Monday's Headlines: Let The Good ‘Times’ Roll For the New York Times
Here were the biggest movers in the MyWallSt shortlist on Friday:
Moving Up ⬆️
Peloton Interactive (PTON) +13.6%
DraftKings (DKNG) +11.5%
Upstart Holdings (UPST) +9.6%
2U (TWOU) +7.8%
Nautilus (NLS) +7.1%
Moving Down ⬇️
The New York Times (NYT) -3.7%
Evolent Health (EVH) -2.6%
ShotSpotter (SSTI) -1.9%
Ericsson (ERIC) -0.9%
Trupanion (TRUP) -0.6%
Here are the stories that you need to know ahead of market-open today, Monday the 15th of August.
Let The Good ‘Times’ Roll For the New York Times 🎲
The New York Times (NYT) stock soared last week after it was revealed that activist investor ValueAct had taken up a 6.7% stake in the company. The publishers’ stock jumped by around 10% immediately following the news but has remained volatile since.
ValueAct is apparently looking to make its presence known by pushing for a rollout of subscriber-only bundles that would see customers gain access to many of the Times’ premier products, such as the highly popular sports media platform The Athletic. Bloomberg reported that a letter shared with ValueAct investors claimed that The New York Times’ current valuation simply doesn’t match its long-term growth prospects.
The letter reportedly states that “we believe NYT may be one of the few consumer subscription businesses well positioned for the current environment” due to its relatively large addressable market and already solid financials.
The New York Times Company is an American media house that produces a wide array of publications — with the iconic New York Times newspaper as its crown jewel. It also boasts a thriving podcast arm and has recently seen success with more adventurous purchases, such as the aforementioned deal for The Athletic, and the acquisition of the global phenomenon ‘Wordle.’
Despite the stock being down over 28% year-to-date, it still boasts over 9 million subscribers. Its goal is to hit 15 million by 2027, something that should be attainable under current growth and considering the continued rise of digital subscriptions becoming more normalized. It also generated over $498 million in revenue for the last quarter, something that many other “traditional” media companies could only dream of.
Poshmark Falls on Uneventful Earnings 👚
Poshmark (POSH) fell 8% on Friday after it delivered a mixed earnings report. The social commerce marketplace known for second-hand clothing beat estimates from management and analysts when it came to the top line, bringing in $89.1 million of revenue. When it came to profitability, the company fell short. Poshmark had a loss per share of $0.29 compared to analysts’ forecasts of $0.27.
For next quarter, Poshmark guided for slow and steady growth of 8% year-over-year representing revenue of $85 million to $87 million.
However, other key performance indicators showed a glimmer of hope.
Poshmark’s site achieved a record 8 million active buyers during the quarter, a 14% increase year-over-year. The company hopes this figure can be further bolstered through its campaign to re-engage past users. Poshmark has more than 80 million registered users.
Additionally, investments in premium-priced products and authentication services helped raise average order values. This includes tech like the Suede One virtual sneaker authentication platform, which Poshmark acquired last October. According to founder-CEO Manish Chandra, the company plans to grow this capability even further, eventually reaching price points below $500 by the end of the year.
That being said, expansion into premium goods will pull Poshmark into competition with The RealReal, a long-established second-hand retailer specializing in high-end, designer wares. Poshmark will have to tread carefully, this is hotly disputed territory.
Tilray CEO Sees Bright Future For Cannabis 🌱
The Tilray Brands (TLRY) CEO Irwin Simon, in an interview over the weekend, claimed that the Cannabis market in the U.S. was a “$100 billion opportunity” — even as Congress is yet to legalize the drug fully. 93% of U.S. adults want medical marijuana legalized, while between 63% and 65% want it legalized for adult use, according to Simon.
Currently, 37 states and D.C. allow medical marijuana use, while 19 states and D.C. allow recreational use. While support for legalization at a federal level is growing in Congress, it is still not enough to pass any legislation.
However, Simon believes there are plenty of areas for the company to expand within the restricted market. When interviewed by Yahoo Finance Live, Simon announced that:
“Even if cannabis does not legalize for the next few years in the U.S., we’re going to get tremendous growth out of our spirits business, our beer business, and our Manitoba Harvest business.”
This comes after the company released its fourth-quarter earnings report on July 28th, which saw full-year net revenue jump by 22% compared to the previous year. This increase was driven by 17.9% growth in the cannabis segment, a 79% increase in the beverage alcohol segment, and a 928.8% jump in the wellness segment.
The company’s share price is currently down more than 45% this year as investors abandon loss-making companies. On Friday, the company’s share price was up by 4.68% but has since declined. Irwin Simon is known for making lofty predictions about growth rates and legalization, which could be one reason for the drop after his upbeat interview.