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Tag: shareholdings

  • 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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  • Icahn Enterprises’ stock slides 30% after company halves quarterly distribution to $1 per unit

    Icahn Enterprises’ stock slides 30% after company halves quarterly distribution to $1 per unit

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    Icahn Enterprises L.P.’s stock tumbled 30% on Friday, after the company said it’s cutting its quarterly distribution to $1 from $2 previously.

    The company
    IEP,
    -23.23%
    made the announcement as it reported a surprise quarterly loss with Chairman Carl Icahn, the billionaire activist investor, blaming the news squarely on one thing.

    “I believe the second quarter partially reflected the impact of short selling on companies we control or invest in, which I attribute to the misleading and self-serving Hindenburg report concerning our company, “Icahn said in a statement.

    “It also reflected the size of the hedge book relative to our activist strategy.”

    Icahn was referring to a report by short seller Hindenburg Research published on May 2 that accused IEP, Icahn’s publicly traded investing arm, of overstating asset values. Hindenburg also revealed that Icahn himself had borrowed from the company, among other issues.

    That had been disclosed in a footnote to financials that Wall Street had overlooked.

    Read: What we know about Carl Icahn’s margin loan

    See also: Carl Icahn rebuts short seller Hindenburg Research’s report. It’s already cost his company $6 billion in market cap.

    The report shaved billions off IEP’s market cap and was firmly rebutted by Icahn, who recently said he has finalized amended loan agreements with banks that untie his personal loans from the trading price of his company’s shares.

    Icahn said IEP has paid out distributions for 73 continuous quarters and does not intend for a “misleading” report to interfere with that practice.

    “The payment of future distributions will be determined by the board of directors quarterly, based upon current economic conditions and business performance and other factors that it deems relevant at the time that declaration of a distribution is considered,” said Icahn.

    On a call with analysts, IEP’s Chief Executive David Willetts highlighted the long-term “lumpiness” of the business, given its many moving parts.

    “We have large wins at times and we have volatility, we’re not a company that necessarily has predictable cash flow, there are no guarantees,” he told analysts.

    But IEP is not changing its strategy on distributions, he added.

    The stock was headed for the biggest one-day selloff since it went public 36 years ago. The next biggest drop was 20.0% on May 2, when the Hindenburg Research report was released.

    The company, which is 84% owned by Icahn and his son, Brett, offers exposure to Icahn’s personal portfolio of public and private companies, including petroleum refineries, car-parts makers, food-packaging companies and real estate. Its unit holders are mostly retail investors.

    The fund has performed poorly in the past decade. For many years Icahn has publicly expressed suspicion of the bull market that raged around him. He shorted the stock market in a big way as a hedge against his long activist positions. Going into 2021, for example, Icahn’s investment fund had a short exposure of 142%, SEC filings show.

    For more, see: Carl Icahn admits he was wrong to take a huge short position on the market that lost $9 billion

    Hindenburg, the short selling firm founded by Nate Anderson, took a victory lap on Elon Musk’s X platform, the renamed Twitter, noting that it had predicted that IEP’s poor investment performance would eventually force it to cut the distribution.

    Icahn has himself waged endless activist campaigns against companies and their management teams, and most recently succeeded in his effort to shake up management at gene sequencing test maker Illumina Inc.
    ILMN,
    +1.26%

    In June, that company accepted the resignation of its Chief Executive and director, Francis DeSouza, ending a monthslong heated battle over its $7.1 billion acquisition of cancer test maker Grail that has faced regulatory hurdles, as the Associated Press reported.

    Icahn had urged shareholders to vote out its chairman, John Thompson, and DeSouza. Company shareholders voted out Thompson in late May.

