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    Stocks making the biggest moves midday: Roku, Tesla, AMC, AeroVironment and more

    The Tesla logo is seen on a charging station in Virginia, Aug. 16, 2023.
    Celal Gunes | Anadolu Agency | Getty Images

    Check out the companies making the biggest moves midday.
    Roku — Shares popped 2.94% after the streaming company announced it would lay off 10% of its staff, consolidate office space and look to trim other expenses. Roku also boosted its third-quarter revenue guidance to between $835 million and $875 million, versus prior guidance of $815 million.

    Tesla — The electric vehicle maker shed 1.78%, falling along with other major tech-related names. The Wall Street Journal also reported late Tuesday that Tesla CEO Elon Musk borrowed $1 billion from SpaceX the same month he acquired Twitter.
    AMC Entertainment — Shares tumbled 36.8% after AMC said it plans to sell up to 40 million new shares to raise cash. The issuance of additional shares was expected after it converted preferred APE shares into AMC common stock in August.
    Apple — The tech giant dropped nearly 3.58% following a report by the Journal that China banned the use of iPhones and other foreign-branded devices by government officials at work. Bank of America estimates up to a five million to 10 million unit headwind if such a ban went through and was enforced.
    AeroVironment — The maker of unmanned aircrafts soared 20.74% after it reported adjusted earnings per share of $1, well above the 26 cents expected from analysts polled by LSEG, formerly known as Refinitiv. Revenue also beat expectations, coming in at $152 million, versus the $129 million expected.
    NextGen Healthcare — The stock rallied 14.65% after private equity firm Thoma Bravo said it would acquire the health-care software provider for $23.95 per share, 17% higher than where the stock closed Tuesday.

    Enbridge, Dominion Energy — Enbridge’s stock fell 5.89% after Dominion, which slipped 1.8%, said Tuesday it would sell its three natural gas distribution companies to the pipeline operator for $9.4 billion.
    Harley-Davidson — The motorcycle maker gained 3.16% after it authorized the repurchase of up to an additional 10 million shares.
    GitLab — The technology platform stock added about 0.5% on the back of better-than-expected second-quarter results. Adjusted earnings per share came in at 1 cent, versus the 3 cent loss expected from analysts polled by LSEG. Revenue was $140 million, topping the $130 million expected.
    Zscaler — The cloud security stock dropped 2.7% despite beating analysts’ expectations for the fiscal fourth quarter and issuing strong guidance. Zscaler reported adjusted earnings of 64 cents per share, excluding items, on revenue of $455 million. Analysts surveyed by LSEG expected 49 cents in earnings per share and $430 million in revenue. The company also said current-quarter and full-year earnings and revenue should beat Wall Street’s respective consensus estimates.
    Asana — Shares fell 13.17% after Asana’s management noted weakness from the technology sector and the disproportionate exposure the company has to pullbacks from companies in the space.
    Dexcom — Shares of the medical device company, which focuses on continuous glucose monitoring, rose 6.53% after Dexcom revealed data in an investor presentation Tuesday that CGM adoption increased after patients initiated GLP-1 obesity drugs. The stock has been under pressure this year due to the attention being paid to the weight-loss drugs.
    Southwest Airlines — Shares of Southwest Airlines fell 2.6% after the company narrowed its unit revenue outlook for the current quarter. The air carrier said it expects revenue to fall between 5% and 7% for the quarter ending Sept. 30, compared to the same period a year ago. In July, Southwest said revenue could drop as little as 3% this quarter from last year.
    — CNBC’s Tanaya Macheel, Alex Harring and Michael Bloom contributed reporting. More

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    AMC shares slide more than 30% after theater chain announces plan to sell additional stock

    AMC was widely expected to sell additional shares after the successful conversion of the preferred APE shares into AMC common stock in August.
    AMC said in the filing that it will sell the new shares through “at-the-market” offerings, without a specific time frame.
    Citigroup, Barclays, B. Riley Securities and Goldman Sachs are listed as sales agents in the filing.

