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Tag: Share Capital

  • Palantir announces $1 billion buyback program, stock rises after earnings

    Palantir announces $1 billion buyback program, stock rises after earnings

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    Palantir Technologies Inc. matched expectations with its latest quarterly results Monday while announcing a new $1 billion buyback authorization.

    The software company posted its third quarter in a row of GAAP profitability, recording second-quarter net income of $28 million, or 1 cent a share, whereas Palantir
    PLTR,
    -1.15%
    racked up a net loss of $179.3 million, or 9 cents a share, in the year-earlier period. Analysts tracked by FactSet were modeling GAAP earnings per share of 1 cent.

    Palantir logged adjusted earnings per share of 5 cents, in line with the FactSet consensus.

    Revenue rose to $533 million from $473 million and also met the FactSet consensus. The company notched $232 million in commercial revenue, up 10% from a year before, along with $302 million of government revenue, up 15%.

    After initially falling following the report, Palantir shares rose 2.6% in after-hours trading.

    “We continue to see unprecedented demand,” Chief Revenue Officer Ryan Taylor told MarketWatch. That includes both “top-of-funnel” conversations with new customers and others expanding their use of Palantir software, as momentum builds for the company’s artificial-intelligence offerings.

    Taylor added that Palantir’s U.S. government work has “never been stronger.”

    See also: Palantir is ‘the Messi of AI,’ says analyst who thinks its stock can jump 45%

    Palantir also announced that its board of directors has approved a stock-buyback program of up to $1 billion. The move comes as the company posted $285 million in adjusted free cash flow during the first half of the year and finished the second quarter with $3.1 billion in cash and equivalents on its balance sheet.

    “Our cash flow, balance sheet and the authorization of a billion-dollar buyback show what we believe in for the future of this company,” Chief Financial Officer David Glazer told MarketWatch. The belief is that “AI is a massive opportunity.”

    Added Chief Executive Alex Karp in a shareholder letter: “The scale of the opportunity that lies ahead has increased significantly in recent months. And we intend to capture it.” 

    He noted that the company is in talks with more than 300 additional enterprises about using Palantir’s AI platform, “all of which are searching for an effective and secure means of adapting the latest large language models for use on their internal systems and proprietary data.”

    For the third quarter, Palantir expects $553 million to $557 million in revenue, along with GAAP profitability. Analysts tracked by FactSet were modeling $553 million,

    Palantir also expects to report GAAP net income for its fourth quarter. It further models upwards of $2.212 billion in full-year revenue, while analysts were looking for $2.210 billion.

    Shares of Palantir are up 180% so far this year.

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  • Warren Buffett’s Berkshire Hathaway swings to Q2 profit, operating earnings up 6%

    Warren Buffett’s Berkshire Hathaway swings to Q2 profit, operating earnings up 6%

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    Warren Buffett’s Berkshire Hathaway swung to a profit in the second quarter owed to its investment portfolio and insurance holdings, according to a release out Saturday. 

    The holding company with businesses that range from insurer Geico and railroad BNSF Railway to Dairy Queen restaurants and its own energy division posted net income of $35.9 billion, or $24,775 a class A share equivalent. That compared with a loss of $43.8 billion, or $29,754 a class A share equivalent, a year earlier. 

    Berkshire’s
    BRK.A,
    -1.37%

    BRK.B,
    -1.08%
    after-tax operating earnings, a figure Warren Buffett wants shareholders to and which excludes some investment results, rose 6% to just over $10 billion from $9.3 billion a year earlier. Regulations do require Berkshire to include unrealized gains and losses from its investment portfolio when it reports its net income. 

    Berkshire’s stock repurchases totaled $1.4 billion in the second quarter, compared with $4.4 billion in the first quarter and $1 billion for the year-earlier period. The Q2 repurchases were below an estimate of $2.2 billion from UBS analyst Brian Meredith.

    Reduced buybacks did come alongside appreciation in Berkshire stock, which was up 10% in the second quarter.

    Berkshire ended the second quarter with $147.4 billion in cash and cash equivalents, compared with $105.4 billion in the same period a year ago. 

    Berkshire’s Class A shares have been hovering near all-time highs, up 21% over the past year and bringing the company’s market value to roughly $780 billion. 