    Past activist campaigns by Icahn’s company have generated billions of dollars for shareholders and helped boards and CEOs capture untapped value, Icahn has argued, citing Reynolds, Netflix
    NFLX,
    +0.14%    ,
    Forest Labs, Apple
    AAPL,
    -4.80%    ,
     CVR Energy 
    CVI,
    -0.98%    ,
     Herbalife
    HLF,
    -0.69%
    eBay
    EBAY,
    -1.28%    ,
     Tropicana, Cheniere
    LNG,
    -0.95%
    and Occidental 
    OXY,
    +2.11%
     as examples.

    IEP said it had a loss of $269 million, or 72 cents per depositary unit, for the second quarter, wider than the loss of $128 million, or 41 cents per depositary unit, posted in the year-earlier period.

    Revenue fell to $2.684 billion from $3.796 billion.

    The FactSet consensus was for income of 25 cents per depositary unit and revenue of $2.657 billion.

    Meanwhile, investors are waiting to see the outcome of a federal probe of IEP’s corporate governance and other issues, which was disclosed along with first-quarter earnings.

    IEP’s stock is down 35% in the year to date, while the S&P 500
    SPX
    has gained 18%.

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  • Palantir Stock Spikes After Analyst Says to Buy ‘The Messi of AI’

    Palantir Stock Spikes After Analyst Says to Buy ‘The Messi of AI’

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    Palantir Technologies


    shares were getting a major boost Friday after Wedbush technology analyst Dan Ives launched coverage of the AI software company with an Outperform rating, setting a target price of $25. Ives contends Palantir is well-positioned to take market share in both the commercial and government analytics software markets.

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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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  • Banc of California is expected to keep leading regional banks higher as PacWest deal ignites sector

    Banc of California is expected to keep leading regional banks higher as PacWest deal ignites sector

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    Banc of California Inc.’s proposed agreement to acquire PacWest Bancorp. helped send regional-bank stocks considerably higher on Wednesday. But even after a two-day increase of 12% for its shares, the acquiring bank remains the favorite name among analysts covering regional players in the U.S.

    The merger agreement was announced after the market close on Tuesday, but the rumor mill had already sent Banc of California’s
    BANC,
    +0.62%
    stock up by 11% that day. Then on Wednesday, shares of PacWest Bancorp
    PACW,
    +26.92%
    shot up 27% to $9.76, which was above the estimated takeout value of $9.60 a share when the deal was announced. The merger deal, if approved by both banks’ shareholders, will also include a $400 million investment from Warburg Pincus LLC and Centerbridge Partners L.P.

    A screen of regional banks by rating and stock-price target is below.

    Deal coverage:

    With PacWest closing above the initial per-share deal valuation, it is fair to wonder whether or not its shareholders will vote to approve the agreement. In a note to clients on Wednesday, Wedbush analyst David Chiaverini called Banc of California’s offer “fair, but not overwhelmingly attractive,” and wrote that PacWest was “a likely seller before the mini banking crisis occurred in March.”

    While Chiaverini went on to predict the deal’s approval by PacWest’s shareholders, he added that he “wouldn’t be surprised if there were some dissent among a minority of shareholders [which could] possibly open the door to the potential emergence of a third-party bid.”

    More broadly, Odeon Capital analyst Dick Bove wrote to clients on Wednesday that the merger deal, along with increasing involvement of private-equity firms in lending businesses, the expected enhancement of regulatory capital requirements for banks and other factors could lead to more consolidation among smaller banks.

    He went on to write that we might be entering a period for the banking industry similar to the 1990s, “when rules were being changed and acquisitions were rampant,” which “created new investment opportunities.”

    The SPDR S&P Regional Banking exchange-traded fund
    KRE,
    +4.74%
    rose 5% on Wednesday but was still down 17% for 2023, while the SPDR S&P 500 ETF Trust
    SPY,
    +0.02%
    was up 19%, both excluding dividends.

