Finance

Take a look at some of the biggest movers in the premarket:
Signify Health (SGFY) – Signify Health surged 37.5% in premarket trading as a potential bidding war escalates for the home health services provider. Amazon.com (AMZN) and UnitedHealth (UNH) are now said to be among the bidders, according to The Wall Street Journal, which had previously reported that CVS Health (CVS) was eyeing Signify.

Bed Bath & Beyond (BBBY) – Bed Bath & Beyond is sliding another 10.2% in premarket trading after Friday’s more than 40% plunge. That sell-off followed news that investor Ryan Cohen had sold his shares in the housewares retailer. Bloomberg is also reporting that certain suppliers have halted shipments to Bed Bath & Beyond due to unpaid bills.
AMC Entertainment (AMC) – The movie theater chain’s stock plummeted 30.6% in the premarket ahead of the debut of AMC’s so-called “APE” preferred equity units. CEO Adam Aron tweeted a reminder to investors that the total value of their AMC holdings would be a combination of the regular shares plus the new units, which were granted as a special dividend. AMC shares have also been pressured by the financial troubles surrounding Cineworld, the British parent of U.S. movie theater chain Regal Cinemas.
Ford (F) – Ford lost 2.8% in the premarket following a Friday jury ruling assessing a $1.7 billion verdict against the automaker. The case involved a fatal crash that centered on the roof strength in older model Super Duty pickup trucks.
Occidental Petroleum (OXY) – Occidental Petroleum gave back 1.4% in premarket action following a nearly 10% gain Friday. That followed news that Warren Buffett’s Berkshire Hathaway (BRK.B) had received permission from regulators to buy up to 50% of the energy producer. Berkshire is already Occidental’s largest shareholder.
Tesla (TSLA) – Tesla CEO Elon Musk said the price of the company’s Full Self Driving software would rise by $3,000 to $15,000 next month, following the wide release of an updated version of the software. Tesla shares fell 2.1% in the premarket.

Netflix (NFLX) – Netflix fell 2.4% in premarket trading after CFRA downgraded the stock to “sell” from “hold.” The firm said Netflix is likely to underperform the S&P 500 after surging 40% from its mid-July lows.
VF Corp. (VFC) – VF was downgraded to “market perform” from “outperform” at Cowen, which cited uncertainty about VF’s upbeat guidance for its Vans footwear and apparel brand. VF slid 2.6% in premarket action.
DocuSign (DOCU) – The electronic signature company was downgraded to “sector perform” from “outperform” at RBC Capital. RBC sees a long path to a turnaround amid execution issues and the current absence of a permanent CEO, among other issues. DocuSign fell 4.5% in premarket trading.

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In a research note dated Sunday, the U.S. banking giant updated its forecasts for the consumer price index and retail price index to 18% and 21%, respectively, in the first quarter of 2023.
Energy regulator Ofgem will this week announce the scale of the next price cap increase from Oct. 1, and Citi expects a rise to £3,717 per year ($4,389) from the current £1,971 for an average household.

Citigroup said it had identified the cause of the flash crash and corrected the error “within minutes.”
Jim Dyson | Getty Images News | Getty Images

LONDON — U.K. inflation is on course to exceed 18% in January as the country’s energy price cap enters the stratosphere, Citi economists are projecting.
In a research note dated Sunday, the U.S. banking giant updated its forecasts for the consumer price index and retail price index to 18% and 21%, respectively, in the first quarter of 2023. This is based on the assumption of a £300 policy offset applied to household energy bills from October through to 2024.

Energy regulator Ofgem will this week announce the scale of the next price cap increase from Oct. 1, and Citi expects a rise to £3,717 per year ($4,389) from the current £1,971 for an average household. The price cap essentially limits the amount a supplier can charge for their tariffs, but this limit has surged higher recently due to the rise in wholesale prices — meaning Brits have seen bills skyrocket.
Market research firm Cornwall Insight recently predicted that the cap would rise to £4,266 in January, while consultancy firm Auxilione forecast last week that it would exceed £6,000 by the spring.
Benjamin Nabarro, senior associate in the global strategy and macro group at Citi, said guidance on future increases would be the most notable aspect of this week’s announcement.

