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. đŸ”ē

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

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. 🤷

Pharmacies Fall Ill As Insurer Picks Amazon

It has been a rough year for retail pharmacy chains CVS and Walgreens, with their stocks falling sharply while much of the market rallied. And that weakness is continuing today on fears that Amazon is getting ready to eat even more of their lunch. 😨

That’s because Blue Shield of California decided to drop the company’s pharmacy benefit management services. Instead, they’re partnering with Mark Cuban’s Cost Plus Drug Company and Amazon Pharmacy, potentially delivering major savings for its roughly 5 million members. 🤝

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AI Adds To Tesla’s Gains

Technology stocks, specifically those in the consumer discretionary sector, drove the market higher today. And leading the pack was electric vehicle maker Tesla.

The world’s most valuable automaker received a boost after Morgan Stanley’s Adam Jonas said the company’s Dojo supercomputer could drive $600 billion in market cap gains. 🤑

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Media Mogul Eyes Disney’s ABC

Yesterday, Disney said it was considering selling its ABC television network assets as it looks to focus purely on ESPN (sports) and its streaming business. Local broadcaster Nexstar was the expected buyer, but today, we may have found out who another potential bidder is. 👀

Media mogul Byron Allen has reportedly offered $10 billion to purchase the ABC TV network and cable networks FX and National Geographic. So far, it looks to include the national TV network and several regional stations, but terms could change anytime. đŸ“ē

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Lattes Fuel Luckin Coffee’s Jump

Chinese coffee company and coffeehouse chain Luckin Coffee is back in the news after flying under the radar for the last two years. But don’t worry, it’s not for a bad reason this time. 👍

For those unfamiliar with the company, it was best known for coming public on the Nasdaq stock exchange in May 2019 and being rocked by an accounting scandal shortly after. In early 2020, investigative investment firm MuddyWatersResearch published a report that indicated the company had heavily inflated its sales numbers. đŸ•ĩī¸â€â™‚ī¸

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