Apple drops, Netflix and Spotify pop after judge rules in favor of Epic Games in lawsuit targeting in-app purchases

tim cook apple
  • A ruling in the Apple vs. Epic Games lawsuit sent shares of the iPhone maker down as much as 3% on Friday.
  • The ruling said Apple must allow other forms of in-app purchases that would not be subject to a commission paid to the company.
  • While shares of Apple fell, companies that rely on the app store to generate business surged, including Netflix, Spotify, and Roblox.
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Shares of Apple fell as much as 3% on Friday after a judge ruled that the iPhone maker must allow other forms of in-app purchases for app developers and their customers.

The ruling – which came in the Apple vs. Epic Games lawsuit – means Apple can’t restrict app developers use of external links when directing customers to sign up for a service. Apple forced app developers to restrict sign-ups to within the app store, allowing the company to collect a percentage of the revenue generated from subscription signups and in-app purchases.

The ruling led to a Friday afternoon pop in shares of companies that rely on the app-store to generate business. Shares of Netflix, Spotify, Roblox, Bumble, and Match.com all popped following the ruling, with some shares up as much as 5%.

The ruling said Apple is “permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.”

But the ruling also favored Apple in some aspects, and the judge said that “the court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws.” That could represent relief for some investors who are concerned about the ongoing anti-trust investigations into Apple.

Apple said in a statement: “As the Court recognized ‘success is not illegal. Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world.”

The company plans to appeal the ruling. If the ruling does stand, Apple’s revenue generated from its app store could fall significantly, as the company warned late last year.

The Apple vs. Epic lawsuit stems from Apple’s decision in August of 2020 to remove the popular video game Fortnite from its app store after Epic developed its own in-app payment system to circumvent Apple’s 30% commission rate.

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Bitcoin and ether plummet 17% as broad sell-off batters crypto on the day El Salvador adopts bitcoin as legal tender

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  • Bitcoin and ether plummeted on Tuesday, the same day El Salvador adopted the crypto as legal tender.
  • The popular cryptocurrency fell from a high of about $52,000 to a low of about $44,000.
  • Bitcoin recovered some of its losses in afternoon trading and is now above its 50- and 200-day moving averages.
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The price of bitcoin and ether plunged on Tuesday, the same day El Salvador officially adopted the cryptocurrency as legal tender to help combat persistent hyper-inflation.

Bitcoin fell as much as 17%, while the sell-off spilled over to other cryptos including ether, which was down as much as 23% in Tuesday trades.

Bitcoin was trading near a key cluster of resistance levels around $52,000 before it plunged to a low of about $44,000. The cryptocurrency managed to find support at its rising 200-day moving average, and quickly bounced off of that level.

Ether fell from about $4,000 to as low as $3,200, both levels well above its 50-day and 200-day moving averages. The crypto pared its losses and was down about 12% at time of publication.

Bitcoin pared its mid-day losses to 11% at time of publication, with the cryptocurrency hovering just above its 50-day moving average of about $46,000. In the run-up to today’s official adoption of bitcoin, El Salvador purchased 400 bitcoins, and indicated that it plans to purchase “a lot more.” Those purchases were worth about $20 million.

To hasten the adoption of bitcoin as a means of legal tender, El Salvador will reportedly utilize crypto unicorn BitGo to code its official bitcoin wallet. But not everyone in El Salvador has been won over by the country’s bitcoin plans, with polls suggesting 75% of Salvadorians have reservations about the plan.

Tuesday’s sell-off in bitcoin and ether spilled over into other altcoins popular among crypto investors, with cardano, dogecoin, and litecoin all plunging more than 14%.

Bitcoin price chart
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Chewy plunges 10% after earnings miss estimates amid post-pandemic growth slowdown

Chewy IPO
  • Shares of Chewy.com fell as much as 10% on Thursday after its second-quarter earnings report missed estimates.
  • The company said it added fewer new customers in the quarter as growth slowed in the post-pandemic quarter.
  • Despite the growth slowdown, Chewy said it’s growing market share among pet supply retailers.
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Chewy plunged as much as 10% on Thursday after the online pet supply retailer missed second-quarter earnings estimates.

The company said growth slowed down in the quarter relative to the year prior when customers were flocking to e-commerce amid the pandemic, limiting their in-person store visits. Despite the slowdown in growth, Chewy said its market share continues to grow among pet supply retailers.

Here were the key numbers:

Revenue: $2.16 billion, versus estimates of $2.17 billion
Earnings per share: -$0.04, versus estimates of -$0.01

Revenue grew 27% year-over-year, and gross margins expanded by 2% to 27.5%. Meanwhile, a bulk of the net loss was tied to share-based compensation charges of more than $25 million.

