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A record share price for LVMH FR:MC alongside a strengthening euro pushed the luxury goods company to a market capitalization of $500 billion on Monday, the first European company to reach that landmark.
LVMH stock touched a fresh high of €904.60, valuing the group at €454.2 billion. With the euro EURUSD at one point edging up to $1.1020, this equated to $500.5 billion.
The…
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European stocks finished higher Friday, with the Stoxx Europe 600 index STOXX Europe 600 Index rising 0.34% to 469.00.
The German DAX DAX increased 0.54% to 15,881.66, the French CAC 40 index CAC 40 Index increased 0.51% to 7,577.00 and the FTSE 100 index FTSE 100 Index increased 0.15% to 7,914.13.
Among Stoxx Europe 600 constituents, health…
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BuzzFeed Inc. said Thursday it is shutting down BuzzFeed News and laying off about 15% of its workforce as founder and Chief Executive Jonah Peretti said it has faced “more challenges than I can count.”
BuzzFeed stock
BZFD,
initially fell as much as 25% after the news. HuffPost and BuzzFeed.com will open “a number of select roles for members of BuzzFeed News,” Peretti said in a memo to staff. HuffPost, which is profitable and enjoys a “loyal direct front page audience,” will be BuzzFeed’s single news brand.
“We’ve faced more challenges than I can count in the past few years: a pandemic, a fading SPAC market that yielded less capital, a tech recession, a tough economy, a declining stock market, a decelerating digital advertising market and ongoing audience and platform shifts,” Peretti said in the memo.
“Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending.”
The CEO also said he and executives could have “managed these changes better.” The integration of BuzzFeed and Complex, which BuzzFeed bought in 2021 for $300 million, “should have been executed faster and better.”
BuzzFeed went public in December 2021 through a merger with a special-purpose acquisition company, or SPAC. The deal valued BuzzFeed at $1.5 billion.
The acquisition of Complex, then a joint venture between Hearst and Verizon Communications Inc. that catered to millennials and Gen Zers, was a bid to open up other revenue streams and rely less on advertising.
BuzzFeed Inc. bought HuffPost from an unit of Verizon in November 2020.
Peretti said he decided to “overinvest” in BuzzFeed News “because I love their work and mission so much,” which made him slow “to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media.”
Chief Revenue Officer Edgar Hernandez and Chief Operating Officer Christian Baesler are leaving as well. The focus going forward is on reducing layers in the organization, streamlining the product mix, “doubling down” on social-media creators, and bringing AI to the sales process, Peretti said in the memo.
BuzzFeed has about 1,200 employees as of December. It had 1,368 employees across seven countries that month, and announced layoffs hitting about 12% of its workforce.
Also Thursday, Insider, the news site formerly known as Business Insider, said it was cutting 10% of its workforce due to “economic headwinds.”
BuzzFeed shares have lost 85% in the past 12 months, compared with losses of around 7% for the S&P 500 index.
SPX,
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Tesla Inc. stock dropped more than 6% in the extended session Wednesday after the electric-vehicle maker narrowly missed quarterly expectations for its revenue and saw adjusted profit margins drop as it cut its EV prices.
Tesla
TSLA,
earned $2.5 billion, or 73 cents a share, in the first quarter, compared with $3.3 billion, or 95 cents a share, in the year-ago period. Adjusted for one-time items, the company earned 85 cents a share.
Revenue rose 24% to $23.3 billion. Ebitda profit margins dropped to 18.3%, from nearly 27% in the year-ago quarter, while operating margins dropped to 11%.
“We are taking a view that we want to keep making as many cars as we can,” Chief Executive Elon Musk said on a call with analysts after the results. “It’s a good time to increase our lead further.”
Analysts polled by FactSet expected Tesla to report adjusted earnings of 85 cents a share on sales of $23.6 billion. Adjusted profit margins were seen at around 20%.
Tesla’s margins “are still among the best in the industry,” Musk said on the call, adding that Tesla is betting that going for higher volumes and a larger EV fleet, one that in the future would be fully autonomous, are the right choices at the moment.
