Raphael Stevens

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    in Business

    Upstart CEO defends increased loan balance, says the AI lending platform's model hasn't changed

    Monday – Friday, 6:00 – 7:00 PM ET

    In an interview Tuesday with CNBC’s Jim Cramer, Upstart Holdings CEO David Girouard sought to downplay investor concerns about the company’s risk exposure.
    Shares of the artificial intelligence lending platform plunged 56.42% Tuesday, closing at $33.61 apiece.
    “All else being equal, I prefer [if] our stock was going up. But the fundamentals of our business has not changed,” Girouard told Cramer.

    In an interview Tuesday with CNBC’s Jim Cramer, Upstart Holdings CEO David Girouard sought to downplay investor concerns about the increased loan balance held on the financial technology firm’s balance sheet at the end of its first quarter.
    Shares of the artificial intelligence lending platform plunged 56.42% Tuesday, closing at $33.61 apiece, one day after it also lowered its full-year outlook for revenue and adjusted EBITDA margin. Upstart cited rising interest rates and broader economic uncertainty for the revised forecasts, which came in lighter than Wall Street’s expectations. Upstart’s loan balance also was in focus Tuesday.

    “Just to make it really clear, in the first quarter, a single-digit percentage of the loans that were originated on our platform came to our balance sheet,” Girouard said in an interview “Mad Money.” “That hasn’t changed in our history.”
    On Monday, Upstart reported that it held $604.4 million worth of loans on its balance sheet, as of March 31, up from $260.8 million in the fourth quarter of 2021. Some analysts noted that increase raises Upstart’s credit risk exposure, and Cramer told Girouard he was “shocked” by the figure.
    “We’ve said we use putting loans on our balance sheet to test new products and new models, and that’s largely what those represented,” Girouard said.
    Upstart has recently been expanding into the auto loan market, while also working to roll out a small-dollar loan product.
    “It’s not a change in our model,” Girouard said, referring to Upstart’s use of its balance sheet to support research and development on new lending products. “More than 90% of our loans are originated and held by banks or originated by banks and sold forward to institutional markets. That hasn’t changed.”

    Upstart, which went public in December 2020, soared for much of last year and reached an all-time closing high of $390 per share on Oct. 15. It’s been tough sledding since then, due in part to a broader shift away from high-flying growth companies in response to a more hawkish Federal Reserve. As of Tuesday’s close, Upstart shares are down about 91% from their record closing high.
    Multiple Wall Street analysts downgraded Upstart shares on Tuesday. Cramer told Girouard he believes part of Tuesday’s dramatic stock slide because investors realized there was “far more risk” than they previously understood.
    “All else being equal, I prefer [if] our stock was going up. But the fundamentals of our business has not changed,” said Girouard, a former Google executive who also founded Upstart. “Profits and growth have been the combination since we public in December 2020 and since before that. We’re proud of what we’re building.”
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  • 163 Shares199 Views

    in Finance

    Stocks making the biggest moves after hours: Coinbase, Roblox, Electronic Arts and more

    The logo for Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, is displayed on the Nasdaq MarketSite jumbotron and others at Times Square in New York, U.S., April 14, 2021.
    Shannon Stapleton | Reuters

    Check out the companies making headlines after the bell: 
    Coinbase — Shares sank 11.5% in extended trading after Coinbase reported first-quarter revenue below expectations. Coinbase posted revenue of $1.17 billion versus the Refinitiv consensus estimate of $1.48 billion. The company said lower crypto asset prices and market volatility impacted first-quarter results.

