Finance

Monitors display Coinbase signage during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, on Wednesday, April 14, 2021.
Michael Nagle | Bloomberg | Getty Images

Check out the companies making headlines in after hours trading:
Coinbase — Shares of Coinbase dropped more than 13% after the company reported quarterly revenue of $1.31 billion, which missed analysts’ expectations. Monthly active transaction users were lower from the previous quarter, at 7.4 million, but up from the prior year. Transaction-based revenue was also lower from the previous quarter.

Poshmark — The social marketplace’s shares tumbled about 27% after it reported quarterly results. It reported a loss of 9 cents per share, versus analyst estimates of 7 cents per share. Revenue also came in weaker than expected at $79.7 million, versus $82.7 million expected by Wall Street.
Aurora — The cannabis company’s shares fell 3.7% in extended trading after the company reported a slight revenue miss in its quarterly results. Aurora recorded CAD $60.1 million compared to estimates of CAD $60.6 million. It also reported a 23% increase in sales of medical cannabis, however, sales of recreational cannabis declined 44%. Recreational cannabis makes up 95% of sales across Canada.
DoorDash — The food delivery platform saw its shares jump 5% after announcing its biggest acquisition to date of Wolt, the Finland-based delivery app, for 7 billion euros, or about $8.1 billion. The company also reported its quarterly results, which included a wider than expected loss of 30 cents per share versus 26 cents pre share.
FuboTV — Shares of the sports live television streaming platform fell 4% after it reported a loss of 47 cents per share and revenue of $156.7 million for the third quarter. The company also increased its guidance for the fourth quarter.

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Traders work beneath a monitor displaying General Electric Co. signage on the floor of the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.
General Electric — Shares of General Electric popped 2.7% after announcing Tuesday that it will divide into three separate publicly traded units focused on aviation, health care and energy. The action followed consistent underperformance of its share price over the last two decades.

Roblox — Shares of video-game company Roblox soared 42.2% in midday trading after the company reported third-quarter results that impressed analysts. Bookings grew 28% year over year in the quarter. Revenue excluding deferred revenue came in at $509.3 million, up 102% year over year, according to a statement. 
PayPal — PayPal shares tumbled 10.5% after the payments company reported quarterly revenue of $6.18 billion, compared to the consensus estimate of $6.23 billion, per Refinitiv. PayPal also issued a fourth-quarter forecast that fell short of analysts’ expectations and provided disappointing guidance for 2022.
TripAdvisor — TripAdvisor shares fell 10.2% after the travel-booking company’s third-quarter earnings missed analyst estimates. The company earned an adjusted 16 cents per share on $303 million in revenue. Analysts surveyed by Refinitiv expected the company to earn 24 cents per share on $304 million in revenue.
SmileDirectClub — The online dentistry company’s stock fell 20.6% following SmileDirect’s disappointing quarterly results. The company reported revenue of $138 million, short of the expected $182.5 million, according to estimates from StreetAccount.
AMC Entertainment — Shares of the movie theater chain fell 11.4% even after the company posted a third-quarter loss that was narrower than expected. CEO Adam Aron said that there are still pandemic challenges ahead for the company. AMC shares have been at the center of this year’s meme-stock craze, skyrocketing more than 1,800% in 2021.

Robinhood — Shares of the stock trading app ticked 3.4% lower after the company announced a data security incident that affected 7 million customers. Robinhood said the breach occurred late in the evening on Nov. 3, and that the third party “obtained access to a limited amount of personal information for a portion of [Robinhood’s] customers.”
The RealReal — The luxury consignment platform saw its shares jump 18.7% following a better-than-expected quarterly report. The RealReal posted a quarterly loss of 47 cents per share, narrower than an estimate of a per-share loss of 53 cents, according to FactSet. BTIG upgraded the stock on Tuesday to buy from hold, citing improving fundamentals.
Palantir — Shares of the software and data analytics company fell 9.4% despite reporting third-quarter revenue that beat Wall Street estimates. The company recorded $392 million versus in revenue, versus the $385 million expected, according to Refinitiv. Its earnings per share were in line with estimates.
ThredUp — Shares of the personal shopping e-commerce company rose 4.1% after reporting better-than-expected earnings results. ThredUp reported a loss of 15 cents per share, compared to the expected loss of 16 cents per share, according to Refinitiv. Revenue came in at $63.3 million, topping estimates of $61.8 million.
— with reporting from CNBC’s Yun Li, Hannah Miao and Tanaya Macheel.
Disclosure: NBC Nightly News investigated SmileDirectClub’s customer complaints in 2020. The company accused NBCUniversal of publishing false information about the company and is seeking $2.85 billion for defamation.