“Our results once again demonstrate the strength of our business model and the incredible bond between pets and pet parents. Our business remains healthy, with second quarter net sales up 27%, driven by a 21% increase in active customers and a 13% increase in net sales per active customer,” Chewy CEO Sumit Singh said.

JPMorgan was impressed with Chewy’s results, and in a note on Wednesday reiterated its Overweight rating but lowered its price target to $95 from $98.

“We remain positive on Chewy and view the pullback as a buying opportunity when the dust settles,” JPMorgan said, adding that it “remains encouraged by overall execution and new initiatives such as Practice Hub within Chewy Health.”

Shares of Chewy.com are down 12% year-to-date, with much of those losses being printed in Thursday’s trading session.

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Globalstar falls 14% after report says iPhone satellite connectivity is for emergencies only and won’t be in iPhone 13

tim cook jony ive iphones
Apple chief design officer Jony Ive (L) and Apple CEO Tim Cook inspect the new iPhone XR during an Apple special event at the Steve Jobs Theatre on September 12, 2018 in Cupertino, California.

  • Shares of Globalstar fell as much as 14% on Tuesday after a Bloomberg report indicated the iPhone 13 will not have satellite connectivity.
  • Globalstar soared 68% on Monday following an analyst report that suggested the upcoming iPhone would include its technology.
  • Bloomberg reported that the basis for including satellite connectivity would be for emergency situations only.
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Globalstar fell as much as 14% on Tuesday after Bloomberg reported that its satellite connection technology would not be included in Apple’s upcoming iPhone 13.

On Monday, shares of the low-earth-orbit satellite technology company soared as much as 68% after an analyst report from Ming-Chi Kuo suggested the upcoming iPhone models would have the ability to make texts and phone calls without 4G or 5G cell coverage via Globalstar’s technology.

But Apple is only planning to include satellite connectivity features for emergency purposes, such as allowing users to send texts to first responders and report crashes in areas with no cell coverage, according to Bloomberg.

The report noted that Apple has been working on such features since at least 2017. But the upcoming iPhone 13 will likely not have the satellite connectivity features, even though it may have hardware included in the phone that could make those features possible down the road, the report said.

It is not clear as to which emergency services company Apple will partner with, though, according to a person with knowledge of the situation, Globalstar’s rival Iridium Communications will not be utilized.

Despite the decline in Globalstar on Tuesday, shares are still up 45% week-to-date.

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Robinhood tumbles 7% after SEC’s Gary Gensler says ban of payment for order flow ‘is on the table’

Robinhood Vlad standing at Nasdaq time square billboard

Shares of Robinhood fell as much as 9% on Monday afternoon following comments from SEC Chairman Gary Gensler. The stock closed 7% lower on the day.

In a Monday interview with Barron’s, Gensler said a ban of the payment for order flow model used by many brokerage firms “is on the table.”

Payment for order flow is a practice in which brokers route trade orders from customers to market makers, who then execute those trades and often collect a small spread from the transaction.

Gensler told Barron’s the practice has “an inherent conflict of interest. They get the data, they get the first look, they get to match buyers and sellers out of that order flow. That may not be the most efficient markets for the 2020s.”

According to Barron’s, Gensler didn’t say whether the SEC found any instances of where the conflicts of interests resulted in harm to investors. Proposals on the practice could come from the SEC in the coming months, Gensler said.

To the end user buying a few shares of Apple or Microsoft, the spread taken by market makers in price paid is often to the tenth of a penny and negligible.

Robinhood utilized payment for order flows to lower its trading commission to $0 when it launched in 2014, as most discount brokerages were charging upwards of $9.99 per trade. Besides $0 commission trades, payment for order flow has helped enable the ability for fractional share investing.

Robinhood derives a bulk of its revenue from payment for order flow and transaction rebates. In 2020, 75% of its revenue was derived from those practices, and that number increased in the first and second quarter of 2021.

Read more: These 5 stocks are most likely to follow in Support.com’s footsteps and surge from a short squeeze this week, according to Fintel

The company listed a potential ban of payment for order flow as a risk to its business in the firm’s S-1 filing.

“Because a majority of our revenue is transaction-based (including payment for order flow, or “PFOF”), reduced spreads in securities pricing, reduced levels of trading activity generally, changes in our business relationships with market makers and any new regulation of, or any bans on, PFOF and similar practices may result in reduced profitability, increased compliance costs and expanded potential for negative publicity,” Robinhood said.

HOOD chart 8-30-21
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Affirm soars 47% after partnering with Amazon to bring buy now, pay later service to the online retail giant

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Shares of Affirm soared as much as 47% on Monday after the buy-now-pay-later fintech inked a partnership with Amazon.

Customers that make a purchase of more than $50 on Amazon will be offered the Affirm payment option at checkout, often with 0% interest, and no late fees.