    Traders work on the floor of the New York Stock Exchange, Aug. 22, 2022.
    Brendan McDermid | Reuters

    Shares of AMC Entertainment fell sharply on Wednesday after the theater chain said in a filing that it plans to sell up to 40 million new shares to raise cash.
    The stock dropped 36.8%, bringing it to $8.62 per share. On a split-adjusted basis, that is AMC’s lowest close on record, according to FactSet.

    Stock chart icon

    AMC’s stock fell sharply on Wednesday.

    AMC was widely expected to sell additional shares after the successful conversion of the preferred APE shares into AMC common stock in August. It followed the settlement of a lawsuit objecting to the move.
    The theater chain sold millions of shares of common stock in recent years after becoming one of the so-called meme stocks popular with retail traders. The sales helped AMC stabilize itself after the Covid pandemic effectively halted the theatrical movie business.
    However, AMC used up its allotment of stock and needed shareholder approval to issue more. The company issued the preferred APE shares as part of a strategy to change its corporate voting structure and get shareholder approval to sell additional common stock.
    AMC said in the filing Wednesday that it will sell the new shares through “at-the-market” offerings, without a specific time frame. Citigroup, Barclays, B. Riley Securities and Goldman Sachs are listed as sales agents in the filing.
    The U.S. movie business remains below pre-pandemic levels, and the ongoing strikes in Hollywood have clouded the release slate for the rest of 2023 and 2024. AMC and pop star Taylor Swift announced last week that the theater chain is serving as the distributor for a concert movie of The Eras Tour to be released in October. More

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    Roku stock jumps after company says it will lay off 10% of workforce

    Streaming company Roku announced another round of layoffs will affect 10% of its workforce, or 360 people.
    In addition to other cost-cutting measures, the company raised its guidance for its third-quarter revenue and EBITDA.
    The company cut about 200 employees in March and then another 200 employees in November.

    Roku products arranged in Hastings-On-Hudson, New York, July 25, 2023.
    Tiffany Hagler-Geard | Bloomberg | Getty Images

    Roku said it will lay off 10% of its workforce, or about 360 people, as the streaming software company looks to slash expenses.
    In a regulatory filing Wednesday, the company said the cost-cutting measures aim to bring down its year-over-year operating expense growth rate.

    The company added that it expects adjusted third-quarter revenue of between $835 million and $875 million, up from a prior forecast of $815 million. In addition, Roku raised its third-quarter guidance for adjusted EBITDA to a range of negative $40 million to negative $20 million compared to a prior estimate of negative $50 million.
    Shares of the San Jose, California-based company closed about 3% higher Wednesday.
    The layoffs are part of an array of cost-cutting actions the company will take. Other actions include consolidating office space, slowing the pace of new hiring and reducing outside services expenses.
    Roku expects impairment and restructuring charges in the third quarter of up to $330 million, including a range of $160 million to $200 million related to office facilities, and $45 million to $65 million related to the job cuts.
    Moreover, Roku said it expects an impairment charge of $55 million to $65 million related to the removal of select existing licensed and produced content on its TV streaming platform, as part of a “strategic review of its content portfolio.” 

    Roku anticipates the layoffs will be mostly complete by the end of its fiscal fourth quarter. The company had 3,600 full-time workers as of December 2022, according to FactSet.
    This is Roku’s third round of layoffs over the past year as it scales back after a period of investment. The company cut about 200 employees in March and another 200 employees in November.
    On CNBC’s “Squawk on the Street,” Jim Cramer said the layoffs and other cost-cutting measures should help the company pivot toward profitability and attract additional investors. More

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    Comcast, Disney move up deadline to decide Hulu future ownership

    Comcast and Disney have modified their agreement to officially begin the process of deciding Hulu’s future ownership to late September, Comcast CEO Brian Roberts said Wednesday at an investor conference.
    Comcast owns 33% of Hulu after reaching a deal with Disney five years ago that initially was set to run through January 2024.
    The deal set the floor valuation for Hulu at $27.5 billion, which Roberts believes the platform has surpassed since then.