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Douglas Sacha | Moment | Getty Images

Thousands of Americans living abroad received stimulus checks during the Covid-19 pandemic, according to federal data.
While that may sound incongruous with the notion of “stimulus” for the U.S. economy, lawmakers generally had a sound rationale for sending funds overseas, according to tax policy experts.

“They are casting a very broad net and [payments may] go to places where people think, ‘Did they really need to go there?'” said Kyle Pomerleau, a senior fellow at the American Enterprise Institute, a right-leaning think tank. “But I think the answer is generally, ‘Yes.'”
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The IRS issued more than 3.7 million payments worth $5.5 billion to individuals outside the 50 states and Washington, D.C., according to agency statistics. The figures include three rounds of pandemic-era payments through June 3, 2021. (Additional payments may have been sent since then.)
The data encompasses U.S. citizens abroad, military members stationed overseas and residents of U.S. territories such as Puerto Rico. (While U.S. territories aren’t “overseas” in the sense that foreign countries are, the IRS doesn’t report these statistics separately.)

Less than 1%

About 9 million U.S. citizens live overseas, according to the U.S. Department of State.

It’s natural many of them would get checks due to the expansive eligibility framework set by Congress, Pomerleau said.
The scope of the overseas payments is also small relative to the total — 0.7% and 0.8%, respectively, of the $803 billion and 472 million payments issued over three rounds of funding.
“The scale of the payments going overseas is less than 1% of the [total],” Pomerleau said. “It wasn’t really very much when you look at it.”

Congress authorized the IRS to send stimulus checks three times during the pandemic: in March 2020 (up to $1,200 a person), last December ($600) and this past March ($1,400).
The funds are technically advance payments of a refundable tax credit (the recovery rebate credit). The advance payments are called Economic Impact Payments — the legislative terminology for what Americans have come to call “stimulus checks.”
But the term “stimulus checks” is somewhat of a misnomer, according to tax policy experts.
The term implies lawmakers aimed to stimulate demand for goods and services in the U.S. economy by sending money to households. But it seems Congress’ primary intent was to buoy household finances at a time of mass unemployment and financial hardship, according to policy experts.

Whether U.S. citizens live here or abroad is not an important distinction in the midst of a worldwide pandemic.

Janet Holtzblatt
senior fellow at the Urban-Brookings Tax Policy Center

“One perspective on these payments is that they were primarily intended to help taxpayers cover their day-to-day expenses, with any stimulus the icing on the cake,” said Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center.
“If assistance to struggling families is the intended goal, then whether U.S. citizens live here or abroad is not an important distinction in the midst of a worldwide pandemic,” she added.
Citizens living abroad are also required to file a U.S. tax return on their worldwide income. (Some may qualify for tax breaks on foreign income.) To the extent such citizens pay taxes, issuing them an Economic Impact Payment seems fair, according to Garrett Watson, a senior policy analyst at the Tax Foundation.

