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    AutoNation shares hit new all-time high after company reports record quarterly earnings

    AutoNation’s stock reached a new all-time record of more than $131.12 a share Thursday.
    The company reported its sixth-consecutive quarterly earnings record.
    AutoNation also announced a major acquisition as well as a $1 billion stock repurchase program.

    AutoNation’s stock reached a new all-time record of $131.12 a share Thursday after the nation’s largest seller of new cars reported its sixth consecutive quarterly earnings record.
    AutoNation beat Wall Street’s profit and sales estimates, led by resilient consumer demand outpacing vehicle supplies due to an ongoing global shortage of semiconductor chips that has resulted in record car prices and profits.

    Shares of the Florida-based dealership group jumped by as much as 12% on Thursday before retreating to close at $126 a share, up by 7.7%. AutoNation’s stock is up by about 80% so far this year.
    The company reported adjusted earnings per share of $5.12 in the third quarter — an all-time record — beating analysts’ estimates of $4.20 a share, according to Refinitiv. AutoNation’s revenue for the quarter jumped by 18% to $6.38 billion compared with estimates of $6.31 billion.
    AutoNation reported net income of $361.7 million, almost double the $182.6 million in profit it generated a year earlier.
    “We are preselling what’s being scheduled to be produced,” AutoNation CEO Mike Jackson said Thursday on CNBC’s “Squawk Box.” “They’re coming in and going right out … the demand is there.”
    In addition to the record earnings, AutoNation also announced an acquisition that’s expected to generate about $420 million in annual revenue. The company’s board also approved the repurchase of up to $1 billion of AutoNation’s common stock.

    AutoNation previously said it was repurchasing 7.9 million shares of common stock, or 11% of shares outstanding, for an aggregate purchase price of $879 million in the third quarter.
    AutoNation’s earnings were led by a 53% increase in used vehicle sales compared with a year earlier, while new vehicle sales were roughly flat.
    The company reported same-store new gross profit per new vehicle was a record $5,484, up $2,949. Gross profit per used vehicle was $2,104, up $108 from a year earlier and 51% compared with the third quarter of 2019, according to the company.

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    WeWork shares jump more than 13% in public markets debut after SPAC merger

    Shares of WeWork closed up more than 13% Thursday after the company went public through a special purpose acquisition company more than two years after its failed IPO.
    The office startup halted initial plans for an IPO in 2019 after investors raised concerns over its business model and its founder and then-CEO Adam Neumann.
    The company was valued at $9 billion earlier this year, a sharp drop from the $47 billion valuation from SoftBank Group in 2019.

    Shares of WeWork closed up 13.49% on Thursday after the company went public through a special purpose acquisition company more than two years after its failed IPO.
    The office-leasing company scrapped plans for an IPO in 2019 after investors raised concerns over its business model and corporate governance and its founder and then-CEO Adam Neumann.

    Plans for the merger with BowX Acquisition Corp. were first announced in March, in a deal that reportedly valued the company at roughly $9 billion.
    The valuation is a sharp drop from 2019, when WeWork was initially valued at a steep $47 billion by SoftBank Group. Its valuation slowly lowered as news of the company’s finances unraveled and investor demand wained.
    “You’ve said this is a story with drama,” WeWork Executive Chairman Marcelo Claure told CNBC’s “Squawk Box” on Thursday. “Sure, this is a story where a lot of people wrote documentaries that it was the end of WeWork. Well the resistance, the persistence of these people is incredible. This company is here, is stronger than ever, and no doubt that we’re going to be celebrating many more milestones.”
    What went wrong
    WeWork’s troubles began in August 2019, when the company’s IPO filing revealed it had lost $1.9 billion the previous year and was on track to run through remaining cash. A crippling report from The Wall Street Journal in September raised concerns over how Neumann managed the company, including possible illegal activities.
    Neumann stepped down as CEO that month. CNBC reported in October that he would get a package worth up to $1.7 billion to walk away from WeWork and give up his voting rights. Real estate executive Sandeep Mathrani later assumed the CEO role.