Later on in the call, Musk said he expects Teslas to be capable of being fully autonomous vehicles later this year. Musk has made similar, and ultimately unrealized, predictions on numerous other occasions.
The CEO also deflected a few follow-up questions around demand, commodity prices and other aspects of the business, saying in several instances that he lacked a “crystal ball” to peer through the future.
In a letter to shareholders accompanying results, Tesla said it expects “ongoing cost reduction of our vehicles, including improved production efficiency at our newest factories and lower logistics costs, and remain focused on operating leverage as we scale.”
The company unveiled a fresh round of U.S. price cuts earlier Wednesday in a bid to boost demand amid concerns of a weakening economy, but that are also bound to cut into its profit margins.
Pricing will continue to “evolve upwards or downwards, depending on a number of factors,” the company said in the letter.
The drop in Ebitda profit margin to 18.3% “doesn’t concern me at this point in time,” since it was reasonably close to expectations, Bill Selesky at Argus Research said after the results. “I don’t see it as a huge miss.”
Profit margins are “still very healthy” compared with others in the auto industry and taking into consideration the economy, said Jeff Windau, an analyst at Edward Jones.
Even as profit margins take a hit, Tesla “will find a way to grow and grow profitably based on past performance and the fact that the business is already EV-ready,” said Alyssa Altman, a consultant at Publicis Sapient who looks into transportation and mobility issues.
“The company has a strong advantage against most other competitors who are either building their presence or recreating their business models to be focused on the EV customer and software product development,” Altman said.
Tesla said it expects to “remain ahead” of its long-term goal of increasing its production rate by 50% annually, producing 1.8 million vehicles in 2023. Tesla has “a shot at 2 million, but that’s the upside case,” Musk said on the call.
The Cybertruck, Tesla’s electric pickup truck, is on track to begin production later in the year at the Texas plant and Tesla continues to “make progress” on its next-generation EV platform, it said in the letter.
Don’t miss: Tesla to break ground at Texas lithium refinery in May
The company ended the quarter with cash and equivalents as well as investments of $22.4 billion, $217 million more than at the end of the fourth quarter.
The economy presents a “unique opportunity” for the company, Tesla said in the letter.
Tesla is aiming “to leverage our position as a cost leader. We are focused on rapidly growing production, investments in autonomy and vehicle software, and remaining on track with our growth investments.”
See also: Here’s how much Tesla short sellers have lost so far this year
In January, Tesla reported operating margins of 16% for the fourth quarter and 16.8% for all of 2022. First-quarter 2022 margins were “over 19%,” Tesla said last April.
Tesla pinned the drop in first-quarter operating margins in part to higher commodities, logistics and warranty prices, lower credit revenue, and increases in ramping up production of new battery cells.
Tesla stock has fallen about 46% in the past 12 months, compared with losses of around 7% for the S&P 500 index
SPX,
So far this year, however, the stock is up 49%, compared with an advance of 8% for the S&P 500.
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Bed Bath & Beyond Inc.’s stock jumped 34.4% in morning trading Wednesday, as shares of the troubled home-goods retailer extended their meme-like bounce to a third straight session.
Shares of the embattled company and sometime meme stock ended Tuesday’s session up 22.5%, which followed a 17.6% surge on Monday. The rally was fueled by social-media speculation, according to retail trading platform Capital.com, which said that the bounce was not likely to last.
A three-day win streak would be the longest such streak since the four-day stretch that ended Jan. 12, 2023.
The rally came after Bed Bath & Beyond’s
BBBY,
stock closed at a record low of 24 cents on Friday following a 22.6% plunge in three days after the company disclosed a sale of more than 100 million shares. The retailer, which is attempting to stave off bankruptcy, said it could sell up to $300 million worth of stock.
Related: Bed Bath & Beyond stock’s meme-like bounce won’t last, analyst says
The company’s stock has fallen 81.6% in 2023, compared with the S&P 500’s
SPX,
gain of 8%.