Mistaken payments

Of course, by the later rounds of payments, budget hawks loath to spend more federal money questioned whether households needed additional financial assistance as the economy began to pick up steam.
And the IRS mistakenly sent funds to many non-citizens. (Congress only allowed payments to U.S. citizens and “resident aliens,” a category that includes individuals with a green card or who’ve been in the U.S. for a certain period of time.)
More than 30,000 first-round checks worth more than $37 million were potentially erroneously paid to nonresidents living overseas, according to the Treasury Inspector General for Tax Administration. (Many such individuals may have filed an incorrect tax return that made them appear to be U.S. residents.)
The federal government also made other erroneous payments, according to the watchdog, such as issuing duplicate payments to people living in U.S. territories, paying funds to ineligible dependents and issuing payments to deceased individuals. Overall, the IRS correctly paid at least 98% of first-round funds, the report said. More

Former WeWork CEO Adam Neumann said the company’s $47 billion valuation went to his head, in the first interview since departing the company in 2019 amid its botched IPO
The interview comes less than a month after WeWork went public through a SPAC-merger at a $9 billion valuation.
Neumann talked of lessons learned and confirmed that JPMorgan CEO Jamie Dimon convinced him to step down.

Adam Neumann, CEO of WeWork.
Eduardo Munoz | Reuters

Ousted WeWork CEO Adam Neumann said Tuesday that the company’s private, $47 billion valuation went to his head, in the first interview since departing the company in 2019 amid its botched IPO.
“So yes the valuation made us feel like we were right, which made me feel that whatever style I was leading at was a correct style at the time, so I do think it affected it,” he told CNBC’s Andrew Ross Sorkin at The New York Times DealBook online summit. “I also think the chase … maybe it went to my head. I do think at some point it did.”

The interview comes less than a month after the company went public through a SPAC merger with a $9 billion valuation.
Neumann confirmed reports that JPMorgan Chase CEO Jamie Dimon, the bank tapped with leading the IPO, convinced him to step down from the company. He also talked about lessons learned, addressing the backlash surrounding the roughly $1 billion he got when he walked away from WeWork.
“This perception that as the company went from a $47 billion valuation down to $9 billion, that I profited somehow while the company was going down, is completely false,” he said, adding that it was a narrative he couldn’t correct because he “wasn’t speaking.”
Neumann said he understands the perception and is “disappointed” for the employees that lost their jobs or took lower salaries and stock because they believed in the company. He said he never intended for the company not to succeed, but every start-up has risks.
“When you take equity … and you join a start-up, you take a risk,” he said. “Now, I wish it would have worked out differently for everybody but the market now decided that it’s worth $9 billion. It’s getting measured on a daily basis and I actually think WeWork today has a better opportunity than it had then.”

Neumann also responded to allegations of drinking and drug use at the company. He said they “make good stories for movies and television shows.” He added that weed is the only drug he’s aware of and that WeWork had a “fun” culture.
He did not comment on a suggestion from the audience to share his wealth with WeWork employees but said he and co-founder Miguel McKelvey have done things privately with their money that they are not ready to discuss. Neumann added that he is currently investing through a family office, and he’s interested in cryptocurrencies.

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The Road to COP26

The London Stock Exchange has announced a new market to scale funding for carbon reduction projects.
LSE CEO Julia Hoggett said it was “seeking to bring all of this out into daylight,” referring to making carbon markets more visible.
Carbon offsetting is part of the 2015 Paris Agreement and is being discussed at climate summit COP26 this week.

The London Stock Exchange is aiming to make funding for carbon reduction projects more transparent, introducing a new market that it says will help the industry to scale.
Currently, so-called voluntary carbon markets allow companies to buy and sell carbon credits. Carbon credits are created by projects that help reduce or avoid emissions and can be bought by firms as a way to offset the greenhouse gases they release.

But the LSE said the system “remains small and fragmented and as such it lacks the market infrastructure and access to institutional investment that will truly enable it to scale,” in an online statement last week.
Speaking to CNBC’s “Squawk Box Europe” Tuesday, LSE CEO Julia Hoggett said: “One of the challenges we’ve had in this market is that it has been … less transparent and less visible to everybody in terms of participants and how the [climate change mitigation] projects are managed. By raising the profile of the public listed fund market, we can enhance the disclosures and the visibility of that market and also direct capital into it.”
“By moving all of these activities into the public markets, by having a voluntary carbon market that is much more visible, ultimately moves to exchange-traded contracts … And in addition, after the announcement last week from Rishi Sunak, about the mandatory requirements for the publication of transition plans for 2023, we’re seeking to bring all of this out into daylight, and sunlight is the best disinfectant,” Hoggett added.