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  • Weaker Energy Prices Temper Shell’s Profit, but Not Cash Payouts for Investors

    Weaker Energy Prices Temper Shell’s Profit, but Not Cash Payouts for Investors

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    Weaker Energy Prices Temper Shell’s Profit, but Not Cash Payouts for Investors

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  • AMC Entertainment Shares Soar After Judge Blocks Equity Transactions

    AMC Entertainment Shares Soar After Judge Blocks Equity Transactions

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    AMC Entertainment shares soared 70% after-hours Friday after a judge rejected a proposed court settlement that would have cleared the way for the movie-theater giant to complete a set of equity transactions enabling it to issue substantially more shares.

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  • Cava Group’s stock soars 11% as analysts start coverage on a bullish note

    Cava Group’s stock soars 11% as analysts start coverage on a bullish note

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    The stock of Mediterranean-style fast-casual restaurant chain Cava Group Inc. soared 11% Monday, after analysts initiated coverage on the stock which made its debut on public markets in mid-June with a flurry of buy ratings.

    At least four of the banks that were underwriters on the initial public offering — JP Morgan, Stifel, William Blair and Jefferies — assigned the stock a buy rating or the equivalent.

    FactSet shows one bank has a hold rating but it’s a restricted listing so it’s not clear who it’s from.

    The company
    CAVA,
    +8.04%
    raised $317 million in its initial public offering, which priced above its proposed range at $22 a share and immediately rallied on opening. The company issued 14.4 million shares at a valuation of $2.45 billion. The stock was last trading at $43.83.

    See also: Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity

    The company is not profitable and has high cash burn and just $23 million in cash and cash equivalents on its balance sheet, according to its IPO filing documents.

    But analysts were unfazed, with William Blair analysts calling it a clear leader in a fast-growing category with proven geographic appeal.

    “CAVA has hit upon a winning formula with its customizable menu of bowls and pitas featuring bold Mediterranean flavors that can fit in any dietary preference,” wrote analysts led by Sharon Zackfia.

    “CAVA’s customer appeal is evident in average unit volumes (AUVs) of roughly $2.5 million and a 44% five-year revenue CAGR through 2022.”

    The company accelerated its growth with the 2018 acquisition of Zoës Kitchen, “which provided immediate access to attractive real estate in new markets while enabling capital-efficient densification in top-tier trade areas (Zoës conversions roughly half the cost of a typical greenfield CAVA),” they wrote.

    That has set the company up to end 2023 with roughly triple the number of locations as it had in 2020.

    William Blair estimates that there’s room for at least 1,200 domestic Cava restaurants based on the population per restaurant already achieved in Virginia, where it’s still adding locations.

    That supports management’s target of 1,000-plus locations by 2032.

    “We also see the potential for digital drive-thrus to further lengthen CAVA’s growth runway while lifting AUVs (and potentially returns), with about one-third of this year’s new units having drive-thrus, ramping up to about half in 2024 (versus roughly 20 drive-thrus today),” they wrote. William Blair initiated coverage with an outperform rating.

    JP Morgan launched coverage with an overweight rating and a December 2024 $45 stock price target. Analysts cheered the entrepreneurial sprit of Founder and CEO Brett Schulman with help from Chairman Ron Shaich, the founder of Panera Bread.

    “In-store design/operational procedures and back-end support for the network allows CAVA to be efficient, safe and consistent as the brand leverages these systems for its goal national brand penetration,” they wrote in a note to clients.

    Mediterranean cuisine covers many types of food and occasions, so the end-market is large, topping out at more than $1 trillion in U.S. sales.

    While bowl builds priced at $10.95 to $16.95 will likely limit a high frequency of lower-income consumers, “we believe the brand has an enduring appeal to a very broad customer base for at least occasional usage.”

    And suburbs are 82% of the site mix and are expected to remain a key location base, they added.

    Stifel and Jefferies analysts initiated coverage with a buy rating and $48 price target. Stifel analysts led by Chris O’Cull also cheered the wide appeal of the food and compelling unit-level returns and highlighted the company’s healthy balance sheet.

    “The company is in strong financial condition with no funded debt and roughly $340M in cash on hand following the company’s IPO,” they wrote in a note to clients. “We project the company’s average quarterly cash balance will remain above $200M with no funded debt for the foreseeable future. We project positive annual free cash flow starting in 2026.”

    Still, not everyone is convinced the company is a buy. David Trainer, chief executive of New Constructs, an independent equity research firm that uses machine learning and natural-language processing to parse corporate filings and model economic earnings, published a series of critical reports before the IPO.

    Trainer questioned Cava’s ability to reach profitability and its high valuation. He even compared it to WeWork 
    WE,
    +5.80%    ,
     the infamous startup created by Israeli entrepreneur Adam Neumann, that at its peak was valued at $47 billion, but is now trading at just 26 cents a share, or a market cap of $521 million.