    Rafael Henrique | SOPA Images | LightRocket | Getty Images

    The timeline to decide Hulu’s ownership fate has been moved up, Comcast CEO Brian Roberts said Wednesday.
    Comcast and Disney are set to begin those discussions on Sept. 30, months earlier than the initial January 2024 deadline. The talks will include an appraisal process.

    Under the original 2019 agreement, Comcast can force Disney to buy, or Disney can require Comcast to sell, that remaining 33% stake in January 2024, at a guaranteed minimum total equity value of $27.5 billion.
    “We are excited to get this resolved,” Roberts said Wednesday at Goldman Sachs’ Communacopia and Technology conference. “And the minimum $27.5 billion that people have bandied about, that was a hypothetical that we picked five years ago because Disney has control of the company. The company is way more valuable today than it was then. ”
    Roberts called out Hulu as a great streaming business, second only to industry giant Netflix, which he noted has a market cap of $200 billion. 
    The deal between Disney and Comcast has set up, in essence, the first-ever sale of a streaming service of this magnitude, Roberts said Wednesday. The two companies will each have their own appraiser, and if their valuations are far apart, a third will likely be brought in.
    When valuing Hulu, there’s more to consider than just the streaming app itself, Roberts said. A valuation would include the platform’s content, much of which is supplied by Disney. The parties will also assess that Hulu is sold in a bundle with fellow Disney services Disney+ and ESPN+, lowering the likelihood of so-called churn or consumers who drop their subscriptions. 

    He also noted that synergies could be worth “a couple billion dollars” to a buyer of Hulu.
    “Just that — the synergy and churn benefit, could be worth $30 billion,” Roberts said. 
    “I think, if you were selling all this as is, there would be a line of bidders around the block to buy all the content, all the bundling of Hulu. That business, we’ve never seen,” Roberts said.
    A representative for Disney didn’t immediately respond to a request for comment Wednesday.
    Discussions between the two companies regarding Hulu’s valuation have been ongoing in recent years, CNBC has previously reported.
    Roberts and Disney CEO Bob Iger have faced questions about the future of Hulu for some time now.
    In May, Roberts said at an investor conference that Comcast would likely sell its 33% stake in Hulu to Disney at the beginning of 2024. He suggested the final price for Hulu would likely be higher than that initial valuation.
    As the deadline has neared, Comcast’s NBCUniversal has removed content — including series such as “Saturday Night Live” that appeared the day after airing on traditional TV — from Hulu and put it on its own fledgling streaming platform, Peacock.
    Although Disney+ is the flagship streaming service of the mouse house, Hulu is its adult-oriented content platform known for series such as “Only Murders in the Building.”
    While Iger said on CNBC earlier this year that “everything is on the table” regarding Hulu, he changed his tune shortly after, announcing in May that Hulu content would be added to Disney+. The content crossover is part of Disney’s push toward offering a “one app experience” in the U.S., Iger had said.
    The move to add Hulu content to Disney+ came as Disney focuses on its ad-supported Disney+ option to attract more subscribers and advertising revenue. Iger had called it a “logical progression” for its streaming options that gives more opportunities to advertisers.
    The one-app platform is expected to be rolled out by the end of this year.
    Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. More

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    A higher global oil price will help Russia pay for its war

