Pet Care On-Demand
Hey Scoopers,
After the Fed decided to keep its current financial policy toward the inflation rate, the markets reversed early gains. â More on that in the “Overall Market” section.
Beyond the overall market, an eCommerce platform presented results that even the most optimistic analysts didnât predict. Meanwhile, a social media company presented good results, but not the good results investors expected. â More on that in the “What’s Up?” and “What’s Down?” sections.
By the way, have you ever thought about investing in a pet care company? â 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 in the red zone on Wednesday. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency:Â Bitcoin‘s price stayed at the $55K per coin mark.
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Markets Against Fedâs Decision
The stock market closed in the red zone on Wednesday.
After the Federal Reserve announced it would keep interest rates near zero, all the three indices dropped slightly. Although the stock market was expecting a stricter approach to possible inflation increase as the economy recovers, the Fed decided to keep its easy monetary policy. Moreover, the Fed stated it would aim to achieve an inflation rate above 2% for some time to balance longer-term inflation expectations.
Nobody Saw It Coming
So, what happened?
Shares of Shopify (Ticker: SHOP) were up by more than 11% on Wednesday. The rally came after the eCommerce platform unveiled its first-quarter financial results. The company reported a 110% year-over-year revenue growth, a 71% subscription revenue growth, and a 137% merchant solutions revenue increase. Following the breathtaking results, Shopifyâs president Harley Finkelstein stated that the companyâs success comes from a singular focus on making entrepreneurship easier.
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Not What Investors Wanted
So what happened?
Shares of Pinterest (Ticker: PINS) were down by more than 14% on Wednesday. Although the company beat analystsâ earnings expectations for its first quarter, investors had a higher bar for Pinterestâs earnings results. For investors, the company missed estimates for user growth and engagement. The social media platform confirmed that user growth would slow down but blamed the COVID-19 pandemic restrictions for the underperformance. However, it seems that investors disagreed with Pinterestâs justification for the slower growth.
Pet Care On-Demand
So what happened?
Rover announced the company is going public via a SPAC merger.
Rover is the worldâs largest online pet care marketplace. The platform connects dog owners with potential dog walkers, house sitters, and groomers. The markets frequently refer to the company as an Uber (Ticker:Â UBER) for dog walkers. As pet adoptions skyrocketed amid the pandemic, the company believes that the pet care market should witness a boost in demand after everything goes back to normal. Since pet owners would have to go back to offices, they would need to find someone to take care of their four-legged friends. The company is merging with Nebula Caravel (Ticker:Â NEBC) valued at $1.3 billion, adding more than $324 million to Roverâs cash balance. Rover CEO Aaron Easterly stated that a public listing would accelerate the expansion of Roverâs service offerings. Following the merger, Rover expects a $97 million revenue in 2021 and profitability by 2022.
Although other companies from the same segment as Rover have reportedly been looking for a SPAC merger, Rover will be the first company from the pet care on-demand business to become publicly traded.
If you have any questions, or suggestions let us know by emailing us at members@tradestocks.com. We look forward to hearing from you.