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  • 😅 Carl Icahn’s $2M 'Oops'

😅 Carl Icahn’s $2M 'Oops'

+ Palo Alto Earnings + Upcoming Week

Good afternoon! If your next Airbnb has a “no crypto-mining” stipulation, here's why: One host gave her guests a five-star rating after they checked out — until she saw her $1.5K electric bill. Turns out they brought in 10+ computers for a three-week mining vacation. The guests wound up paying the electric bill, but they still came out on top — they claim to have made $100K+ from crypto mining during their stay.

MARKETS

*Stock data as of market close*

  • Stocks kicked off the week on a high note, with the Nasdaq exiting correction territory and both the Nasdaq and S&P 500 extending their winning streak to eight consecutive sessions. With a light data week, the market's recent momentum could continue—unless the Federal Reserve steps in.

  • All eyes are on Wednesday's release of the July FOMC meeting minutes and, more importantly, Fed Chair Jerome Powell's speech at the Jackson Hole conference on Friday.

  • Investors are gearing up for the key Fed events later this week, with the odds of a 25 basis point rate cut in September at 73.5%, according to the CME FedWatch Tool. After last week's best performance in a year, the market's strong rally continued, reversing the early August sell-off.

STOCKS
Winners & Losers

What’s up 📈

  • AST SpaceMobile ($ASTS) surged 24.4% as its stock continued to climb after last week's business update and second-quarter results, with momentum fueled by confirmation that its critical satellite launch plans remain on track.

  • FuboTV ($FUBO) soared 17.65% following news that a judge temporarily blocked a sports streaming service joint venture, Venu, from Walt Disney, Fox, and Warner Bros. Discovery.

  • Li Auto ($LI) rose 4.58% despite limited company-specific news, as a Bloomberg New Energy Finance report suggested China may significantly increase subsidies for its "cash for clunkers" program, potentially boosting EV sales in the country.

  • AMD ($AMD) jumped 4.52% after announcing plans to acquire server builder ZT Systems in a $4.9 billion deal, aiming to expand its AI footprint amid growing competition.

  • Roku ($ROKU) climbed 5.77%.

  • NVIDIA ($NVDA) edged up 4.35%, benefiting from AMD’s acquisition of ZT Systems, which provides compute design and infrastructure for AI, cloud, and general-purpose computing.

  • Match Group ($MTCH) added 3.95%.

What’s down 📉

  • Sweetgreen ($SG) dropped 6.82% after Piper Sandler downgraded the stock to neutral from overweight, although the price target was raised. The downgrade comes as Piper tempered its expectations for the fast-casual restaurant sector post-earnings season.

  • Lumen Technologies ($LUMN) fell 4.32% despite securing a three-year contract with The New Mexico Office of Broadband Access and Expansion to deliver nearly 900 miles of high-speed fiber connectivity to K-12 public schools.

  • HP Inc. ($HPQ) slumped 3.65% after Morgan Stanley downgraded the stock from Overweight to Equal-Weight.

  • Trump Media & Technology Group ($DJT) declined 3.56% as the Democratic National Convention kicks off today.

SEC
Carl Icahn’s $2M 'Oops' Moment: SEC Slaps His Wrist

Icahn’s Costly Oversight

Carl Icahn, the billionaire investor known for his high-stakes moves, just found himself on the wrong side of the SEC. The agency slapped him and his investment firm, Icahn Enterprises ($IEP), with a $2 million fine. The reason? Icahn failed to disclose billions in personal margin loans backed by his stake in the company. Icahn himself will pay $500,000, while Icahn Enterprises is on the hook for $1.5 million.

This all started when Hindenburg Research, a notorious short-seller, dropped a bombshell report in 2023. The report claimed that IEP was grossly overvalued and hinted at some shady financial practices. IEP shares plummeted, catching the SEC’s attention. What they found was that Icahn had pledged up to 65% of his IEP units as collateral for personal loans totaling up to $5.1 billion. These pledges, made between 2018 and 2022, went largely unnoticed by investors because Icahn didn’t bother to update his securities filings—until July 2023, well after Hindenburg’s report had already done its damage.

Icahn is now in full damage control, stating he’s “glad to put this matter behind us” and insists that the SEC settlement doesn’t imply that he or IEP engaged in any shady dealings like inflating asset values or running a “Ponzi-like” structure. However, Hindenburg isn’t backing down. On social media, they doubled down on their claims, accusing IEP of still operating in a questionable manner and reiterating their short position on the stock.