    The Renaissance IPO ETF 
    IPO,
    +0.52%
     has gained 32% in the year to date, while the S&P 500 
    SPX,
    -0.07%
    has gained 15%.

    For more, see: Fast-casual restaurant chain Cava Group’s IPO documents raise some red flags: analyst

    Read now: Cava Group CFO is confident restaurant chain will be profitable—but she won’t say when

    Related: 5 things to know about the fast-casual Mediterranean restaurant chain Cava

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  • Mullen Automotive’s stock more than doubles in 2 days. Here’s why.

    Mullen Automotive’s stock more than doubles in 2 days. Here’s why.

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    Shares of Mullen Automotive Inc. rocketed on massive volume for a second-straight day, after the electric vehicle maker announced plans to buy back a chunk of its shares.

    The company
    MULN,
    +29.02%
    said it believes its stock is “significantly undervalued,” given its current cash position of about $235 million. Therefore, the board of directors have authorized the repurchase of up to $25 million worth of its outstanding shares through the end of this year.

    The buyback amount represents 17.1% of Mullen’s current market capitalization of about $145.8 million.

    “We are initiating this buyback program as an attractive opportunity to deploy capital and return value to our shareholders,” said Chief Executive Officer David Michery.

    The stock soared as much as 88.2% intraday, before paring gains to be up 32.8% in afternoon trading. Trading volume swelled to an already record 1.78 billion shares, compared with the full-day average over the past 30 days of about 205.0 million shares.

    On Wednesday, the stock blasted 69.4% higher, the biggest one-day gain since it ran up 145.6% on Feb. 28, 2022, on then-record volume of 1.39 billion shares. That followed the company’s announcement that it retained a law firm to combat illegal naked short selling.


    FactSet, MarketWatch

    A short sale is a way for investors to bet that prices will fall. The short seller must pay to borrow stock owned by another investor so they can sell it with the hope of buying the stock back at a lower price. If the investor who originally owned the stock sells their stock, the borrower must cover their short so they can return the stock.

    “Naked” short selling refers to the illegal act of shorting a stock without borrowing it first. While that is often blamed for what companies believe are unwarranted declines in their stock, market structure experts have often refuted those claims.

    Read: Short sellers are not evil, but they are misunderstood.

    Before the stock’s two-day bounce, it had closed Monday at a record low of 10.1 cents, even after the company reported last week that it recorded revenue for the first time, and that it received additional financing that put it in the “best financial position” in its history.

    Mullen had said on Wednesday that it “believes it may have been” targeted by naked short sellers, and therefore decided to investigate any “potential wrongdoing.”


    FactSet, MarketWatch

    The latest exchange data showed that the percent of Mullen’s public float, or shares freely available to trade, that have been shorted was 16.2%, according to FactSet data. That’s less than half what the percentage was a month ago.

    In comparison, fellow “meme” stock AMC Entertainment Holdings Inc.
    AMC,
    +0.94%
    has 23.6% of its float shorted and 20.8% of GameStop Corp.’s
    GME,
    -4.48%
    float is shorted.

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  • Yahoo CEO says the company plans a return to the public markets

    Yahoo CEO says the company plans a return to the public markets

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    Yahoo, an early trailblazer of the Internet boom, is “very profitable,” and ready to return to public markets via an initial public offering.

    That’s according to Chief Executive Jim Lanzone, who made the comment in an interview with the Financial Times published Tuesday. Yahoo soared to prominence in the 1990s, rising in the public consciousness alongside its share price — under the ticker symbol “YHOO” — during the dot-com boom.

    Apollo Funds purchased the Yahoo business from Verizon Communications Inc. 
    VZ,
    +0.24%
     in 2021.

    IPO Report: Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity

    The web services provider, which competes with the likes of Google parent Alphabet Inc. 
    GOOGL,
    +0.17%
    and Facebook parent Meta Platforms Inc. 
    META,
    -0.33%    ,
    said earlier this year that more than 20% of its workforce would be laid off. At the time, Lanzone reportedly said that the cuts would be made in an unprofitable area of its business but that they would be “tremendously beneficial” to the company overall.

    “Whether it’s finance, or sports or news, that’s still what we do, and why we’re No. 1, or No. 2, in all these important categories all these years later,” Lanzone reportedly told the FT. “While the company has had struggles [at] different points in time, we’re still huge in traffic, and we have our best days ahead of us productwise.”

