Monday's Headlines: Musk Asks Twitter if he Should Step Down
Here were the biggest movers in the MyWallSt shortlist on Friday:
Moving Up ⬆️
Spotify (SPOT) +3.3%
Lemonade (LMND) +3.2%
Adobe Inc. (ADBE) +3.0%
Meta (META) +2.8%
Eventbrite (EB) +2.1%
Moving Down ⬇️
Sea Limited (SE) -12.1%
Stitch Fix (SFIX) -8.2%
Ford Motor Company (F) -7.0%
Ericsson (ERIC) -6.4%
Guardant Sinks on Disappointing Study Results 💊
Shares of Guardant Health fell 27% on Friday for its worst-ever trading day as a public company after it released disappointing data from a study on the effectiveness of its colorectal cancer tests. The study revealed that Guardant’s test identified cancer or precancer 83% of the time with a 10% false positive rate. Shares of competitor Exact Sciences, whose tests have proven to be more accurate, were up 16% on the day.
Some analysts expected an identification rate of at least 85%, while others surmised that the results were not enough to make Guardant’s test a go-to ahead of Exact Science. The study was initiated in October 2019 and had more than 20,000 applicants.
Co-CEO Amir Ali Talasaz has defended the results of the study:
“There’s some lack of understanding of the fact that this is strong data. It’s the data that’s going to pave the path for a FDA approval.”
For those with little knowledge of Guardant, it is a company that manufactures and distributes blood tests or liquid biopsies to screen for cancer. For a disease like colorectal cancer, where the long-time standard screen involved a colonoscopy, a simple blood test provides an easier and much faster alternative. The stock is down 70% year-to-date after Friday’s nosedive.
Musk Asks Twitter if he Should Step Down 🐦
Elon Musk released a poll on Twitter last night asking users whether he should step down as head of the company. He stated that he would “abide by the results”. It is the latest in a long line of controversial stunts in his short tenure as the social media site's new leader.
Recent highlights from the past week include suspending a number of high-profile journalists who cover the Tesla CEO over his private jet tracking fiasco, as well as banning the cross-promotion of other social media sites — two actions that fly in the face of his many promises of delivering free speech to the masses.
With the poll closing this morning and the majority of voters opting for Musk to vacate, we may actually see some form of leadership change as he has shown to follow voters’ desires in the past. Looking deeper, he may be trying to get out of dodge with recent claims that the company is losing $4 million a day and the long-term survival of the business in question. He tweeted last night:
“No one wants the job who can actually keep Twitter alive. There is no successor.”
It is also important to note that Musk’s team began looking for new investors in the business at the $44 billion valuation at which he bought it. With Tesla stock down more than 60% year-to-date and pressure mounting from investors, this poll could be the start of some form of exit strategy for Musk. Tesla stock is up 5% in pre-market trading on the news.
Avatar Sequel Disappoints on Opening Weekend 🎥
“Avatar: The Way of Water” failed to live up to expectations at the box office this weekend amid continued coronavirus restrictions in China.
The film, directed by James Cameron, brought in $134 million in the United States. Analysts had predicted that it would earn between $150 million and $175 million based on pre-sale data.
In China, the film brought in just $57.1 million as fears of coronavirus kept fans at home. Disney, which distributed the film through its 20th Century Studios, had been hoping for a big win following the huge success of the 2009 original. At the time, Avatar was the first film in China to be shown in 3-D IMAX.
However, the Chinese government has been maintaining strict restrictions around COVID-19 with severe lockdown measures. This has led many consumers to stay home rather than risk exposure to the virus. Anger over the measures led to several protests across the country in recent weeks.
The original Avatar was the highest-grossing movie ever made, bringing in almost $2.9 billion globally.
Disney shares have been under pressure this year despite repeated success at the box office. Fears about the profitability of its steaming division led to CEO Bob Chapek being forced out last month, spurring the return of Bob Iger to the top job.
Iger first became CEO of Disney in 2005, succeeding Michael Eisner. After 15 years at the helm, he stepped down in 2020, but returned last month at the request of the Board of Directors. Disney shares are currently down 42% year-to-date.