Could The Qs Collapse?

Tale of the Tape

Good evening, folks! Tomorrow is Friday. 🙏 It’s been one helluva week— trade responsibly. 

The market of stocks marched lower for the third straight day. The Russell 2000 tumbled 2.76% while the Nasdaq dropped 2.11%. 

The Nasdaq-100 ETF $QQQ ticked a low of $300.11 before bouncing back a few bucks. $QQ closed down 9.6% from an all-time high, but it closed just off its September 2 high. Is this level support? Or will the Qs collapse? Place your bets…

Every sector except (yup, you guessed it) energy closed in negative territory. ⚡ The energy ETF $XLE advanced 2.4%, adding to its 2021 gains. The sector is up 34.6% YTD compared to tech, which is now negative in 2021.

Tech and consumer discretionary both dropped more than 2%, again. 😪

DraftKings announced another deal, this time with the UFC. Is degenerate gambling officially mainstream?? 😂 Nobody knows, but $DKNG dipped 5.8%. See more below.

Tesla tumbled 4.86% and closed at its lowest price since December 16, 2020. The stock is down nearly 30% from its all-time high. 

Shift4 surged 9% after the company announced its acquisition of VenueNext, and its raised guidance. The stock is up 130% since the June 2020 IPO. 

GameStop somehow gained in today’s terrible tape. $GME galloped 6.5% and closed at its highest price since February 1. Is the stock gearing up for another epic squeeze?? Time will tell… ⏳

Here are the closing prints: 

S&P 5003,768-1.34%
Russell 20002,146-2.76%
Dow Jones30,924-1.11%

It’s Good To Be A (Draft)King

Just one day after announcing the deal with Dish, DraftKings dropped another bomb 💣… the company will partner with the UFC in a deal that UFC President Dana White called “massive.”

The new agreement makes DraftKings the very first official sportsbook and daily fantasy partner in the US and Canada— an arrangement that’s valued at more than $350M. The amount DraftKings paid hasn’t been disclosed, but it’s been characterized as “low nine figures.”

Dana White said:

…[this is] the most important deal we’ve ever done to increase engagement with our fans and reach new ones.

The UFC will now integrate live betting into its matches, including live odds, in-game promotions, and more prop bets.

Read the official press release here.

Empire State of Square

Square, Inc. is on a roll these days. 👏👏

The payment company just announced a deal with global music and entertainment platform TIDAL, marking Square’s newfound interest in the music industry. 

Square will pay $297M in cash and stock to get majority ownership in TIDAL, though the platform will still run independently. Square’s payment services were a breakthrough for entrepreneurs— the company sees similar potential among budding artists.

Square CEO and Co-Founder Jack Dorsey said: 

It comes down to one simple idea: finding new ways for artists to support their work… I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.

To make this power partnership even more interesting, Square’s putting Jay-Z on its Board of Directors. 👑 Read more about the deal here

Flipkart Adds a SPAC to Its Shopping Kart

SPACs aren’t slowing down anytime soon. 🚗 💨

Reports around Walmart Inc. indicate the retail giant’s interest in listing its Bengaluru-based online retailer, Flipkart, through a SPAC. The deal will likely happen soon, as sources hint that SPACs’ speed makes them more appealing than traditional listings.

Flipkart (Walmart’s had a majority stake since 2018) is currently one of the largest Indian e-commerce sites, and it’s exploding in popularity. In 2019, Flipkart posted ~$6.1B in revenue with a 31.9% market share…and both of these numbers are ahead of Amazon. 😳

E-commerce in India is growing exponentially (with an estimated market cap of $200B by 2027), so this might not be a bad investment to look at. 

Where Virtual Dreams Do Come True 🏰

Could Disney Stores become a thing of the past…? 💔

Disney announced the closing of 20% of its brick-and-mortar stores before the end of 2021. The company said it’s shifting gears to e-commerce, instead (who isn’t?). 

60 Disney Stores will close in North America. While there are 300 brick-and-mortar locations worldwide, apparel and collectibles will become more readily available on the ShopDisney website. Stephanie Young, Disney’s President of Consumer Products, said: 

While consumer behavior has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer.

While they’re at it, Disney might as well change its slogan, too: “Where virtual dreams do come true.” 🙃 🤦‍♀️

Earnings Round-Up

Shift4 reported earnings early this morning. Although the company failed to exceed earnings estimates, it did announce the acquisition of VenueNext, and raised 2021 guidance.

Here are the numbers:

EPS: ($0.05) vs $0.02 est.
Revenue: $210.9M, +4.4% YoY

$FOUR flew 9% on the news. Here’s the daily chart:

Jared Isaacman, Shift4 Payments’ CEO, shared:

At Shift4, we thrive on eliminating complexity and reducing cost for the most demanding commerce environments. We have taken the same successful vertically-integrated strategy that has served us incredibly well in the hospitality and restaurant industries, and brought it to e-commerce with Shift4Shop and now to sports stadiums, entertainment venues and theme parks with this exciting acquisition. We couldn’t be more excited to welcome VenueNext to the Shift4 organization. We love their focus on the ‘fan & patron experience’ and making commerce simple and more enjoyable. In addition to jointly pursuing new opportunities, we intend to immediately offer Shift4’s end-to-end payments solution to VenueNext’s sizable existing customer portfolio which spans across virtually every category of large venue across the country and internationally.

Costco reported earnings after the close. The company exceeded earnings estimates, while revenue grew 14.6% YoY.

Here are the numbers:

EPS: $2.55 vs $2.43 est
Revenue: $44.77B, +14.6 YoY

Earnings This Week

Be sure to know when your stocks report earnings. Here’s the earnings calendar

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