    “WeWork is an amazing brand and if someone gives you a super brand to turn around, you’re going to have to say yes,” Mathrani told CNBC’s “Squawk Box.”
    After the failed IPO, WeWork’s troubles continued. That November, Reuters reported the New York State Attorney General was investigating the company, including whether Neumann engaged in self-dealing to enrich himself.
    That included reports that Neumann purchased the trademark for the word “We,” and planned to charge WeWork $6 million to transfer it. Self-dealing is when someone acts in their own best interest rather than their clients.
    Bloomberg also reported that month that WeWork was facing scrutiny from the U.S. Securities and Exchange Commission over its disclosures to investors in the run-up to its failed IPO.
    The failed IPO and onslaught of the pandemic led to several rounds of layoffs at the company in late 2019 and 2020. WeWork also suffered massive losses as Covid-19 shuttered office spaces worldwide.
    Claure told “Squawk Box” that everybody has “an important role to play” and that Neumann deserves credit as the visionary who came up with the idea.
    Neumann congratulated the new leadership team during an interview with the media Thursday morning at the outdoor beer garden at The Standard, an expensive hotel in New York City’s meatpacking district. He and co-founder Miguel McKelvey “couldn’t be happier” to celebrate the IPO, Neumann said.
    “This has always been about the team and about what we did together, and we’re just so proud today and for this day,” he said.
    SoftBank takeover
    SoftBank made its first multi-billion dollar investment in WeWork in 2017 through its $100 billion Vision Fund, which has also funded Silicon Valley startups like Uber. The Japanese technology giant invested a total $18.5 billion in WeWork in the lead-up to its failed IPO.
    In October 2019, SoftBank agreed to spend $10 billion for an 80% stake in WeWork. As part of the deal, SoftBank also said it would buy $3 billion in shares from investors and employees, but it nixed those plans in April 2020, in part due to government investigation into the company.
    SoftBank progressively dropped its valuation of WeWork to $7.3 billion at the end of Dec. 2019 and $2.9 billion in early 2020.
    During an earnings presentation later that year, SoftBank CEO Masayoshi Son said he was “foolish” for his firm’s multibillion investment in WeWork.
    “We made a failure on investing in WeWork and I’ve been admitting that several times I was foolish,” he said, according to a FactSet transcription of the call.
    Claure told CNBC’s “Squawk Box” that Son is “excited” about the company going public.
    “Two years ago, the value of WeWork was zero and the fact we’ve taken it from zero to $8 billion to $9 billion is great,” Claure said on “Squawk Box.”
    WeWork’s comeback
    The pandemic recovery has since accelerated the demand for flexible workspaces, as more workers shift toward hybrid or permanent remote work.
    In March, WeWork agreed to the $9 billion SPAC merger with BowX Acquisition, a move that was finalized Oct. 20. As part of the deal, SoftBank retained a majority stake in the company but agreed to a one-year lock-up on their shares, according to a person familiar with the matter, Reuters previously reported.
    SPACs, also known as blank-check companies, are set up for the sole purpose of raising money through an IPO and using that money to acquire an existing company. They have soared in recent months, as celebrities like Shaquille O’Neal hop on the trend. Companies like Virgin Galactic and Lucid Motors have used SPACs to go public, but their structure has also drawn scrutiny from the SEC.
    BowX Acquisition raised $420 million when it went public in August 2020. WeWork is trading under the ticker WE.

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    Fed to ban policymakers from owning individual stocks, restrict trading following controversy

    The Federal Reserve announced sweeping new rules for its top officials Thursday, banning trading in individual stocks and bonds.
    Those new rules come on the heels of a swelling ethics controversy over whether central bank officials should be able to trade while their policies can, and often do, move markets.
    Officials will be restricted primarily to owning mutual funds, which they will have to hold for a year and will need permission to buy or sell.

