Tuesday's Headlines: Argentina and Mercado Libre Both Win
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
MercadoLibre (MELI) +4.8%
Calavo Growers (CVGW) +3.8%
StoneCo (STNE) +3.4%
Ericsson (ERIC) +1.8%
Axos Financial (AX) +1.2%
Moving Down ⬇️
Stitch Fix (SFIX) -11.7%
2U (TWOU) -6.5%
Under Armour (UAA) -6.0%
Smartsheet (SMAR) -5.9%
IMAX (IMAX) -5.5%
Argentina and Mercado Libre Both Win 🇦🇷
Mercado Libre rallied more than 4% on Monday after a slew of good news for its South American market.
The e-commerce and online payment provider received a boost from a Brazilian court’s decision to grant the continuation of a 600-reais social welfare payment. The benefit, which was almost canceled due to budgetary constraints, is designed to help low-income families and will remain in place into next year. 55% of Mercado Libre’s revenue is generated from Brazil and analysts hope the extension will boost holiday spending.
This was on top of Argentina’s World Cup win which should provide a temporary spending increase in MELI’s home country. On average, World Cup winners see a 0.25% increase in economic growth in the two quarters following the tournament. Not to mention, all the party materials likely to be purchased in the next week.
MELI is down more than 50% from its all-time high in September of 2021 as inflation has severely impacted South American spending.
Lucid Completes a $1.5 billion Equity Offering 🚙
Shares in electric vehicle (EV) maker Lucid are trending up this morning premarket following news that the California-based company has just closed a $1.5 billion funding raise, backed in part by the Saudi Arabian Public Investment Fund. Lucid is up close to 5% at time of writing as investors appear buoyed by the positive announcement.
This planned raise was first announced last month in the firm’s latest quarterly earnings report. Of the $1.5 billion raised, close to $915 million came via a private sale to the Saudi Public Investment Fund — now the proud owners of almost 83 million shares in Lucid. The remaining funds were accrued through a more traditional offering, with 56 million additional shares being sold.
However, it must be noted that this isn’t the first investment made by the aforementioned Saudi fund into Lucid. In fact, the structure of this offering actually maintains the Saudi Arabian’s previous stake of about 62%.
Lucid’s stock has had a torrid time this year-to-date, with it currently sitting down over 82%. While it can’t be solely blamed for this precipitous drop, with a widespread rotation from tech and growth stocks completely out of its control, it’s clear that the firm needed to take some positive steps to reassure investors of its promise. This latest funding round appears to be doing just that, and is a welcome step in the right direction for a company that has been stuck in reverse all year.
Rocket Lab Delays First U.S. Launch 🚀
Shares of Rocket Lab fell 4% yesterday after it delayed the inaugural U.S. launch of its Electron rocket until January. This has forced the aerospace company to revise its revenue forecast for its fourth quarter, as that payday will now be recognized in Q1 of next year. The mission had to be postponed due to a combination of poor weather conditions and a delay in regulatory documents.
Both NASA and the Federal Aviation Administration needed additional time to complete the necessary regulatory approval process, giving Rocket Lab just two days out of its 14-day flight window to conduct the launch. Due to bad weather, it was forced to push the spaceflight out to next month.
The mission was the first of three for the Virginia-based satellite company HawkEye 360. Rocket Lab now expects to take in $46 - $47 million in revenue this quarter, down from $51 - $54 million.
Rocket Lab is attempting to carve out a niche for itself in the rapidly growing rocket launch and satellite market. It accommodates the delivery of smaller payloads, compared to its big brother SpaceX. The stock is currently down 79% from its all-time highs set shortly after its SPAC merger in September of last year.