Raphael Stevens

In this articleDKNGShares of sports-betting firm DraftKings fell Tuesday after Hindenburg Research announced it had taken a short position against the stock.The stock, which has been one of the best performers on Wall Street since going public through a merger with a special purpose acquisition company last year, closed 4.2% lower at $48.51 on Tuesday.In the report, Hindenburg compares DraftKings’ valuation to that of rival firms and questions the company’s promotional spend and future potential in the highly competitive sports-gambling landscape.The report also alleges that SBTech, a European technology company that merged with DraftKings as part of the SPAC deal, generates significant revenue from questionable gambling practices in overseas markets, particularly in some Asian markets.DraftKings said in a statement that it was comfortable with SBTech’s business history.”This report is written by someone who is short on DraftKings stock with an incentive to drive down the share price,” DraftKings said. “Our business combination with SBTech was completed in 2020. We conducted a thorough review of their business practices and we were comfortable with the findings. We do not comment on speculation or allegations made by former SBTech employees.”Hindenburg is a relatively new short selling firm that has made several high profile calls against SPACs over the past year.The firm took out short positions against clean-energy vehicle startups Nikola and Lordstown Motors, which have suffered from executive turnover and falling stock prices since Hindenburg’s reports.Hindenburg also published a negative report against Clover Health in February but did not take a position. The stock fell in the months following that move but rebounded in early June amid increased interest from retail traders on Reddit.DraftKings and Diamond Eagle Acquisition Corp. first announced their merger deal in December 2019 and completed the combination in April 2020. As of Monday’s close, the stock had jumped more than 150% since the deal was finalized and roughly 400% since the deal was announced.Sports betting companies have boomed since the Supreme Court cleared the way for widespread legalization in 2018. The stocks got an extra boost during the pandemic, as some states appeared to accelerate their adoption of sports and online gambling to help shore up budgets amid the recession caused by the pandemic.Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today. More

In this articleRIDEThe Lordstown Motors Corp. Endurance electric pickup truck sits on stage during an unveiling event in Lordstown, Ohio, U.S., on Thursday, June 25, 2020.Matthew Hatcher | Bloomberg | Getty ImagesEmbattled electric truck company Lordstown Motors has enough funding to operate through May 2022 and remains on track to begin limited production of its Endurance pickup in late September following an executive shake-up that ousted the start-up’s CEO and chairman, executives said Tuesday.The company’s new chairwoman, Angela Strand, called it a “new day” for the aspiring automaker, which raised bankruptcy concerns after warning investors last week that it had “substantial doubt” about its ability to continue as a going concern in the next year.Shares of Lordstown Motors soared Tuesday afternoon by as much as 15% before leveling off at about $10 a share, up 8%. The company’s stock price has roughly been cut in half this year, including an 18.8% decline on Monday.”It’s a new day at Lordstown and there are no disruptions, and there will be no disruptions, to our day-to-day operations,” Strand said during a webcast for the Automotive Press Association. “We remain committed to inspiring, building and maintaining confidence and transparency in our relationships with each other at Lordstown and, very importantly, with our customers, our partners, our suppliers and our shareholders.”The comments come a day after Lordstown’s chairman and CEO, Steve Burns, and CFO Julio Rodriguez resigned from the company after the board released a summary of an internal investigation into claims made by short seller Hindenburg Research that Lordstown misled investors.The company said the internal investigation found Hindenburg’s report “is, in significant respects, false and misleading.” The probe, however, did identify “issues regarding the accuracy of certain statements regarding” Lordstown’s preorders, specifically the seriousness of the orders and who was making them.President Rich Schmidt said the company needs more experienced leadership. And while Lordstown didn’t say the investigation led to Burns’ and Rodriguez’s resignations, he indicated the findings contributed, at least in part, to their abrupt departures. “It was a little bit of both,” he said.Hindenburg accused Lordstown in March of using “fake” orders to raise capital for its Endurance electric pickup. The short seller said the pickup was years away from production, but Lordstown has maintained it’s on track to start making