It has been a tumultuous few months for the retailer, which announced another equity offering earlier this year. That came after a troubled couple of years marked by strategic missteps, cash burn, challenging underlying business trends and the impact of the COVID-19 pandemic. Earlier this month, the company issued a sales warning that sent the stock to a then-record low.
Bed Bath & Beyond is also pushing for a reverse stock split. In a recent filing, the company said a special meeting of shareholders would be held May 9 to vote on the proposal. The vote is on whether to effect a reverse stock split “at a ratio in the range of 1-for-10 to 1-for-20, with such ratio to be determined at the discretion of the Board,” according to the filing.
Stocktwits, a social platform for investors and traders, has been seeing plenty of activity related to Bed Bath & Beyond. “Sentiment and message volume on the platform saw an uptick yesterday and today compared to last week,” Tom Bruni, lead writer of the Daily Rip & Markets, Stocktwits’ newsletter, told MarketWatch.
Related: Bed Bath & Beyond’s stock hit record lows amid push for reverse stock split
“It’s important to point out that many retail investors’ positions with meme stocks are so underwater that the narrative is more so self-deprecating than enthusiastic, with tons of comments like ‘only needs to move up 5000% more, and I would break even!’,” he added.
Bruni also noted that companies that file for bankruptcy often end up rallying afterward, citing the recent example of National CineMedia Inc.
NCMI,
whose stock popped last week after filing for Chapter 11 bankruptcy protection.
“A potential reason for this is investors may think that a reorganization may be the company’s best shot at surviving,” he told MarketWatch. “Investors may be betting that Bed Bath & Beyond might eventually have to take this route. However, we won’t know until next month’s reverse stock split vote takes place.”
Additionally, bankruptcy often sparks a short covering rally, according to Bruni, who notes that bearish investors don’t want to risk their profits in an attempt to squeeze the last bit of juice out of the stock. “When a company files for bankruptcy, it’s generally a sign your bearish thesis was correct, and you can take some chips off the table,” he added. “Very few investors will ride a stock to zero, as the risk isn’t worth it in many cases.”
Related: Bed Bath & Beyond has launched a ‘Hail Mary pass’ with latest partnership, says retail expert
“Also, at that point, there are few incentives for people down a lot on their investment to sell for a loss,” Bruni said. “They’d rather hold and see what happens.” Between “bag holders” and shorts covering, there’s more demand than supply for the stock, so prices go up, according to Bruni. “Then, that can feed on itself if that lasts for more than a few hours/days,” he added.
Earlier this month, Bed Bath & Beyond announced a new vendor consignment program with ReStore Capital in an attempt to boost its inventory. Carol Spieckerman, president of retail advisory firm Spieckerman Retail, told MarketWatch that the consignment plan feels like “a Hail Mary pass.”
Spieckerman said Bed Bath & Beyond is continuing “a mighty fight” amid mounting distractions, such as former chief executive Mark Tritton’s recent compensation lawsuit against the company. The lawsuit alleges that in January, Bed Bath & Beyond ceased making payments owed under Tritton’s separation agreement. Under the terms of the agreement, Bed Bath & Beyond was required to pay Tritton $6,765,000 in ratable installments over a 24-month period beginning in July 2022, according to the lawsuit. The payments were made from July 2022 to January 2023, it said.
Bed Bath & Beyond told MarketWatch that the company does not comment on legal matters.
Of eight analysts surveyed by FactSet who cover Bed Bath & Beyond, two have the equivalent of hold ratings and six have the equivalent of sell ratings.
Additional reporting by Tomi Kilgore.
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It feels as if every day brings new price changes from
Tesla
Investors are getting used to them. The bigger deal now is the electric-vehicle company’s first-quarter gross profit margins are due to be reported in just a few days.
Reuters reported Friday that Tesla cut prices for its electric vehicles in Europe and some other countries. The price of a Model 3 and Y in Germany were reduced about 5% and 10%, respectively.
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There is currently no dispute over who wears the crown of world’s wealthiest person. It isn’t Tesla Chief Executive Elon Musk.
