💩 Four minute man

And Super Micro has some major issues

Author

Tyler Morin
October 31, 2024

TOGETHER WITH

Hey there weekday warriors,

Mark Zuckerberg remains very, very good at making money.

Enjoy the next 4 minutes and 30 seconds of blue-chip news and commentary.

Keep on snapping necks and cashing checks,

+ US stocks “slipped on Wednesday as investors digested a deluge of earnings reports and looked toward more results from megacap technology companies.” (CNBC)

+ The 10-year Treasury yield “hovered near a three-month high as traders combed through a fresh batch of mixed data and hunted for further clues on the rate cut outlook.” (CNBC)

+ Oil “rebounded on Wednesday, rising more than 2% after data showed U.S. crude and gasoline inventories fell unexpectedly last week and on reports that OPEC+ may delay a planned oil output increase.” (Reuters)

+ Bitcoin “rose on Wednesday and was within spitting distance of record highs as positioning around the upcoming presidential election spurred sharp gains across cryptocurrency markets.” (Investing)

+ The three most talked about stocks on WallStreetBets in the past 24 hours were: 1) Super Micro -32.6% 2) Robinhood +0.6% // -12.4% after hours 3) Microsoft +0.1% // -3.7% after hours

The market moves you need to know about


– Letting users bet on the Presidential election wasn’t enough to distract investors from a pretty sh*tty quarter. Shares of Robinhood fell 12.4% after reporting a drop in users and revenue per user. Has Vlad Tenev considered halting the sale of HOOD?

+ Carvana’s epic comeback shows no signs of slowing down. After throwing around the ‘C-word’ (think: Chapter 11) in late 2022, CVNA has risen from the ashes. And it just posted another record-breaking profit. Shares rose 20.0% after hours.

Are you overlooking this retail payment tech?

Buy now pay later is having a moment. But its cousin, lease to buy has flown a bit more under the radar.

It's pretty simple... a consumer buys a good and pays it off with a weekly installment plan.

FlexShopper (NASDAQ: FPAY) is one of these unique retail and financing plays.

And while its biggest competitors are burdened by brick-and-mortar stores, $FPAY operates online only.

This has allowed $FPAY to focus on building proprietary credit rating tech that can assess consumers in minutes.

Interested in learning more about FlexShopper?

This is promotional content. The Water Coolest has been compensated by FlexShopper for this content. This is for informational and educational purposes only. It does not constitute financial advice, investment advice, or a recommendation to buy or sell any securities. Please see full disclosure below.**

Four-minute man

Source: Giphy

Tell me Starbucks (-0.7% // +0.3% after hours) CEO Brian Niccol is lactose intolerant without telling me/violating HIPPA


During its earnings call, Starbucks said it would stop charging for dairy alternatives as part of a laundry list of changes aimed at making Starbucks great again.

The company also announced it’s getting rid of its olive-oil-infused coffee line, partially because it's f*cking disgusting
 but mostly because it was a major initiative of the previous CEO.

And while the company was light on the details, it promised to make its menu feel less like Cheesecake Factory (think: there will be fewer choices). The pretentious drink sizing system will presumably be left unchanged, much to the chagrin of everyone who has ever said “Grande? You mean medium?”

Meanwhile, on the operations side...

One of the biggest complaints from customers under the previous regime was that orders took too damn long.

Niccol hopes that "bringing order to mobile order and pay" (don’t worry, I had to read that like 3 times, too) and other ops tweaks will help Starbucks deliver on an audacious goal: getting drinks into the hands of customers in under four minutes.

Oh, and the Niccol administration will pump the brakes on store openings and store renovations. You know, cost-cutting 101 stuff.

ICYMI

Technically, Starbucks reported yesterday, but you might recall it actually got out ahead of its piss-poor earnings last week.

The company confirmed what everyone already knew: it was going to miss on the top and bottom lines, driven by a 7% drop in global same-store sales.

No pressure, Brian.

TS

+ â€œAnd for that reason I’m out.” - E&Y to Super Micro (spoiler: the reason is accounting fraud)

Ernst & Young stepped down as Super Micro’s (-32.6%) auditor, claiming it was “unwilling to be associated with the financial statements prepared by management.” It also questioned the board’s independence from the CEO.