the vehicle in September. The company on Monday said customer deliveries are scheduled to begin in the first quarter of 2022.Lordstown Motors Corp Chief Executive Steve Burns poses with a prototype of the electric vehicle start-up’s Endurance pickup truck, which it will begin building in the second half of 2021, at the company’s plant in Lordstown, Ohio, U.S. June 25, 2020.Lordstown Motors | ReutersThe Securities and Exchange Commission has opened an inquiry looking at Hindenburg’s claims as well as the company’s merger with SPAC DiamondPeak Holdings. Schmidt declined to comment on inquiry.Strand, who was Lordstown’s lead independent director, is overseeing its transition until a permanent CEO is identified, according to the company.Schmidt reconfirmed Lordstown is actively raising additional capital, which the company announced plans to do in May. He also said Lordstown is no longer working with Camping World on EV products and solutions for the RV marketplace, citing a need to focus on the Endurance.”We’re just focused currently on the Endurance truck,” he said. “That’s our next goal for the next three months is to make sure we hit our production targets and stay within our budgets and drive forward to getting the vehicles ready for the market.” More

Billionaire businessman Joe Tsai told CNBC on Tuesday that Asian Americans have wrongly faced violent backlash for various challenges facing the U.S. throughout history.In an interview on “Squawk Box,” the co-founder and executive vice chairman of China-based tech giant Alibaba offered a personal and historic reflection on the spike in racist attacks against Asian Americans during the coronavirus pandemic.”If the economy is well, the Asian Americans play by the rules, prosper together with everybody else, that’s fine,” said Tsai, who owns the NBA’s Brooklyn Nets and the WNBA’s New York Liberty.”But if there’s a crisis — if there’s a pandemic, if there’s a war or if there’s an economic downturn — Asian Americans get scapegoated,” added Tsai, whose parents were from mainland China. He was born in Taiwan and came to the U.S. at age 13 to attend a New Jersey boarding school. He got his undergraduate and law degrees at Yale.Tsai noted the restrictions on Chinese immigration that were put in place in the late 1800s and lasted well into the 20th century, as well as the U.S. forcing more than 100,000 Japanese Americans into internment camps during World War II.He also recalled the killing of Vincent Chin in 1982, which came as Japanese carmakers were expanding operations in the U.S. Chin, who was Chinese American, was attacked in Detroit by two white autoworkers, who blamed Japan for the problems the U.S. auto industry was experiencing.”There’s a lot of that undertone of anti-Asian sentiment. When things are good, that’s fine. When things are bad for everyone, that’s when those ugly” anti-Asian attitudes surface, Tsai said.The recent increase in hate crimes against Asian Americans and Pacific Islanders prompted action by U.S. lawmakers. In May, President Joe Biden signed into law a bipartisan bill that gives law enforcement additional tools to improve reporting and investigations of such incidents.”Everybody thinks Covid came from China, and as a Chinese person, I felt it personally,” Tsai said. “There was a period of time when every day you wake up, you see a new report of an anti-Asian hate crime,” he added.Tsai is on the board of the recently created Asian American Foundation, which launched this year with the goal of supporting Asian Americans and Pacific Islanders through a broad range of philanthropic pursuits. Yahoo co-founder Jerry Yang, KKR co-President Joseph Bae and Himalaya Capital founder Li Lu also are on the board.Most immediately, Tsai said, the group wants to begin addressing the lack of foundation and corporate giving that goes specifically to Asian American and Pacific Islander causes. Last month, the Asian American Foundation announced it already received more than $1 billion in commitments.”Not all that money is going to come … to the foundation,” Tsai said. “Most of that money will be spent on other Asian-American organizations that are doing great work in anti-hate, in getting people to go out and vote, and all the great work that they’re doing.”In Tuesday’s CNBC interview from inside the Barclays Center, Tsai also addressed recent questions about fellow Alibaba co-founder Jack Ma’s retreat from public life. “He’s lying low right now. I talk to him every day,” said Tsai, who added that Ma is focusing on hobbies and philanthropy. Ma has had a rocky year with the Chinese government. More

