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.

Apple stock chart
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US stocks rebound from multi-day skid as concerns over Fed stimulus slowdown ease

trader nyse pray

US stocks jumped higher on Friday, partly rebounding from a four-day losing streak as concerns over the Fed’s tapering schedule began to ease.

Investors have been looking for clues as to when the Federal Reserve may begin to wind down its monthly $120 billion bond purchases implemented amid the COVID-19 pandemic to shore up credit markets. But a weak August jobs report has investors less concerned about the tapering schedule as the Fed leans more dovish.

President Biden’s more than hour-long conversation with Chinese President Xi Jinping could also be lifting market sentiment on Friday, as hope builds that trade relations between the two countries will be improved.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Friday:

Shares of buy now, pay later provider Affirm soared as much as 22% on Friday after the company reported better-than-expected revenue for its fiscal fourth-quarter, and raised revenue guidance for its fiscal year of 2022.

Cathie Wood’s Ark Invest sold more than $100 million worth of Tesla this week, according to daily trade updates. The sales come even as Ark believes Tesla could soar 300% from current levels.

Oil prices jumped. West Texas Intermediate crude was up as much as 2.35%, to $69.74 per barrel. Brent crude, oil’s international benchmark, jumped 2.18%, to $73.01 per barrel.

Gold fell as much as 0.21%, to $1,796.30 per ounce.

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Retail investors were net sellers of AMC on Tuesday for the first time since February even as the stock surged 9%

AMC stock
  • Retail investors were net sellers of AMC stock on Tuesday for the first time since February, according to new data from Vanda Research.
  • That occurred on the same day AMC shares closed 9% higher.
  • Vanda attributes the upward price movement to buying by institutional investors.
  • See more stories on Insider’s business page.

Retail investors were net sellers of AMC Entertainment stock on Tuesday for the first time since February, even as shares climbed 9%, according to new data from Vanda Research.

The firm says the gains were instead driven by institutional investors.

“Many hedge funds are now trying to anticipate changes in retail sentiment and buy these stocks before mom and pop investors get involved,” Vanda analysts wrote.

The stock is now up more than 2,000% since the start of 2021.

AMC on Tuesday said more than 2 million people attended a movie at its theaters during Labor Day weekend, surpassing attendance for the same holiday weekend in 2019, before the coronavirus pandemic hit.

The firm noted a stark slowdown in retail purchases of AMC shares. According to Vanda’s data, day traders were buying more than $1 billion per week during peak meme-stock rallies in January and June. But since the stock’s latest rally started in August, they’ve bought less than $250 million.

AMC has been a day-trader favorite for months, attracting loads of posts on social-media sites like Reddit’s Wall Street Bets, StockTwits, and Twitter. Those retail investors have banded together on multiple occasions to squeeze the shares of heavily shorted companies higher.

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Stocks actually perform better when investors are uncertain about economic policy, despite fears to the contrary, says a Wall Street chief strategist

NYSE Trader
  • Investors have been trained to believe that the stock market hates uncertainty, but historical performance tells a different story.
  • Since 1985, high levels of economic-policy uncertainty have been associated with solid future stock returns, according to The Leuthold Group.
  • “Investors hoping for more clarity should be careful what they wish for,” chief investment strategist James Paulsen said.
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Investors have been trained to believe that the stock market hates uncertainty, but historical performance tells a different story, according to Leuthold Group chief investment strategist James Paulsen.

In a recent client note, Paulsen highlighted that periods of high economic policy uncertainty have been associated with solid future stock market returns. It makes sense, according to Paulsen, as people remained highly uncertain of Fed and fiscal policy many years into the economic recovery of 2008’s great recession.

Uncertainty is high now among investors as they wonder when the Fed will taper its monthly bond purchases (and by how much), when the Fed will raise interest rates, and whether Congress will be able to spend as much as President Biden wants them too.

Utilizing various indicators that measure fiscal and monetary policy uncertainty, Paulsen found that the only time stock market returns disappointed was when both monetary and fiscal policy uncertainty were below average. “That is, the stock market struggled whenever investors were not worried about economic policies,” Paulsen explained.

On the flipside, when concerns about monetary or fiscal policy were above average, the stock market delivered future annualized returns of about 20%.

“We guess that higher levels of policy uncertainty often result in superior stock returns because it creates a Wall of Worry. When investors are anxious about pending actions of monetary and fiscal authorities, the stock market’s potential upside appears to be much greater than its risk,” Paulsen said.