    Electronic Arts — The stock rose 2.2% after hours despite Electronic Arts narrowly missing Wall Street’s revenue estimates. The video game company reported quarterly revenue of $1.75 billion, while analysts surveyed by Refinitiv expected revenue of $1.77 billion on average.
    Roblox — Shares dropped 6.9% in extended trading after the video game company missed analyst projections on the top and bottom lines. Roblox reported a first-quarter loss of 27 cents per share on revenue of $631 million. Analysts had expected a loss of 21 cents per share on revenue of $645 million, according to Refinitiv.
    Unity Software — The stock plunged 31.6% in extended trading after the video game software company posted revenue below expectations. Unity Software reported $320 million in revenue in the first quarter, while analysts surveyed by Refinitiv expected $322 million.
    Wynn Resorts — The hotel and casino operator stock fell marginally after hours following a weaker-than-expected quarterly report. Wynn posted an adjusted loss of $1.21 per share while analysts expected $1.15, according to Refinitiv. Revenue came in at $953 million versus the consensus estimate of $986 million.
    SoFi — The stock rose 1% after hours following a plunge of 12% in the regular trading session, after SoFi accidentally released quarterly results early. SoFi posted better-than-expected numbers on the top and bottom lines, but issued weaker-than-expected forward guidance.
    Occidental Petroleum — The stock fell 1% despite a better-than-expected quarterly report. Occidental reported first-quarter earnings of $2.12 per share on revenue of $8.53 billion. Analysts had expected a profit of $2.03 per share on revenue of $8.08 billion, according to Refinitiv.

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  • 113 Shares169 Views

    in Finance

    Russia is on track for a record trade surplus

    WITHIN DAYS of Vladimir Putin’s invasion of Ukraine, Russia’s financial system seemed on the verge of collapse. The West imposed a range of financial sanctions, notably on the Russian central bank’s foreign-exchange reserves, that sent the rouble plunging and led citizens to withdraw cash frantically. Once the central bank raised interest rates, imposed capital controls and injected liquidity into the banking system, however, some of these misfortunes reversed. And although a chunk of Russia’s currency reserves remains frozen, the country still generates about $1bn a day from its energy exports.Russia has stopped publishing detailed monthly trade statistics. But figures from its trading partners can be used to work out what is going on. They suggest that, as imports slide and exports hold up, Russia is on track for a record trade surplus.On May 9th China reported that its exports to Russia were broadly flat in April, compared with the previous month, while its imports from Russia rose by 13%. Germany reported a 62% monthly drop in exports to Russia in March, and its imports fell by 3%. Adding up such flows across eight of Russia’s biggest trading partners, we estimate that Russian imports have fallen by about 44% since the invasion of Ukraine, while its exports have risen by roughly 8%.Imports have collapsed partly because sanctions on the Russian central bank and the expulsion of some lenders from the SWIFT interbank messaging network have made it harder for consumers and firms to buy Western goods. Elina Ribakova of the Institute of International Finance (IIF), a bankers’ group, says that regulatory uncertainty was also a big factor at first, as Western firms were unsure which Russian banks came under sanctions. Logistical disruptions, including decisions by Western firms to suspend deliveries to Russia, mattered, too. The early depreciation of the rouble also dampened Russian demand for imports, says Claus Vistesen of Pantheon Macroeconomics, a consultancy.Russia’s exports, meanwhile, have held up surprisingly well, including those directed to the West. Sanctions permit the sale of oil and gas to most of the world to continue uninterrupted. And a spike in prices has boosted revenues further.As a result, analysts expect Russia’s trade surplus to hit record highs in the coming months. The IIF reckons that in 2022 the current-account surplus, which includes trade and some financial flows, could come in at $250bn (15% of last year’s GDP), more than double the $120bn recorded in 2021. That sanctions have boosted Russia’s trade surplus, and thus helped finance the war, is disappointing, says Mr Vistesen. Ms Ribakova says the efficacy of financial sanctions may have reached its limits. A decision to tighten trade sanctions must come next.But such measures could take time to take effect. Even if the EU enacts its proposal to ban Russian oil, the embargo would be phased in so slowly that the bloc’s oil imports from Russia would fall by just 19% this year, says Liam Peach of Capital Economics, a consultancy. The full impact of these sanctions would be felt only at the start of 2023—by which point Mr Putin will have amassed billions to fund his war. For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

  • 88 Shares169 Views

    in Business

    Cramer's lightning round: AECOM is a buy

    Monday – Friday, 6:00 – 7:00 PM ET

    It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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    Funko Inc: “Many of us were confounded that the stock went down as low as it did.”