Trevor Bauer #27 of the Los Angeles Dodgers pitches against the San Francisco Giants in the first inning at Oracle Park on May 21, 2021 in San Francisco, California.Thearon W. Henderson | Getty Images Sport | Getty ImagesMajor League Baseball said Tuesday it will enforce new guidelines around pitchers using foreign substances on baseballs during games beginning June 21.The league office announced that it will empower umpires to check pitchers regularly for banned substances, even if clubs don’t request searches. Relief pitchers will be searched for foreign substances after the inning they pitched or when they’re removed from games.In addition, MLB said umpires will be urged to check pitchers when they notice “the baseball has an unusually sticky feel to it, or when the umpire observes a pitcher going to his glove, hat, belt, or any other part of his uniform or body to retrieve or apply what may be a foreign substance.”Players caught cheating will be ejected from the contest and suspended with pay for up to 10 games.MLB investigated complaints from players, collected data, and tested balls used by all 30 clubs in the first two months of the season. It determined “there is a prevalence of foreign substance use by pitchers” throughout MLB and the Minor League level.The league added third-party research revealed impacted baseballs have better spin rates and movement that provides pitchers with an “unfair competitive advantage over hitters and pitchers who do not use foreign substances, and results in less action on the field.”Pitchers have dominated this season. There have already been six no-hitters thrown, which could break the record of eight no-hitters set in 1884. Pitchers are also holding hitters to league-low batting averages not seen since 1968. After more than 1,900 games this season, MLB hitters have a combined .238 average. In a statement, MLB Commissioner Rob Manfred acknowledged “the history of foreign substances being used on the ball, but what we are seeing today is objectively far different, with much tackier substances being used more frequently than ever before.”MLB Commissioner Rob ManfredSteven Ferdman | Getty Images”It has become clear that the use of foreign substance has generally morphed from trying to get a better grip on the ball into something else — an unfair competitive advantage that is creating a lack of action and an uneven playing field,” he added. “This is not about any individual player or club, or placing blame, it is about a collective shift that has changed the game and needs to be addressed. We have a responsibility to our fans and the generational talent competing on the field to eliminate these substances and improve the game.”Game umpires will also examine catchers and positional players if they “observe conduct consistent with the use of a foreign substance by the pitcher.” If players refuse umpire checks, they will be ejected from games and suspended.Teams are responsible for educating players on the rules. Club personnel may be placed on MLB’s ineligible list if they’re caught encouraging or aiding players using sticky substances.If players are suspended for the on-field violations, clubs won’t be eligible to replace the roster spot, the league said. MLB notified the players union of the new guidelines and could make further changes to penalties in the future. “Major League Umpires stand in support of this initiative to eliminate the use of foreign substances in the game,” said Bill Miller, president of the Major League Umpires Association, in a statement. “The integrity of the competition is of utmost importance to us. We have worked diligently with MLB to develop an enforcement system that will treat all players and Clubs equally.”Read MLB’s complete enforcement plan here. More

In this articleDISStill from Disney’s latest Pixar film “Luca.”DisneyAlong the crisp white beaches and cerulean waters of the Italian Riviera, an unlikely friendship grows between two young sea monsters disguised as humans.That’s the premise of Pixar’s latest feature-length film, “Luca,” which debuts Friday on Disney+.Since 1995, Pixar has released 23 other titles, setting the standard for animated movies. Its films have earned nearly two dozen Academy Awards, including 10 for best picture, and tallied more than $14.5 billion at the global box office.”It’s difficult to imagine [it’s been] 26 years since Pixar first opened its animated toy box to the world,” said Paul Dergarabedian, senior media analyst at Comscore. “From the first ‘Toy Story’ movie to ‘Luca,’ Pixar has left an indelible creative mark on the art of animation, built a reputation for storytelling brilliance, and in the process, has generated a global box office fortune.”Over the course of nearly three decades, Pixar has fundamentally changed the animation industry. It released the first completely computer-generated feature-length film in 1995 and revolutionized how animated movies were made. Its stories were designed to entertain children and adults alike.Disney acquired the studio in 2006, funneling millions into the brand’s coffers to produce and release more films. Pixar became the darling of the Disney company, revitalizing its animation pipeline, which had stalled at the box office.But, nearly two decades later, Pixar animators are reported to be questioning their role in the ever-expanding