“Meme Stock” Trend Misses $SDC

Investors hoping that SmileDirectClub would receive the same “meme stock” treatment as Yellow Corporation, Bed Bath & Beyond, and other bankruptcy filers were left severely disappointed. 😢

Friday after the bell, the dental aligner company announced that it filed for bankruptcy four years after raising $1.35 billion in its initial public offering (IPO). Its Chapter 11 filing and a loan of at least $20 million from the company’s founders will allow it to operate as it tries to reorganize. 

Since the announcement came after the market had closed, there wasn’t much of an initial reaction. That left some traders hoping it would experience a pop and short-term upside momentum on Monday morning. But it did not. Instead, $SDC shares fell another 61% to fresh all-time lows. 📉

Unfortunately, the public markets will not bail the company out by pumping the stock price and allowing it to issue more equity. And if it doesn’t find a buyer soon, it will be forced to liquidate. Chief Financial Officer Troy Crawford said in the bankruptcy court statement, “If no bidder is found by November 23, SmileDirectClub will shut down and liquidate.” 💰

It was on track to generate free cash flow by the fourth quarter of this year but has been unable to secure the funding needed to get it there. As a result, its more than 1,800 employees and many other stakeholders remain at risk. 😢

Boeing Loses Altitude (Again)

If you’re an investor in airlines or airplane manufacturers, this is not the type of headline you want to wake up to. Unfortunately for Boeing and several others, the news is not great. So let’s dig into it. 👇

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AI’s Copyright Crisis Begins

We all knew copyright law would be a key issue at the heart of the artificial intelligence (AI) revolution, but we didn’t know when. Well, the time has come. ⌛

Today, The New York Times filed a lawsuit against Microsoft and OpenAI, accusing them of infringing copyright and abusing the newspaper’s intellectual property. In its court filing, the publisher said it looks to hold the two companies accountable for the “unlawful copying and use of The Times’s uniquely valuable works,” claiming billions in statutory and actual damages.

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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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