British Finance Minister Sunak said the U.K. government would expect financial firms to publish their climate change mitigation plans by 2023 at the COP26 climate summit last week.
The LSE said it hoped firms that needed to buy carbon credits would invest. “We anticipate that corporates and other organisations with long-term needs for carbon credits will become investors, using the carbon credits delivered by these vehicles — which may be issued as an alternative or additional dividend — to meet a portion of their offset needs,” it said in an online statement. 

Part of the 2015 Paris Agreement, where countries agreed to pursue efforts to limit global warming to 1.5 degrees Celsius above pre-industrial levels, are rules around how governments can use carbon offsetting to meet their goals, known as Article 6. Negotiators are currently discussing how to move forward on carbon offsetting at the ongoing COP26 climate summit, as issues such as how emissions are accounted for have yet to be agreed.
– CNBC’s Saheli Roy Choudhury and Kristina Partsinevelos contributed to this report. More

Scammers are using the child tax credit to steal money and personal information from unsuspecting Americans, according to the Federal Trade Commission.
Criminals pose as IRS agents, sending bogus e-mails, texts, phone calls and social media messages.
There is still time to sign up for monthly payments of the child tax credit, up to $250 or $300 per kid. Those with questions should consult IRS.gov.

MoMo Productions | DigitalVision | Getty Images

Scammers are using the child tax credit to try to steal from unsuspecting Americans, according to the Federal Trade Commission.
Often, these criminals perpetuate a type of “government impersonator” scam. They contact people by phone, text, e-mail and social media, pretending to be IRS agents and directing victims to fake websites that seem legitimate.

The American Rescue Plan, a pandemic relief law passed in March, temporarily enhanced the value of the child tax credit and authorized the IRS send funds in monthly installments through 2021.
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Families can get up to $250 or $300 a month per child, depending on their age. The IRS has issued $61 billion to households since July.
“Many people have gotten their advance Child Tax Credit payments this year, but scammers are taking advantage of this new program to try to trick you out of money or information,” Emily Wu, an attorney in the FTC’s Division of Consumer and Business Education, wrote.
The IRS is issuing payments automatically to families based on tax information it has on file. The agency collects that data from annual tax returns or, for those who don’t file a return, via a new online portal through which low earners and others can sign up.

Families have until Nov. 15 to sign up for advance payments this year. They can sign up through GetCTC.org. (Others will receive the credit’s full value during the 2022 tax season.)
Individuals with questions should consult IRS.gov.
The IRS and other government agencies will never ask for personal or financial information over text, e-mail or social media, according to the FTC. Scammers will.
The IRS also doesn’t use robocalls and won’t call to ask taxpayers to give or verify financial information for a child tax credit payment, the FTC said. The IRS will also never ask for a payment by gift card, wire transfer or cryptocurrency, or ask for payment to get financial help.

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Check out the companies making headlines before the bell.
General Electric (GE) — Shares of GE rallied more than 7% in the premarket after the company announced it will split up into three publicly traded entities focused on aviation, health care and energy. GE said it will spin off its healthcare unit by early 2023 and energy unit by early 2024.

