Business and Finance News - 6.7.24

FTC and DOJ Launch Antitrust Investigations into AI Giants Microsoft, OpenAI, and Nvidia Amidst Oversight Concerns and Rapid Industry Growth

• FTC and DOJ to open antitrust investigations into Microsoft (MSFT), OpenAI, and Nvidia (NVDA).

• FTC will investigate Microsoft and OpenAI; DOJ will focus on Nvidia.

• Investigations will examine company conduct, not mergers or acquisitions.

• Microsoft has invested around $13 billion in OpenAI since 2019.

• Nvidia's revenue has surged over 250% year-over-year due to AI chip demand.

• Former OpenAI employees raised concerns about AI industry's lack of oversight.

• FTC's AI market study includes Amazon, Alphabet, Microsoft, Anthropic, and OpenAI.

-The Federal Trade Commission (FTC) is an independent agency of the United States government that focuses on promoting consumer protection and eliminating and preventing anticompetitive business practices.

-The Department of Justice (DOJ) is the federal executive department responsible for enforcing the laws of the United States and ensuring public safety against foreign and domestic threats.

-Microsoft Corporation is a global technology company that develops, manufactures, licenses, supports, and sells a wide range of software products, hardware devices, and related services.

-Nvidia Corporation is a leading technology company specializing in designing and manufacturing graphics processing units (GPUs) and related technologies for gaming, professional visualization, data centers, and automotive markets.

Lululemon Beats Earnings Estimates but Issues Weak Q2 Guidance Amidst Flat Americas Sales and Product Issues

• Lululemon (LULU) beat earnings and revenue estimates but issued weak second-quarter guidance.

• Sales in the Americas were flat, with issues in product sizing and color affecting sales.

• CEO Calvin McDonald highlighted international growth but acknowledged challenges in the Americas.

• Earnings per share were $2.54, compared to $2.38 expected.

• Revenue was $2.21 billion, slightly above the $2.19 billion expected.

• Lululemon added $1 billion to its stock buyback program.

• Full fiscal-year guidance indicates optimism for improved conditions later in the year.

-Lululemon is a company that designs and sells athletic apparel and accessories.

Lyft Projects 15% Annual Growth in Gross Bookings Through 2027

• Lyft (LYFT) predicts annual gross bookings will increase 15% per year through 2027.

• Adjusted EBITDA margin expected to be about 4% of gross bookings by 2027.

• Free cash flow conversion to exceed 90% of adjusted EBITDA from 2025-2027.

• Lyft anticipates $400 million in gross bookings from advertising in 2027.

• Advertising revenue expected to be eight times higher than in 2024.

• Shares of Lyft increased 2.3% to $15.89 following the optimistic outlook.

• No changes to current-quarter or full-year guidance were announced.

-Lyft is a transportation network company that operates a ridesharing service primarily through a mobile app.

Rivian Unveils Redesigned R1 Pickup and SUV with Enhanced Performance

• Rivian (RIVN) redesigned R1 pickup and SUV models to improve range, performance, and computing power.

• Over half the hardware components have been changed for second-generation products.

• Pricing for the R1S SUV starts at $75,900, with top-end trimotor models starting around $106,000.

• The R1T starts at $69,900, with top-end models exceeding $100,000.

• New vehicles have 10 times more computing power with dual Nvidia DRIVE Orin processors.

• Rivian expects R2 models, starting at about $45,000, to launch in early 2026.

• Deliveries for the 2025 R1S and R1T will start immediately.

-Rivian Automotive is an American electric vehicle manufacturer and automotive technology company that focuses on producing sustainable transportation solutions.

Robinhood Acquires Bitstamp for $200M to Expand Global Crypto Presence; Stock Soars to 52-Week High

• Robinhood (HOOD) is acquiring U.K.-based crypto exchange Bitstamp for $200 million.

• The acquisition aims to expand Robinhood's global cryptocurrency presence and attract institutional clients.

• Robinhood’s stock rose over 6%, reaching a new 52-week high at $22.

• The all-cash deal is expected to close in the first half of 2025.

• Bitstamp offers spot trading for nearly 100 cryptocurrencies, plus staking and lending services.

• Robinhood’s crypto arm is being monitored by the SEC for potential securities law violations.

• Barclays Capital and Galaxy Digital Partners served as exclusive financial advisors for the deal.

-Robinhood is a financial services company that offers a range of investment and trading products primarily through its mobile app and website.

Here’s how the markets closed yesterday:

• Dow Jones: 38,886.17 +78.84 (+0.20%)

• S&P 500: 5,352.96 -1.07 (-0.02%)

• Nasdaq: 17,173.12 -14.78 (-0.09%)

• Bitcoin (BTC): $70,805.61 (8:00PM PST on 6/6/24)

• Ethereum (ETH): $3,798.62 (8:00PM PST on 6/6/24)

Here’s how THE SUPER SIX did yesterday:

• Microsoft (3.155T): 424.52 +0.51 (+0.12%)

• Apple (2.982T): 194.48 -1.39 (-0.71%)

• Nvidia (2.977T): 1,209.98 -14.42 (-1.18%)

• Alphabet (2.204T): 178.35 +1.28 (+0.72%)

• Amazon (1.925T): 185.00 +3.72 (+2.05%)

• Meta Platforms (1.252T): 493.76 -1.30 (-0.26%)