“We expect further increases to £4,567 in January and then £5,816 in April. The risks here remain skewed to the upside,” Nabarro said.
The key question now is how government policy might impact both inflation and the real economy after a new prime minister takes office on Sept. 5. Comments so far from Conservative leadership favorite Liz Truss point to only a “limited offset” for headline inflation, he suggested.
“We already account for a £300 reduction in bills associated with the suspension of the Green Levy and a cut to VAT on household energy bills,” Nabarro said.
“However, in reality any government response to this is likely to involve substantially more fiscal firepower (around £40bn in our view). Offsetting the energy increase in full would cost around £30bn for the coming six months (1.4% GDP).”

The issue for inflation, he added, is that any fiscal space deployed is likely to be squeezed between weaker medium-term forecasts and the new government’s desire to cut taxes, meaning disinflationary measures are “likely somewhat further down the pecking order.”
The Bank of England earlier this month hiked interest rates by 50 basis points, its largest single increase since 1995, and projected the U.K.’s longest recession since the global financial crisis. It also forecast that inflation would peak at 13.3% in October.
Citi now expects a further 125 basis points of monetary tightening at the coming three meetings of the Bank’s Monetary Policy Committee. U.K. inflation hit 10.1% annually in July and is increasingly expected to exceed the MPC’s latest projections.
“Even with the economy softening, last week’s data re-affirmed the continued risk of pass-through from headline inflation into wage and domestic price setting could accelerate,” Nabarro said.
“With inflation now set to peak substantially higher than the 13% forecast in August, we expect the MPC will conclude the risks surrounding more persistent inflation have intensified.”
This would mean taking rates into restrictive territory quickly, and Citi anticipates that should signs of more embedded inflation emerge, a benchmark lending rate of between 6% and 7% will be necessary to get inflation under control. The current bank rate is 1.75%.
“For now though, we continue to think evidence for such effects are limited – with increases inunemployment still more likely to allow the MPC to pause around the turn of the year,” Nabarro added.

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FTX saw explosive growth last year driven by its global trading business, according to audited financials seen by CNBC.
The exchange took revenue from below $90 million in 2020 to more than $1 billion last year as cryptocurrencies hit an all-time high. The U.S. business was only a blip on the top line, accounting for less than 5% of revenue.
CEO Sam Bankman-Fried’s empire expanded as FTX bought start-ups across Switzerland and Australia.

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug 17, 2022.
Jeenah Moon | Bloomberg | Getty Images

FTX rode the crypto craze to a billion dollars in revenue last year while expanding its global footprint through a flurry of acquisitions, according to internal documents seen by CNBC.
The audited financials give a rare glimpse into the privately held company’s finances. FTX was profitable, quickly expanding across the globe and saw breakneck growth.

The crypto exchange’s revenue soared more than 1,000% from $89 million to $1.02 billion in 2021. Its profitability, like many start-ups, depends on how you measure it. Operating income was $272 million, up from $14 million a year earlier. FTX saw net income of $388 million last year, up from just $17 million a year earlier.
FTX declined to comment on the leaked financial documents.
The company brought in $270 million in revenue in the first quarter of 2022, and was on track to do roughly $1.1 billion in revenue in 2022, according to an investor deck shared with CNBC. But it’s unclear how FTX held up in the second quarter as crypto prices plunged during the recent so-called “Crypto Winter.”
By way of comparison, publicly traded Coinbase also experienced a cash boom during crypto’s bull market, with $7.4 billion in revenue and $3.6 billion of net income last year. But in the second quarter of this year, it reported $808.3 million in revenue, a decline of 64% from the year-ago quarter, and a surprise net loss of $1.1 billion, compared with $1.59 billion in net income a year earlier, as retail trading volumes cratered.
FTX was founded three years ago by former Wall Street quant trader Sam Bankman-Fried. The 30-year-old CEO has recently stepped in as the industry’s lender of last resort, looking to backstop companies as liquidity dried up. On top of multiple loans of hundreds of millions of dollars, Bankman-Fried’s companies also looked to acquire distressed assets. In July, FTX signed a deal that gives it the option to buy lender BlockFi and was in discussions to acquire South Korean Bithumb. FTX also offered to buy Voyager in August but was turned down for what the company claimed was a “low ball bid.”