Palantir (PLTR) — Palantir shares dipped 2% in the premarket even after the software and data analytics company’s third-quarter revenue beat the Wall Street forecast. The company reported revenue of $392 million versus $385 million expected, according to Refinitiv. Palantir’s earnings per share were in line with estimates.
Coinbase (COIN) — Shares of the cryptocurrency exchange rose more than 2% in the premarket after bitcoin hit a new all-time high on Tuesday, rallying above $68,000 at one point. Ethereum also set a new record high and topped the $4,800 level.
Cinemark (CNK) — Shares of Cinemark gained more than 2% in early morning trading after Credit Suisse upgraded the movie theater stock to outperform from neutral. The firm said Cinemark is the “best positioned U.S. pure-play theater operator as the box office recovery ramps up into 2022.”
Nucor (NUE) — Nucor shares dipped more than 1% in early morning trading after Citi downgraded the steel stock to neutral from buy. After Nucor rallied Monday following the House’s passage of a massive infrastructure spending bill, Citi said the good news was already priced into Nucor shares.
Roblox (RBLX) — Roblox shares surged more than 25% in early morning trading after better-than-expected quarterly results. The online gaming platform reported revenue of $637.8 million versus $636.5 million expected from Wall Street analysts, according to Refinitiv.

TripAdvisor (TRIP) — TripAdvisor shares fell more than 8% premarket after the travel-booking company missed Wall Street expectations for its third-quarter financial results. The company earned an adjusted 16 cents per share on $303 million in revenue. Analysts surveyed by Refinitiv expected the company to earn 24 cents per share on $304 million in revenue.
Robinhood Markets (HOOD) — Robinhood shares retreated more than 3% in early morning trading after the company announced a data security breach. Robinhood said the breach occurred late in the evening last Wednesday, and that the third party “obtained access to a limited amount of personal information for a portion of [Robinhood’s] customers.”
PayPal (PYPL) — PayPal shares fell more than 4% premarket after the digital payments company reported quarterly results. The company’s revenue of $6.18 billion fell short of the Refinitiv consensus estimate of $6.23 billion. PayPal also issued a fourth-quarter forecast that fell short of analysts’ expectations and provided disappointing guidance for next year.
SmileDirectClub (SDC) — SmileDirect shares sunk more than 22% in early morning trading after the digital dentistry company reported weaker-than-expected. quarterly results. The company reported revenue of $138 million, short of the expected $182.5 million, according to estimates from StreetAccount.
Disclosure: NBC Nightly News investigated SmileDirectClub’s customer complaints in 2020. The company accused NBCUniversal of publishing false information about the company and is seeking $2.85 billion for defamation.

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Evergrande said Wednesday it completed project deliveries involving 57,462 apartment owners from July to October.
However, news of other developers’ liquidity issues kept investors on edge this week.
“Our view is that currently the property market is caught in a negative credit loop,” Franco Leung, Hong Kong-based associate managing director at Moody’s Investor Service, said in a phone interview last week.

People look at models of houses at the 2021 Dalian autumn real estate fair at Dalian World Expo Center on October 15, 2021 in Dalian, Liaoning Province of China.
Liu Debin | Visual China Group | Getty Images

BEIJING — Worries about Chinese real estate developers’ high debt levels have rattled investors despite signs that property giant China Evergrande may be making progress on resolving its debt problems.
It’s an indication of further pain to come in China’s property market, analysts told CNBC.

Since late summer, global investors have watched for Evergrande’s ability to stave off official default — and are concerned about whether the fallout might spread to the rest of China’s real estate industry.
Other major developers have also reported liquidity problems in the last several days.
Chinese property stocks trading in Hong Kong mostly fell last week. Evergrande was among the least affected and lost about 1.3% for the week.
On the debt front, the Markit iBoxx index for China real estate high yield bonds fell 11.5% last week, according to IHS Markit.

“The market is a bit more worried,” Gary Ng, Asia-Pacific economist at Natixis, said in a phone interview on Thursday. He pointed to how tighter government regulations on debt have restricted liquidity, which has spread to more developers.