    The bonanza could not last for ever. After reaching record volumes in recent months, despite Western embargoes, dwindling domestic production and the risks of navigating the Black Sea, Russia’s crude shipments fell to 3m barrels a day (b/d) in August, some 800,000 lower than the April-May average and below pre-war levels. They are likely to remain sub-par. On September 5th Russia said it would extend a “voluntary” 300,000 b/d cut first announced for August to the end of 2023 (the baseline for this reduction is unclear).Sagging exports deprive the Kremlin of treasure just when it wants to replenish its military arsenal. In August federal-tax revenues from crude sales dropped to just $8bn, down from $10bn in July and $13bn in August last year, according to estimates by Viktor Kurilov of Rystad Energy, a consultancy (see chart). The rouble, which was for a long time another symbol of Russian resilience, has crashed to near 100 to the dollar, its cheapest since the invasion. Both slumps have injected urgency into Russia’s efforts to earn more money from every drop of crude it pumps out. Three types of tactics feature in its new playbook.image: The EconomistThe first—chasing higher prices for the fewer barrels it sells—has faced difficulties. Between January and August, the price of Urals, Russia’s main grade of crude, averaged $59 a barrel, down from $83 in the first eight months of last year. In large part this was because of a lower global oil price, which fell from $104 to $81 over the period. But Western embargoes, which make it easier for other buyers, such as China and India, to negotiate probably played a part, too. So did the g7’s “price cap”, which bans Western shippers and insurers from facilitating Russian crude exports unless the fuel is sold below $60 a barrel.More recently, though, the strategy of chasing higher prices has seen some success. Expectations of peaking interest rates in America, as well as production cuts both by Russia and Saudi Arabia, have helped lift the global oil price, which rose above $90 a barrel for the first time this year on September 5th. This benefits Russia, which in recent months has built a “grey” fleet of tankers—often ageing ships owned by obscure intermediaries in the Gulf, Hong Kong or Turkey—and a state-backed insurance system that insulates much of its distribution network from the price cap’s effects. It is also shipping less from the Black Sea and more from its Baltic and far-eastern ports, where breaches of sanctions are harder to detect. Since mid-August Urals has been trading above $70 a barrel.The West is unlikely to push for stricter enforcement of its price cap: it wants to keep Russian oil flowing to avoid supply shortfalls later this year if the global economy rebounds. Therefore gains in the price of Urals look secure, even if it will be difficult to persuade customers to accept smaller discounts relative to the global oil price. India insists that the rising price of Urals has eroded the grade’s competitive edge, especially compared with Gulf crude. This is a little disingenuous. Urals continues to trade at a solid $7 rebate to the cheapest grade of Saudi crude, reckons Kpler, a data firm, although it is a superior blend. India’s obduracy hints that it probably has the upper hand in talks.As Russia sells less crude, it is also trying to sell more of its premium refined oil—its second tactic for keeping proceeds afloat. To do so, it can process more crude through its refineries by mobilising idle capacity, which Kpler estimates at 10% of the total. Analysts reckon it will postpone much of the maintenance scheduled for this month to autumn next year. And it is maximising yields of diesel, a highly profitable product, to the detriment of jet fuel. In August the country exported more such “clean” products than during the same month in any of the past five years.The third way that Russia is trying to compensate for lower crude shipments is by developing new channels to distribute its oil. Exporters are discreetly cranking up piped flows to those European countries that still can, and do, buy Russian oil: namely, the Czech Republic and Hungary. Analysts expect this to continue until 2025, by when the Czech pipeline operator should have capacity to take more crude from a conduit linking it to Italy.Russia is also starting to send more cargoes through the Arctic, which could cut the cost of shipments to China. The route is 30-45% shorter than those departing from the Baltic and Barents seas. Kpler data show an eightfold rise in Russian crude tankers using this path in 2023. Navigating the Arctic is possible only in the summer and early autumn but Russia, betting on global warming, is targeting year-round sailing by 2025. That may come too late to support the war effort. Much of what will decide Russia’s export receipts in the interim—starting with the state of the global economy—remains beyond its control. ■ More

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    Airlines warn about spike in fuel costs, Southwest narrows revenue outlook

    Southwest, Alaska and United reported higher fuel costs this summer.
    Prices have spiked some 30% since early July.
    Airlines are scheduled to report full results in October.

    A bird flies by in the foreground as a Southwest Airlines jet comes in for a landing at McCarran International Airport on May 25, 2020 in Las Vegas, Nevada.
    Ethan Miller | Getty Images

    Major U.S. airlines warned about a spike in jet fuel prices, adding to costs during the busy summer travel season.
    Jet fuel in Chicago, Houston, Los Angeles and New York averaged $3.18 a gallon on Tuesday after the Labor Day holiday weekend, up more than 30% compared with July 5, according to industry group Airlines for America.