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    AECOM: “This is a tremendous infrastructure play. … I think you should buy it.”

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    Affirm Holdings Inc: “We have to hear if they have some secret weapon. … Let’s learn more when they report [their quarterly earnings].”

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    Black Knight Inc: “There are a lot of stocks in the arbitrage world that are getting hit. … These guys are getting hurt.”

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  • 163 Shares169 Views

    in Business

    Pfizer deal will help expand reach of migraine pill Nurtec, Biohaven CEO says

    Monday – Friday, 6:00 – 7:00 PM ET

    Pfizer’s purchase of Biohaven Pharmaceutical represents a commitment to expand the reach of its calcitonin gene-related peptide (CGRP) franchise, CEO Vlad Coric told CNBC’s Jim Cramer on Tuesday.
    “We have to bring the modern day, novel therapies to those patients, and Pfizer really is the best company to build upon our work and unlock the potential of this franchise and bring it to the patients who are still in need,” Coric said in an interview on “Mad Money.”

    Pfizer’s purchase of migraine medication maker Biohaven Pharmaceutical represents a commitment to expand the reach of its calcitonin gene-related peptide (CGRP) franchise, CEO Vlad Coric told CNBC’s Jim Cramer on Tuesday.
    “There are still over 300,000 physicians in the U.S who write for the older triptans and have not yet written for one oral CGRP,” Coric said in an interview on “Mad Money,” referring to a class of medicine used to treat migraines.

    “That’s not acceptable — we have to bring the modern day, novel therapies to those patients, and Pfizer really is the best company to build upon our work and unlock the potential of this franchise and bring it to the patients who are still in need,” he added.
    Pfizer and Biohaven announced on Tuesday that the Covid vaccine maker will purchase Biohaven for about $11.6 billion. Pfizer will receive all Biohaven stock it doesn’t already own — the company took a 2.6% stake in Biohaven in November — for $148.50 a share in cash.
    Shares of Biohaven, whose main product is migraine pill Nurtec, skyrocketed 68% on Tuesday to $140. Pfizer stock rose 1.75%.
    Cramer said that while he believes Biohaven wouldn’t have been able to expand the drug globally on its own, he believes that Pfizer’s help will make its migraine medication one of the “top 10 drugs in the history of the world.”
    “I agree, Jim. I think this is going to be one of the most important primary care drugs, and in addition to that is going to change the way migraine is treated and set a new standard of care,” Coric said in response. 

    “I’m really looking forward to seeing the team at Pfizer really encourage patients to learn about this and tap into the full potential of CGRP agents,” he added.
    Pfizer and Biohaven said they expect to close the acquisition by early 2023.
    Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
    Disclaimer

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  • 125 Shares199 Views

    in Finance

    Stock futures are little changed ahead of key inflation reading

    Stock futures were little changed in overnight trading Tuesday ahead of a key inflation reading.
    Futures on the Dow Jones Industrial Average shed about 15 points. S&P 500 futures were marginally lower and Nasdaq 100 futures were near flat.

    The moves come after the Dow fell for a fourth consecutive day Tuesday in a volatile trading session alternating between gains and losses. The S&P 500 ticked up 0.25% and the Nasdaq Composite gained about 1%.
    Mega-cap technology names, which have struggled in recent weeks, led gains Tuesday. Microsoft and Apple each rose more than 1%.
    Investors are awaiting the release of April’s consumer price index Wednesday morning for the latest temperature check on inflation. Rising prices have been front-of-mind, particularly as the Federal Reserve is hiking interest rates and trimming its balance sheet to address inflation.
    “We are seeing signs on a month-over-month basis that inflation is peaking,” Brian Belski, BMO Capital markets chief investment strategist, told CNBC’s “Closing Bell: Overtime” on Tuesday. “But are we going to see some sort of a surprise number? That could really get things going.”
    Economists expect the CPI to rise 0.2% from the month prior and 8.1% year over year, according to the Dow Jones consensus estimate. That compares with March’s 8.5% year-over-year pace.
    Investors are also looking to earnings reports from companies including Toyota Motors, Walt Disney and Beyond Meat.