That plays into the Wall Street adage that the stock market climbs a wall of worry and falls on a slope of hope.

“Investors hoping for more clarity should be careful what they wish for…rather than fear policy uncertainty, stock investors should embrace it!” Paulsen concluded.

Read more: Goldman Sachs shares a ‘consistently profitable’ stock options strategy that capitalizes on earnings and company analyst days – including the 4 trades to make by next week

Stock market returns amid policy uncertainties
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Robinhood calls potential payment for order flow ban ‘draconian’ as it fires back at SEC’s Gary Gensler

GettyImages 530148986
Co-founder of Robinhood, Vladimir Tenev.


Robinhood is hitting back at recent comments from SEC Chairman Gary Gensler, who said a payment for order flow ban was under consideration at the agency last week.

Robinhood’s chief legal officer Dan Gallagher told Barron’s on Thursday that “the idea of banning payment for order flow is pretty draconian.” About 80% Robinhood’s second quarter revenue was derived from the PFOF practice. Gallagher admitted to Barron’s that Robinhood has to work at diversifying its revenue base.

Gallagher pointed out that banning PFOF would be harmful to the retail investors, as it allows the brokerage industry to offer commission-free trading and fractional share investing.

“This is the revenue that provided us the ability to offer commission-free trading with no minimum balance,” Gallagher explained, adding that “abandoning it would be such a negative thing for retail investors.”

Gensler’s main concern on PFOF is the fact that much of the trades are routed to off-exchange market makers like Citadel Securities, which could result in a less favorable execution price for the end investor. Gensler did not tell Barron’s if the SEC found any instances where PFOF practices harmed retail investors.

The potential ban of PFOF has left Robinhood investors on edge over the past week, with the stock down about 7% since Gensler’s comments.

To block a potential SEC ban of PFOF, Gallagher told Barron’s it would go to court and sue the regulatory agency. “We’d have to get in line. There would be a long line of folks that would sue,” Gallagher said. But before it comes to that, Robinhood plans to meet with the SEC to make its case for the practice.

“They are going to realize that payment for order flow is an amazingly good thing for investors,” Gallagher said.

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S&P 500 hits 54th record close of the year ahead of crucial jobs report

Trader NYSE green
  • US stocks closed higher on Thursday as investors await Friday’s crucial jobs report.
  • The S&P 500 closed at a record high for the 54th time of the year, while the Nasdaq also hit a new record close.
  • Jobless claims fell to 340,000 last week, beating Bloomberg economist estimates of 345,000.
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US stocks gained on Thursday, with the S&P 500 and Nasdaq both closing at record highs ahead of Friday’s crucial jobs report. For the S&P 500, it was the 54th record close of 2021.

The August jobs report will likely influence the Fed’s decision as to when to and how much it should taper its monthly bond purchases of $120 billion, which was put into place to calm credit markets during the pandemic.

Meanwhile, jobless claims fell to their lowest level since March 2020 last week, hitting 340,000. That beat economist estimates of 345,000. Continuing claims fell to 2.75 million for the week, coming in slightly below estimates.

The jobless claims data signals ongoing strength in the economic recovery from COVID-19, which coincides with a strong second-quarter earnings season from S&P 500 companies.

Here’s where US indexes stood at the 4:00 p.m. ET close on Thursday:

Despite the stock market’s ongoing record surge, there are still risks that could derail the historic rally. DataTrek’s Nicholas Colas outlined seven potential risks that could push stocks lower into year-end.

Shares of Chewy plunged as much as 10% after second-quarter earnings results missed analyst estimates and showed a slow-down in growth.

The US division of Binance is considering an IPO within the next three years as cryptocurrency interest soars among investors.

Also in crypto, the IRS said it posed as a crypto trader called “Mr. Coins” in a $180,000 dark-web drug sting. Cryptocurrencies are often used as a form of payment for dark-web marketplaces.

Beijing will set up a new stock exchange in the capital to support and facilitate the development of small and medium sized businesses, China’s president Xi Jinping said on Thursday.

Cardano’s ada cryptocurrency soared above $3 for the first time ever on Thursday after network upgrades enabled smart contracts. Meanwhile, JPMorgan believes the surge in retail trading spilled over to cryptocurrency altcoins that have seen a surge in popularity this summer.

Oil prices jumped. West Texas Intermediate crude was up as much as 1.71%, to $69.76 per barrel. Brent crude, oil’s international benchmark, rose 1.70%, to $72.81 per barrel.