The net worth of Bernard Arnault, the founder and chairman and chief executive officer of LVMH Moet-Hennessy Louis Vuitton SE
MC,
stood at $210 billion as of Thursday, according to the Bloomberg Billionaire Index. That makes him the world’s richest person by that marker, with an increasingly comfortable lead over Tesla’s
TSLA,
Musk, who also leads SpaceX and Twitter and whose wealth stands at $180 billion. At times the two have been in a neck-and-neck race for that top spot.
LVMH shares closed at a record €883 on Thursday, helping lift the French CAC-40
PX1,
to an all-time high. That followed forecast-beating first-quarter sales from the luxury giant, thanks to returning China shoppers as COVID-19 restrictions eased, and rebounding international travel that drove duty-free sales. Up 7% so far this week, LVMH shares rose another 0.5% on Friday to €888.70.
The stock surge padded Arnault’s fortune by $11.6 billion on Thursday, the second-biggest single-day gain ever for him and a fresh record fortune, according to Bloomberg. Musk didn’t do badly.
He increased his wealth by $3.83 billion on Thursday, before Tesla and U.S. equities
SPX,
generally retreated a bit on Friday.
Read: Who is Bernard Arnault, the world’s richest person after surpassing Elon Musk?
LVMH owns jewelers Bulgari and Tiffany, alongside fashion houses Louis Vuitton and Dior. Results released late Wednesday showed the luxury standard-bearer beating expectations across every division, led by fashion and leather goods, the latter of which is significant, Berenberg analysts observed.
“As the most profitable division, this also bodes well for margin development,” said Berenberg analyst Graham Renwick, in a note to clients on Friday.
“This performance sets the standard for [first quarter] luxury reporting and gives encouragement on China’s recovery from pandemic disruption. Overall, we think these results continue to demonstrate LVMH’s strong momentum and best-in-class execution — again reaffirming its high quality and strong track record, which we believe investors are favoring in this uncertain macro environment,” said Renwick, who reiterated a buy rating on LVMH’s stock and lifted his share-price target to €960.
The luxury sector got another confidence boost on Friday, as Hermès International SCA
RMS,
revealed sales momentum in the first quarter, driven by a bump in tourism and new stores. The maker of the legendary Birkin handbag saw a 23% annual increase in first-quarter sales and backed “ambitious” organic revenue-growth targets.
Luxury stocks have seen an impressive rebound in 2023, after a weak 2022 — LVMH shares fell 6% in 2022 as travel restrictions in China and overall economic worries weighed on shoppers.
LVMH shares are up 30% so far in 2023, with Hermès up 36% and Christian Dior SE
CDI,
and Gucci owner Kering SA
KER,
up 26% and 21%, respectively.
As for Musk, his wealth is divided among his businesses. While Tesla accounts for $76 billion, Bloomberg estimates his share of SpaceX is worth $49 billion, and his share of Tesla is worth nearly $10 billion. He paid $44 billion for Twitter last year, after an attempt to wriggle out of the deal, and its current valuation is a matter of much speculation. Musk has fired thousands of employees and claimed this week that a return to profitability is now just around the corner.
Tesla is slated to report quarterly results next week, and some analysts aren’t optimistic due to persistent price cuts of its models.
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https://www.barrons.com/articles/stock-market-movers-6336691f
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Shares of Delta Air Lines Inc. surged Thursday, after the air carrier swung to a first-quarter profit as revenue rose above expectations, and said it was “confident” in its full-year projections given a “strong” outlook for the current quarter.
The company reported a net loss that narrowed to $363 million, or 57 cents a share, from $940 million, or $1.48 a share, in the same period a year ago.
But…
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https://www.barrons.com/articles/stock-market-movers-94b3c433
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Tupperware Brands Corp.’s stock slid 45% Monday to the lowest level in three years, after the maker of food-storage goods issued a going-concern warning late Friday, saying it has hired financial advisers to help navigate its near-term challenges.