FTX had roughly $2.5 billion in cash at the end of last year and 27% profit margins, according to the documents. Margins were closer to 50% if advertising and “related party” expenses are stripped out. It last raised money in January, collecting $400 million from investors like SoftBank’s Vision Fund 2 and Tiger Global, at a $32 billion valuation.

Global footprint

FTX was founded at a time when Coinbase and Binance had solidified themselves as the world’s largest trading venues. Coinbase still operates largely within the U.S. Binance, the largest exchange by trading volume got its start in China, later moved its headquarters to the Cayman Islands and is now making a push for the U.S. market with an American subsidiary.
FTX has been quietly building its own fleet of global subsidiaries to compete.
FTX Trading Ltd. is headquartered in Antigua, with FTX Derivatives Markets based in the Bahamas, where Bankman-Fried lives. FTX Trading recently bought Digital Assets DA AG, out of Switzerland, as well as IFS Group and Hive out of Australia – bringing the total to 15 smaller companies across the world. Its portfolio companies span Cyprus, Germany, Gibraltar, Singapore, Turkey and the United Arab Emirates, among other countries, according to the documents. Crypto companies often acquire start-ups to quickly get the proper regulatory licenses to set up shop in a new country.
Bankman-Fried also founded trading firm Alameda Research, which accounts for about 6% of FTX’s exchange volumes, according to the documents.
FTX’s U.S. business is technically owned by a parent company, West Realm Shires Inc. As of 2021, FTX U.S. made up less than 5% of FTX’s total revenue. Still, the company is making a push to expand in the U.S. with a series of high-profile ads and sponsorships.
FTX spent roughly 15% of revenue on advertising and marketing in 2021, according to the documents. That may account for its 2022 Super Bowl ad with actor Larry David and high-profile celebrity endorsements by Tom Brady and Giselle Bündchen, who are also equity investors in the company. FTX also bought the naming rights to Miami’s NBA arena, formerly the American Airlines Arena. FTX planned to spend an estimated $900 million in advertising in the coming years, according to the documents.
The crypto exchange is also expanding into stock trading. It launched equities trading weeks after Bankman-Fried took a 7.6% passive stake in Robinhood, fueling speculation that FTX is looking to buy the trading app in a landgrab for U.S. retail accounts. Robinhood and Bankman-Fried have denied that a deal is in the works.
FTX has certainly ramped up its retail expansion efforts. But the documents show that it’s still mainly a venue for more sophisticated traders using derivatives – either futures, or options. About two-thirds of revenue came from futures trading fees, while roughly 16% came from so-called spot trading. Futures and derivatives trades tend to be more lucrative for exchanges.

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Warren Buffett at press conference during the Berkshire Hathaway Shareholders Meeting, April 30, 2022.

Warren Buffett’s Berkshire Hathaway on Friday received regulatory approval to purchase up to 50% of oil giant Occidental Petroleum.
Shares of Occidental jumped10% on the news to close at $71.29 apiece, pushing their 2022 gains to more than 145%.

On July 11, Berkshire filed an application with the Federal Energy Regulatory Commission to buy more of the oil company’s common stock in secondary market transactions. The conglomerate argued that a maximum 50% stake wouldn’t hurt competition or diminish regulatory authority.
Carlos Clay, acting director of division of electric power regulation, granted the permission Friday, saying authorization was “consistent with the public interest.”
The conglomerate has already increased its Occidental stake drastically this year. Berkshire currently owns 188.5 million shares of Occidental, equal to a 20.2% position. It surpassed a key threshold where Berkshire could record some of the oil company’s earnings with its own, potentially adding billions of dollars in profit.

