Today is Thursday, September 16, 2021.
Starbucks' China Problem Hits Stock
Shares of Starbucks (Nasdaq: SBUX) dropped 3.55% Wednesday after another company in China reported a negative business update.
Pandemic: Yum China Holdings (NYSE: YUMC) revealed yesterday that its profit took a hit in the previous quarter due to the pandemic.
Why This Matters: Starbucks has a major presence in China and gets a lot of business there. Investors saw the Yum China news as a potential sign of future bad news for Starbucks.
Unionization: Starbucks is also facing another headwind with workers in Buffalo, New York stores wanting to vote on a proposed union.
Competition: Shares of Starbucks fell on the same day that Dutch Bros (NYSE: BROS), a coffee chain, had a strong IPO.
Bigger Picture: Starbucks's stock reached an all-time high in July. The stock has been hot.
Final Thoughts: Could other fast-food restaurants with a presence in China also see similar problems?
Notable Earnings Today: Kintara Therapeutics (KTRA), TuanChe (TC).
Notable IPOs Today: ForgeRock (NYSE: FORG), Enact Holdings, Inc. Common Stock (Nasdaq: ACT), Alpha Healthcare Acquisition Corp. III Class A Common Stock (Nasdaq: ALPA).
Notable Equity Crowdfunding Campaigns Ending Today: Super Belly Ferments (SMBX), Empire State Greenhouses (Wefunder), Contractor+ (Wefunder).
Notable Economic Events Today: Jobless Claims (8:30 a.m. ET), Retail Sales (8:30 a.m. ET), Philadelphia Fed Manufacturing Index (8:30 a.m. ET).
Weber Stock Soars After Positive Earnings
Shares of grill manufacturer Weber (NYSE: WEBR) popped 7.26% after the company posted positive results for its first earnings since its IPO.
Numbers: Net sales increased 19% year-over-year to $669 million. It was the fifth straight year-over-year quarterly sales record.
Big Picture: The company attributed the sales increase to strong demand in the U.S. and in international markets.
Stock Price: Weber’s stock is down 9.52% since its IPO in August.
Final Thoughts: Weber certainly has room to grow, but there are supply chain issues that could challenge the company.
Buy Now, Pay Later Providers Could Be At Risk
Affirm (Nasdaq: AFRM) allows consumers to make purchases through short-term installments (known as Buy Now, Pay Later or BNPL). In fact, both Square (NYSE: SQ) and PayPal (Nasdaq: PYPL) now provide this BNPL service.
But is the entire BNPL industry at risk of financial downfall?
Market Growth: The global BNPL market is expected to grow from $90 billion in 2020 to nearly $4 trillion in 2030, according to Allied Market Research. That’s the bullish argument for BNPL.
Defaults: However, BNPL could be a problem for consumers, with potential defaults at risk. A third of U.S. BNPL users have already fallen behind on one or more payments.
The Problem: Some of the BNPL providers don’t operate like traditional banks. They may not necessarily conduct credit checks for consumers and they may lack the funds to cover loan losses.
Final Thoughts: While it is clear that BNPL stocks are rising now, investors should be concerned about future risks.
Trends to Watch
Growing Fast: Crypto adoption in Africa has surged 1,200% over the last year (Insider)
Everything is Bigger in Texas: Texas Instruments increases dividend by 13% to $1.15 (Seeking Alpha)
Big Drop: Wynn, Las Vegas Sands Tumble on China’s Casino Crackdown (Bloomberg / Yahoo!)
Harsh Words: Ray Dalio says if bitcoin is really successful, regulators will ‘kill it’ (CNBC)
Kick It Into High Gear: Federer-Backed Shoemaker On Holding Jumps 46% in U.S. Debut (Bloomberg / Yahoo!)
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