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NVIDIA vs. The FTC 💪

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Good evening, folks. Stocks bounced back after yesterday’s beating.

All four major indexes traded higher. The Russell 2K rebounded 2.74%, not surprising considering how weak it was the prior two days. The Dow boosted 1.82% thanks to $BA (+7.54%). The S&P 500 recouped all of Wednesday’s losses.

Solana spiked 5.71% to $243, sitting less than 7% below all-time highs. $SOL.X has registered five consecutive green days and looks to make it a sixth. 🍀

Each sector ETF traded positive. Financials flew 2.98% with energy trailing right behind, +2.91%. ⚡

President Biden announced that his strategy for combating COVID during the winter months will not involve new lockdowns or a broadening of the administration’s current vaccination mandates.

Kroger Company climbed 11% after upping full-year sales and profit predictions. 💸 More on this below.

$JWEL jammed 25.56%, $YELL yelped 11%, and $ADA.X ascended 10.2%.

Here are the closing prices: 

S&P 500 4,577 +1.42%
Nasdaq 15,381 +0.83%
Russell 2000 2,206 +2.74%
Dow Jones 34,639 +1.82%

Earnings

DocuSign Dumped on Earnings

DocuSign Dumped on Earnings Featured Image

We’re in the thick of a big week for software companies, which has shown mixed results. Unfortunately, DocuSign fell on the wrong side of the tape today after reporting earnings. 

The company reported Non-GAAP net income of $0.61 per share, which comes out to $121.1 million in net income. The company’s total revenue was $545.5 million, +42% YoY. These figures topped analysts’ bets, which came in at $0.46/share and $531 million in revenue. You wouldn’t think that though, based on how the stock performed…

$DOCU fell over 28% in after hours today. Ouch. That’s almost entirely because the company’s revenue guidance came in under analyst expectations. The company anticipated $557-563 million in revenue during Q4, which is below the $575 million figure that analysts published.

Unfortunately, it’s easy to see why DocuSign’s growth is slowing. The company appreciated enormous growth in 2020, during which the stock more than tripled because of the pandemic. However, with the pandemic coming to a “relative conclusion,” the stock has moved mere inches in 2021. 👎 $DOCU is up just 5% this year.

$DOCU quickly ascended the Stocktwits trending rankings, eclipsing other trending streams for the day. DocuSign has settled into the top 10 — it’s worth popping in to check out the conversation.



M&A

NVIDIA’s ARM Wrestle with the FTC

NVIDIA’s ARM Wrestle with the FTC Featured Image

In September 2020, NVIDIA announced its intent to acquire ARM, a semiconductor design company, in a $40 billion deal. That deal has already received some flack in Europe, but now the U.S’s very own trade regulators are filing a lawsuit to block the merger. 🥊

The U.S. Federal Trade Commission is suing NVIDIA over its ARM merger for “stifling” competition. It suggests that NVIDIA could influence ARM to stop producing valuable IP for the rest of the tech world. Specifically, the FTC worries that NVIDIA’s deal could “undermine competitors, reduce competition and ultimately result in reduced product quality, reduced innovation, higher prices, and less choice” throughout semiconductor and tech markets.

NVIDIA’s not acting like the lawsuit is a huge issue, but it’s no joking matter… after all, Qualcomm, Apple, MediaTek, and Samsung all rely on ARM technology. NVIDIA released a statement claiming the company will encourage ARM to continue making IP beneficial to the greater tech market:

…NVIDIA is committed to preserving ARM’s open licensing model and ensuring that its IP is available to all interested licensees, current and future.”

We’ll be watching to see where this goes. But given these hurdles, NVIDIA might have a looong road ahead of them. 🕵️‍♀️ $NVDA stock seemed unbothered, gaining 2.2%.