    KRE holds 139 stocks, with 98 covered by at least five analysts working for brokerage firms polled by FactSet. Out of those 98 banks, 45 have majority “buy” ratings among the analysts. Among those 45, here are the 10 with the most upside potential over the next 12 months, implied by consensus price targets:

    Bank

    		 Ticker

    		 City

    		 Total assets ($mil)

    		 July 26 price change

    		 Share buy ratings

    		 July 26 closing price

    		 Consensus price target

    		 Implied 12-month upside potential
    Banc of California Inc.

    		 BANC,
    +0.62%         		Santa Ana, Calif.

    		 $9,370

    		 1%

    		 71%

    		 $14.71

    		 $18.58

    		 26%
    Enterprise Financial Services Corp.

    		 EFSC,
    +1.83%         		Clayton, Mo.

    		 $13,871

    		 2%

    		 80%

    		 $41.75

    		 $49.25

    		 18%
    First Merchants Corp.

    		 FRME,
    +3.52%         		Muncie, Ind.

    		 $17,968

    		 4%

    		 100%

    		 $32.38

    		 $37.33

    		 15%
    Amerant Bancorp Inc. Class A

    		 AMTB,
    +3.47%         		Coral Gables, Fla.

    		 $9,520

    		 3%

    		 60%

    		 $20.26

    		 $23.30

    		 15%
    Old Second Bancorp Inc.

    		 OSBC,
    +3.39%         		Aurora, Ill.

    		 $5,884

    		 3%

    		 100%

    		 $16.15

    		 $18.50

    		 15%
    F.N.B. Corp.

    		 FNB,
    +2.87%         		Pittsburgh

    		 $44,778

    		 3%

    		 75%

    		 $12.91

    		 $14.50

    		 12%
    Columbia Banking System Inc.

    		 COLB,
    +3.95%         		Tacoma, Wash.

    		 $53,592

    		 4%

    		 55%

    		 $22.63

    		 $25.32

    		 12%
    Wintrust Financial Corp.

    		 WTFC,
    +3.43%         		Rosemont, Ill.

    		 $54,286

    		 3%

    		 92%

    		 $86.05

    		 $95.33

    		 11%
    Synovus Financial Corp.

    		 SNV,
    +6.01%         		Columbus, Ga.

    		 $60,656

    		 6%

    		 75%

    		 $34.06

    		 $37.73

    		 11%
    Home BancShares Inc.

    		 HOMB,
    +4.56%         		Conway, Ark.

    		 $22,126

    		 5%

    		 57%

    		 $24.09

    		 $26.67

    		 11%
    Source: FactSet

    Click on the tickers for more about each bank.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Any stock screen can only be a starting point when considering whether or not to invest. If you see any stocks of interest here, you should do your own research to form your own opinion.

    Don’t miss: How you can profit in the stock market from an incredible financial-services trend over the next 20 years

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  • Tupperware’s stock sees largest daily gain on record amid meme-like surge

    Tupperware’s stock sees largest daily gain on record amid meme-like surge

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    Tupperware Brands Corp. shares enjoyed their best day on record Monday despite an apparent absence of news related to the beleaguered seller of kitchen and home products.

    The stock shot up more than 75% Monday in meme-like trading action and amid vastly higher-than-average volume. The surge marked Tupperware’s
    TUP,
    +75.56%
    largest one-day percentage gain yet, surpassing the prior record of a 67.7% increase on July 29, 2020, according to Dow Jones Market Data.

    Just shy of 130 million Tupperware shares changed hands on the day, easily breaking the record of 42.7 million shares traded, also set on July 29, 2020. The name’s 30-day average volume is about 2.4 million shares.

    The stock finished Monday at $1.58 to record its highest close since April 6, 2023, according to Dow Jones Market Data.

    Tupperware shares remain off 62% so far in 2023 amid serious challenges for the company. It issued a going-concern warning in April and disclosed that it has hired financial advisers, and it said earlier in the year that it had discovered misstatements in past financial reports.

    Don’t miss: Why investors gamble on shares of bankrupt companies — Bed Bath & Beyond, for example

    The company’s website doesn’t appear to show any recent filings or press releases that would have driven Monday’s stock move. Tupperware didn’t immediately respond to a MarketWatch request for comment about the day’s trading activity.