    Fuel and labor are airlines’ biggest costs. A spike raises questions about how much of the increase carriers have been able to pass along to customers this summer after fares fell from last year.
    The higher cost forecasts come as Southwest Airlines narrowed its unit revenue outlook for the current quarter. The Dallas-based carrier said it expected unit revenue to fall 5% to 7% from last year in the three months ending Sept. 30. In July, Southwest said revenue could drop as little as 3% this quarter from last year.
    “While August 2023 close-in leisure bookings were on the lower-end of the Company’s expectations, modestly impacted by seasonal trends, overall leisure demand and yields continue to remain healthy,” the carrier said in a securities filing.
    Southwest said that it expects fuel to average $2.70 to $2.80 a gallon this quarter, up from its earlier estimate of up $2.55 to $2.65. It maintained its forecast for capacity to rise 12% from 2022.
    Other carriers warned increased costs could affect their results.

    Alaska Airlines said higher fuel prices will eat into its pretax margin this quarter.
    United Airlines maintained its revenue forecast, but said it expects fuel prices of as much as $3.05 for the quarter, up from its July estimate of no more than $2.80 a gallon.
    Airlines are scheduled to report quarterly results in October. More

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    A record 73 million Americans plan to bet on the NFL this season, survey says

    More than 73 million Americans plan to wager on the NFL season, a nearly 60% increase from last season, according to a survey from the American Gaming Association.
    Fourteen percent plan to place their bets online as betting becomes legal in more states.
    The NFL has embraced sports gambling after initially opposing it, but is still dealing with growing pains as it navigates betting by players and staff.

    Buffalo Bills quarterback Josh Allen (17) runs the ball during the AFC Divisional Round playoff game against the Kansas City Chiefs on January 23rd, 2022 at Arrowhead Stadium in Kansas City, Missouri.
    William Purnell | Icon Sportswire | Getty Images

    As legalized sports gambling expands across the U.S., a record 73.5 million Americans plan to wager on the NFL this season, according to the American Gaming Association’s latest survey on Americans’ betting plans released Wednesday.
    Last year, an estimated 46 million people bet on the NFL in the U.S., according to the AGA.

    The association said its survey found 19% of American adults plan to place a bet online, at a casino or with a bookie this year, up 56% from a year ago. Out of all U.S. adults, 35.1 million people or 14% plan to bet online, while 13.6 million or 5% plan to bet at a physical sportsbook.
    Self-identified NFL fans are expected to place more bets than ever this season, with 37% projected to place a wager. That’s up 42% from last year.
    Sportsbooks anticipate a boon as the first NFL game of the season kicks off Thursday.
    “We expect this to be the most bet NFL season in BetMGM’s history,” Seamus Magee, trading team lead at BetMGM, told CNBC in an email.

    NFL warms on gambling

    The NFL was once a staunch opponent of sports gambling. But the league changed its tune when the Supreme Court in 2018 paved the way for states to legalize sports betting.

    Sports betting is now legal in 34 states and Washington, D.C. In four more states, it’s legal but not yet operational.
    The growth of legal gambling, and the ability for Americans to place wagers on their phones, has brought a flood of users to major players like DraftKings, FanDuel, Caesars and BetMGM. The space has proven crowded for companies, including with the entry of ESPN, but has left leagues with no shortage of business partners.
    In 2021, the NFL signed five-year deals worth an estimated $1 billion combined with DraftKings, FanDuel and Caesars to become the league’s official sportsbook partners.
    Then came sportsbooks at stadiums. The Washington Commanders have a physical sportsbook within their stadium. The Arizona Cardinals, who hosted last year’s Super Bowl, have one just outside their venue, as do the New York Giants and Jets outside of their shared MetLife Stadium.
    NFL owners voted this year to allow sportsbooks to operate on game days in states where sports betting is legal, starting with the coming season.
    Recently, the league struck a deal with Aristocrat to allow NFL-branded slot machines on casino floors across the country. And in another example of the synergies, FanDuel’s latest promotion is offering fans $100 off the NFL’s “Sunday Ticket” just for placing a small wager.
    After changing its stance on gambling, the NFL appears to have found wagering on the game engages longtime fans in new ways, increases loyalty among casual viewers and establishes new revenue streams.