Berkshire also owns $10 billion of Occidental preferred stock, and has warrants to buy another 83.9 million common shares for $5 billion, or $59.62 each. The warrants were obtained as part of the company’s 2019 deal that helped finance Occidental’s purchase of Anadarko. The stake would rise to nearly 27% if Berkshire exercises those warrants.
Acquiring the whole company?
Friday’s news fueled speculation that Buffett will be interested in acquiring the whole company eventually after ramping up his stake at low prices.

“He will likely continue to buy as much as he can get below $70 or $75. If you own 30% or 40% and would like to buy it out at $95 or $100, you saved a lot of money,” said Cole Smead, president of Smead Capital Management and a Berkshire shareholder. “This stock trades like a casino. The market is giving him all the stock he wants.”
David Kass, a finance professor at the University of Maryland’s Robert H. Smith School of Business, said an acquisition down the road is likely.
“I think it is likely that Buffett will buy the whole thing eventually. The 50% limit may have been set to receive FERC approval for a non-controlling stake,” Kass said. “He clearly plans to purchase additional shares. So far his maximum purchase price has been $60.37 per share.”
Some speculated that Berkshire and Occidental had been in communication about the potential move to increase the stake to up to 50%.
“He has always said he would only do friendly deals, so that he may have agreed with the OXY board on that limit,” said Bill Stone, CIO of The Glenview Trust Company and a Berkshire shareholder.
‘Made nothing but sense’
The “Oracle of Omaha” started buying the stock after reading through Occidental’s annual report and gaining confidence in the company’s growth and its leadership.
“What Vicki Hollub was saying made nothing but sense. And I decided that it was a good place to put Berkshire’s money,” Buffett said of Occidental’s CEO during Berkshire’s annual meeting in April.”Vicki was saying what the company had gone through and where it was now and what they planned to do with the money,” he added.
Occidental has been the best-performing stock in the S&P 500, benefiting from surging oil prices.
Buffett’s growing bet on Occidental has inspired a legion of small investors to follow suit, making it a favorite retail stock this year, according to data from VandaTrack.

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Niraj Shah, CEO, Wayfair
Ashlee Espinal | CNBC

Check out the companies making headlines in midday trading.
Foot Locker — The retail stock surged 20% after it appointed former Ulta Beauty head Mary Dillon as its chief executive officer, replacing Richard Johnson. Foot Locker also reported a smaller-than-expected drop in comparable sales for the second quarter and profit that was above estimates.

Bill.com — Shares soared 16.7% after the financial back-office software provider surpassed earnings expectations in its most recent quarter. Bill.com also issued strong guidance.
Cineworld Group — Shares tumbled 58.3% following a Wall Street Journal report that the British cinema chain is preparing to file for bankruptcy. Cineworld Group struggled to attract moviegoers back into its theaters after the pandemic.
Bed Bath & Beyond — Shares of the struggling retailer plunged 40.5% after activist investor Ryan Cohen dumped his entire stake in the company. Bed Bath & Beyond had surged this month in a move reminiscent of the meme stock craze of 2021, with heavy trading volume and social media activity.
Madison Square Garden Entertainment — Shares gained 3.5% after it planned to spin off its live entertainment business, including its New York performance venue Madison Square Garden, as well as the Hulu Theater and Radio City Music Hall.
Coinbase — Shares of the cryptocurrency exchange operator dropped 11.3% following a sudden overnight sell-off in bitcoin. Bitcoin is trading below $22,000, a more than three-week low.