Walt Disney Company. They may not need to worry, analysts said. Animated films have had a strong track record at the global box office, which should persuade studios to continue to release these features on the big screen.The coronavirus pandemic fast-tracked streaming ambitions for studios, altering how certain films arrive on the market. Disney sidestepped movie theaters in December to release Pixar’s “Soul” on Disney+ for free, a move that staffers at its prestigious animation branch hoped would be a one-off.However, in March, the company said its upcoming “Luca” would skip theaters and head straight to streaming as well. Once again, Disney didn’t place the $30 premiere access price tag on the film —something it had done for the release of “Mulan” and “Raya and the Last Dragon” as well as part of the theatrical release of “Cruella” and the upcoming “Black Widow.”The strategy for “Luca” was crafted when studios were very concerned about theatrical exhibition. It’s only in the last month that the box office has shown signs of revival. The push also comes as Disney has reorganized its media and entertainment divisions to focus more heavily on digital offerings.Disney+ was always going to be home to television series based on Pixar and Disney Animation properties such as “Monsters Inc.” and “Big Hero Six.” The strategy has been employed for both its Star Wars and Marvel franchises, too.For the most part, studios have held off on releasing animated films until movie theaters have reopened. Universal-owned animation studio Illumination, for example, delayed “Minions: The Rise of Gru” until 2022 to ensure it could be released to as many theaters as possible. After all, animated features can bring in hundreds of millions of dollars at the global box office and even break the $1 billion mark.”I would think a lot of people involved in feature film development are not happy about the direct-to-streaming approach,” said Eric Handler, media and entertainment analyst at MKM Partners. “If your compensation structure is dependent upon the financial success of a film, then cutting out the first, and largest, window likely means lower profit. In addition, how do you define profit for a film which is part of a subscription driven platform?”Representatives for Disney did not respond to CNBC’s request for comment.The big screen vs. the living roomIn recent years, streaming players such as Netflix have looked toward animation as a way to lure new subscribers, particularly parents of young children. That could change the dynamic a bit as streaming services look to keep subscribers satisfied.While Disney was forced to place “Soul” and “Luca” on Disney+ due to the pandemic, these films could easily have made hundreds of millions of dollars at the box office for the company. Disney diverted these films to its streaming platform predominantly because the coronavirus outbreak interrupted the development pipeline and it needed fresh content for its digital consumers.”Throughout the pandemic, the major media conglomerates have prioritized their streaming platforms as the key (top priority) growth driver of the future,” said Handler, explaining the films became a tool to accelerate subscriber growth.Tina Fey and Jamie Foxx voice characters in Disney Pixar’s “Soul.”DisneyDisney+ has certainly benefited from this. In May, the company said it had 103.6 million paid subscribers at the end of its fiscal second quarter. This was a feather in Disney’s cap, considering the platform had only launched 16 months earlier. The company expects to see between 230 million and 260 million subscribers on Disney+ by 2024.Still, the sizable budgets for films such as “Soul” and “Luca” mean this digital release strategy isn’t sustainable. While shows such as “WandaVision,” “Loki” and “Monsters at Work” were budgeted to debut on streaming, these Pixar features were created with the expectation that they would hit the big screen first.”Given that not all theaters are open yet, capacity restrictions are still in place and not all age demographics are comfortable returning to theaters just yet, studios have to be flexible with their films — especially given there are not many theatrical release slots available to push out films into 2022 anymore,” said Eric Wold, senior analyst at B. Riley Securities.As global markets continue to reopen and seating restrictions loosen, there is an expectation that attendance will return to normal levels. Handler and Wold foresee Pixar releases returning to theaters, as well.’To infinity and beyond’When it comes to the box office, Pixar has become one of the most consistent studios in the industry.Since its first film, “Toy Story,” was released in 1995, its films have averaged $650 million at the global box office and four of its films have garnered more than $1 billion in ticket sales.And the critical reception for its films has been equally consistent.The animation company has long been lauded for its heartwarming, and sometimes