“We still think the majority of this stress” will be on companies in the private sector and “on smaller developers and on the high-yield space,” Ng said. “State-owned developers, or the general investment grade [space], those seem quite stable.”
Only five of the twenty largest Chinese real estate developers by assets as of the first half of this year were central government-owned enterprises, according to Natixis.
The three developers that have caught investor attention recently do not fall in that state-owned category.
Evergrande is the industry’s biggest issuer of U.S. dollar-denominated high yield bonds, according to Natixis.
Kaisa Group Holdings, which ranks second among those high yield bond issuers, suspended trading in its Hong Kong-listed shares Friday before the stock market opened. Shares of the developer were already down nearly 13% for the week after news it missed payment on a wealth management product.
Another large Chinese developer, Shimao Group Holdings, traded about 14% lower Friday in Hong Kong. The company disclosed in a filing Thursday that it will only allow institutional investors to buy seven of its Shanghai-traded bonds, effective Friday. Existing retail investors must sell or hold the bonds until maturity, the filing said.
These developments come as investors are already on edge over the risk of default for other Chinese real estate companies.
Moody’s made 32 negative rating actions in the Chinese property sector in roughly the four weeks that ended Oct. 26.
The ratings agency noted in a report in late October that the rated developers will need to pay or refinance tens of billions of dollars’ worth of debt in the coming 12 months: $33.1 billion of onshore bonds listed in mainland China, and $43.8 billion of offshore U.S.-dollar denominated bonds. The figure includes bonds maturing and those subject to put options, or the right for investors to sell.

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Central government officials have sought to reassure markets and said in the last few weeks that Evergrande is an isolated case and the real estate industry overall is fine.
Evergrande avoided official default at the 11th hour in late October, and began to announce progress on its construction projects. The property developer said Wednesday it had completed project deliveries involving 57,462 apartment owners from July to October.
However, the pace of deliveries has generally slowed down month-on-month. Deliveries covered 39 projects and 7,568 apartment owners in October, down from 48 projects and 7,808 owners in September, the company said.
Evergrande faced another deadline last Saturday to repay bond investors. The company was the second-largest Chinese developer by sales last year, but fell to fourth this year as of the third quarter, according to industry data site China Index Academy.

Caught in a negative loop

“Our view is that currently, the property market is caught in a negative credit loop,” Franco Leung, Hong Kong-based associate managing director at Moody’s Investor Service, told CNBC in a phone interview last week.
Regulators’ call for developers to reduce their debt have made investors and onshore lenders less willing to provide financing, Leung said. Developers — particularly those that are financially weaker — then had to reduce their spending on land or construction costs, resulting in a drop in sales, he added.

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As business slows for some developers, investors will choose to put their money elsewhere.
A government policy change or longer-term developer reductions to spending on land and construction can break this “negative loop,” Leung said, adding that it will take time.
Moody’s has no view on whether such a break would even happen. The firm’s outlook on China property is negative for at least three to six months, he said.
S&P Global Ratings forecasts a 10% decline in China’s residential sales next year, and a further 5% to 10% decline in 2023.
“Defaults will rise as down cycle persists under the shadow of sluggish sales, narrower funding channels, and more cautious lenders,” S&P analysts said in an Oct. 27 report.

Real estate bright spots

Not all Chinese real estate developers are in such dire straits.
For the first three quarters of the year, Moody’s noted the top three developers by year-on-year contracted sales growth saw significant gains in sales.

Greentown China Holdings, +76%
Powerlong Real Estate Holdings, +42.8%
Hopson Development Holdings, +35.3%

Powerlong and Hopson had not violated any of the government’s “three red lines” as of the first half of this year, while Greentown had violated one, according to Natixis.
“In the short run, [the regulation means] there will be a liquidity squeeze,” Ng from Natixis said. “In the long run, it will improve the general financial health of the whole property sector because there will be consolidation if we see some of the weaker players … are forced to sell their assets.”
As for the implications for the real estate industry and China’s economy, he said the risk is limited because homebuyers won’t likely want to give up properties or mortgages they’ve already paid for. Since most apartments in China are sold ahead of completion, a major challenge for cash-strapped developers is to finish construction and deliver properties to buyers.
For bondholders, “you feel like your bonds are falling 80%, 90%. But for the homebuyers, the real estate sector itself, we haven’t seen a big change … in terms of this financial risk,” Ng said.

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