    Tupperware’s stock is up 136% over a two-session span, with the rally coming as investors don’t necessarily seem spooked by companies sporting bankruptcy risk. Used-car retailer Carvana Co.
    CVNA,
    +1.36%    ,
    once thought to be on the brink of failure, has seen its shares come roaring back this year, up nearly 900% over the course of 2023.

    See more: Carvana’s stock has roared back from the brink. This chart shows its meteoric surge.

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  • 3 Reasons Sirius XM Stock Just Surged 42%

    3 Reasons Sirius XM Stock Just Surged 42%

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    3 Reasons Sirius XM Stock Just Surged 42%

    Sirius XM Holdings stock surged 42% Thursday on an apparent combination of short covering, an unwinding of a spread trade involving Liberty SiriusXM, and possible buying related to a rebalancing of the Nasdaq 100 index.

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  • Cathie Wood’s ARK funds dump $26 million more in Coinbase stock, shed $13 million more of Tesla shares

    Cathie Wood’s ARK funds dump $26 million more in Coinbase stock, shed $13 million more of Tesla shares

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    Funds associated with Cathie Wood’s ARK Investment continued to cull shares of Coinbase Global Inc. and Tesla Inc. on Monday, according to recent trade disclosures.

    The ARK Fintech Innovation ETF
    ARKF,
    +1.58%
    dumped 76,788 Coinbase shares
    COIN,
    +0.23%
    on the day, while the ARK Innovation ETF
    ARKK,
    +2.29%
    sold 127,266 and the ARK Next Generation Internet ETF
    ARKW,
    +2.23%
    sold 44,784 shares.

    Those were worth $26.3 million based on Coinbase’s Monday closing price of $105.55, and the sales follow ARK’s move to dump about $50 million in Coinbase’s stock Friday.

    Coinbase represents 0.78% of the Fintech Innovation ETF, along with 0.15% of the Innovation ETF and 0.30% of the Next Generation Internet ETF. ARK disclosed the transactions and weightings in the daily trade notifications it posts to its website.

    Read: Coinbase’s spectacular stock surge after Ripple ruling sparks fierce debate

    Meanwhile, the ARK Innovation ETF shed 38,329 Tesla shares
    TSLA,
    +3.20%
    on Monday, while the ARK Next Generation Internet ETF sold 6,855. Those shares were worth $13.1 million based on Tesla’s Monday closing level of $290.38. Tesla represents about 0.12% of both funds as they continue to unload shares.

    Don’t miss: Tesla is looking at its best sales quarter ever

    ARK scooped up 455 shares of Meta Platforms Inc.
    META,
    +0.57%
    within its Next Generation Internet ETF and bought up 3,729 shares within the ARK Innovation ETF. That amounted to $1.3 million worth of stock based on Meta’s $310.62 Monday close.

    Two ARK funds bought a combined $790 million in Robinhood Markets Inc.’s stock
    HOOD,
    +0.89%    ,
    with the fintech fund scooping up 25,641 shares and the Next Generation Internet ETF buying 37,630 shares. ARK added 4,608 shares of SoFi Technologies Inc.
    SOFI,
    +4.41%
    to the fintech fund, worth $43,683 based on Monday’s close.

    See also: SoFi’s stock catches another downgrade as analyst says it ‘needs to be valued more like a bank’

    ARK was also active in shares of Twilio Inc.
    TWLO,
    -0.63%    ,
    buying 15,702 within the Fintech Innovation ETF, 133,499 within the Innovation ETF and 22,748 within the Next Generation Internet ETF. That amounted to $11.4 million in Twilio’s stock based on Monday’s $66.47 closing price.