    Responding to a growing controversy over investing practices, the Federal Reserve announced Thursday a wide-ranging ban on officials owning individual stocks and bonds and limits on other activities as well.
    The ban includes top policymakers such as those who sit on the Federal Open Market Committee, along with senior staff. Future investments will have to be confined to diversified assets such as mutual funds.

    Fed officials can no longer have holdings in shares of particular companies, nor can they invest in individual bonds, hold agency securities or derivative contracts. The new rules replace existing regulations that, while somewhat restrictive, still allowed officials such as regional presidents to buy and sell stocks.
    “These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve,” Fed Chairman Jerome Powell said in a statement.
    Under the new rules, the officials will have to provide 45 days’ notice in advance of buying or selling any securities that are still allowed. They also will be required to hold the securities for at least a year, and they cannot buy or sell funds during “heightened financial market stress,” a news release announcing the moves said.
    “I’m hopeful that swift action will allow us to put this behind us and get us back focused on the job ahead,” Atlanta Fed President Raphael Bostic told CNBC during a “Closing Bell” interview.
    The rules come on the heels of disclosures that multiple Fed officials had been buying and selling stocks at a time when the central bank’s policies were designed to improve market functioning, particularly during the Covid-19 crisis.

    Since the early days of the pandemic, the Fed has purchased more than $4 trillion worth of bonds to bolster the economy through liquidity and low interest rates. It also bought billions in corporate bonds of some of the biggest names on Wall Street in an effort to ensure market functioning.

    Regional presidents Robert Kaplan of Dallas and Eric Rosengren of Boston resigned shortly after disclosures that they had engaged in trading of individual securities in 2020. In Kaplan’s case, the moves occurred in large-dollar allotments.
    Vice Chairman Richard Clarida also had been featured in the reports. Powell also sold securities last year, though they were exchange-traded funds that tracked market indexes. The chair also owns municipal bonds, which the Fed bought as part of its relief measures.
    “It’s probably a wise move, because the fact is that distinguishing between genuine insider trading and just ordinary trades that look like they might be taking advantage of insider information is fraught with problems,” said George Selgin, director emeritus of the Center for Monetary and Financial Alternatives at the Cato Institute.
    The announcement stated that regional presidents will have to disclose transactions within 30 days, a requirement already in place for FOMC members and senior staff. The new rules will be incorporated formally “over the month months,” the release said. Current holdings will have to be divested, though no timetable has been announced.
    “The optics are bad,” Selgin said of the previous Fed rules. “They needed a rule like this. I don’t think we need to feel sorry for them. They’ll do well enough with this restraint in place.”
    Those new rules come following a fresh disclosure from the New York Times that the Fed’s ethics office had sent an email in March 2020 to officials cautioning about trading as the pandemic was worsening and central bank officials were rolling out a series of emergency measures.
    Sen. Elizabeth Warren, D-Mass., a Fed critic who has said she will not support Powell should he be renominated for a second term, called Thursday for public release of the email, the Times reported.

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    Fed's Bostic sees interest rate hike coming next year as inflation lingers

    Atlanta Federal Reserve President Raphael Bostic sees an interest rate hike coming later in 2022 as inflation persists.
    Bostic also welcomed a change announced Thursday which bars Fed officials from buying and selling individual stocks and bonds.
    “The market has changed and we need to change our approach to make sure the public trust is kept,” he told CNBC.

    Atlanta Federal Reserve President Raphael Bostic said Thursday that he sees an interest rate hike coming later in 2022 as he forecasts a growing economy and lasting inflation pressures.
    The central bank official told CNBC that he has “penciled in” a rate increase in “late third, maybe early fourth” quarter of 2022. The expectation puts him on the more hawkish side of Fed officials who are now about even on whether policy will tighten next year.

