US stocks pop after S&P 500’s 3-day losing streak

Live6 updates

• Wed, March 27, 2024 at 10:30 AM MDT

  Reddit shares slump as Hedgeye initiates short position

  Reddit stock fell more than 12% in afternoon trade on Wednesday following a new short report from Hedgeye Risk Management.

  After the stock more than doubled from its initial IPO price, Hedgeye described shares of the social media company as “grossly overvalued” and argued the stock has reached meme stock territory.

  “While we expect 1Q24 results to show positive fundamental momentum, our attention is focused on 2H24 and 1H25 where we expect a rapid deceleration in user and revenue growth,” Hedgeye wrote in the reporrt. “We see ~50% downside to it’s original IPO price.”

  The report added: “At [$75 per share Reddit] was the most expensive stock among internet and media peers in our coverage. To justify the price, we think RDDT would need to sustain +35% revenue growth in 1H24 (versus our 25-27%) and +30% in 2H24 (versus our 20-23%).”

  Hedgeye claims Reddit’s platform overall is “niche” and could struggle to gain mainstream adoption in the longterm, including in international markets given Reddit’s dominant language on the site is English.

  Hedgeye also points out that while Reddit has formed an AI pitch to investors given a new deal with Google, its prospects in the space are “nascent” with “uncertainties around the long-term value and scalability.”

• Wed, March 27, 2024 at 9:39 AM MDT

  Trump Media stock surges again following strong market debut

  Trump Media & Technology Group (DJT) soared as much as 14% on Wednesday in its second day of trading on the Nasdaq (^IXIC).

  The parent company of Donald Trump’s social media platform Truth Social climbed 16% in its first official trading day on Tuesday. It went public after merging with special purpose acquisition vehicle Digital World Acquisition Corp. in a deal approved by shareholders last week.

  DJT’s strong debut comes amid a meme stock resurgence as some trades viewed as lacking fundamentals have seen eye-popping returns.

  According to an SEC filing from DWAC, Trump Media lost $49 million in the first nine months of last year and brought in $3.4 million in revenue. At current levels, its market cap now sits around $8 billion.

  Other meme-friendly names like Reddit (RDDT) and GameStop (GME) had also seen massive run-ups in recent days while riskier assets like Bitcoin (BTC-USD) and commodities have soared since the start of the year.

  Some names are coming back down to earth. Reddit and GameStop were down about 13% and 16%, respectively, in Wednesday’s trade.

  Short interest in DJT stock — bets that the stock price will fall rather than rise — is about 11% of outstanding shares, according to the latest data from S3 Partners. To note, average short interest in public companies sits in the 3% to 4% range.

  Read more here.

• Wed, March 27, 2024 at 8:52 AM MDT

  Robinhood (HOOD) shares are up more than 3% following the launch of the company’s first credit card. Robinhod CEO and co-founder Vlad Tenev sat down with Yahoo Finance’s Brian Sozzi to discuss expectations for the launch.

• Wed, March 27, 2024 at 8:20 AM MDT

  Carnival notes potential $10 million impact from Baltimore bridge collapse

  The collapse of Maryland’s Francis Scott Key Bridge is expected to have ripple effects across the economy.

  Carnival Corporation noted in its latest quarterly financials release on Wednesday, that the accident will cause a shift in its homeport and therefore could impact adjusted EBITDA and adjusted net income by $10 million for the full year 2024.

  “Given the timing of yesterday’s event in Baltimore and the temporary change in homeport, our guidance does not include the current estimated impact of up to $10 million on both adjusted EBITDA and adjusted net income for the full year 2024,” Carnival wrote in the release.

  Carnival stock was off about 3% in morning trade.

• Wed, March 27, 2024 at 7:34 AM MDT

  Stocks rebound at the open

  US stocks rebounded Wednesday morning after several days of red closings, an unusual occurrence in the market’s bullish start to 2024.

  The S&P 500 (^GSPC) the blue-chip Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite (^IXIC) all gained about 0.6%.

• Wed, March 27, 2024 at 6:15 AM MDT

  Robinhood looks to take on Amex, Mastercard and Visa

  Robinhood’s (HOOD) under-the-radar pivot to a financial services super app continues.

  Last night, the company took the wraps off its first-ever credit card. Shares are up 6% in the pre-market today.

  As the Yahoo Finance personal team reports, the card has a few nice perks but also a couple drawbacks.

  “This is not just about credit card but Robinhood’s rather smart strategy to acquire sticky assets and maximizing average revenue per user/wallet,” Bernstein analyst Gautam Chhugani said in a client note.

  Chhugani reiterated an out-perform rating on Robinhood’s stock, and sees 56% upside from current levels.

  I will be sitting down with Robinhood co-founder and CEO Vlad Tenev on Yahoo Finance Live around 9:40am ET, give it a watch!