That’s a No Bueno
By Wed, May 12, 2021
Hey Scoopers,
After investors raised more concerns about higher-than-expected inflation ahead, the stock market extended Monday’s losses. — More on that in the “Overall Market” section.
Beyond the overall market, an edge-computing company witnessed a rally in its stock after an analyst said it was oversold. Meanwhile, a luxury services company disappointed investors with more losses than expected. — More on that in the “What’s Up?” and “What’s Down?” sections.
By the way, what do you think about social media platforms focused on kids? — 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 Thursday. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin‘s price stayed at $56K per coin.
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Extending Losses
The stock market ended in the red zone on Tuesday.
Although the Nasdaq index traded higher during the afternoon, the growing inflation concerns dragged the index below the flatline for another session. Along with the Nasdaq index, the S&P 500 and the Dow Jones indices also erased last week’s gains to end in the red.
Analyst to the Rescue
So, what happened?
Shares of Fastly (Ticker: FSLY) were up by more than 10% on Thursday. Although the edge-computing company unveiled a worse-than-expected earnings report and the stock fell raidy after, analysts believe that the post-earnings selloff is overdone. DA Davidson analyst Rishi Jaluria stated that despite the company’s weak guidance for the second quarter, Fastly’s share price is going undervalued. According to the analyst, the fair stock’s price is at the $60 mark. It seems that Rishi’s analysis was enough to spark a bullish sentiment toward Fastly.
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Losing Money
So what happened?
Shares of the RealReal (Ticker: REAL) were down by more than 18% on Thursday. Although the tech sector selloff affected the luxury consignment services company, investors pointed out different reasons for the dip. Along with the selloff, the company revealed its first-quarter earnings report. In the report, RealReal posted its fourth consecutive loss per share miss over the past year, delivering a $0.49 loss per share against an expected $0.46 estimate. Furthermore, the revenue results didn’t please the markets.
That’s a No Bueno
So what happened?
Forty-four states urged Facebook (Ticker: FB) to abandon its children’s Instagram project.
More than forty attorneys general asked Facebook to stop its plan to build an Instagram platform focused on 13-years old children on Monday. According to the letter, the new platform could cause detrimental effects on children’s mental health. Following the concerns about children’s mental health, the attorneys also supported federal regulators’ concerns over the platform’s impact on children. Furthermore, the attorneys stated kids are not prepared to handle the range of challenges that come with a social media account, such as online privacy, the permanence of posts, and navigating inappropriate content.
To support the letter, the attorneys mentioned that Facebook and Instagram reported more than 20 million child indecent images in 2020 and pointed out that Facebook “has a record of failing to protect the safety and privacy of children on its platform, despite claims that its products have strict privacy controls.”
To defend itself from the accusations of creating a new need and not a solution for kids, the company affirmed it wants to improve the situation by delivering experiences that enable parents to control what kids are doing.
Although Facebook claims that it is a good idea, social media users and lawmakers are thinking otherwise.
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.
