: T). But the company is growing to encompass more than just your Wi-Fi connection…
On Monday, September 30, VZ bought a virtual reality video startup company called Jaunt XR. The multinational telecommunications conglomerate will assume Jaunt’s software and technology.
This might seem like your run-of-the-mill deal. I mean, big companies like VZ are buying smaller ones all the time. But this is VZ’s first venture into the world of VR, making the purchase a serious game-changer.
Founded back in 2013, Jaunt developed hardware, software, tools, and apps for companies to use to create high-quality virtual reality (VR) content. The company even made its own VR video platform, formatted like today’s Netflix Inc. (NASDAQ: NFLX) website.
But VR proved a difficult space to navigate. Currently, the industry is crowded with well-known players like Facebook Inc. (NASDAQ: FB), Alphabet Inc. (NASDAQ: GOOGL), and Apple Inc. (NASDAQ: AAPL). And VR products have yet to break out from their niche audience.
Augmented reality (AR), however, is a different story. While VR completely shuts out the outside world by replacing users’ vision with its own entrancing experience, AR works with the physical world, adding digital features to what one already sees.
Think of it like using a filter to take a picture. If you’ve ever seen a group of teenagers making faces at their phone screens, they’re likely using AR, be it photo filters on social media app “Snapchat” or even the wildly popular video game, Pokémon Go. While VR has struggled to take off, AR is already shooting toward the sky.
That’s why Jaunt shifted to an AR focus, raising about $100 million in funding from Walt Disney Co. (NYSE: DIS), GOOGL’s Google Ventures (GV) and Redpoint Ventures, and more. Now, with VZ’s leadership, Jaunt’s path to a new, augmented reality is growing even bigger.
According to Jaunt CEO Mitzi Reaugh,
“We are thrilled with Verizon’s acquisition of Jaunt’s technology. The Jaunt team has built leading-edge software and we are excited for its next chapter with Verizon.”
Jaunt could be the chance that VZ’s media arm needs. The company was recently forced to scale back their media ambitions, laying off about 7% of their workforce in January and taking a $4.6 billion write-down on its media business. It looked as though the branch wasn’t performing as well as originally hoped.
But Jaunt has the potential to change all of that.
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VZ has had a volatile year so far. It’s only up 7.5% year-to-date. And based on the success of its media business – or lack thereof – it makes sense. But it also makes it the perfect time to jump into the telecommunications giant, allowing you to rake in gains while the company grows.
VZ is currently trading around $60. You could buy the stock, but you’d be paying $6,000 for control over 100 shares. Plus, you’d likely have to wait a while before VZ makes a pop big enough to return any gains worth selling for, especially if the stock continues on the volatile path it’s been on this year.
Your best bet here isn’t buying the stock – it’s buying the option. But I’m not talking about a simple long call…
I’m talking about LEAPs – long-term equity anticipation securities. These are long-term stock options with expirations as far out as three years.
You see, it could take a while for VZ to fully develop its venture into AR. With LEAPs, you have much more time for a trade to move in your favor than with a simple call. You can take part in price increases without having to pay the high costs of buying the stock outright, and you can take home a hefty return on VZ‘s upcoming growth as a result.
From the Mailbag…
Reader: Hey Tom. I just joined your club and I noticed you talk a lot about the “big guys.” I thought the secret to getting rich was to find the little stocks that are about to take off… not the other way around. Am I missing something here?
Tom: Sure, you can always devote a portion of your portfolio to small stocks you think have potential. But in my opinion, that’s no way to get rich. Chances are, if you think a stock is going to hit it big, so does everyone else. So why not trade on the stocks we already know can make us money? The key is to look for a good amount of trading volume. Now, I know that finding those opportunities can be tricky, so that’s why I go over this in detail with a new stock each month in my Million Dollar Masterclass – sign up here to make sure you’re on the list to get my next one.
Good trading,
Tom Gentile
America’s #1 Pattern Trader