Amazon said the Affirm payment offering is currently being tested among certain customers, and will be broadly rolled out in the next few months.

“By partnering with Amazon we’re bringing the transparency, predictability and affordability that Affirm provides today to the millions of people who shop on Amazon.com in the U.S.,” said Eric Morse, senior vice president of sales at Affirm. “Offering Affirm’s alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want.”

The move comes amid a surge in popularity for buy-now-pay-later services, and as companies rush to offer the service to customers. While PayPal has built its own in-house option, Square purchased Afterpay for $29 billion earlier this month.

Read more: Buy these 13 small, high-growth stocks that are on track for long term gains and returns of over 20% in the next year, RBC says

Buy-now-pay-later services allow customers to make monthly installment plans on purchases of goods and services, usually with 0% interest payments and no later or hidden fees. Merchants are interested in offering the service because it can lead to increased sales among those who may be on a tight budget.

Apple recently partnered with Affirm to bring its buy-now-pay-later service to Canadian customers of the iPhone, iPad, and Mac, and is also working on offering a similar payment option in the US, according to reports.

The partnership with Amazon is welcome news for Affirm investors, as the company looks to diversify away from its concentrated base of Peloton users that helped fuel growth for the company. On Friday, shares of Affirm sold off after Peloton lowered the price of its bike by a few hundred dollars.

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Lordstown Motors soars 41% after new CEO takes charge of EV developer

Endurance electric pickup truck by Lordstown Motors
The Endurance.

  • Lordstown Motors soared as much as 41% on Thursday after the EV developer named Daniel Ninivaggi as its CEO.
  • Ninivaggi was previously the CEO of Icahn Enterprises and has experience in the auto business.
  • He hinted at plans to raise more cash and said Lordstown’s Endurance pickup truck could take market share.
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Shares of Lordstown Motors soared as much as 41% on Thursday after the EV developer named Daniel Ninivaggi as its CEO..

The Ohio-based company has been struggling in recent months following the resignation of its CEO and CFO, as well as being the subject of a DOJ and SEC investigation into whether it misled investors on its pick-up truck reservations.

Ninivaggi was previously the CEO of Icahn Enterprises, a conglomerate founded by Carl Icahn. At Icahn Enterprises, he oversaw the company’s auto parts and distribution businesses.

Lordstown’s appointment of a new CEO is likely easing some investor concerns, as Morgan Stanley commented earlier this month about the EV company, “Our team is not aware of any example in contemporary automotive history where a product was successfully validated, launched and commercialized without a CEO.”

The new CEO is taking charge of the company as it looks to compete in the increasingly competitive EV market. Ninivaggi said he sees potential for Lordstown’s Endurance pick-up truck to take meaningful market share from incumbents like Tesla, Ford, and General Motors.

“I believe the demand for full-size electric pickup trucks will be strong and the Endurance truck, with its innovative wheel hub motor design, has the opportunity to capture a meaningful share of the market,” Ninivaggi said.

But to execute on that vision, Lordstown Motors badly needs cash, which is top of mind for the new CEO, who said the company will evaluate all options to raise cash to fund the development, manufacturing, and sale of the Endurance pick-up truck.

Despite Thursday’s rally, shares of Lordstown Motors are still down 68% year-to-date, and down as much as 73% from its record high.

Read more: 573 mutual funds with $3 trillion in assets are most bullish on these 10 stocks in a ‘deteriorating stock-picking environment,’ Goldman Sachs says – and are underweight some of the biggest tech stocks on the market

Lordstown Motors stock price
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Nvidia surges 8% after record earnings results blow past analyst expectations

FILE PHOTO: A NVIDIA logo is shown at SIGGRAPH 2017 in Los Angeles, California, U.S. July 31, 2017.  REUTERS/Mike Blake
NVIDIA logo shown at SIGGRAPH 2017

  • Shares of Nvidia jumped as much as 8% on Thursday after the company reported strong second-quarter earnings.
  • Shares of the GPU manufacturer reversed early losses of 1% as investors digested the results.
  • Nvidia said it expects the ongoing semiconductor shortage to last well into 2022 and remains hopeful its proposed acquisition of Arm will be approved.
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Nvidia surged as much as 8% on Thursday after the graphics card manufacturer reported record second-quarter earnings results that surpassed analyst estimates.

The company saw surging demand in its gaming, data center, and professional visualizations business units, and said it is struggling to keep up with demand amid an ongoing semiconductor shortage. Nvidia CEO Jensen Huang expects the chip shortage to last well into 2022.

Here were the key numbers:

Revenue: $6.51 billion, versus estimates of $6.34 billion
Adjusted earnings per share: $1.04, versus estimates of $1.02
Third quarter outlook: $6.80 billion, versus estimates of $6.53 billion

On the crypto front, Nvidia said it expects a decline in the sale of its crypto mining processors, especially as ethereum transitions to EIP-3554, which will make the cryptocurrency essentially unmineable. The company also said it expects the ongoing chip shortage to last well into 2022.