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  • 213 Shares139 Views

    in Business

    WWE looks to boost its sponsorship revenue as live events return and a key media deal expires

    WWE is looking to boost its sponsorship revenue as it returns to live events and aims to expand its programming.
    The company also has a big streaming rights deal with Hulu that’s set to expire this year.
    It might make sense for WWE to broaden its partnership with NBCUniversal’s Peacock, according to a longtime advisor in the media rights industry.

    Chief Brand Officer and TV Personality of WWE, Stephanie McMahon delivers her keynote address at the opening of Sports Matters in conjunction with All That Matters 2016 in Singapore on September 14, 2016.
    Roslan Rahman | AFP | Getty Images

    WWE and industry analysts agree: The pro wrestling and media company can squeeze more revenue out of sponsorship deals.
    The company leans on the intellectual property built around performers such as superstar personalities like The Undertaker, John Cena, Dwayne “The Rock” Johnson, Roman Reigns and Bianca Belair. Revenue from its live events, which are returning as Covid restrictions ease, and media offerings are fueled in part by sponsorship dollars. 

    WWE this year aims to fill football stadiums and expand its programming, according to Frank Riddick, WWE’s chief financial officer. Riddick, who took over the job in November, said after last week’s earnings release that the company is making sponsorship a priority this year.
    In 2021, WWE reported roughly $72 million combined for advertising and sponsorships in its media and live events businesses.
    WWE made more than $10 million in sponsorship fees alone for last month’s marquee Wrestlemania 38, executive Stephanie McMahon said last week. That was a record for the two-day event held at AT&T Stadium in Dallas. WWE’s sponsorship partners include Toyota, DoorDash, Rocket Mortgage and Rihanna’s Fenty Beauty cosmetics line, said McMahon, who is also the daughter of longtime CEO Vince McMahon.
    Analysts suggest the WWE is undervalued when it comes to sponsorship revenue, estimating the company lures around $35 million per year just from sponsorships. That’s less than combat-sports company UFC, which attracts more than $100 million annually, according to a Guggenheim Partners note to clients last month.
    While WWE lags behind UFC in overall popularity, its fans are the most likely to notice sponsors, according to sponsorship consulting firm IEG. Sixty-seven percent of WWE’s fans are more likely to consume brands associated with the company, according to IEG’s research, which used data from polling outfit YouGov. That’s ahead of the 55% average for the group of the 11 biggest sports leagues, including the NFL, which is by far the most popular sports organization in the United States.

    “All that does is spell potential and opportunity,” said Peter Laatz, IEG’s global managing director. He said he thinks WWE can clear over $100 million in annual sponsorship revenue.
    But he also noted WWE might not be the “right fit for the most affluent categories or top tier brands.”
    The WWE did not return a CNBC request to discuss its sponsorships.