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  • AT&T’s stock sinks toward 30-year low as it nabs another downgrade

    AT&T’s stock sinks toward 30-year low as it nabs another downgrade

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    Shares of AT&T Inc. were falling again Monday after a Citi Research analyst weighed in with a more cautious view in light of recent reporting on legacy use of lead-sheathed cables within the telecommunications industry.

    Citi’s Michael Rollins cut his rating on AT&T’s stock
    T,
    -6.69%
    to neutral from buy Monday, writing that it was among names that could see an “overhang” following The Wall Street Journal’s recent reporting on risks related to industry’s historical use of lead-sheathed cabling as Wall Street works to understand potential financial implications.

    He also downgraded shares of Frontier Communications Parent Inc.
    FYBR,
    -15.79%
    and Telephone & Data Systems Inc.
    TDS,
    -8.38%
    to neutral from buy, and he already had a neutral rating on Verizon Communications Inc.’s stock
    VZ,
    -7.50%    .

    “First, copper network deployed with possible lead sheathing could be a significant percentage of the legacy network deployed nationally with varying exposures for each firm,” Rollins wrote. He said he was “unable to specifically quantify financial risks (if anything material)” for wireline telecommunications companies stemming from these issues, though “the timing to receive more information could take at least a couple months and full resolution could take years.”

    AT&T’s stock was off 3.8% in Monday morning action, to a recent $13.95, and on track to close at its lowest level since March 24, 1993, according to Dow Jones Market Data. The stock is on pace to spend a ninth-straight session without a daily gain, factoring in one day of flat performance last week alongside a string of daily losses.

    “We still expect the company to display forward progress on cash flow generation and setting the stage to reduce net debt leverage over the next two years before considering any potential liabilities, if anything material, associated with lead sheathed cables,” Rollins wrote, though he called out “uncertainty from the industry’s use of lead-sheathed cabling” as a key reason for the downgrade.

    See also: AT&T sees ‘incredibly healthy’ wireless market, even as several factors will ding growth this quarter

    Frontier shares were down 8.2%, while TDS shares were off 5.0%. Verizon’s stock was down 1.6% and on pace for its eighth consecutive losing session.

    USTelecom, a trade association that counts AT&T and Verizon as members, said in a statement that the telecommunications industry “has a long tradition of closely following science and evidence as it relates to public health, environmental protection, and worker safety issues,” while “safe work practices within the industry have proven effective in reducing potential lead exposures to workers.”

    There are “many considerations” that go into deciding whether to remove legacy cables, “including those regarding the safety of workers who must handle the cables, potential impacts on the environment, the age and composition of the cables, their geographic location, and customer needs as well as the needs of the business and infrastructure demands,” the spokesperson continued.

    The trade group said in a prior statement that it had “not seen, nor have regulators identified, evidence that legacy lead-sheathed telecom cables are a leading cause of lead exposure or the cause of a public health issue.”

    Representatives from Frontier and TDS couldn’t immediately be reached for comment.

    Rollins noted in his report that “Verizon and AT&T indicated their expectation as that the exposure should be small,” though he said that “for Verizon, we learned the term ‘small’ could be as much as 20% of its copper network infrastructure.”

    Don’t miss: Verizon CEO says the wireless market isn’t such a bad business after all

    He joined JPMorgan’s Philip Cusick, who downgraded AT&T’s stock Friday and mentioned potential lead-cable liabilities as a concern.

    SVB MoffettNathanson analyst Craig Moffett weighed in on the issue as well Monday, calling out heavy uncertainty.

    “The unsatisfying, but honest, answer is that at this point we have nothing but unknowns to work with and no real way to quantify the companies’ exposures,” he wrote. “Lead risk is clearly not a good thing, but we don’t know how bad it will ultimately be. It would be disingenuous to try putting firm numbers around it.”

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  • FTC Loses First Bid to Block Microsoft’s Acquisition of Activision Blizzard

    FTC Loses First Bid to Block Microsoft’s Acquisition of Activision Blizzard

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    FTC Loses First Bid to Block Microsoft’s Acquisition of Activision Blizzard. The Focus Turns to U.K. Regulators.