    He said Yahoo would be aggressively looking at the chance to build businesses in related sectors via M&A — it recently bought Wagr, a sports-betting app. While Yahoo is still “too small” to take on Google and Microsoft’s
    MSFT,
    -0.75%
    search engine Bing, Lanzone said he’s optimistic, and also sees AI offering up new opportunities for the company.

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  • Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity

    Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity

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    IPO investors, much like retail shoppers in recent years’ inflationary environment, are demanding clear discounts and demonstrating sensitivity to price and valuations, according to Renaissance Capital.

    The provider of IPO exchange-traded funds and institutional research said that’s a positive — even if tech unicorns in the pipeline would prefer it were not the case.

    “Quality consumer names are working,” said Matthew Kennedy, senior strategist at Renaissance, listing Kenvue, Cava Group Inc., Gen Restaurant Group Inc. and Savers Value Village Inc. as examples of recent new issues that enjoyed strong debuts.

    Kenvue
    KVUE,
    +1.65%    ,
    the former consumer arm of Johnson & Johnson
    JNJ,
    +0.87%
    and parent of household-name products such as Tylenol and Band-Aid, raised $3.8 billion in its May IPO at a valuation of $41.08 billion, making it the biggest deal of the year to date.

    Cava Group
    CAVA,
    -5.93%    ,
    the loss-making Mediterranean-style fast-casual restaurant group, raised $317 million in its mid-June deal at a valuation of $2.5 billion. The stock popped more than 99% on its first day of trade.

    For more: Cava Group CFO is confident restaurant chain will be profitable — but she won’t say when

    Gen Restaurant Group
    GENK,
    +13.95%
    is a profitable Korean barbecue chain that made its debut Wednesday with a more than 50% pop in early trade.

    “But broadly investors are still demanding clear discounts to public peers, especially if they take issue with certain aspects of a deal. So it’s good to see that valuation sensitivity,” said Kennedy.

    Savers Value Village
    SVV,
    +3.45%
    went public Thursday with some fanfare, closing 27% above its $18 issue price. The company is the biggest for-profit thrift-store chain in North America, with 317 stores that operate under multiple names.

    The company is profitable, with net income of $11.9 million in the quarter through April 2, after a loss of $10.2 million in the same period a year earlier. For all of 2022, it had net income of $84.7 million, up from $83.4 million in 2021.

    Revenue for the quarter came to $327.5 million, down from $345.7 million in the year-ago period. Revenue totaled $1.4 billion for 2022, up from $1.2 billion in 2021.

    See: Money-losing food chain Cava showed IPO success. Is it finally time for some tech deals?

    Two other deals that made their debut on Thursday fared less well, however.

    Texas-based Kodiak Gas Services Inc. 
    KGS,
    +3.44%
     and Fidelis Insurance Holdings Ltd. closed lower after pricing below their estimated ranges and making other accommodations to get their deals through.

    Bermuda-based Fidelis, a reinsurer, downsized its deal to 15 million shares from a previous expectation that it would offer 17 million. The initial public offering was priced at $14 a share, below the proposed $16-to-$19 range.

    Maker of oil- and gas-production equipment Kodiak opened almost 3% below its issue price of $16, which was well below its proposed price range of $19 to $22.

    Fidelis has an unusual structure, in that it uses a third party for origination, underwriting and claims management, said Kennedy.

    “We think insurance investors wanted a discount for a company that didn’t own the underwriting group,” he said. “It has an experienced management team, though, so now they’ll just need to execute.”

    Kodiak, meanwhile, carries substantial debt and will need to undertake significant capital spendig in the coming years, just as gas prices have fallen back.

    It’s also worth noting that the last big oil and gas IPO, Atlas, “is slightly below its offer price,” Kennedy said.

    Atlas Energy Solutions Inc.
    AESI,
    -2.75%
    went public in March at an issue price of $18 a share. The stock was last quoted at $17.52.

    Still, Renaissance is expecting a gradual reopening of the IPO market in the second half, said Kennedy, who noted that the IPO ETF
    IPO,
    +1.38%
    has gained about 30% in to date in 2023, outperforming the S&P 500’s
    SPX,
    +1.23%
    14% gain.

    To date, there have been 52 IPOs this year, up 33% from the same time last year, when the market was effectively frozen. Almost $9 billion in proceeds have been raised, up 115% from last year but well below levels seen in frothier times.

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  • Cathie Wood Sold More Tesla Stock. She Might Not Be Done.

    Cathie Wood Sold More Tesla Stock. She Might Not Be Done.

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    Cathie Wood Sold More Tesla Stock. She Might Not Be Done.

