Thursday’s Headlines: Sea Limited Eyes Global Expansion
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Upstart Holdings (UPST) +4.4%
Trupanion (TRUP) +3.6%
Brown-Forman (BF.B) +3.3%
BlackLine (BL) +2.5%
Moving Down ⬇️
Smartsheet (SMAR) -14.4%
Stitch Fix (SFIX) -5.6%
Casey's (CASY) -4.8%
StoneCo (STNE) -4.4%
Coupa Software (COUP) -4.2%
1. Sea Limited shares fell after the online gaming and e-commerce firm announced its intention to raise $6.3 billion in the largest equity offering of the year. The Tencent-backed company is offering 11 million shares, worth around $3.8 billion, and plans to issue $2.5 billion of equity-linked debt. Southeast Asia's largest company is hoping to use the funds to rapidly expand its market share as competition in the gaming and e-commerce spaces intensifies and is looking at new opportunities including e-commerce in Latin America and food delivery in Southeast Asia. Shareholders might not be happy with the share dilution, but the potentially profitable ventures Sea is going for will surely pay off for long-term investors. See more here.
2. Move over Reddit, Twitter (TWTR) has begun testing its own forum-like community features. Twitter’s Communities will allow tweeters to discuss specific topics with others who share the same interest, offering the ability to tweet specifically to others in that community, as opposed to all of their followers. The feature will be part of its strategy to grow its user base to 315 million monetizable daily active users to bring in annual revenue of $7.5 billion by the end of 2023. Last week, the social media site launched Super Follows to boost engagement on the platform, and after witnessing the rising popularity of Reddit over the past year, this looks like the next logical step for Twitter. Check out the full story here.
3. Lululemon (LULU) shares skyrocketed in after-hours trading after it reported profit and sales that topped Wall Street’s estimates. As fans of the brand stocked up on sports apparel for their stay-at-home wardrobes, Lululemon posted adjusted earnings of $1.65 on revenue of $1.5 billion, up 61% compared to year-ago sales. Net income also made a substantial jump, rising to $208.1 million up from the $86.8 million a year ago. The yoga pants expert also recorded a 49% jump in international sales, proving the global opportunity for the brand. Chief Financial Officer, Meghan Frank, stated: “Our performance in Q2 was driven by a strong response to our product offering, improving productivity in our stores, and sustained strength in e-commerce.” Read the full earnings release here.
Some more earnings from last night:
Calavo Growers (CVGW)
It was a mixed bag for the fruit distributor, posting a quarterly loss of $0.17 per share, compared to earnings of $0.73 per share a year ago, on revenue of $285.01 million, up 5% from year-ago sales. The avocado industry leader spoke about the challenges it faced during the quarter which impacted margins and profitability, adding: “We are taking the necessary steps to mitigate the current higher cost environment and to navigate the tight labor market and various supply chain issues.” See the full press release here.
Shares in the luxury furniture retailer soared in after-hours trading after RH smashed expectations, reporting earnings per share growth of 73% year-over-year (YoY) to $8.48 on sales of $989 million, up 39% YoY. RH stated: "Our demand growth has accelerated during the third quarter, adding the company, ‘has continued to build momentum despite cycling the most difficult comparisons from a year ago and the continued supply chain challenges that have been amplified by the spread of the Delta variant." Read the full report here.