The news is just the latest blow to the company
TUP,
whose products were once a fixture in American homes, made popular in the 1950s by stay-at-home moms who would gather at special parties to introduce the product line to friends and family.
The company’s website opens on an image from the Amazon Prime show “The Marvelous Mrs. Maisel,” with the title character hosting her own party and showing friends a pastel-colored vintage line.
That direct-selling model is no longer fashionable in the U.S., although it has traction in markets like Indonesia, where women have limited earnings opportunities but often gather to eat and drink.
From the archive: You won’t believe what Tupperware says is a key challenge
The company has struggled for years to retain its selling force, which has been shrinking thanks to the proliferation of other gig-economy opportunities around the world.
In March, the company told analysts on its fourth-quarter earnings call that the sales force fell 18% last year.
That wasn’t even the worst news from that call, because Tupperware had warned in its earning release that it had identified weakness in internal control over financial reporting and that it expected to restate prior financials.
On Friday, it said that once it finalizes its 10-K annual report, which is now late, that the numbers announced in March would differ significantly from the restated numbers. It expects to file the 10-K with the Securities and Exchange Commission in the next 30 days.
Then there’s the issue of the company’s debt burden, which has led to repeated efforts to squeeze concessions from bank lenders so it can remain compliant with financial covenants.
See now: Tupperware stock craters after company warns its debt burden may force it out of business
Due “to the challenging internal and external business economics, coupled with the increased levels and cost of borrowings under its credit facility, the company currently forecasts that, if it is unable to obtain adequate capital resources or amendments to its credit agreement, it may not have adequate liquidity in the near term,” the company said on Friday.
Chief Executive Miguel Fernandez said Tupperware had embarked on a journey to turn around its operations and address its capital and liquidity positions.
The company is looking for additional financing and is discussing its options with potential investors or financing partners. Tupperware is also reviewing its real-estate portfolio with an eye toward potential sales or lease-back transactions, it said.
On its third-quarter earnings call in November, Fernandez acknowledged that some of the company’s problems are of its own making. “The global macro environment continues to be challenging, and we are not executing internally at a level or consistency that we believe we should be,” he told analysts on the call, according to a FactSet transcript.
One key challenge is connecting with younger consumers, who are unlikely to attend Tupperware parties. The company started to sell its goods at 1,900 Target
TGT,
stores in the U.S. at the start of the third quarter as part of a strategy of reducing its reliance on direct selling.
But those sales accounted for just 1% of total sales in the fourth quarter, suggesting the strategy has not gained traction.
One challenge facing Tupperware is price. Amazon
AMZN,
and other retailers such as dollar stores offer far cheaper food-storage containers. In addition, Americans are increasingly shopping online.
Tupperware’s stock has fallen 98% in the last 12 months, while the S&P 500
SPX,
has fallen 9%.
Also from the archives: Think the Avon Lady is American? Think again
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Tesla
is at it again.
The electric-vehicle maker lowered prices for its EVs in the U.S. again. This change hints at what might be happening to Tesla (ticker: TSLA) vehicles’ eligibility for purchase tax credits under stricter rules about to be applied by the IRS.
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After the start to the year
Tesla
shares have had, first-quarter deliveries better beat Wall Street expectations.
Shares of Tesla (ticker: TSLA) finished the first quarter up more than 68%—the best first-quarter performance ever. In second place: 2012’s first quarter, when shares gained 30.4%. This year’s first quarter is the sixth best quarter for shares ever. The stock has been trading for 51 quarters.
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Lyft Inc. is bringing in a new chief executive and removing its co-founders from running the ride-hailing company on a day-to-day basis, sending shares more than 3% higher in after-hours trading Monday.
Lyft
LYFT,
announced after markets closed Monday that board member David Risher will take over as CEO, replacing co-founder Logan Green. Green and Lyft’s other active co-founder — John Zimmer, who had been serving as president — will remain on the company’s board as chair and vice chair respectively, but not actively participate in running the company.