heartbreaking, storytelling. Its films feature complex characters and rich universes. The studio has answered timeless questions that inhabit children’s minds, such as: What happens to your toys when you leave the room? What if the monsters in your closet weren’t all bad? Where do our emotions come from?Only seven of its 23 releases have earned less than a 90% score on Rotten Tomatoes, and only one film, “Cars 2,” is considered “rotten” on the site, with a score of less than 60%.”The emergence of Pixar on the Hollywood scene was an inflection point if there’s ever been one,” said Shawn Robbins, chief analyst at Boxoffice.com. “Not only did ‘Toy Story’ and those early films shepherd a new era focused on [computer-generated] animation, effectively retiring the traditional style, they proved that Disney’s in-house animators weren’t the only creative teams capable of making timeless animated classics.”In fact, Pixar’s early success from films such as “Toy Story,” “Monsters Inc.,” “Finding Nemo” and “The Incredibles,” which were co-produced with funding and distribution from Disney, led then-CEO Bob Iger to purchase the company for $7.4 billion in 2006.Tim Allen and Tom Hanks voice Buzz Lightyear and Sheriff Woody in Pixar’s “Toy Story.”DisneyPixar’s use of computer animation changed the game. This new method of filmmaking essentially bypassed the need for hundreds of illustrators and significantly cut down the amount of time it took to make an animated film.”It took hundreds and hundreds of people — highly trained people — to make one piece,” said Frank Gladstone, executive director of ASIFA, an international animation film association. “In the traditional way of drawing and making the painting and photographing and all that, it took a long time and it took a lot of people. There were other animated features, but for all intents and purposes for the big markets, it was Disney.”In the decades before the release of “Toy Story,” the box office saw only a handful of animated film releases each year, and the dominant distributor of those films was Disney. Now, there are dozens of animated films from a number of different studios every year.And as more content flooded the market, the Academy of Motion Picture Arts and Sciences took notice. It added a category to its annual Oscar ceremony just for animated features. Alongside the prestige came massive box-office gains, inspiring studios to continue to invest heavily in these projects.In the years leading up to Pixar’s entrance into the industry, animated movies were averaging only around $250 million to $350 million in ticket sales globally. Since 1995, nine animated features have surpassed $1 billion at the global box office and the average box-office haul is around $740 million worldwide.This box-office success is hard for studios to ignore and is one reason that analysts are convinced animated films will continue to debut on the big screen.”It has been clear that most of the studios have been using some key titles to launch their streaming platforms — and that is likely to no longer be a priority heading into 2022 and beyond,” Wold said.Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Illumination, Dreamworks and Rotten Tomatoes. More

In this articleAMZNURBNEXPRPASADENA, CA – MAY 22: Exterior view of Urban Outfitters signage is seen on May 22, 2021 in Pasadena, California. (Photo by RBL/Bauer-Griffin/GC Images)RBL/Bauer-Griffin | GC Images | Getty ImagesRetailers including Express, Urban Outfitters and J. Crew are trying to better compete with Amazon by offering products from third-party sellers on their websites.The move is an attempt to capture shoppers as they browse the internet, according to a report in The Wall Street Journal. The retailers are planning to offer a wider range of products to increase the chances that shoppers can find what they are looking for on their websites and boost sales. However, the retailers plan to stick with products that are more similar to their own offerings, not create a marketplace like Amazon.Still, Express told the Wall Street Journal it has been able to expand into new categories like beauty, activewear and men’s grooming.”We established Express Marketplace as a way for our customers to discover and shop new brands that complement our existing assortment,” Tim Baxter, CEO of Express, said to CNBC in a statement. “Express Marketplace keeps us focused on our strengths, lets us test and learn our way into new categories, and broadens our overall assortment in an interesting and relevant way.”The retailers receive a cut of each transaction made, although the size of that percentage is not known, according to the Journal.Despite appearing on the retailers’ websites, the products are sold and shipped by other sellers, according to the paper.Retail giants like Amazon, Walmart and Target have been utilizing third-party sellers for years. The model has generated increased revenue for Amazon — which launched its marketplace more than 20 years ago — and given sellers increased exposure.About 60% of sales on Amazon are from third-party sellers, CEO Jeff Bezos said in his last letter to investors.J. Crew declined to comment on this story. Urban Outfitters did not immediately respond to a request for comment by CNBC. More

