Friday’s Headlines: Robinhood’s IPO Falls Flat
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Align Technology (ALGN) +8.9%
Tesla Motors (TSLA) +4.7%
Zoom Communications (ZM) +4.5%
Ford Motor Company (F) +3.8%
Moving Down ⬇️
PayPal (PYPL) -6.2%
Pinterest (PINS) -6.0%
Facebook (FB) -4.0%
Roku Inc. (ROKU) -4.0%
1. One of the most hotly anticipated listings of the year, Robinhood, received a gloomy reception yesterday with shares closing down more than 8%. Robinhood began trading at $38 per share, the low end of its range, and closed at $34.82, giving it a market capitalization of $29 billion. Selling under the ticker HOOD, the commission-free trading app sold 52.4 million shares and raised almost $2 billion. Its long-awaited stock debut comes just months after it halted trading in a few popular stocks which enraged lawmakers and users of the app, costing it some fans. Experts said there was skepticism regarding its sky-high valuation and explained that Robinhood still has a lot to prove. Read more on the story here.
2. Just days after reporting record profitability, Tesla (TSLA) has bad news for its shareholders after one of its Megapacks caught fire and produced toxic smoke in Australia this morning. The flames took place at one of the largest batteries in the world in the state of Victoria and the cause of the fire is yet to be determined. Renewable energy giant, Neoen, is working with Tesla and AusNet Services to build a grid-scale project and said the fire took place during testing. On Tesla’s Q2 earnings call, CEO Elon Musk boasted about the company’s energy storage business saying there was demand for “a vast amount” of Megapacks. However, this news might dampen enthusiasm for the battery and could potentially impact sales in the upcoming year. See more on the story here.
3. Shares in Pinterest (PINS) tanked in after-hours trading after it fell short of analysts expectations for monthly active user growth. The social media company posted monthly active user growth of 454 million, up 9%, which missed estimates of 482 million. Pinterest stock bounced last week off the back of rival Snap’s (SNAP) impressive earnings results, as Wall Street betted Pinterest’s would also see an increase in ad spending. Those predictions were correct as Pinterest reported revenue of $613.2 million, up 125% year-over-year (YoY), and earnings of $0.25 per share. While it delivered on financials, shareholders have focused on Pinterest’s slowing user growth as it is a key performance indicator for the firm’s future success. Read the full press release here.
Some more earnings from last night:
The king of e-commerce posted its third $100 billion quarter in a row, with sales up 27%, which fell short of expectations and represented Amazon’s first revenue miss in three years. Amazon CFO Brian Olsavsky blamed tough year-over-year comparisons for the miss due to the hyper growth the firm experienced during COVID-19, explaining: “We’re starting to lap that and that’s why you see some of the growth rate coming down.” See the full press release here.
American Tower (AMT)
It was another earnings beat for the communications real estate business, which reported a 20% increase YoY in revenue to $2.23 billion, on EPS of $1.65. It was all smiles from CEO Tom Bartlett, who stated: “Looking forward, we expect to leverage the competitive advantage provided by our scaled, diversified portfolio of more than 214,000 communications sites to drive sustainable long-term growth and attractive returns, capitalize on new opportunities associated with 5G and execute our vision of making wireless communication possible everywhere.” Read more here.
Atlassian shares rocketed up after hours as the software company reported a smaller loss than expected and year-on-year revenue growth of 30%. To quote co-founder and co-CEO Mike Cannon-Brookes, “Our Q4 was a ripper of a quarter — as we Aussies say — as we added over 23,000 new customers, grew subscription revenue 50 percent year-over-year, and continued to see cloud momentum build.” Read the earnings letter here.
As the economy continues to reopen and spending increases, Mastercard is reaping the rewards after reporting second-quarter earnings of $1.95 per share on revenue of $4.5 billion, up 36% YoY, while rebates and incentives jumped 53% thanks to growth in transactions and new deals. Much of the plaudits for this increase were placed firmly on the uptake in cross-border travel, with Mastercard singling out international transactions as a big factor in its growth, despite only being in the early days of recovery. Read more here.
Retail Opportunity Investment Corp (ROIC)
Despite national concerns around inflation and property prices, ROIC managed to keep in line with consensus estimates, coming out with net income of $16.5 million, or $0.14 per share. The good news didn’t stop there either, as CEO Stuart Tanz outlined how the company is “heading into the second half of 2021 with excellent momentum and look forward to continuing to advance our business and enhance long-term value.” Read the official press release here.
It was a strong quarter of top line growth for Twilio, who reported a 67% revenue jump year-over-year to hit $668.9 million for Q2. Losses did widen significantly in the period, however, and management is guiding for wider losses in the quarter ahead too, attributing this to investments in new products like its contact center platform Flex. Check out more from CEO Jeff Lawson here.
Texas Roadhouse (TXRH)
The reopening is definitely benefiting companies like Texas Roadhouse, with the company reporting revenue growth of close to 90% and comparable restaurant sales (sales from restaurants open more than one year) of just over 80%. However, such a positive rebound has been tempered somewhat by the difficult labour market at the moment, with hiring being cited by management as one of their major challenges going forward. More here.
Shares of Zendesk plummeted as much as 10% after the bell last night after the customer service software company barely met expectations for the last quarter. A loss of $0.49 per share on revenue of $318.2 million came in at the lower end of managements' forecasts, with the CFO blaming changes to the company's booking pacing for this. Check out more here.
There is one company on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.