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  • Cava Group CFO is confident restaurant chain will be profitable — but she won’t say when

    Cava Group CFO is confident restaurant chain will be profitable — but she won’t say when

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    Cava Group, the Mediterranean-focused fast-casual restaurant chain that’s making its trading debut on Thursday, is confident it has access to enough funding to expand its business and make a profit, according to Chief Financial Officer Tricia Tolivar.

    But Tolivar declined to provide a timeline to profitability in an interview with MarketWatch.

    The…

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  • Mediterranean fast-casual restaurant chain Cava prices IPO at $22 a share

    Mediterranean fast-casual restaurant chain Cava prices IPO at $22 a share

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    Mediterranean fast-casual restaurant chain Cava Group on Wednesday priced its initial public offering of 14.4 million shares at $22 a share, up from a prior range, giving the company a valuation of roughly $2.45 billion.

    Shares are expected to begin trading Thursday on the New York Stock Exchange with the ticker symbol CAVA.

    The rapidly-growing…

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  • Cummins spinoff Atmus Filtration’s stock soars 14% in trading debut

    Cummins spinoff Atmus Filtration’s stock soars 14% in trading debut

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    Atmus Filtration Technologies Inc.’s stock soared 14% Friday in its trading debut, after the Cummins Inc. spinoff priced its initial public offering in the middle of its proposed price range.

    The Nashville, Tenn.-based company sold 14.1 million shares priced at $19.50 each to raise $275 million. With 83.3 million shares to be outstanding after the deal, the company’s valuation is $1.6 billion.

    The stock
    ATMU,
    +11.90%
    is trading on the New York Stock Exchange under the ticker ATMU. Goldman Sachs and JPMorgan Chase were lead book-running managers on the deal, with 10 other banks acting as co-managers.

    Although the company is issuing primary shares, Atmus will not receive any of the IPO proceeds; all of the proceeds will go to debt-for-equity exchange parties, namely underwriters Goldman Sachs and JPMorgan, and will indirectly pay down parent Cummins’
    CMI,
    +1.03%
    debt, according to the filing documents.

    Atmus makes products for on-highway commercial vehicles and off-highway agriculture, construction, mining and power-generation vehicles and equipment, mostly under the Fleetguard brand. The company had pro forma net income of $34.9 million in the first quarter on sales of $418.6 million.

    About 16% of its 2022 sales went to original-equipment manufacturers, where its filters are used for new vehicles and equipment, and about 84% were aftermarket sales.

    The company was created by Cummins, a maker of diesel and natural-gas engines, in 1958.

    The IPO comes in a thin year for deals. There have been just 44 IPOs this year to raise $7.3 billion in proceeds, according to Renaissance Capital, a provider of IPO exchange-traded funds and institutional research.

    That’s up 29.4% from the same period in 2022, when deal flow slowed to its lightest in decades.

    “Deal flow started at a decent pace but failed to pick back up after the February lull, as hawkish signals from the Fed, renewed recession fears, and turmoil within the banking industry caused a spike in volatility,” Renaissance wrote in April commentary.

    The biggest deal of the year to date was that of Kenvue Inc.
    KVUE,
    -0.11%    ,
    a spinoff from Johnson & Johnson
    JNJ,
    +0.14%    ,
    which is parent to a number of household brands, including Tylenol, Band-Aid, Listerine and Benadryl.

    For more, see: Kenvue stock cheered in Wall Street debut, as Tylenol and Band-Aid brand parent is valued at $48 billion

    Kenvue raised $3.8 billion after pricing above range and achieving a valuation of $41 billion.

    The Renaissance IPO ETF
    IPO,
    +2.06%
    has gained 18% in the year to date, while the S&P 500
    SPX,
    +1.34%
    has gained 9%.

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  • Apple earnings show surprise jump in iPhone sales and a 4% dividend hike

    Apple earnings show surprise jump in iPhone sales and a 4% dividend hike

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    Apple Inc. on Thursday revealed surprise growth in its iPhone business during the first three months of the year, overcoming a shortfall in Mac revenue as the company promised investors billions more in dividends and stock repurchases.

    Apple shares
    AAPL,
    -0.99%
    rose 2.5% in extended trading.

    The company reported fiscal second-quarter revenue of $94.8 billion, down from $97.3 billion a year before, while analysts had been expecting $92.9 billion. Revenue for the iPhone category rose to $51.3 billion from $50.6 billion, with analysts surveyed by FactSet expecting a decline to $48.7 billion.

    Chief Financial Officer Luca Maestri said on the earnings call that the iPhone growth was driven by “strong performance in emerging markets from South Asia and India to Latin America and the Middle East.”