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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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  • Activision’s Microsoft Saga Is Almost Over. It May Be Time to Sell the Stock.

    Activision’s Microsoft Saga Is Almost Over. It May Be Time to Sell the Stock.

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    The fate of


    Microsoft


    $69 billion purchase of


    Activision


    Blizzard will finally be known in the coming weeks—and investors may want to consider taking profits on the videogame maker’s stock before then.

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  • Intel Stock Drops Despite Plan for Cost Savings. This Is Why.

    Intel Stock Drops Despite Plan for Cost Savings. This Is Why.

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    Chip maker


    Intel


    offered positive news on its foundry business Wednesday as it continues to build out new facilities to expand the custom chip-making service. Investors sold the stock anyway.

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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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  • Amazon’s $1.7 Bln Takeover of iRobot Cleared by UK Regulator

    Amazon’s $1.7 Bln Takeover of iRobot Cleared by UK Regulator

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    By Joe Hoppe

    The U.K. Competition and Markets Authority on Friday said it has cleared Amazon.com’s proposed $1.7 billion acquisition of iRobot Corp.
    

    The regulator, which had launched an initial formal investigation in April into the takeover of the Roomba maker, concluded that the deal wouldn’t lead to competition concerns in the U.K.
    

    

    The deal remains under regulatory review in other jurisdictions. In September, iRobot said the U.S. Federal Trade Commission formally requested documents from both companies explaining the deal’s purpose and rationale. A securities filing by iRobot said both companies would cooperate with the FTC’s investigation.
    

    After an investigation, which typically takes up to a year, the FTC can sue to block a merger, seek concessions such as divestitures or decline to take action, allowing a deal to close.
    

    “We’re working cooperatively with the relevant regulators in their review of the merger,” an Amazon spokesperson said at the time.
    

    Write to Joe Hoppe at joseph.hoppe@wsj.com
    

    

    

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  • 
		
		
    
			
    Adobe Earnings Are Coming. The Focus Remains on AI.
    
			
    Adobe Earnings Are Coming. The Focus Remains on AI.
    
			
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            Adobe
    
          
    
        
    
       Systems reports financial results after the close of trading on Thursday, but the stock is more likely to move on any tidbits the company shares about its push into artificial intelligence—and the status of its pending $20 billion acquisition of the collaborative design software company Figma.
    

    

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  • 
		
		
    
			
    UBS Expects to Complete Credit Suisse Acquisition, Delisting as Early as Next Week – Update
    
			
    UBS Expects to Complete Credit Suisse Acquisition, Delisting as Early as Next Week – Update
    
			
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    By Pierre Bertrand
    

    UBS Group said it expects to complete its acquisition of Credit Suisse Group and have the shares of the Swiss peer delisted as early as next week.
    

    Upon completion, Credit Suisse will be merged into UBS and its shares and American depositary shares will be delisted from the SIX Swiss Exchange and the New York Stock Exchange, UBS said in a statement Monday.
    

    

    If the acquisition is finalized before the opening of trading in the U.S. on June 12, Credit Suisse will de delisted in New York on June 12 and delisted in Switzerland on June 13, UBS said.
    

    If the deal is finalized after the opening of trading in the U.S. on June 12, the delisting on the NYSE and the SIX will both occur on June 13, UBS added.
    

    UBS, which received the European Union’s clearance for its takeover of Credit Suisse last month, said Credit Suisse shareholders will receive one UBS share for every 22.48 outstanding shares held and that it will assume all Credit Suisse Group assets and liabilities.
    

    It added that Credit Suisse Group’s obligations under its outstanding debt securities will become UBS obligations.
    

    UBS agreed to take over Credit Suisse as part of an emergency measure in March to shore up the troubled lender and restore confidence in the global banking system.
    

    Write to Pierre Bertrand at pierre.bertrand@wsj.com
    

    

    

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