    WWE’s place in the streaming world

    WWE gets most of its revenue from its media business, accounting for $278.1 million of its $333.4 million overall revenue in the quarter ended March 31. Advertising and sponsorship revenue in the media segment grew 27% to $19.8 million from the year-ago period.
    The company is preparing for a key media deals amid an “increasingly cluttered streaming marketplace,” WWE President Nick Khan said on last week’s earnings call. Hulu’s deal for day 2 rights around WWE’s weekly “Raw” program expires this year.
    Day 2 rights allow subscribers to watch “Raw” and “Smackdown,” another weekly show, 24 hours after they first air. Raw airs live on USA Network, and Smackdown is shown on Fox. After 30 days, subscribers to NBCUniversal’s Peacock service can watch the shows. (In 2021, WWE entered a five-year deal with NBCUniversal for a reported $1 billion to license its library and show live main events on Peacock.)
    Khan also suggested a new player could enter the sports streaming game.
    “It’s just a matter of time before Netflix goes with live,” said Khan. He added the live events generate the highest consumer impressions for networks and streaming companies.
    Netflix is indeed looking to bounce back as its results suffer while viewers shake off pandemic restrictions and head back out into the world. In April, Netflix reported a decline in subscribers and warned of millions of more losses in the months ahead. Co-CEO Ted Sarandos said at the time he doesn’t see a profitable way for the streamer to get into sports, although its “Formula 1: Drive to Survive” series has been a smash hit.
    Netflix probably wouldn’t be interested in WWE, anyway, according to longtime media rights advisor Lee Berke, since the wrestling company is already tied up with Peacock. He said it would make more sense for the NBCUniversal service to add more WWE rights.
    “That’s a major relationship for them, and there’s a lot they can do to build on that,” said Berke, CEO of LHB Sports, which advises the sports entertainment industry. “But if [Netflix] is going to make a move for WWE, I see them making an aggressive for all of their content or major live events.”
    WWE is also looking at overseas expansion, particularly in India, home to a billion people and a growing middle class. WWE estimates its content is shown in more than 180 countries. The company said it drew 25 million viewers for an exclusive event showcasing U.S. WWE wrestlers competing against India-born performers. Wrestlemania drew more than 50 million viewers last month in India.
    Khan, the WWE president, called India a “hugely important market.” But, he added, WWE is waiting for networks to finish bidding on rights to cricket – the most popular sport in the country – before the company determines its future media marketplace there.
    Disclosure: Peacock owner NBCUniversal is also the parent company of CNBC.

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  • 175 Shares169 Views

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    Jim Cramer says the market is signaling to pick up beaten-down, profitable tech names

    Monday – Friday, 6:00 – 7:00 PM ET

    CNBC’s Jim Cramer on Tuesday stressed the importance of changing market strategies when the market shifts, saying right now the market says to buy beaten-down tech growth names.
    “There are lots of tech companies that now return capital to you and are at reasonable prices and are going to have very good growth. They exist again,” the “Mad Money” host said.

    CNBC’s Jim Cramer on Tuesday stressed the importance of changing market strategies when the market shifts, saying right now the market says to buy beaten-down tech growth names.
    “Many tech companies that make real things and return capital to shareholders now do sell at reasonable prices after the tsunami of selling. … I’m talking about amazing semiconductor and software companies, especially Nasdaq names that are doing so well, including internet names,” the “Mad Money” host said.

    “When the facts change, I do change my mind, and right now the facts are a lot less hostile to the beaten-down high-flyers. At least for the moment. … There are lots of tech companies that now return capital to you and are at reasonable prices and are going to have very good growth. They exist again,” he later added.
    Stocks had a bumpy path on Tuesday as the major indices teetered between gains and sell-offs. The Dow Jones Industrial Average slipped 0.26%, while the S&P 500 rose 0.25%. The tech-heavy Nasdaq Composite gained 0.98%. 
    The 10-year Treasury yield note pulled back below 3%, after reaching the highest level since 2018 a day earlier.
    “I don’t know if Treasury yields will actually keep heading lower. .. I do know that the stock market’s gotten over-sold to the point where even a couple days of calmness in the bond market can actually create some nice action in stocks,” Cramer said.
    He also stressed the importance of knowing when to change strategies to fit the tide of the market —despite what critics might say.

    “I can’t stick to my old views when the data no longer supports them,” Cramer said. “If you want true consistency in this market, you’ve got to take your cue from bonds, and bonds have changed direction,” he added.

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