    The company recently opened its first two Apple stores in India, and Chief Executive Tim Cook noted opportunity in India.

    “What I do see in India is a lot of people entering the middle class, and I’m hopeful that we can convince some number of them to buy an iPhone,” he said.

    Apple logged net income of $24.2 billion, or $1.52 a share, compared with $25 billion, or $1.52 a share, in the year-prior quarter. Analysts were modeling $1.43 a share in earnings on average, according to FactSet.

    Apple’s results arrived amid concern about the state of consumer-electronics spending, given worrisome third-party data points and cautious signals from players like Qualcomm Inc.
    QCOM,
    -5.54%
    and DuPont de Nemours Inc.
    DD,
    -0.53%    .

    See also: Qualcomm stock falls as backed up Apple iPhone inventory contributes to weak outlook

    The company saw steep revenue declines in both the iPad and Mac categories. Sales of iPads fell to $6.7 billion from $7.6 billion a year ago and matched the FactSet consensus. Mac revenue sank to $7.2 billion from $10.4 billion, while analysts were looking for $7.8 billion.

    The Mac segment was up against tough comparisons to a year-ago period that saw the “incredibly successful rollout of our M1 chips,” Cook noted. It’s “facing some macroeconomic and foreign exchange headwinds as well.”

    Apple’s wearables, home and accessories category was essentially flat, with sales of $8.8 billion. The FactSet consensus called for $8.4 billion. The services segment showed growth, with revenue up to $20.9 billion from $19.8 billion, roughly in line with the FactSet consensus of $21.0 billion.

    Maestri noted that “certain services offerings, such as digital advertising and mobile gaming, continue to be affected by the current macroeconomic environment,” though advertising, Apple Care and video set revenue records for the March quarter.

    Executives shared some very big-picture views on recent financial-services initiatives, though without any financial specifics. Apple’s recently launched savings account, which has a 4.15% yield, has had an “incredible” initial response, while Apple Pay Later, a buy-now-pay-later product, has received “really good” feedback as well, they said.

    Read: Apple Card savings account has an attractive 4.15% interest rate, but beware of these pitfalls before signing

    Apple also announced Thursday that it was boosting its buyback program by $90 billion while upping its quarterly dividend by 4% to 24 cents a share. That compares to a $90 billion increase to the share-repurchase authorization and 5% dividend hike a year ago.

    While Apple stopped giving traditional guidance at the start of the pandemic, Maestri said on the call that he expects June-quarter revenue growth to be similar to what was seen in the March quarter on a year-over-year basis, assuming a stable macroeconomic climate.

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  • Mullen Automotive now a ‘go to’ meme stock, says influential trader

    Mullen Automotive now a ‘go to’ meme stock, says influential trader

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    Mullen Automotive Inc. is attracting more meme-like attention from retail investors than traditional meme stock darlings AMC Entertainment Holdings Inc. and GameStop Corp., according to an influential meme-stock trader.

    The electric vehicle company’s stock has become the “meme go to” for retail investors, said the trader, who goes by the name Obi. The trader participates in the WallStreetBets group on Reddit under the user name Major-Access2321.

    Obi, whose Making Easy Money YouTube channel has over 28,000 subscribers, said that Mullen
    MULN,
    -7.98%
    is generating plenty of buzz across social media. “When it comes to meme stock world on Reddit, Twitter and now even Facebook, groups are popping up calling themselves the ‘MULN army’,” he told MarketWatch.

    The trader said that “less and less” people are speaking about AMC Entertainment
    AMC,
    +3.14%
    and GameStop
    GME,
    +2.38%    .
    “More and more people are speaking about MULN … they call it the meme that makes sense,” he added.

    Mullen shares have seen a dramatic spike in trading volume recently, with average trading volume of 1.1 billion shares Wednesday and 547.8 million shares over the past five days, according to FactSet data. The stock’s 65-day average trading volume is 279 million shares. Mullen ended Wednesday’s session down 21.1% on the company’s announcement of a reverse stock split.

    Related: Mullen Automotive shares plunge on reverse stock split announcement

    AMC’s stock ended Wednesday’s session up 4.4% on trading volume of 25.1 million shares, below its 65-day average trading volume of 35.4 million shares. GameStop’s stock closed up 1.7% Wednesday on trading volume of 3.2 million shares, below its 65-day average of 4.8 million shares.

    The stock was down 18% on Thursday.

    The over outlook for the EV market looks bright, according to Obi. “Retail feel like they have something special here with MULN,” he added.