SPACs

$GRAB, The Super App

$GRAB, The Super App Featured Image

Grab, a Singapore-based “super app,” listed on the Nasdaq today via SPAC. Grab started out as a ride-hailing platform in 2012, but has since-branched into everything from food delivery to digital payments and investments. 🤑

Grab listed through a reverse merger with a SPAC created by the U.S.-based tech investment firm Altimeter Capital. The “super app” of Southeast Asia — also known as the Uber of Southeast Asia — is now valued at a whopping $40 billion. 💸 💸

Brad Gerstner, Altimeter’s CEO, said Grab has become a “powerful flywheel combining ride-hailing, delivery and payments [that has] demonstrated durable growth even during the pandemic and is playing a foundational role in the digitization of Southeast Asia.”

Grab hasn’t turned a profit yet, but its SPAC deal also involved a $4.5 billion private investment in public equity (code for: fundraise on top of the fundraise.) However, by midday today $GRAB shares crumbled 20%, erasing a fifth of its value post-merger. Anthony Tan, Grab Holdings’ Co-Founder and CEO, shared:

“Regardless of the stock price, our focus is on the super app [business model] and that is resilient in spite of COVID.” 🤷 

$GRAB closed down 20.5% today.


Earnings

Earnings Recap

Kroger Company beat on top and bottom lines before the bell, catapulting shares 11% higher. $KR expects higher full-year earnings thanks to the greatest levels of food price inflation in more than a decade.

$KR | EPS: $0.78 (vs. $0.67 expected) | Revenue: $31.9 billion (vs. $30.1 billion expected) | Link to Report

Express surged 14.8% thanks to a surprise profit in the third quarter. Net sales accelerated 47% year-over-year.

$EXPR | EPS: $0.17 (vs. ($0.02) expected) | Revenue: $4.6 billion (vs. $4.27 billion expected) | Link to Report

Ulta Beauty blasted 4.5% in extended trading after delivering record sales and earnings. The beauty company raised full-year guidance, too.

$ULTA | EPS: $3.94 (vs. $2.51 expected) | Revenue: $2 billion (vs. $1.84 billion expected) | Link to Report

Asana plunged 16.5% after hours despite better-than-expected earnings and sales data. The software company grew sales 70% year-over-year.

$ASAN | EPS: ($0.23) (vs. ($0.26) expected) | Revenue: $100.3 million (vs. $93.9 million expected) | Link to Report

Curious about who else reported today? Check out the Stocktwits earnings calendar for all the deets. 😌


Bullets

Bullets from the Day

The 737 Max flies in China, once again. China issued an airworthiness directive for the 737 Max, allowing the troubled airliner to return to China. The country was first to ground the jet after two crashes, which prompted the plane to be taken out of service for over 18 months. Boeing stock rose on the news. Read more in CNBC.

Gaming company Razer to go private. While hundreds of unicorns are rushing to market, Hong Kong-based gaming company Razer is running the other way. The company’s executives and a consortium of investors proposed taking the company private at a valuation of nearly $3.2 billion. The consortium owns 57% of Razer and they’re expected to tender HK$2.82 per share to buy what’s left. Read more in Reuters.

Talent giant starts SPAC effort. United Talent Agency (UTA) is one of the premiere talent agencies in Hollywood, representing thousands of celebs and creators. Now UTA is hoping it can represent a startup in its journey to capital markets. The talent agency raised $200 million for its new SPAC, UTA Acquisition Corporation, a SPAC led by former Nintendo president Reggie Fils-Aimé. He’s joined by other UTA execs. Read more about it in Hollywood Reporter.

Tesla asks for a tariff break. Tesla has filed to request a tariff waiver affecting graphite, a critical ingredient in lithium-ion batteries. Tariffs on artificial graphite from China are up to 25%, which is a beefy price to pay. It’s possible that the Biden administration might choose to exclude graphite from the tariffs in an effort to help the EV sector. Read more about it in CNBC.

Exxon plans below-inflation U.S. pay raise. Exxon has spent 2020 and 2021 alienating many of its employees, letting go thousands and reining in pay on thousands more. After an excellent year for the oil and gas giant, you would expect that they’d chill out… but they won’t. The company plans a below-inflation U.S. pay raise for most of its employees this year. That will probably anger many employees. Why are companies surprised that labor movements are gaining traction again? Read more in Bloomberg.