    “Our experience from the pandemic has really frankly surprised to the upside,” he said in a live “Closing Bell” interview. “I’ve really adjusted my expectations moving forward.”
    Bostic’s outlook comes as some recent economic data slows and the Atlanta Fed’s own GDP tracker estimates GDP growth of just 0.5% in the third quarter.
    He said he thinks that some of the barriers in place due to the Covid-19 pandemic will fade and clear the way for stronger growth. One challenge he doesn’t see going away soon, though, is inflation.
    Other Fed officials have called the current spate of inflation, which is running at a 30-year high, transitory. Bostic rejects that notion. He said price pressures are showing up across the economy and will influence growth and policy.
    “The disruptions are going to last longer than we expected,” Bostic said. “The labor markets are not going to get to equilibrium as quick as we hoped, but demand was also going to stay high and that combination was going to mean we’re going to have inflationary pressures. The more I talk to folks, it’s becoming clearer and clearer this is going to last into 2022.”

    The Fed has been keeping its benchmark short-term interest rate anchored near zero since the start of the pandemic. In recent weeks, officials have indicated they are ready to start tapering the monthly asset purchases, possibly starting in November. Bostic has favored that move.
    He also said he will watch inflation developments closely. If the Fed needs to put on the brakes to control prices, Bostic said he “will really encourage my colleagues and I to take some definitive steps to try to prevent that damage from getting very deep.”
    Bostic also addressed a major announcement the Fed made Thursday, in which it said it will bar top officials from buying and selling individual stocks and bonds and playing the derivatives market. The move follows disclosures of trading that led to the resignation of two Fed regional presidents.
    Bostic said he welcomed the change.
    “I think this is a step to reflect and acknowledge that conditions have changed our position. The market has changed and we need to change our approach to make sure the public trust is kept,” he said.

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    CDC says these are the most common side effects people report after getting Moderna, J&J boosters

    The Centers for Disease Control and Prevention on Thursday published data listing the most common side effects people reported after receiving Covid vaccine boosters.
    A CDC advisory committee is meeting Thursday to discuss booster shots of Moderna’s and J&J’s vaccine as well as whether people can mix and match the companies’ shots.

    A healthcare clinician prepares a dose of the Johnson & Johnson vaccine for the coronavirus disease (COVID-19) for a commuter during the opening of MTA’s public vaccination program at the 179th Street subway station in the Queens borough of New York City, New York, U.S., May 12, 2021.
    Shannon Stapleton | Reuters

    The Centers for Disease Control and Prevention on Thursday published data listing the most common side effects people reported after receiving boosters of Pfizer’s or Moderna’s two-dose Covid vaccine or a second dose of Johnson & Johnson’s single-dose vaccine.
    The data, presented to the agency’s Advisory Committee on Immunization Practices, is based on submissions to the agency’s text messaging system v-safe and the Vaccine Adverse Event Reporting System, a national vaccine safety surveillance program.

    The advisory group is meeting Thursday to discuss booster shots of Moderna’s and J&J’s vaccine as well as whether people can mix and match the companies’ shots.

    The most common side effects reported after getting a third shot of an mRNA vaccine, the type made by Moderna and Pfizer, were pain at the injection site, fatigue, muscle pain, headache and fever, followed by chills and nausea, according to the CDC data.
    Side effect rates were similar to those seen after the second dose of an mRNA vaccine, according to the data.
    The data available for J&J was more limited, but people reported fever, fatigue and headache after receiving a second dose of that vaccine, according to the agency.
    In a separate presentation, Dr. Macaya Douoguih, head of clinical development and medical affairs for J&J’s vaccines division Janssen, said there is no data to suggest people are at increased risk of a rare but serious blood clot condition after receiving a second dose.
    The majority of people who received an additional dose of any vaccine were white women over the age of 50, according to the v-safe data.

    CNBC Health & Science

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    California moves to ban oil wells within 3,200 feet of homes and schools

    California Gov. Gavin Newsom on Thursday proposed a statewide 3,200-foot buffer zone to separate homes, schools, hospitals and other populated areas from oil and gas wells.
    The draft rule, released by the state’s oil regulator, would not ban existing wells within those areas but would require new pollution controls.
    More than 2 million state residents live within 2,500 feet of an operational oil and gas well, according to an analysis by the non-profit FracTracker Alliance.