Gold fell as much as 0.24%, to $1,811.60 per ounce.

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These are the 10 most talked about stocks on Reddit’s Wall Street Bets

Reddit Wall Street Bets Retail Trading GameStop
  • Reddit’s Wall Street Bets forum entered the mainstream during the January GameStop craze.
  • From GameStop to AMC Entertainment, retail investors congregating on the subreddit are a driving force in the stock market.
  • These are the 10 most popular stocks Wall Street Bets is talking about right now.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

It’s paid to follow what stocks Reddit’s Wall Street Bets crowd are talking about this year, as several have gone through epic rallies and seen heightened volatility.

From GameStop in January to AMC Entertainment in June, the near 11 million-member forum has driven the conversation in so-called meme stocks that have exploded higher amid overwhelming demand from retail investors. Strong demand for stocks with shaky fundamentals has led to several hedge fund blowups that were caught on the opposite side of the trade betting against the company in question.

GameStop’s short-squeeze, in-part led by the Wall Street Bets crowd, led to a more than 50% drawdown in multi-billion dollar hedge fund Melvin Capital. Meanwhile, the sharp rally in struggling movie theater chain AMC Entertainment caused billions of dollar in losses for short-sellers in May and June.

As traders look to replicate the success of Wall Street Bets stocks, one data aggregator is compiling the most mentioned stocks on Reddit’s forum.

These are the top 10 stocks Reddit’s WallStreetBets forum is focused on right now, according to data compiled by SwaggyStocks. The list is based on mentions over the past 24 hours.

10. Abbvie

Ticker: ABBV
Wall Street Bet Mentions Over Past 24 Hours: 113
Market Capitalization: $199.8 billion
1-Week Performance: -6.3%

FILE PHOTO: A screen displays the share price for drugmaker AbbVie on the floor of the New York Stock Exchange July 18, 2014.  REUTERS/Brendan McDermid/File Photo
FILE PHOTO: A screen displays the share price for drugmaker AbbVie on the floor of the New York Stock Exchange

9. Skillz

Ticker: SKLZ
Wall Street Bet Mentions Over Past 24 Hours: 114
Market Capitalization: $4.7 billion
1-Week Performance: 16.3%

Skillz
Skillz website.

8. Blackberry

Ticker: BB
Wall Street Bet Mentions Over Past 24 Hours: 118
Market Capitalization: $6.3 billion
1-Week Performance: 5.0%

A shareholder uses his Blackberry while waiting for the Research In Motion annual meeting to begin in Waterloo, July 17, 2007.
BlackBerry shareholder

7. ContextLogic

Ticker: WISH
Wall Street Bet Mentions Over Past 24 Hours: 118
Market Capitalization: $4.5 billion
1-Week Performance: 13.1%

Wish CFO
Wish CFO Rajat Bahri.

6. Tesla

Ticker: TSLA
Wall Street Bet Mentions Over Past 24 Hours: 136
Market Capitalization: $707.2 billion
1-Week Performance: 5.3%

Tesla SuperCharger

5. Apple

Ticker: AAPL
Wall Street Bet Mentions Over Past 24 Hours: 147
Market Capitalization: $2.50 trillion
1-Week Performance: 4.0%

An Apple store employee's dark silhouette next to a white glowing Apple logo
An Apple store employee in New York.

4. AMC Entertainment

Ticker: AMC
Wall Street Bet Mentions Over Past 24 Hours: 176
Market Capitalization: $22.1 billion
1-Week Performance: 10.3%

AMC Entertainment

3. Chewy

Ticker: CHWY
Wall Street Bet Mentions Over Past 24 Hours: 207
Market Capitalization: $36.9 billion
1-Week Performance: -11.3%

Chewy IPO

2. GameStop

Ticker: GME
Wall Street Bet Mentions Over Past 24 Hours: 221
Market Capitalization: $15.3 billion
1-Week Performance: 4.0%

GameStop
Queue in front of Gamestop store in Christmas atmosphere in Milan during coronavirus emergency, Milan, Italy, on November 03 2020.

1. Alibaba

Ticker: BABA
Wall Street Bet Mentions Over Past 24 Hours: 332
Market Capitalization: $488.0 billion
1-Week Performance: 5.5%

An office building of Alibaba Group is pictured on August 10, 2021 in Zhengzhou, Henan Province of China.
An office building of Alibaba Group is pictured on August 10, 2021 in Zhengzhou, Henan Province of China.