Wayfair — The furniture retailer’s stock price plunged 20.1% after Wayfair cut 870 jobs, or roughly 5% of its global workforce. Wayfair believes the $30 million to $40 million hit from the headcount reduction will hit in the third quarter.
DoorDash — The food delivery stock dropped 2.6% following an Insider report that DoorDash will end its partnership with Walmart next month. DoorDash delivered products for Walmart for more than four years.
General Motors — General Motors gained 2.5% after the automaker announced it would reinstate its quarterly dividend, which was cut during the pandemic. The company also increased its buyback program to $5 billion from $3.3 billion.
Carnival — Shares of cruise line operators fell Friday. Carnival, Norwegian Cruise Line Holdings and Royal Caribbean declined 5.6%, 4.6% and 5.2%, respectively.
— CNBC’s Yun Li, Jesse Pound and Carmen Reinicke contributed reporting.

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The FDIC issued letters to five crypto companies demanding they stop making false claims about deposit insurance.
The recipients were FTX US, along with Cryptonews.com, Cryptosec.info, SmartAsset.com and FDICCrypto.com.

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug 17, 2022.
Jeenah Moon | Bloomberg | Getty Images

FTX, the crypto exchange controlled by Sam Bankman-Fried, received a cease-and-desist warning on Friday from the Federal Deposit Insurance Corporation, telling the company to stop “misleading” consumers about the insurance status of their funds.
The FDIC issued letters to five crypto companies, including FTX US. Unlike deposits held at U.S. banks, cryptocurrencies stored with brokerages are not protected by the government.

“Based upon evidence collected by the FDIC, each of these companies made false representations —including on their websites and social media accounts — stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured,” the regulator said in a press release.
In addition to FTX US, the FDIC notified Cryptonews.com, Cryptosec.info, SmartAsset.com and FDICCrypto.com. The FDIC said the companies must “take immediate corrective action to address these false or misleading statements.” The agency said knowingly misrepresenting or implying that an uninsured product is FDIC-insured is prohibited by the Federal Deposit Insurance Act.
In the letter specifically to FTX, the FDIC said it appeared that on July 20, Brett Harrison, the president of FTX.US, published a tweet stating that direct deposits from employers are stored in FDIC-insured accounts in the user’s name.
Harrison tweeted on Friday that he deleted that post and didn’t mean to indicate that crypto assets stored in FTX are insured by the FDIC, but rather “USD deposits from employers were held at insured banks.”
“We really didn’t mean to mislead anyone, and we didn’t suggest that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance,” Harrison wrote.

FTX.US is a U.S. cryptocurrency exchange owned by FTX, which is based in the Bahamas and has been largely focused on building its business outside of the U.S.
The FDIC also said that the websites for SmartAsset and CryptoSec identify FTX as an “‘FDIC-insured’ cryptocurrency exchange.”
WATCH: Sam Bankfman-Fried’s portfolio

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Check out the companies making headlines before the bell:
Deere (DE) – Deere slid 5.2% in premarket trading after the heavy equipment maker missed quarterly earnings estimates despite higher-than-expected sales. Deere earned $6.16 per share, below the consensus estimate of $6.69, as it successfully implemented price hikes but also faced higher costs. The company also cut its full-year forecast.

Foot Locker (FL) – Foot Locker surged 17.4% in the premarket after the athletic footwear and apparel retailer’s quarterly earnings beat analyst forecasts, and the company also announced a CEO transition. Former Ulta Beauty (ULTA) CEO Mary Dillon will replace Richard Johnson as CEO on Sept. 1.
Bed Bath & Beyond (BBBY) – Bed Bath & Beyond plunged 42.7% in premarket trading following news that investor Ryan Cohen had sold his entire stake in the housewares retailer, garnering a profit of more than $58 million.
Ross Stores (ROST) – Ross Stores reported better-than-expected earnings for its latest quarter, but its revenue was below Wall Street forecasts, and the company issued a weaker than expected full-year outlook. The company said its results were impacted by higher costs as well as increased promotional activity. The stock fell 1% in premarket action.
Applied Materials (AMAT) – Applied Materials beat estimates by 15 cents with adjusted quarterly profit of $1.94 per share, and the maker of semiconductor manufacturing equipment saw revenue top forecasts as well. It also gave an upbeat current quarter revenue forecast as chipmakers increase production.
Coinbase (COIN) – The crypto exchange operator’s stock slid 8.6% in premarket trading, falling in sympathy with the sudden overnight drop in bitcoin prices. Microstrategy (MSTR), the business analytics company with extensive bitcoin holdings, saw its stock fall 9.3%.