    Surrounded by local, state and national officials, California Governor Gavin Newsom speaks during a news conference at Bolsa Chica State Beach in Huntington Beach, site of the the recent offshore oil spill, on Tuesday, October 5, 2021. waters.
    Mark Rightmire | MediaNews Group | Orange County Register via Getty Images

    California Gov. Gavin Newsom on Thursday proposed a statewide 3,200-foot buffer zone to separate homes, schools, hospitals and other populated areas from oil and gas wells.
    The draft rule, released by the state’s oil regulator California Geologic Energy Management Division (CalGEM), would not ban existing wells within those areas but would require new pollution controls.

    California is the seventh-largest oil-producing state in the country but has no rule or standard for the distance that active wells need to be from communities. More than 2 million state residents live within 2,500 feet of an operational oil and gas well, and another 5 million, or 14% of the California’s population, are within 1 mile, according to an analysis by the non-profit FracTracker Alliance.
    People who live near oil and gas drilling sites are at greater risk of preterm births, asthma, respiratory disease and cancer, research shows. Oil drilling disproportionately affects Black and Latino residents in major oil fields like Los Angeles County and Kern County.
    The new restrictions could take a couple years to go into effect and will likely face pushback from the state’s oil and gas industry. The Western States Petroleum Association and the State Building and Construction Trades Council have opposed a statewide mandate to impose setbacks, arguing that buffer zones will raise fuel costs and harm workers.

    More from CNBC Climate:

    “Our reliance on fossil fuels has resulted in more kids getting asthma, more children born with birth defects, and more communities exposed to toxic, dangerous chemicals,” Newsom said in a statement. “California is taking a significant step to protect the more than two million residents who live within a half-mile of oil drilling sites, many in low-income and communities of color.”
    Environmental advocacy groups have long urged the governor to instate a 2,500-foot setback between fossil fuel operations and communities, as well as place an immediate moratorium on all new oil and gas permits in those zones. Legislation to ban fracking and instate a buffer zone failed this year in a state committee vote.

    Other oil producing states like Colorado, Pennsylvania and Texas have imposed some form of setback between properties and oil operations.
    If adopted, California’s 3,200-foot setback would be the largest in the country. Newsom initially directed regulators to study buffer zones around oil wells in 2019, but they didn’t meet the December 2020 deadline to release that information.
    “The largest statewide buffer zone in the country is a huge victory for frontline communities that have fought for health protections for years,” Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute, said in a statement.

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    Pricier shipping containers and port delays haven't slowed Vita Coco's growth, co-CEO says

    Vita Coco hasn’t been able to stock grocery shelves fully with its drinks due to supply chain challenges, but co-founder and co-CEO Mike Kirban said that hasn’t stopped the company from growing.
    The company made its public market debut Thursday on the Nasdaq, trading under the symbol “COCO.”
    Shares of Vita Coco fell nearly 4% in afternoon trading.

    Vita Coco hasn’t been able to fully stock grocery fridges with its coconut water for months, but co-founder and co-CEO Mike Kirban said that hasn’t stopped the beverage company from gaining new customers.
    “We haven’t been fully in stock for 18 to 24 months, but at the same time, we’ve grown our business substantially,” Kirban said in an interview. “Not only are we able to keep up, we’re able to accelerate growth even with empty shelves out there.”