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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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Binance’s US arm is considering an IPO within the next 3 years, boss Changpeng Zhao says

Changpeng Zhao, CEO of Binance, speaks at the Delta Summit, Malta's official Blockchain and Digital Innovation event promoting cryptocurrency, in St Julian's, Malta October 4, 2018.
Changpeng Zhao, founder and CEO of Binance.

Crypto exchange Binance is planning an initial public offering for its US arm within the next three years depending on business growth, CEO Changpeng Zhao told The Information in a recent interview.

“Binance.US is just going to do what Coinbase did,” Zhao told the tech-based publication in a Zoom interview published Wednesday.

He suggested Binance has an edge over Coinbase in terms of cost structure. “The users using Binance.US pay about one-fifth of the fees that they pay on Coinbase – so it’s about five times cheaper,” he said.

Some experts said Coinbase’s public listing, the first for a major crypto exchange, was for crypto what Google’s IPO was for the internet.

Without mentioning any names, Zhao said Binance.US is about to close a “large” private fundraising round in the next two months that should reduce his control of the board. It plans to IPO after that, he said.

“If the business can grow consistently over the next three years, then three years should be sufficient for an IPO, but if there’s a prolonged bear market for, I don’t know, maybe three or five years, then it may be a little bit longer,” he added.

Binance has recently been under fire over a series of regulatory clampdowns around the world, which have prompted the company to double the size of its global compliance team by the end of 2021. Binance has been slapped with multiple warnings and banned from operating in some jurisdictions due to failure to register with local regulators.

Founded in 2017, Binance offers hundreds of cryptocurrencies for traders around the world. Its ambitions for an IPO follows a mass adoption of cryptocurrencies in the last year, with more traditional finance companies beginning to incorporate digital assets into their client offerings.

The company generated profits as high as $1 billion in the last year, triple the net income posted by Coinbase in the same period, Zhao told The Information. While Binance US is the American partner of Binance, profits from the US unit are independent.

Before pursuing a stock market debut, Binance US will have to find a new leader since Brian Brooks resigned as CEO after just three months in the position. Zhao suggested one among the company’s new senior hires could become his replacement.

“Binance.US has hired a few senior people already and any one of them could be the future CEO,” he said.

Zhao himself has said he’s open to stepping down as CEO of Binance, in favor of someone who has a more current approach to compliance. “If you have a CEO for longer than 10 years, that’s a lot of time-the organization probably has a lot of stale thinking,” he said. “Four to five years is probably a good time frame. Presidents only do four-year terms.”

In the interview, Zhao also revealed he owns only bitcoin and Binance’s BNB token. He said he isn’t against holding other digital currencies, but that he doesn’t have the time to accommodate them.

“I think those things are interesting. I’m not against those projects,” he said. “I like those projects, but I don’t have time to deal with many different cryptocurrencies.”

Read More: The head of trading for a crypto brokerage firm shares 11 altcoins he’s bullish on – and 3 rules he abides by in the hyper-volatile and fast-moving market

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Apple still has 10% upside following its surge to record highs, one technical analyst says

apple store
  • Shares of Apple still have 10% upside potential after breaking out to record highs, according to Katie Stockton of Fairlead Strategies.
  • Stockton derived a measured move price target of $168 after its breakout, and sees support around $150.
  • September is often a busy month for Apple as it unveils its new slate of iPhone models.
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Apple still has a lot more upside ahead following its confirmed breakout to record highs, according to Katie Stockton of Fairlead Strategies.

In a note on Wednesday, Stockton identified a measured-move price target of $168 for Apple, representing potential upside of 10% from Tuesday’s close.

After decisively clearing the key $150 resistance level, Stockton sees support for Apple at that level going forward, according to the note. That level will likely serve as a better support level than the 50-day moving average, which currently sits near $145, Stockton said.

The strong move in shares of Apple has led Stockton to have an overweight bias towards the technology sector, “noting also that there is a bullish reversal in the S&P 600 Information Technology Index versus the S&P 500,” the note said.

September is often a busy month for Apple, as it unveils its new slate of iPhone models at a highly-watched event. While the September invitations from Apple have not yet gone out, rumors are building as to what the iPhone 13 model line-up may offer. Potential features include a better camera, the elimination of the front screen notch, and satellite connectivity for emergency purposes.

Apple traded up as much as 2% on Wednesday, hitting a record high of $154.98. The stock is up 16% year-to-date.

Apple stock chart
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