Home Depot (HD) – Home Depot announced a new $15 billion share repurchase program, replacing a prior authorization. The home improvement retailer also announced that CEO Ted Decker will replace former CEO Craig Menear as chairman, effective October 1.
Madison Square Garden Entertainment (MSGE) – Madison Square Garden Entertainment rallied 7.3% in the premarket following news that its board is mulling a spin-off that would contain the company’s live entertainment and MSG Networks businesses.
Bill.com (BILL) – Bill.com surged 18.5% in premarket trading after the financial back-office software provider reported better-than-expected quarterly results and issued upbeat guidance.

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Check out the companies making the biggest moves midday:
Cisco Systems — Shares of the networking equipment producer jumped 5.8%. The company reported earnings after the bell on Wednesday that beat estimates. Cisco also provided a better-than-expected forecast for 2023.

Bed Bath & Beyond — The latest favored meme stock, which has surged in August, dropped almost 20%. Investors appeared to be reacting to activist investor Ryan Cohen’s filing that he intends to sell his entire stake in the company.
Kohl’s — Kohl’s shares sank more than 7% after the retailer slashed its financial forecast for the year, citing inflation pressures on middle-income customers. The company expects net sales in fiscal 2022 down 5% to 6%, down from a prior range of flat to up 1%. However, Kohl’s beat analysts’ expectations for fiscal second-quarter profit and revenue.
BJ’s Wholesale — Shares of the club retailer popped more than 7% on Thursday after BJ’s reported better-than-expected results for the second quarter. The company generated $1.06 in adjusted earnings per share on $5.01 billion of revenue. Analysts surveyed by FactSet were expecting 80 cents per share on $4.67 billion of revenue. The company’s comparable sales rose 7.6% year over year, excluding gasoline. BJ’s was also upgraded by Bank of America to a buy from neutral.
Elanco Animal Health — Shares of Elanco shed more than 4% after the company was downgraded by Morgan Stanley. The firm shifted the stock to equal weight from overweight citing concerns about future profits.
Verizon — Shares of Verizon slipped 2.54% after MoffettNathanson downgraded it to underperform and slashed its price target. Increased competition from AT&T and T-Mobile is weighing on Verizon and will likely drag shares lower, analysts said.

Canadian Solar — The solar equipment and services company hit a new 52-week high, popping more than 15%, after reporting quarterly profits that beat expectations. Canadian Solar also raised its full-year revenue forecast and reported solar module shipments that were at the high end of its forecast.
Wolfspeed — Shares surged more than 31% after the semiconductor company surpassed expectations in its most recent earnings report. Wolfspeed CEO Gregg Lowe said he remains “very encouraged about the industry’s prospects for future growth and the activity we are seeing across our end-markets.”
Walgreens Boots Alliance — Shares of Walgreens fell more than 5% in trading Thursday. The drugstore chain, along with CVS and Walmart, was ordered Wednesday by a federal judge to pay a combined $650.6 million to two Ohio counties to address damage done by the opioid crisis. Walgreens also announced Wednesday it had sold 11 million shares of Option Care Health’s common stock in an underwritten secondary offering.
Energy stocks — Energy stocks were buoyed by the rise in oil prices, with shares of Devon Energy and Halliburton rising more than 5%, and APA adding more than 8%. Exxon Mobil gained more than 2% and Occidental Petroleum rallied 3%..
—CNBC’s Jesse Pound, Carmen Reinicke and Sarah Min contributed reporting.

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