    Gambling poses new challenges

    As the league adapts to the new normal for gambling, it has also experienced growing pains. Player confusion over the league’s betting rules has led to multiple suspensions.
    Over the past two years, at least 10 players have been suspended for violating the NFL’s gambling policy.

    Where the money’s going

    The Kansas City Chiefs are the favorites to win the Super Bowl this year, and bettors are backing them to cover the point spread in the Week 1 opener, according to BetMGM.
    The sportsbook said the most bet on teams to win the Super Bowl also include the Cincinnati Bengals, Philadelphia Eagles, Buffalo Bills and Detroit Lions.
    BetMGM said one bettor placed a $100 bet on the Cardinals to beat the Houston Texans in the Super Bowl in a matchup of two teams expected to finish among the league’s worst this year. If the bettor is right, that gamble would win $1 million.
    At FanDuel, the Eagles receive the most bets to win the Super Bowl at 14%, followed by the Chiefs with 10%.
    Philadelphia quarterback Jalen Hurts is receiving almost a quarter of the bets for MVP. More

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    EU lists Alphabet, Amazon, Meta and three other tech giants as ‘gatekeepers’ under strict competition rules

    The European Commission on Wednesday listed six tech giants — Alphabet, Amazon, Apple, Meta, Microsoft and ByteDance — as gatekeepers under its new Digital Markets Act.
    The Digital Markets Act is a groundbreaking piece of legislation that aims to encourage greater competition in digital markets and ensure greater choice for consumers.
    The rules could lead to some big changes for the platforms of Big Tech companies.

    The logos of Google, Apple, Facebook, Amazon and Microsoft displayed on a mobile phone with an EU flag shown in the background.
    Justin Tallis | AFP via Getty Images

    The European Commission on Wednesday said it designated six tech giants as “gatekeepers” under its new Digital Markets Act — a strict set of rules that could shake up the business models of large digital platforms.
    Amazon, Alphabet, Apple, Microsoft, Meta and ByteDance will have six months to bring their core platform services into compliance with the obligations laid out in the EU’s DMA, the commission, which is the executive arm of the European Union, said in a press release.

    The commission said it deems Amazon, Apple, Alphabet, Meta, Microsoft and China’s ByteDance as “gatekeepers.” The term refers to massive internet platforms which the EU views are restricting access to core platform services, such as online search, advertising, and messaging and communications.
    The bloc also opened five new market investigations into U.S. tech giants Microsoft and Apple, evaluating whether some of the companies’ services should or should not qualify as gatekeepers.
    As part of these probes, the EU will study submissions from Microsoft and Apple. The EU believes that Microsoft’s Bing, Edge and Microsoft Advertising platforms and Apple’s iMessage service meet the bar to be considered gatekeepers. Microsoft and Apple argue otherwise.
    The EU will also investigate whether Apple’s iPadOS, the operating system behind the Cupertino, California, tech giant’s line of iPad tablets, should be pronounced as a gatekeeper, even though the European Commission says it does not meet the criteria.
    The Digital Markets Act is a groundbreaking new EU law that aims to clamp down on anti-competitive practices from big tech players. Smaller internet firms and other businesses have complained of being hurt by these companies’ business practices.

    For instance, the mobile operating systems of Google and Apple — which are the primary mobile OS platforms worldwide — charge a 30% fee for in-app purchases, which companies including Spotify and Epic Games have claimed are too high.
    Apple said it remains “very concerned” about the privacy and data security risks that the Digital Markets Act poses for its users. The company has said that the DMA could lead to weakened security for its iMessage platform — the EU wants Apple to make it easier for iMessage to work with rival messaging services, such as WhatsApp.
    “Our focus will be on how we mitigate these impacts and continue to deliver the very best products and services to our European customers,” an Apple spokesperson said in an emailed statement to CNBC on Wednesday. 
    Notably, the EU also designated ByteDance as a gatekeeper. Its social media platform TikTok has come under greater scrutiny globally, with regulators fearing its growing popularity and its potential for spreading disinformation to a young audience.
    EU lawmakers have also raised concerns about the prospect of influence from Beijing over TikTok, including the possibility that government authorities could use the app to spy on users. More