“I’m honored and humbled that Logan, John, and the board have trusted me to lead Lyft,” Risher said in a letter to employees. “And I’ll start by saying this: I want Lyft to lead, and I’m thrilled to lead Lyft.”
Risher worked at Microsoft Corp.
MSFT,
in the 1990s before becoming employee No. 37 at Amazon.com Inc.
AMZN,
according to Lyft’s announcement, which noted that he received a permanent thank you on the Amazon website from founder and former chief executive Jeff Bezos upon his departure in 2002. For the past 13 years, he has been in charge of a nonprofit focused on childhood literacy called Worldreader.
“Across all three organizations, I learned of the power of leading with purpose,” he wrote to employees. “Each organization derived tremendous energy through a singleness of purpose. It’s what attracted and retained great people, allowed us to make focused decisions and inspired our customers.”
In an interview with The Wall Street Journal, Risher — who has been on Lyft’s board since 2021 — admitted that Lyft faces competitive issues, seemingly referencing Uber Technologies Inc.
UBER,
He mentioned “a very aggressive — very aggressive — competitor,” while adding, “I think being a strong No. 2 is a good place to be.”
Lyft shares lost more than a third of their value in a single session in February after Green and Zimmer provided a forecast that missed expectations in what one analyst called “a debacle for the ages.” Monday’s announcement reiterated Lyft’s first-quarter guidance and said Lyft expects to report quarterly results in early May.
D.A. Davidson analyst Tom White told MarketWatch on Monday afternoon that the change at the top could be “a potential model positive.”
“A new leader with broader range of experiences could signal increased willingness to broaden Lyft’s strategic aperture a bit as it relates to other possible adjacent products (delivery?), partners, or ways to create value,” he wrote in an email.
Green and Zimmer began developing the company nearly 15 years ago, and launched the service in 2012, according to their separate letters to employees. They have jointly led the company since, including through a 2019 initial public offering that gave them special shares with stronger voting power.
From 2019: 5 things to know about the Lyft IPO
“To say I have loved leading Lyft is an understatement,” Green wrote in his letter to employees. “To say that I will miss working alongside you and this incredible team every day doesn’t even come close. This was an adventure of a lifetime, and I’ve loved every minute of it — the sweetness of the highs, and the pain of the lows that make you appreciate the next win that much more. I’m eternally grateful to this team.”
Lyft shares sold for $72 in its IPO, and closed Monday at $9.60 before moving closer to $10 in the extended session. Lyft stock has plummeted nearly 75% in the past 12 months, dropping 74.4% as the S&P 500 index
SPX,
has declined 12.6%.
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Deutsche Bank shares slumped on Friday, putting the health of another globally systemic important bank in the spotlight heading into the weekend.
The German lender’s shares
DBK,
fell 10% in Frankfurt trade, and the Euro Stoxx bank index
SX7E,
fell 5%.
Deutsche Bank’s 5-year credit-default swaps widened on Thursday, in what Reuters reported was the largest one-day rise in its history. And on Friday, they widened again.
It should be noted that Deutsche Bank’s 5-year credit-default swap, which was 215 on Friday, is nowhere near the peak for Credit Suisse, which was 1,194, according to S&P Global data. The higher the value of the CDS, the more likely the market sees the issuer defaulting.
Deutsche Bank’s AT1 bonds have tumbled in value after Switzerland wiped out Credit Suisse’s
CSGN,
securities in the deal for it to be taken over by UBS
UBSG,
The Invesco AT1 Capital Bond UCITS ETF
AT1,
which invests in these convertible bonds, has dropped 18% this month as investors lose faith in the securities. European and other banking regulators across the globe have insisted they will not follow Switzerland’s precedent, and first let bank equity fall to zero before wiping out the convertible securities in the event of a failure.
“It is doubtful that banks will be able to issue new AT1 anytime soon, increasing the likelihood of outstanding AT1 notes being extended. We consider that the recent events in the banking sector have resulted in substantially increased uncertainty, which is likely to continue to be reflected as substantial short-term volatility in credit markets,” said analysts at ING.
