Carvana Cruises Higher On Upbeat Outlook

A short squeeze of beaten-down stocks is just what “the Docusign” ordered. Let’s see what’s happening in several beaten-down tech names and what it says about the market environment. 👇

First up is online car retailer Carvana, which provided investors with updated second-quarter guidance today. The company said its cost-reduction efforts would boost results beyond prior expectations.

Executives expect adjusted EBITDA of more than $50 million in Q2, while analysts anticipated the company would break even. It also expects gross profit per unit (GPU) to be over $6,000, a new company record, and a 60% YoY increase. 🔋

$CVNA shares rallied 56% today, bringing its year-to-date performance to 423%. That said, the highly-shorted company is still down 93% from its all-time highs. 📈

Buy now pay later (BNPL) company Affirm Holdings is also rebounding sharply. Yesterday the company announced a deal with Amazon to offer its “Adaptive Checkout” to all Amazon Pay merchants. $AFRM shares rose 16% today, bringing their year-to-date performance to 107%. 🛒

Lastly, e-signature provider DocuSign is jumping after reporting better-than-expected first-quarter results. The company’s adjusted earnings per share of $0.72 on revenues of $661 million topped the estimated $0.56 and $642 million.

Executives focused on their international growth, as the service is now in more than 180 countries with a YoY revenue growth of 17%. Meanwhile, it touted 1.4 million paying users and more than 1 billion users at the end of the quarter. Its second-quarter forecast was essentially in line with expectations. $DOCU rose 5% after hours. 🔺

Ultimately, the short squeezes occurring are a potential sign of two things. ✌️

The first is improving risk appetite as investors move from the safety of big-cap technology into more volatile market areas. And the second is that expectations for the underlying businesses of many of these stocks had gotten too dire. After all, if the economy is able to avoid a recession and inflation is under control, maybe some of these companies can stage a turnaround.

We’ll have to wait and see what happens to these companies long-term. But for now, traders are taking advantage of short-term trends in front of them. 🤷

AT&T Suffers Major Outage

Those who work at AT&T today did not have a great day, but those who use their services had a pretty good excuse to chill out at work today. That’s because the telecom giant experienced a nationwide cellphone outage that impacted tens of thousands of its customers today. 📵

While the nation’s largest carrier said it restored wireless service to all impacted customers by midday, no reason has been given for the outages. With T-Mobile and Verizon’s networks unaffected, regulators quickly questioned whether AT&T experienced a hack or other cyberattack. 📡

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Justice Department Targets UnitedHealth

With the upcoming presidential election looming, the current administration is itching to accomplish more before a potential shakeup. While antitrust regulators have had a field day with big tech, airlines, grocery chains, and others this year, they’re taking another look at UnitedHealth, especially given its recent cybersecurity issues. 🕵️‍♂️

The Justice Department is poking around to figure out the relationship between the company’s UnitedHealthcare insurance unit and its Optum health-services division. They’ve asked how UnitedHealth’s acquisitions of doctor groups might affect competitors and consumers. 🤔

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Adobe Leads Day Of Breakups

Most of today’s stories were related to hookups in the market, but we also need to touch on some major breakups. 💔

The first and most prevalent news story was that Adobe and Figma have called off their $20 billion acquisition. The two companies have faced intense scrutiny from European regulators, today saying, “There is no clear path to receive necessary regulatory approvals from the European Commission and the U.K. Competition and Markets Authority.”

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Trouble Continues For Telecoms

We last talked about Telecom stocks about six months ago, when their stocks came under significant pressure due to slowing growth, competition concerns, and regulatory issues. We then discussed them in October when investors dumped defensive stocks for higher-yielding treasuries with no risk.

Prices have since rebounded sharply with the broader market as investors priced in Fed rate cuts this year. However, Verizon was back in the news today for a not-so-great reason. Let’s dig in. 👇

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