Retailer Gap (GPS) is heading toward its best day ever after announcing a partnership with Kanye West — and options traders are piling on Facebook CEO Mark Zuckerberg announced hate-content policy changes after company shares tumble. In a tweet on Friday, Kanye West shared a photo of clothing being taken out of bag that says “developed by Yeezy and GAP.” Recent headlines were saturated with the alarming uptick of new coronavirus cases in several states. Accordingly, the stock market experienced a sell off. Yet, stocks of companies engaged in the search for a COVID-19 vaccine or treatment took the news as a bullish signal. Inovio Pharmaceuticals (INO) Wall Street closed higher on Thursday gaining some ground that it lost the previous day following the rollback of some of the regulations of the big banks by the FDIC.
While Nike (NKE) and its surprise fiscal fourth-quarter loss stirred flashing lights across Wall Street, one retail stock has had a good morning. Kanye West, acclaimed musician and burgeoning entrepreneur, announced his Yeezy brand entered a 10-year partnership with Gap Inc. (NYSE: GPS) to develop a clothing line aimed at younger shoppers. The apparel line will be available in 2021, while the controversial West — who has previously collaborated with NKE and Adidas — will receive loyalties and potential equity as part of the deal.
Calls are the champion in the options pits today. Gap options bulls look to be digging for gold, with a whopping 192,000 calls changing hands, 15 times the average intraday amount and already a new annual high. The most popular by far is the July 15 call, with new positions being opened. Buyers of these calls are expecting GPS to fly away on the charts by July 17, when the options expire.
Author: by Patrick Martin
Mark Zuckerberg reverses hate-content policy after Facebook stock nosedives, will flag Trump posts if needed
Wall Street talked and Mark Zuckerberg finally listened.
The Facebook CEO did an abrupt about-face on Friday by implementing policy changes regarding hate content on his social media platform as the company’s stock nosedived.
At market close, Facebook shares were down 8.3% for the day to $216.08 per share.
Zuckerberg announced the changes during a virtual meeting on Friday as yet more advertisers vowed to stop advertising on Facebook, sending shares tumbling.
The company will flag all “newsworthy” posts from politicians that break its new rules — even those from President Trump.
Facebook had left the president’s posts unchallenged, but now joins Twitter, which recently began flagging some presidential posts.
Zuckerberg, 36, asserted that the company would take a more proactive stance in eliminating hateful content in ads, blocking false claims, helping to fight voter suppression leading up to the 2020 elections and bettering racial equality.
“The 2020 elections were already shaping up to be heated — and that was before we all faced the additional complexities of voting during a pandemic and protests for racial justice across the country,” Zuckerberg wrote on his personal Facebook page on Friday. “During this moment, Facebook will take extra precautions to help everyone stay safe, stay informed and ultimately use their voice where it matters most — voting.”
Just within the past two weeks, dozens of major corporations — including The North Face and Verizon — have pulled Facebook advertising or indicated intentions to do so.
“In 82 years, we have put people over profits,” tweeted billion-dollar sporting goods company Recreational Equipment, Inc. on June 19. “We’re pulling all Facebook/Instagram advertising for the month of July.”
In mid-June, major civil rights groups — including the Anti-Defamation League and NAACP — formed the initiative Stop Hate For Profit, which urges advertisers to halt hawking goods on Facebook throughout July.
Facebook, which generates nearly all of its revenue through advertising, saw shares tumble Friday trading after conglomerate Unilever halted U.S. advertising on Facebook, Twitter and Instagram.
Unilvever, the London-based conglomerate comprising more than 400 brands including Ben & Jerry’s, Dove toiletries and Lipton, shelled out over $42 million in 2019 U.S. advertising on Facebook, according to analytics firm Pathmatics.
“Continuing to advertise on these platforms at this time would not add value to people and society,” said Unilver executive vice president of global media Luis Di Como in a statement, citing hateful speech and divisive content. “We will be monitoring ongoing and will revisit our current position if necessary.”
Facebook’s global marketing vice president, Carolyn Everson, said Friday that the company would maintain dialogues with advertisers on ways to improve.
“We respect any brand’s decision, and remain focused on the important work of removing hate speech and providing critical voting information,” said Everson. “Our conversations with marketers of civil rights organizations are about how, together, we can be a force for good,” according to The Verge.