For everyone without a CPA (and a huge a**), this isn’t just a red flag, it’s about as bad as it gets for a company. An accounting firm refusing to work with a company indicates that they’ve seen something so horrific they aren’t willing to risk their reputation/go the way of Arthur Andersen (spoiler: Enron’s auditor).

It probably shouldn’t come as a huge surprise. A scathing (is there any other kind?) short seller report pointed to some book cooking on the part of SMCI earlier this year. That led to a delay in reporting earnings (spoiler: it still hasn’t)
 and prompted a DOJ investigation.

Spoiler: it has never been more over.

+ New Zuck. Same old Facebook


Once again, Zuck and Meta (-0.2% // -3.1% after hours) did what they do best: interfere in an election beat on the top and bottom lines. But because nothing is ever enough for you people, shares fell after hours.

Investors didn’t love that Zuck expects capex to balloon thanks to AI investment (hey, at least it’s not metaverse spend). Plus, daily active people missed expectations. This sounds bad until you consider it was still more than 1/3 of the world’s population


+ Justtt a bit outside.

Despite posting a big swinging quarter, Microsoft (+0.1% // -3.7% after hours) let down investors with its outlook. Its revenue guidance for its fiscal Q2 was, for lack of a better word, “soft”, coming in shy of the Street’s expectations. You hate to see it


+ Economists aren’t mad
 they’re disappointed. US GDP grew at a 2.8% pace in Q3 according to the Commerce Department. That’s below expectations of 3.1% and Q2’s 3.0%. Team Kamala has gotta be punching air rn.

+ New automatic airline refund rules are now in effect — here’s what’s covered. To answer your question, yes, you can request a refund when someone says “I don't give two f–ks, but I am telling you right now – that motherf–ker back there is NOT real.”

FYI, TWC might be compensated if you click on the links above. So, what are you waiting for? Start clicking.

FWD

âȘ Yesterday, Lilly, CAT, GE Health, UBS, Wingstop, and GlaxoSmithKline reported before the bell. Microsoft, Meta, Robinhood, Starbucks, Coinbase, MicroStrategy, DoorDash, Carvana, Roku, Etsy, and eBay dropped earnings after hours.

⏩ Today we’re keeping an eye on


+ Uber, Mastercard, Roblox, Merck, Shell, Altria, Peloton, ABInbev, Cigna, and Nikola report this morning

+ Apple, Amazon, and Intel drop earnings after the close

+ We’ll get core PCE (inflation) data for September

EXIT

Yesterday, I asked, “Is that interfering Yankees fan the best thing you’ve ever seen or the worst thing?”

79.9% of you said “worst.”

Here’s what some of you guys had to say (and my thoughts in italics)


  • Worst: “Ban them and anyone within their genetic puddle for life from any sporting event, amateur or professional.

  • Best: "Down 3-0, you have to make sacrifices."

And here’s today’s question


You had to see this one coming


What's the best Halloween candy in the game?

Login or Subscribe to participate in polls.

Oh, and one more thing


What did you think about today's newsletter?

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FINE

Does this look like the face of a guy you should take financial advice from?

No, it’s the face of an individual who is financially irresponsible/dumb enough to be talked into spending money on a family photo shoot that he could have just done with his iPhone. So, act accordingly...

This is not financial advice. Nothing in this newsletter is an investment recommendation. All content is created for entertainment, educational, or informational purposes only. Do your own research, or do yourself a favor and hire a professional.

** Disclaimer: The information provided in this newsletter about FlexShopper Inc is for informational and educational purposes only. It does not constitute financial advice, investment advice, or a recommendation to buy or sell any securities. Readers are encouraged to conduct their own independent research or seek advice from a licensed financial professional before making any investment decisions. If you want to learn more about FlexShopper, visit their investor page for more information: https://investors.flexshopper.com/

The Water Coolest Limited Liability Company has been compensated by Cashu Technologies Pty Ltd on behalf of FlexShopper Inc for this promotional content. While we have taken care to present accurate information, we make no guarantees as to the accuracy, completeness, or reliability of the information provided. Any investment decision you make based on this video is at your own risk, and The Water Coolest Limited Liability Company assumes no liability for any losses or damages that may result.

For more details regarding the partnership between The Water Coolest Limited Liability Company and Cashu Technologies Pty Ltd, visit: https://www.cashuapp.com/disclaimers/fairfax