In this articleBBYA view of a Best Buy retail store on August 29, 2019 in San Bruno, California.Justin Sullivan | Getty ImagesBest Buy is starting to sell luggage and outdoor grills, as it tries to take advantage of the rebounding travel industry and the popularity of investing in the home.The consumer electronics retailer said Tuesday that shoppers can now find Tumi suitcases, Weber grills and other outdoor items, from patio furniture to heaters, on its website and in select stores — along with its usual mix of laptops, videogame consoles and other gadgets. Some of those items are geared toward tech purchases, such as laptop bags and a new esports collection from Tumi that can carry gaming gear.With the move, Best Buy joins other retailers breaking into new categories and expanding the online assortment to capture more of consumers’ attention and dollars. Lowe’s has also added adjacent products, such as outdoor toys like trampolines, small appliances like air fryers and exercise equipment. Other retailers, such as Walmart and Target, have used third-party marketplaces as a way to grow e-commerce sales and carry new categories or brands.Best Buy’s online sales in the U.S. rose 144.4% last fiscal year, as Americans bought computer monitors, tablets, kitchen appliances and other tools to work, learn and cook at home. The company got a lift from stimulus spending in the first quarter and raised its forecast for the first half of the year. However, Chief Financial Officer Matt Bilunas said demand could taper off later in the year as consumers spend on other areas, such as travel.Its online sales growth in the U.S. slowed to 7.6% in the fiscal first quarter compared with the same period last year and reflected the tough year-over-year comparisons the retailer faces in the coming months.With luggage and home-related merchandise, Best Buy is betting that the reopening economy and strength of the real estate market can drive sales. CEO Corie Barry said last month that rising home values inspired customers to buy big-screen TVs and hire the company to set up technology around their house in the first quarter.”Even with the elevated demand we have seen throughout the pandemic, we believe the nesting phenomenon will continue to drive demand for products and services that help customers improve their home experience,” she said on the company’s first-quarter earnings call. More

In this articleGMCruise, a majority-owned subsidiary of General Motors, has secured a new $5 billion line of credit as it prepares for commercialization of its autonomous ride-hailing business.The new credit, announced Tuesday, is being provided by GM’s automotive financing arm to use for the purchase of Cruise’s self-driving Origin shuttles, which GM is expected to begin producing at a factory in Detroit in early 2023. It brings Cruise’s war chest to more than $10 billion, according to Cruise CEO Dan Ammann.”$10 billion. It’s a big number. However, when you think about what we’re building – safer, cleaner, and more accessible transportation for the world – you quickly realize it’s also a necessary number,” Ammann said in a blog post. “This is an incredibly exciting time for Cruise.”Ultimately, GM Finance is providing Cruise credit instead of the company attempting to raise outside capital, which it has done in the past. GM acquired Cruise in 2016. Since then, it has brought on investors such as Honda Motor, SoftBank Vision Fund and, more recently, Walmart and Microsoft.Cruise OriginCruiseThis past month, Cruise said GM began assembly of 100 pre-production Cruise Origin vehicles that will be built this summer for validation testing.The Origin, which was unveiled in January 2020, is the company’s first vehicle specifically designed to operate without a driver on board. It does not have manual controls such as pedals or a steering wheel.The new credit line and pre-production model announcements follow Cruise earlier this month becoming the first autonomous vehicle developer to obtain a permit from the California Public Utilities Commission to give passengers rides in prototype robotaxis.Commercializing autonomous vehicles has been far more challenging than many predicted even a few years ago. The challenges have led to a consolidation in the autonomous vehicle sector after years of enthusiasm touting the technology as the next multitrillion-dollar market for transportation companies.Cruise was expected to launch a ride-hailing service for the public in San Francisco in 2019. The company delayed those plans that year to conduct further testing. It has been operating an employee ride-hailing service with a current fleet of autonomous vehicles in San Francisco for several years.  More