Author: Storm Gifford
Gap stock soars after Kanye West touts collaboration with his fashion brand Yeezy
Kanye West and daughter North West attends the “Yeezy Season 8” show as part of the Paris Fashion Week Womenswear Fall/Winter 2020/2021 on March 02, 2020 in Paris, France.
Arnold Jerocki | Getty Images
Gap shares soared Friday after Kanye West shared a photo that touted his collaboration with the retailer.
Shares closed up 18.8% Friday at $12.07, but had been up as much as 40% earlier in the day. The move added more than $700 million to Gap’s market cap, pushing it to about $4.5 billion.
Gap and West are developing a clothing line for men, women and kids that will be sold in its stores and online. The retailer said in a news release that the items from his fashion brand, Yeezy, will be made up of “modern, elevated basics” sold at “accessible price points.” The new line will debut in 2021.
West is the sole owner of the Yeezy brand, Gap said in its press release.
The partnership is a ten-year agreement, a person familiar with the deal’s terms said. Gap did not disclose terms of the deal, but said Yeezy will receive royalties and may get equity based on how much it sells. Gap has issued Yeezy Supply warrants for up to 8.5 million shares depending on whether the brand meets certain sales targets, according to a filing with the Securities and Exchange Commission.
Yeezy Supply is guaranteed the first third of those shares if annual net sales of the Gap-Yeezy line hit $250 million and the pursuant thirds if sales reach $450 million and $700 million annually. Those warrants expire 20 days after the company confirms its sales for fiscal 2025.
Following Friday’s rally, the total stake is worth more than $100 million at the current share price. In all, Yeezy Supply could have up to a 2% ownership in Gap, based off the company’s current share count.
The fashion partnership may seem like an unlikely one for some industry-watchers, but may have a familiar ring for West’s music fans. He worked in a Gap store as a teen and referred to his time there in the lyrics of “Spaceship,” on his 2004 College Dropout album.
The retailer and artist have been in touch for years, people familiar with the situation told CNBC, with West speaking openly of his hopes to work with the retailer as early as 2015. Over the past year, Gap and Yeezy began to negotiate more seriously about striking a deal, the people said.
The deal was already underway before the pandemic struck. Yet the move comes at a fortunate time for Gap and gave the company a much-needed boost on Friday. Gap was struggling to resonate with customers before the pandemic. Shuttered stores during stay-at-home orders dealt another blow.
Sales at Gap’s namesake brand were down 50% in the first quarter, which ended May 2. The company, which has skipped rent payments during the pandemic, has been sued by mall owner Simon Property Group.
Gap’s CEO Sonia Syngal told analysts earlier this month that the company is working improve its brand and its assortment.
With the deal, Gap will gain a mix of high-profile goods that could draw in new customers or entice long-time customers to return. Yeezy will get the benefits that brick-and-mortar retailers have given upstart brands — access to a platform and supply chain that can speed up growth. The Gap deal could also help Yeezy, which sells sneakers that cost hundreds of dollars, reach more price-conscious customers as the recession pressures consumers’ wallets.
Yeezy already has a shoe partnership with sports brand Adidas. A spokesperson for the German company declined to comment on the Gap collaboration when asked about it on Friday.
In its announcement of the deal, Gap said West’s experience working in one of its stores has come full circle.
“We are excited to welcome Kanye back to the Gap family as a creative visionary, building on the aesthetic and success of his YEEZY brand and together defining a next-level retail partnership,” Mark Breitbard, the company’s global head of brand, said in a news release.
In a tweet on Friday, West included a photo of clothing being taken out of bag that says “developed by Yeezy and GAP.” He included the hashtag #WESTDAYEVER. The tweet was previously reported by Complex.
His wife, Kim Kardashian West, expressed excitement about the collaboration and described it as a “dream come true.”
—CNBC’s Amelia Lucas contributed to this report.
Author: Melissa Repko,Lauren Hirsch
Inovio (INO) Stock Is a Winner, but Its Valuation Is Getting Stretched
Recent headlines were saturated with the alarming uptick of new coronavirus cases in several states. Accordingly, the stock market experienced a sell off. Yet, stocks of companies engaged in the search for a COVID-19 vaccine or treatment took the news as a bullish signal.