    In the six months ended June 30, the company’s net sales climbed 15.2% to $177.3 million.
    Like many businesses, Vita Coco has been dealing with supply chain challenges caused by the pandemic, like higher costs for shipping containers and delays at ports. But Kirban said the company is unique because of the long-term contracts it struck with coconut manufacturers who agreed to sell coconut water, a byproduct of their production processes, to Vita Coco. As a result, it hasn’t paid more for the key ingredient, even as beverage giants like Coca-Cola and PepsiCo hike their prices to deal with higher commodity costs.
    Vita Coco’s strong supply chain helped the company beat Coke and Pepsi when the two companies tried to enter the coconut water market more than a decade ago, according to Kirban.
    The beverage company made its public market debut Thursday, trading on the Nasdaq under the symbol “COCO.” Its initial public offering was priced at $15 a share, below its targeted range of $18 to $21 per share. The IPO raised $173 million for the company, giving it an implied valuation of more than $830 million. Vita Coco’s stock opened at $15.37 per share but fell in afternoon trading by nearly 4%, trading at $14.42 per share.
    Founded in 2004, Vita Coco started as a coconut water brand but has expanded into other beverage categories, like energy drinks and water. Still, coconut water accounted for 84% of its sales last year. The company positions itself as an upstart with a healthier portfolio than Coke and Pepsi. In 2020, Vita Coco’s net sales rose 9.4% to $310.6 million. The company reported net income of $32.7 million, up from the prior year’s net income of $9.4 million.

    Kirban said that the company’s primary focus is growing coconut water sales, but Vita Coco is also expanding its smaller brands, like Ever & Ever water, and considering acquisitions that would make sense for the company’s portfolio.
    Other food and beverage companies that have gone public this year have seen their stocks struggle after successful market debuts. For example, shares of Oatly, which makes oat-based dairy alternatives, have tumbled 29% since its IPO in May.

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    Here's how Crocs avoided some of the pain of shipping delays and factory closures

    A snarled global supply chain is hurting retailers, from shoe brands to department store chains, and threating their performance this holiday season.
    But Crocs says it has created a playbook to manage through the crisis with mitigated impact.
    Chief Executive Andrew Rees told analysts on an earnings call that the retailer’s clog shoes are easy to make and so the company faces fewer hurdles in shifting production around.

    A snarled global supply chain is hurting retailers, from shoe brands to department store chains, and threatening their performance this holiday season.
    But Crocs says it has created a playbook to manage through the crisis with mitigated impact. On Thursday, the company’s fiscal third-quarter earnings and sales smashed Wall Street estimates, and Crocs hiked its full-year revenue outlook. The news sent Crocs shares soaring; the stock was recently up about 7%.

    Chief Executive Andrew Rees explained on an earnings call a key advantage is the fact that the retailer’s clog shoes are easy to make and so the company faces fewer hurdles in shifting production around when needed.
    “Our shoes are really simple, and so [swapping] factories can be very, very quick,” Rees explained. “The classic clog has three components, two of which are made on site, so you don’t have a lot of external logistics to be able to get started. We think we’re competent in terms of rapid manufacturing.”
    Crocs was quick to begin diversifying its manufacturing overseas, especially with facilities in Vietnam facing prolonged shutdowns due to pandemic lockdowns in the region. In the short term, the company said it has moved some production back to China and Bosnia. It’s also ramping up production in Indonesia, and it has a facility in India expected to be online by next year.
    Vietnam has traditionally represented a significant chunk of Crocs’ manufacturing base. It was expected to account for about 70% of production by the end of this year, the company said, but will be less due to Crocs’ diversification efforts.
    As of this week, most of the retailer’s factories in Vietnam are operational again, according to Rees. Workers are coming back to plants “pretty effectively,” he added. But Rees said Crocs is still cautiously planning for an “on again, off again” situation in the region.

    Meantime, to avoid massive logjams at West Coast ports, the company said it has been building a larger presence along the East Coast to reach its customers in the United States. Crocs has also been using air freight instead of cargo transportation to move orders in preparation for spring and summer of next year.
    “We will prioritize our most important channels,” Rees said.
    Crocs is anticipating some inflation next year, primarily from heightened freight and wage costs, it said. The retailer has already slightly increased the prices of some of its clog shoes. Pulling back on promotions has also helped to balance out inflationary pressures.
    “We’re proactively looking at other measures and things that we can do to kind of offset any inflationary pressures,” Chief Financial Officer Anne Mehlman told analysts.
    Crocs shares have soared more than 140% year to date. The company has a market cap of $9.3 billion.

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