    On Wednesday Mullen Automotive Inc. announced that it will conduct the 1-for-25 reverse stock split as the electric-vehicle company looks to maintain its Nasdaq listing.

    The stock will continue to trade on the Nasdaq Capital Market under the existing symbol “MULN” and will begin trading on a split-adjusted basis at market open Thursday.

    In March, Mullen announced that the Nasdaq had approved the company’s request for a 180-day extension to meet the $1 minimum-bid-price requirement. On Sept. 7, 2022, the Nasdaq notified the company that its stock was not compliant with rules as it had traded below $1 for more than 30 days.

    Related: After TOP Financial’s surge, influential meme-stock trader looks for next big opportunity

    Mullen’s stock soared last year after Amazon.com Inc.’s
    AMZN,
    +0.34%
    delivery partner placed an order for up to 600 cargo vans, and the company has since teamed up with Rapid Response Defense Systems to supply vans for federal government business.

    In December, Mullen announced that it is partnering with Loop Global Inc. to build public and private EV-charging technology, infrastructure and network solutions. Earlier this year, Mullen joined forces with Qiantu Motors to launch what they called an EV supercar.

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  • Johnson & Johnson’s Kenvue IPO to command valuation of more than $40 billion in biggest public debut since 2021

    Johnson & Johnson’s Kenvue IPO to command valuation of more than $40 billion in biggest public debut since 2021

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    A unit of Johnson & Johnson is headed for the biggest initial public offering in more than a year after its shares were priced near the top of the expected range Wednesday evening.

    Johnson & Johnson JNJ will charge $22 a share in the IPO for Kenvue, the companies said in a statement Wednesday evening. Kenvue, which is expected to begin trading Thursday morning on the New York Stock Exchange, under the ticker “KVUE,” will hold a wealth of consumer brands that includes Band-Aid, Tylenol and Listerine.

    Johnson…

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  • Bed Bath & Beyond’s stock rallies toward longest win streak in 3 months

    Bed Bath & Beyond’s stock rallies toward longest win streak in 3 months

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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,
    +30.90%
    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,
    -0.03%
    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,
    +6.89%    ,
    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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  • Why Snap is suddenly eligible to join the S&P 500

    Why Snap is suddenly eligible to join the S&P 500

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    Snap Inc.’s initial public offering led to changes that barred the company and others like it from joining major stock indexes, but at least one major index provider has decided to drop those limitations after less than six years.

    S&P Dow Jones Indices announced Monday afternoon that a 2017 rule barring companies with multiple share classes from joining indexes such as the S&P 500
    SPX,
    +0.33%
    has been dropped. The move comes after the index manager consulted with “market participants” at the end of last year to discuss several potential changes to the policy.

    Snap
    SNAP,
    +1.78%
    was the poster child for the initial change, after the parent company of the Snapchat mobile app went public in 2017 by selling a class of shares with no voting rights. That unprecedented move ensured that co-founders Evan Spiegel and Bobby Murphy would retain absolute power over their company even while selling shares to the public.

    Snap’s move was an acceleration of an approach used by a generation of Silicon Valley tech companies to ensure that founders retained control of their companies even while selling shares to the public. Companies such as Facebook parent Meta Platforms Inc.
    META,
    -1.19%
    and Google parent Alphabet Inc.
    GOOGL,
    -2.66%
    GOOG,
    -2.78%
    used similar structures that provided their leaders with special shares that included increased voting rights, which Snap took further by offering no voting rights.

    From 2017: Snap backlash, Facebook capitulation won’t stop founder-friendly stock structures

    In response, FTSE Russell established rules about putting votes in the public’s hands while selling stock, and S&P Dow Jones Indices completely barred all companies that had multiple classes of stock from joining its core indexes. While FTSE Russell’s rule — which requires that at least 5% of votes rest in the hands of public investors — remains, S&P Dow Jones Indices will now drop its rule entirely, after roughly 80% of respondents voted in favor of a change in 2017.

    There were other options besides completely dropping the rule. Participants in the consultation process were given several options and asked to rank them, including barring companies that only offer nonvoting stock to the public — such as Snap — or allowing companies that establish “sunset” provisions that would eventually revert all shares to equal voting rights.

    Related: Investors want change, but founders like Mark Zuckerberg hold them off

    Snap declined to comment Monday afternoon.

    The change to allow all companies with multiple share classes to join the S&P Composite 1500 and its multiple component indexes is effective as of Monday, S&P Dow Jones Indices announced, though no changes were immediately made to any index. Tracking stocks will still not be eligible for inclusion, according to the announcement.

