🏹 Robinhood Crash

1) Investors Don’t Like Robinhood 2) Roblox Keeps Stacking, 3) Duolingo Is Taking Off, and more!

Happy Tuesday.

Welcome to the 128 new subscribers who joined this past week. Some key data bites you should know: 

  • The MSG Sphere $SPHR in Las Vegas reported a $98.4M loss for its first financial quarter and saw its CFO resign.

  • AMC Entertainment's $AMC stock plunged after the company filed to sell up to $350M in common shares in an effort to improve liquidity and reduce debt.

  • A study shows that the weight loss drug Wegovy, owned by Novo Nordisk $NVO, can reduce the risk of cardiovascular issues in overweight or obese people with heart disease by 20%.

  • Google $GOOG pays Apple $AAPL 36% of the revenue it earns from search advertising on the Safari browser.

In today’s newsletter:

  • 🏹 Investors Don’t Like Robinhood

  • 🧱 Roblox Keeps Stacking

  • 🦜 Duolingo Is Taking Off

Let’s dive right in!

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🏹 Investors Don’t Like Robinhood

Robinhood has been taking a hit after the company recently reported lower trading volumes and active users, with its Q3 revenue of $467M missing analysts' expectations of $480M. The company's transaction revenue declined, particularly in crypto trading, which dropped 55% year-over-year. Despite these challenges, Robinhood is planning to expand into Europe, including launching its brokerage in the U.K. and opening crypto trading to EU customers, as it aims to broaden its product offerings and market presence.

Following the sharp decline, Cathie Wood’s ARK Invest purchased approximately 1.14M shares of Robinhood, valued at $9.55M, across their three ETFs. This continues to reinforce ARK’s position as the second largest institutional holder of Robinhood, according to FactSet.

🧱 Roblox Keeps Stacking

While Robinhood has been getting beat up, Roblox, the popular video-game platform among teenagers, saw its shares surge by the most in nearly 9 months, buoyed by third-quarter bookings and revenue that exceeded analyst expectations. The company's bookings climbed 20% to $839.5M, surpassing the projected $822M, and their adjusted EBITDA reached $81.1M. Additionally, daily active users were reported at 70.2M and hours engaged for the quarter rose by 20% to 16B. These positive results are linked to robust growth in areas like advertising, music, shopping, and a strategic focus on AI for content creation.

Bookings is a key metric to analyze Roblox because it represents virtual currency sales from in-game purchases. The company is strategically attracting older gamers with better graphics and enhanced game fidelity, which has led to higher spending per user. This shift is part of Roblox's effort to move away from the "metaverse" label and diversify its offerings and revenue streams through partnerships in sports, music, and major brands.

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🦜 Duolingo Is Taking Off

Duolingo shares have been on the rise following a quarterly earnings report that exceeded expectations, with a Q3 EPS of $0.06, surpassing analysts' estimate of ($0.08), and revenue reaching $153.6M, a 43% year-over-year increase. The company also reported significant growth in total bookings, paid subscribers, and user engagement, with paid subscribers up 60% year-over-year to 5.8M, and monthly active users increasing by 47% from last year. Duolingo's future outlook remains positive, with projected Q4 2023 revenue and FY2023 revenue both exceeding consensus estimates.

🛍 Meta/Amazon Partnership. Meta $META is partnering with Amazon $AMZN to allow users to link their Facebook and Instagram accounts to shop through Meta's apps, streamlining the buying process. [TC]

🇨🇳 China’s Attractive Sectors. Citadel founder Ken Griffin encouraged global investors to invest in China's innovative sectors, particularly in solar and electric vehicles. [BB]

🇺🇸 Negative Outlook. Moody's $MCO maintained the U.S. credit rating as AAA but changed the outlook to "negative" due to fiscal concerns and political polarization. [NYT]

💾 New Nvidia Chips. Nvidia $NVDA is developing new AI chips for China due to U.S. restrictions, aiming to maintain access to the market while complying with regulations. [WSJ]

🥈 Ether ETF. BlackRock $BLK applied to list an ETF that tracks the price of Ether. [F]

🏦 Financials Short. Global hedge funds have increased bearish positions to their highest level in nearly five years, particularly in the financial sector. [R]

Notable Companies Reporting Earnings This Week:

  • Monday:

    • Sun Life Financial $SLF, Tyson Foods $TSN, AECOM $ACM, Monday.com $MDAY

  • Tuesday:

    • Home Depot $HD, Sea Limited $SE

  • Wednesday:

    • Cisco Systems $CSCO, TJX Companies $TJX, Palo Alto Networks $PANW, Target $TGT, JD.com $JD, XPeng $XPEV

  • Thursday:

    • Walmart $WMT, Alibaba $BABA, Applied Materials $AMAT

  • Friday:

    • BJ’s Wholesale $BJ, Atkore $ATKR

All of the companies that are reporting earnings this week can be viewed here.

Major Trades Published Week of 11/6. Trades may be those of family members. [Source: 2iQ]

Buys:

  • Carol Miller (R)

    • Company: iShares MSCI Emerging Markets ex-China ETF ($EMXC)

      • Amount Purchased: $65K - $150K

  • Maria Elvira Salazar (R)

    • Company: New Fortress Energy ($NFE)

      • Amount Purchased: $15K - $50K

  • Greg Stanton (D)

    • Company: Microsoft ($MSFT)

      • Amount Purchased: $15K - $50K

    • Company: Apple ($AAPL)

      • Amount Purchased: $15K - $50K

Sells:

  • Pete Sessions (R)

    • Company: BlackRock Utility & Infrastructure Trust ($BUI)

      • Amount Sold: $250K - $500K

    • Company: Procter & Gamble ($PG)

      • Amount Sold: $100K - $250K

    • Company: McDonald’s ($MCD)

      • Amount Sold: $100K - $250K

    • Company: Lockheed Martin ($LMT)

      • Amount Sold: $100K - $250K

    • Company: Snowflake ($SNOW)

      • Amount Sold: $15K - $50K

    • Company: Microsoft ($MSFT)

      • Amount Sold: $15K - $50K

  • Greg Stanton (D)

    • Company: Microsoft ($MSFT)

      • Amount Sold: $15K - $50K

    • Company: Apple ($AAPL)

      • Amount Sold: $15K - $50K

  • Katherine Clark (D)

    • Company: Coca-Cola ($KO)

      • Amount Sold: $15K - $50K

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