Stock Market Nerd – Market Headlines – May 25, 2024
The Consumer Financial Protection Bureau (CFPB) designated buy now, pay later (BNPL) lenders as credit card issuers. This means consumers can dispute changes on BNPL loans going forward. This will raise costs associated with running this business. Players like Affirm cheered this regulation while Klarna was more critical of the ruling. It’s likely safe to assume that’s because Affirm’s policies leave it less vulnerable to this change than for Klarna. Nobody else commented as those two are the only pure-play BNPL companies in public markets. Block, PayPal, Shopify, SoFi and others could also potentially be impacted less materially as chargeback rates could rise. This makes proper fraud detection all the more important.
Progyny ($PGNY) added another $100 million to its buyback program. It is now authorized to purchase up to roughly 5% of its share count. That could lower its 2024 earnings multiple from 17x to 16x if it gets aggressive.
Disney ($DIS) licensed the rights to 10 College Football playoff games to Warner Brothers. This is a good way to minimize hefty content spend while securing the rights a company most wants. It lets Disney pick and choose what it wants while monetizing the rest. Disney also fired 175 employees within its Pixar division.
Amazon ($AMZN) is working on infusing more of its GenAI consumer application work into Alexa. Amazon’s. Amazon is also gearing up to spend $17 billion on cloud infrastructure expansion in Spain. Finally, Amazon and Meta participated in a $1 billion funding round for a now $14 billion AI firm called “Scale AI.”
Lightspeed ($LSPD) and Uber ($UBER) announced a new integration for LSPD’s merchants on Uber’s Uber Direct and Uber Eats platforms.
Alphabet ($GOOGL) is investing heavily in India smartphone production capacity. Google also plans to purchase HubSpot for $31 billion. HubSpot is a customer relationship management (CRM) software tool that competes with Salesforce, Microsoft and many others.
J.P. Morgan’s ($JPM) Jamie Dimon says he will retire within 5 years. He’s Buffett’s favorite banker, and obviously an iconic executive within the sector.
As expected, Microsoft ($MSFT) announced a new series of personal computers purpose-built for its GenAI copilot products. This will become available next month.
Tesla ($TSLA) removed its 2030 delivery targets from its latest impact report. It’s reportedly accelerated robotics and autonomous hiring. Tesla cut Model Y production in Shanghai amid challenging demand. This is according to Reuters, not Tesla.