    For more: As Snap melts down, its founders make sure to protect the people who matter — themselves

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  • Lyft brings in new CEO, pushing co-founders from helm after stock’s plunge

    Lyft brings in new CEO, pushing co-founders from helm after stock’s plunge

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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,
    -2.74%
    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,
    -1.49%
    in the 1990s before becoming employee No. 37 at Amazon.com Inc.
    AMZN,
    -0.09%    ,
    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,
    -0.42%    .
    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,
    +0.16%
    has declined 12.6%.

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  • AMC shareholders approve ‘APE’ conversion in ‘landslide victory’ but stock tumbles

    AMC shareholders approve ‘APE’ conversion in ‘landslide victory’ but stock tumbles

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    Shareholders of AMC Entertainment Holdings Inc. voted overwhelmingly in support of the company’s proposal to convert AMC Preferred Equity units into shares of common stock Tuesday.

    AMC’s AMC stock, which was repeatedly halted for volatility Monday, fell 13.8%. APEs APE rose 9.3%.

    In January, AMC announced the special meeting of shareholders…

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  • SVB Financial’s stock suffers biggest drop in 25 years after large losses on securities sales, equity offering

    SVB Financial’s stock suffers biggest drop in 25 years after large losses on securities sales, equity offering

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    Shares of Silicon Valley Bank parent company SVB Financial Group plummeted Thursday toward the biggest one-day selloff since the dotcom boom, after the Santa Clara, Calif.-based financial-services company disclosed large losses from securities sales and a stock offering meant to provide a boost to its balance sheet.

    The bank
    SIVB,
    -43.86%    ,
    which helps fund technology startups backed by venture-capital firms, said it took the “strategic actions” to strengthen its financial position as rising interest rates increase pressure on public and private markets and as clients face elevated cash burn levels.

    SVB also cut its first-quarter guidance ranges for net interest income (NII) to $880 million-$900 million from $925 million-$955 million and for net interest margin (NIM) to 1.75%-1.79% from 1.85%-1.95%. The outlook for declines in average deposits was increased to the low-double-digit percentage range from mid single digits.

    “While VC deployment has tracked our expectations, client cash burn has remained elevated and increased further in February, resulting in lower deposits than forecasted,” Chief Executive Greg Becker wrote in a letter to shareholders. “The related shift in our funding mix to more, higher-cost deposits and short-term borrowings, coupled with higher interest rates, continues to pressure NII and NIM.”

    The stock dove 41% in morning trading, outpacing the S&P 500’s
    SPX,
    +0.02%
    losers by a wide margin. It was suffering the biggest one-day selloff since its record 42.3% decline on Sept. 10, 1998.

    SVB said late Wednesday it sold about $21 billion worth of its available-for-sale securities. As of Dec. 31, the company had $26.1 billion in AFS securities.

    The sale will result in a loss of about $1.8 billion in the first quarter of 2023, while the FactSet consensus for first-quarter net income was $274.8 million.

    “The sale of substantially all of our AFS securities will enable us to increase our asset sensitivity, partially lock in funding costs, better insulate net interest income (NII) and net interest margin (NIM) from the impact of higher interest rates, and enhance profitability,” Becker wrote.

    Separately, the company said it plans to offer for sale $2.25 billion worth of equity securities to bolster its financial position.

    The offering includes $1.25 billion worth of common stock, which represents 13.4% of the company’s current market capitalization of $9.33 billion, and $500 million worth of mandatory convertible preferred stock. SVB has also entered into an agreement with private-equity investor General Atlantic to buy $500 million worth of common stock in a separate private transaction.

    “Our financial position enables us to take these strategic actions, which are intended to further bolster that position now and over the long term,” the bank said in a statement.

    JPMorgan analyst Steven Alexopoulos cut his stock-price target to $270 from $300 but reiterated the overweight rating he’s had on SVB for at least the past three years. The stock target is above Tuesday’s closing price of $267.83.

    “While this is yet another setback that will result in another negative [earnings-per-share] revision, we continue to believe that it remains a question of when rather than if the war chest of dry powder on the sidelines starts to get deployed at a much more rapid pace,” Alexopoulos wrote in a note to clients.

    The stock, which was headed for its lowest close since April 2020, has tumbled 28.3% over the past three months and plunged 70.7% over the past 12 months. In comparison, the Financial Select Sector SPDR exchange-traded fund
    XLF,
    -2.06%
    has lost 7.1% over the past year and the S&P 500 has shed 6.6%.

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