Nvidia also said it continues to work through the regulatory process for completing its proposed $40 billion acquisition of Arm, which has not yet closed due to anti-trust concerns.

“Although some Arm licensees have expressed concerns or objected to the transaction, and discussions with regulators are taking longer than initially thought, we are confident in the deal and that regulators should recognize the benefits of the acquisition to Arm, its licensees, and the industry,” Nvidia CFO Colette Kress said.

The results impressed Wall Street analysts, with many seeing demand outstripping supply in the immediate future. While that’s often a great problem to have in business, it will limit near-term upside in the stock, analysts said.

The strong results helped add to Nvidia’s year-to-date gains of 51% as of Thursday afternoon. The stock has remained perched near record highs even after it completed its 4-for-1 stock split earlier this year.

Nvidia stock chart
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Oil slumps 4% as dismal data from China highlights supply-chain risks associated with Delta variant

Mercer Street oil tanker
  • The price of crude oil fell as much as 4% on Monday after pessimistic industrial and retail data out of China signaled an economic growth slowdown.
  • Chinese retail sales, industrial production, fixed-asset investment, and unemployment all came in below expectations, according to official data released Monday.
  • Last week, the International Energy Agency said that the resurgent Delta variant posed a significant risk to rising oil demand, especially in Asia, and slashed projections for the second half of the year.
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The price of crude oil fell as much as 4% on Monday after pessimistic industrial and retail data out of China highlighted signaled a Delta variant-driven slowdown in economic activity.

July economic data released by China’s statistics bureau on Monday revealed misses across the board. Retail sales, industrial production, fixed-asset investment, and unemployment all came in below expectations, underscoring the costs of China’s tough “zero COVID” approach to new waves of infection.

“July’s data suggest the economy is losing steam very fast,” Raymond Yeung, chief China economist at ANZ, told Bloomberg. “The resurgence of Delta also adds extra risk to August’s activities.”

Delta has spelled complications for supply chains running through China. Last week, the country partially shut down the Ningbo-Zhoushan port in eastern Zhejiang province, one of the world’s busiest, after a few workers contracted COVID. Freight rates have surged and shipping reliability has cratered as pandemic bottlenecks throttle global commerce.

Last week, the International Energy Agency said that the resurgent Delta variant posed a significant risk to rising oil demand, especially in Asia, and slashed projections for the second half of the year. The IEA now expects 500,000 barrels per day lower production, driven by lower demand.

“We now estimate that demand fell in July as the rapid spread of the COVID-19 Delta variant undermined deliveries in China, Indonesia, and other parts of Asia,” the agency said.

The oil slump came alongside broader weakness in global stocks, as the weak Chinese data bit into markets that have only marched upward in recent weeks.

WTI futures were trading at $66.66 as of 10:30 a.m. ET, down 2.6% on the day.

Read more: Bank of America warns historically high valuations and slowing earnings growth put the stock market at risk of a 16.5% drop – and names 3 sectors that are safe to hide out in

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Palantir jumps 9% after 2nd-quarter earnings and future guidance beat estimates

Palantir
  • Shares of Palantir surged as much as 9% on Thursday after its second-quarter earnings beat estimates.
  • The company said it closed 62 deals worth $1 million or more, with 21 of those deals being worth more than $10 million.
  • Palantir expects third-quarter revenue of $385 million, ahead of analyst estimates for $380 million.
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Shares of Palantir surged as much as 9% on Thursday after it reported second-quarter earnings that beat analyst estimates.

The data analytics company said it closed 62 deals worth $1 million or more in the quarter, with 21 of those deals being worth more than $10 million, and 30 of those deals being worth more than $5 million.

Palantir added 20 new customers in its second quarter, with total customers up 13% sequentially, and commercial customers up 32% sequentially.

Here are the key numbers:

  • Revenue: $375.6 million, versus estimates of $361.1 million
  • Adjusted earnings per share: $0.04, versus estimates of $0.03

With revenue growth of 49% year-over-year, Palantir expects the strength to continue into year-end. The company gave third-quarter revenue guidance of $385 million, ahead of analyst estimates for $380 million, and expects adjusted operating margins of 22%.

For the full year, Palantir raised its guidance for adjusted free cash flow to more than $300 million, more than double its previous estimate of $150 million. Meanwhile, the company reiterated its long-term outlook for annual revenue growth of 30% through 2025.

Finally, Palantir has continued to invest in SPAC merger transactions, as it uses the deals to help cement business contracts with emerging growth companies. The company said it has made $250 million in investment commitments to SPAC transactions during the quarter.

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