UBS
UBS,
also is feeling the stress in a deal that the banks say might not complete this year. UBS shares dropped 6%.
Related: Analysts say UBS will face revenue pressure before it can cut Credit Suisse costs.
Analysts also noted that a foreign institution tapped a Fed facility for $60 billion, according to data released by the U.S. central bank on Thursday. The Fed does not identify the counterparties. Major central banks do have access to swap lines for dollar borrowing from the Fed, meaning that either it was an institution that does not have that capability, or it was one that wanted to do so anonymously.
Furthermore, Bloomberg News reported the U.S. government was investigating banks including Credit Suisse and UBS for allegedly helping Russians evade U.S. sanctions.
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Shares of Coinbase Global Inc. dropped 15.8% in the extended session Wednesday after the crypto exchange disclosed a warning from regulators that it may have broken securities laws.
Coinbase
COIN,
said it received a Wells notice from the Securities and Exchange Commission, which could lead to formal charges.
“We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead,” Coinbase said in a blog post detailing the action. “Rest assured, Coinbase products and services continue to operate as usual — today’s news does not require any changes to our current products or services.”
Based on discussions with the SEC, Coinbase said that the potential charges relate to the company’s spot market, its staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet.
The crypto exchange said it asked the regulators to detail which assets in its platforms the SEC believes may be securities, but the SEC declined to do so. Coinbase called it a “cursory investigation.”
SEC representatives declined to comment Wednesday.
The company said that the investigation is “still at a very early stage,” and that it has turned in documents and provided two witnesses for testimony, “one on the basic aspects of our staking services and one on the basic operation of our trading platform.”
Coinbase has said that its staking services are not securities.
Regulators have doubled down on efforts to increase oversight of the crypto industry, shutting down crypto exchange Kraken’s staking program in February and issuing a Wells notice to warn stablecoin issuer Paxos.
Staking allows users to earn rewards by using their existing holdings of tokens to verify transactions.
Shares of Coinbase ended the regular trading day down 8.2%.
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GameStop Corp. stock jumped 48% in the extended session Tuesday after the specialty retailer reported a surprise quarterly profit and sales that were above Wall Street expectations.
The retailer is “aggressively focused on year-over-year profitability improvement while still pursuing pragmatic long-term growth,” Chief Executive Matt Furlong said at the company’s call after the results.
GameStop
GME,
earned $48.2 million, or 16 cents a share, in the fourth quarter, contrasting with a loss of $147.5 million, or 49 cents a share, in the year-ago quarter.
Sales dropped slightly to $2.23 billion, from $2.25 billion a year ago, in the prior year’s fourth quarter.
Analysts polled by FactSet expected the videogame retailer to report an adjusted loss of 13 cents a share on sales of $2.18 billion.
GameStop said it trimmed its inventory to $682.9 million at the close of the quarter, compared with $915 million at the close of the fourth quarter of 2022.
That reflected its “ongoing focus on maintaining a healthy inventory position,” the company said.
GameStop said it completed most of its upgrades related to infrastructure, systems, shipping capabilities, and online and mobile platforms.
On the call with analysts after the results, Furlong said that the company is taking steps this fiscal year to improve efficiency and reach profitability goals.
Those include continuing to cut costs, including in Europe, leveraging GameStop’s “strengthened financial position” to continue to improve terms from suppliers, and getting its full allocation of consoles to meet demand, he said.
Building “a stronger presence” in high-margin categories such as collectibles and toys, where the company is also seeing “pockets of growth,” is also on the table, Furlong said.
“GameStop is a much healthier business today than it was at the start of 2021,” the CEO said.
GameStop stock ended the regular trading day up 4.6%, and has gained about 12% in the four days since it closed at a two-year low.
GameStop has reported wider-than-expected losses in three of the past four quarters, but the stock has gained the day after each of the past four reports, by an average of 8.2%, according to FactSet data.
The onetime meme stock has lost about 13% over the past three months, while the S&P 500 index
SPX,
has gained 2.6%.
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