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Daily Scoop

Mass Recall

By Thu, May 6, 2021

Hey Scoopers,

Better-than-expected earnings reports turned markets’ attention away from Yellen’s commentaries. — More on that in the “Overall Market” section.

Beyond the overall market, a company announced it would be splitting into two different publicly traded companies along with a solid earnings report. Meanwhile, investors didn’t like the increase in an online education platform’s cost. — More on that in the “What’s Up?” and “What’s Down?” sections.

By the way, how do you think a product recall impacts the future of a growth stock? — More on that in the “Water Cooler” section.

But, first, here is a recap of what happened in the market yesterday:

Market Recap

  • U.S. markets: The stock market ended mixed on Wednesday. Scroll down to the “Overall Market” section to read more.
  • Cryptocurrency: Bitcoin‘s price climbed back to $56K per coin.

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Solid Earnings

The stock market ended mainly in the green zone on Wednesday.

After a mixed trading session, the markets closed near to the flat line. Despite Treasury Secretary Janet Yellen’s comments about higher interest rates possibly in the previous session, the markets turned attention to stronger-than-expected earnings reports unveiled before the markets opened. As a result, the Dow Jones index rose about 100 points to close at a record high.

Splitting Into Two

So, what happened?

Shares of ODP (Ticker: ODP) were up by more than 8% on Wednesday. Although Office Depot and OfficeMax’s parent company reported a solid first quarter, the announcement of the split into two publicly traded companies led the rally. The company believes that creating two focused companies would unlock opportunities to improve its B2B business model shift. Furthermore, ODP expects to complete the separation in the first half of 2022. It seems that investors liked the idea a lot.

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More Expenses

So what happened?

Shares of Coursera (Ticker: COUR) were down by more than 8% on Wednesday. After the learning platform went public in April, Coursera now unveiled its first earnings report. Although the company achieved significant revenue and gross profit growth targets, it also increased its losses. Coursera’s net loss increased 12.5%, $0.45 per share. Furthermore, the learning platform’s operating loss increased by 25%. Despite Coursera showing promising results in revenue and gross profit, it seems that investors were concerned about other metrics.

Mass Recall

So what happened?

Peloton (Ticker: PTON) is recalling all of its treadmills.

After injuries reports, including one death, Peloton recalled all its Tread+ and Tread treadmills over safety concerns. In an official statement, the company apologized for not taking more severe actions before. Although it is voluntary, the company recommended that all its clients return the treadmills to preserve their health while they find the fix. Furthermore, the company said that it would guarantee that clients could contact the company and request a full refund if they don’t want the recalled products anymore.

The recall may have a long-lasting effect on Pelaton’s reputation and growth potential at least in the short to medium term.

If you have any questions, or suggestions let us know by emailing us at members@tradestocks.com. We look forward to hearing from you.

About the Author

Felipe Nebesnyj is an Economics student who is passionate about the stock market and investing in the market. Originally from Brazil, he is working and studying in the U.S. and started learning about and researching the stock market at 16. Before joining Stock Card, Felipe worked on multiple stock market research projects that gave him the necessary knowledge and confidence to put into his stock market analyst career at Stock Card. Last but not least, he is an excellent violinist and enjoys video games.