The Fallout Continues

While Icahn may want to move on, the fallout isn’t over yet. IEP’s stock took a 6% hit on the news of the SEC settlement (but ended the day in the green up 1.25%), adding to the ongoing pressure from both regulators and short-sellers. This episode serves as a stark reminder that even Wall Street legends like Icahn aren’t immune to the repercussions of overlooking/dismissing the fine print altogether. Investors, take note: transparency isn’t just a good practice—it’s the law. And when you miss the mark, it can cost you, even if your name is Carl Icahn.

NEWS
Market Movements

EARNINGS
Palo Alto Networks Surges on Strong Forecast and Buyback Boost

Sales Surge Despite Spending Fatigue

Palo Alto Networks ($PANW) just gave Wall Street a pleasant surprise. The cybersecurity giant posted a profit forecast for the current quarter that beat expectations, with earnings projected between $1.47 and $1.49 per share—comfortably ahead of analysts’ predictions of $1.43. This upbeat outlook, combined with a 12% sales growth last quarter, sent shares soaring up to 5% in post-market trading and ended the day up 2.77%. The company’s market cap now stands at a robust $111 billion, up from $91 billion at the start of the year.

This marks a significant rebound for Palo Alto after a rough patch earlier this year when CEO Nikesh Arora warned of "spending fatigue" among customers. That warning, coupled with a miss on annual sales expectations, had sent the stock plunging by 27%. But it looks like the company has turned a corner, with its recent performance suggesting that cybersecurity is back on the priority list for many companies, especially after a major outage linked to rival CrowdStrike ($CRWD).

$1 Billion Buyback Bonanza

In addition to the rosy profit forecast, Palo Alto’s board greenlit an extra $500 million for its share repurchase program, doubling the total buyback authorization to a whopping $1 billion. This move is a clear signal of confidence from the company’s leadership, showing that they believe in the stock’s future growth potential.

CEO Nikesh Arora emphasized the importance of cybersecurity in a post-CrowdStrike outage world, noting that Palo Alto’s approach to updates is "fundamentally different" and more secure. With customers now more cautious, Palo Alto seems well-positioned to capitalize on any shifts in the market.

Shifting Metrics and a New Strategy

One notable change: Palo Alto’s CFO Dipak Golechha announced the company will no longer issue guidance on billings forecasts, which had been a contentious point with investors. Instead, the focus will shift to annualized recurring revenue and remaining performance obligations (RPO). While some on Wall Street, like Guggenheim Securities, have raised concerns about relying too heavily on RPO due to its lack of time frame clarity, Palo Alto is confident this shift will provide a clearer picture of its long-term growth prospects.

Overall, Palo Alto Networks appears to be back on track, with a strong forecast, a hefty buyback, and a strategy shift that could keep investors intrigued as the cybersecurity landscape continues to evolve.

Calendar
On The Horizon

This Week

Monday: Earnings expected from Estée Lauder ($EL) and Palo Alto Networks ($PANW).

Tuesday: Lowe’s ($LOW), Medtronic ($MDT), XPeng ($XPEV), La-Z-Boy ($LZB), and ZTO Express ($ZTO).

Wednesday: Target ($TGT), Macy’s ($M), TJX Companies ($TJX), Zoom ($ZM), and Urban Outfitters ($URBN). FOMC July meeting minutes published.

Thursday: Baidu ($BIDU), Peloton ($PTON), Advance Auto Parts ($AAP), BJ’s Wholesale Club ($BJ), TD Bank ($TD), Workday ($WDAY), Intuit ($INTU), Ross Stores ($ROST), and Cava ($CAVA). U.S. initial jobless claims and existing-home sales. and Jackson Hole Economic Policy Symposium opens.

Friday: New-home sales & Fed Chair Powell speaks at Jackson Hole symposium.

Tomorrow

Before Market Open:

  • Lowe’s ($LOW): Like its competitor Home Depot, Lowe’s straddles the line between consumer spending and the housing market—both of which are feeling the strain. Home Depot’s recent earnings report highlighted a dip in home renovation spending, dragging Lowe’s shares down with it. While Lowe’s management held steady on its full-year outlook last quarter, any shift in that stance could spark a selloff. Expectations are set at $4.00 EPS and $23.96 billion in revenue.

  • Medtronic ($MDT): Medtronic’s shares have been relatively flat this year, but investors are optimistic about the medical device giant’s prospects. The company exceeded analyst expectations on both revenue and earnings last quarter, and a promising pipeline could help it stay competitive in a tough market. Plus, with 47 consecutive years of dividend increases, Medtronic gives shareholders a solid reason to stick around during slower growth periods. The consensus is $1.24 EPS and $8 billion in revenue.

ENTERTAINMENT
Meme Street