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Southwest’s Turbulent Situation

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Good evening, y’all!! 👋👋👋

The stock market moved lower on Monday. Every index closed negative, though none lost more than a percent.

Real estate and materials were today’s lone gainers – $XLRE rose 0.13% and $XLB bopped 0.01%. Communications crumbled 1.50%. 📡

Bitcoin temporarily broke above $58K before retreating to $57K. Is $60K in sight?? Place your bets…

Protagonist Therapeutics ripped 94% after the Food and Drug Administration removed its clinical hold on the company’s clinical studies. $PTGX is currently Stocktwits’ top-trending ticker. Check out our Twitter thread! 👀

Dutch Bros Inc. increased 14.90% today, boosted by upgrades this morning. The drive-through coffee chain IPOed last month.

$ADMS ascended 75%, $FLXN flew 58.65%, and $ANY accelerated 23.80%. 📈

Here are the closing prices:

S&P 500 4,361 -0.69%
Nasdaq 14,486 -0.64%
Russell 2000 2,220 -0.56%
Dow Jones 34,496 -0.72%

Events

Some Turbulence at Southwest

Some Turbulence at Southwest Featured Image

This weekend, Southwest airlines cancelled over 1,800 flights, citing issues related to “air traffic control issues, bad weather, and staffing shortfalls.”

While Southwest appears to be in panic-mode, other airlines aren’t reporting any issues. Not only that, but the Federal Aviation Administration reported “No FAA air traffic staffing shortages have been reported since Friday.” Hmm.

Denver, Baltimore, Dallas, and Chicago were among the hardest hit markets for Southwest’s cancellations. Southwest cancelled 28% of its total scheduled flights. 🤯  Meanwhile, American Airlines and Spirit only cancelled 2% and 4% of their respective scheduled flights. Ouch. Imagine getting beat by Spirit.

Southwest’s Executive VP, Alan Kasher, responded “I know this is incredibly difficult for all of you, and our Customers are not happy… Although we were staffed for the weekend, we could not anticipate the significant disruption that was created from unexpected ATC issues and bad weather across our Florida stations.”

The company backtracked after blaming other people and Mother Nature for their problems, indicating that their cancellations were caused by flight crew shortages. Lying is never good PR, but we’re still curious what the deal is. 🤔

$LUV closed down 4.17%. 



IPOs

The Future of Volvo ⚡

The Future of Volvo ⚡ Featured Image

Today, Volvo announced details on an international IPO that would value the Swedish carmaker at over $25 billion. This listing could be Volvo’s big break after years of lagging car sales. 🤞 ⚡

Volvo’s IPO comes as the company stabilizes for its future as an all-EV carmaker. Volvo CEO Hakan Samuelsson commented “The intention here is to secure the future of the company. Volvo will be an electric car company.”

Volvo has always had a strong reputation for safety, but safety alone wasn’t enough to excite buyers in the early 2000s. In 2010, Chinese company Geely bought Volvo for $1.8 billion to boost the company’s car sales and update its existing models. Now, Volvo leads the pack of companies transitioning to the all-EV life — its sales soared 18% in the beginning of this year. 📈 💸

In addition to Volvo’s revitalized status among brands like Audi, BMW, and Mercedes-Benz, the company’s all-EV brand Polestar just announced a $20 billion merger via SPAC. Talk about some electric money move$. 🤑


Stocks

Cybersecurity Rallies After Facebook Outage

It’s no secret that the market has been a bit dull as of late. However, the cybersecurity group has been an exception. In fact, in light of Facebook’s two outages last week, it has become too hot to ignore. Here are a few of the hottest cyber-stocks…

Cloudflare, Inc climbed 3.30% to all-time highs. The cybersecurity stock has been incredibly strong in each session following Facebook’s crashes last week. The sessions are marked by an arrow.

$NET is up 90% YTD.

Palo Alto Networks gained 1.42% today and registered a record close. $PANW sits less than a quarter away from $500.

The Global X Cybersecurity ETF ($BUG) just bounced off prior highs set earlier in February. Will this line in the sand continue to hold or is $BUG on its way to retest $30? Place your bets…


Stocks

Netflix’s Merch Play

It’s no secret that Netflix is diversifying. In June, the company began expanding its podcasting footprint. Two weeks ago, the company picked up its first game studio as part of its new gaming initiative. Now the company is teaming up with a big retailer to sell merch from their biggest hits.

Netflix announced a partnership with Walmart on Monday, which will include plush toys, t-shirts, cassette players, and the like. The partnership will also include a feature that allows Netflix fans to vote on what merch they’d like to see.

This is a big step up from Netflix’s existing web store, the Netflix Shop, which launched in June. However, both are capitalizing on the popularity of “Squid Game”, “Stranger Things”, and other shows.

This model is no stranger to competitors like Disney and NBCUniversal, which have used physical merchandise to generate ancillary cash and boost their biz. However, it also speaks to another urgent need for Netflix: the need to remain relevant

As other streaming platforms tune into Netflix’s frequency, the urgency to create profitable and popular content becomes more dire. Other competitors such as HBO Max, Prime Video, and Disney+ have found new momentum, catching up with the market leader.

$NFLX fell 0.89% today. $WMT fell 0.08%.