Inovio Pharmaceuticals (INO) skyrocketed over 100% this week, after the coronavirus vaccine maker disclosed it had been given $71 million by the U.S. Department of Defense (DOD). This will go toward the manufacturing of its Cellectra 3PSP smart device and the purchase of Cellectra 2000 devices. These are the devices through which Inovio’s COVID-19 DNA vaccine candidate INO-4800 is delivered into the skin.
INO-4800 is currently in a Phase 1 trial with interim data expected in June. A Phase 2/3 trial of INO-4800 should also kick off in the summer.
Maxim analyst Naureen Quibria argues the new contract represents vindication for Inovio’s vaccine program.
“The DoD coming on board for manufacturing of the delivery device ahead of the vaccine reaching approval is supportive and validating for INO-4800 in our view… As such, while the focus in the space seems to still be on mRNA based vaccines, a vaccine approach that has never yet been approved for any indication (oncology, infectious diseases, etc), Inovio’s DNA-based vaccine is making substantial progress, has support from multiple groups and the platform has a pedigree of safety and success in clinical trials for multiple indications,” the analyst commented.
Quibria, therefore, reiterated a Buy on Inovio shares, while bumping the price target to $24 (from $18). (To watch Quibria’s track record, click here) After Inovio’s latest surge, the stock is currently trading below the analyst’s price target.
Overall, among the 8 analysts to have posted a review of Inovio over the last 3 months, 5 recommend Buy while 3 say Hold. INO’s Moderate Buy consensus rating comes with a $17.57 price target attached. However, the Street has some catching up to do, as the figure currently represents downside of 26%. (See Inovio stock analysis on TipRanks)
To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Stock Market News for Jun 26, 2020
Wall Street closed higher on Thursday gaining some ground that it lost the previous day following the rollback of some of the regulations of the big banks by the FDIC. Improvement in economic data also bolstered market participants’ confidence. All three major stock indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) surged 1.2% or 299.66 points to close at 25,745.60. Notably, 22 components of the 30-stock blue-chip index ended in the green while 8 closed in red. The tech-heavy Nasdaq Composite ended at 10,017, gaining 1.1% or 107.84 points due to strong performance by large-cap tech stocks.
Meanwhile, the S&P 500 advanced 1.1% to end at 3,083.76. The Energy Select Sector SPDR (XLE), the Financials Select Sector SPDR (XLF) and the Technology Select Sector SPDR (XLK) appreciated 1.9%, 2.7% and 1.3%, respectively. Notably, all eleven sectors of the benchmark index closed in positive territory.
The fear-gauge CBOE Volatility Index (VIX) was down 4.8% to 32.22. A total of 11.38 billion shares were traded on Thursday, lower than the last 20-session average of 13.32 billion. Advancers outnumbered decliners on the NYSE by a 1.81-to-1 ratio. On Nasdaq, a 2.00-to-1 ratio favored advancing issues.
Rollback of Regulations on Banks
The Federal Deposit Insurance Commission (FDIC) and Office of the Comptroller of the Currency stated that they are planning to rollback some restrictions imposed on the banks by the Volcker rule. Per deregulations, banks will be permitted to more easily make large investments into venture capital and similar funds.
Moreover, banks will no longer be required to set aside cash for derivatives trades between different units of the same firm. This deregulation procedure will free up billions of dollars in bank’s exchequer to be invested in the economy.
Consequently, shares of banking behemoths like The Goldman Sachs Group Inc. (GS – Free Report) , JPMorgan Chase & Co. (JPM – Free Report) and Citigroup Inc. (C – Free Report) jumped 4.6%, 3.5% and 3.7%, respectively. All three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Department of Labor reported that initial jobless claims came in at 1.48 million for the week ended Jun 20 compared with a upwardly revised figure of 1.54 million in the previous week. The consensus estimate was 1.307 million. However, continuing claims – which indicates the number of jobless people already received government benefits – declined 767,000 to 19.52 million for the week ended Jun 13.
In its final estimate, the Department of Commerce reported that the U.S. economy shrank 5% in the first-quarter 2020, marking the biggest quarterly decline since an 8.4% drop in fourth-quarter 2008.
The Department of Commerce reported that the durable goods orders for the month of May jumped 15.8% compared with a revised decline of 18.1% in April. The consensus estimate was for a gain of 11.9%. Notably, May’s data was the highest since July 2014. The core durable goods orders (excluding aircrafts and military hardware) gained 2.3% in May.
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