Plus, Lordstown Motors said it will begin limited production next month, Microsoft is protesting the NSA’s decision to award a $10 billion contract to Amazon, and the a U.K. regulator said Facebook’s acquisition of Giphy presents competition concerns.
Stocks were slightly lower at the open on Thursday with the Dow trading just below the flatline. The S&P 500 slid less than 0.1%, while the Nasdaq dropped 0.1%.
Palantir Technologies shares are up more than 13% this morning after the data analytics company reported its revenue jumped 49% in the second quarter. The company delivered an earnings beat, posting adjusted earnings per share of $0.04 on revenue of $376 million, while analysts had expected revenue of $352.3 million. Palantir said its commercial revenues surged 90% year-over-year in the quarter, with its commercial customer count increasing 32% quarter-over-quarter. The company’s head of business development said that it is on track to more than double its commercial customer base by the end of this year. Kawasaki added that Palantir’s investments in special purpose acquisition companies made up less than 1% of revenue in the quarter. When asked if Palantir is “buying revenue” by investing in SPACs, Kawasaki said, “These are companies that we think we will be working with for a very long time. Further, we think that using our product is going to help them win.”
Lordstown Motors is up more than 4% at the time of writing after the cash strapped electric pickup start-up said today that it will begin “limited production” by the end of September. In a release of its second quarter financials, Lordstown indicated that it is still in need of cash to meet its eventual production goals, with $366 million in cash on hand at the end of the second quarter, and no more than $275 million expected to be available by the end of September unless it lands new financing. “We are launching the Endurance with a prudent ramp of production given a challenging industry and supply chain landscape,” Executive Chairwoman Angela Strand said in the earnings release. “We are on track to begin limited production at the end of September and through the fourth quarter and complete vehicle validation and regulatory approvals in December and January. This will be followed by deployments with selected early customers in Q1 in advance of commercial deliveries in early Q2, with the ramp steepening the second half of next year.”
Microsoft has filed a protest with the Government Accountability Office against the NSA over a cloud computing contract awarded to Amazon. The $10 billion JEDI cloud contract, codenamed “WildandStormy,” is intended to modernize the NSA’s classified data storage. A spokesman for the agency said that the NSA “recently awarded a contract for cloud computing services,” adding that “The unsuccessful offeror has filed a protest with the Government Accountability Office. The Agency will respond to the protest in accordance with appropriate federal regulations.” A Microsoft spokesperson said in a statement, “Based on the decision we are filing an administrative protest… We are exercising our legal rights and will do so carefully and responsibly.”
The U.K.’s Competition and Markets Authority announced today that Facebook’s acquisition of popular GIF website Giphy presents competition concerns. The regulator said it has provisionally found that Facebook’s purchase of Giphy will harm competition between social media platforms and remove a potential challenger in the display advertising market, which may require the deal to be unwound. “While our investigation has shown serious competition concerns, these are provisional,” said Stuart McIntosh, chair of the independent inquiry group that is working on the investigation. “We will now consult on our findings before completing our review. Should we conclude that the merger is detrimental to the market and social media users, we will take the necessary actions to make sure people are protected.” Facebook said it disagrees with the CMA’s preliminary findings, saying in a statement, “As we have demonstrated, this merger is in the best interest of people and businesses in the U.K.—and around the world—who use GIPHY and our services. We will continue to work with the CMA to address the misconception that the deal harms competition.”
And jobless claims fell for the third straight week. The Labor Department reported initial claims of 375,000 last week, matching economists’ estimates. Continuing claims also dipped to a new pandemic era low of 2.866 million. “As last week revealed, incoming data at the start of Q3 points to further strong GDP growth and a recovering labor market,” Sam Bullard, senior economist for Wells Fargo, said in a note. “That said, the Delta variant which has led to a surge in hospitalizations and a rise in deaths attributed to COVID has to be monitored and poses downside risk to the growth and labor market outlooks — especially if plans to bring back office workers and re-open schools this fall are delayed.”
Stocks We’re Watching
Mogo Inc (NASDAQ: MOGO): Mogo shares rose as much as 25% yesterday after the fintech company announced second quarter earnings results. “Mogo achieved very strong results for the quarter led by accelerating subscription & services revenue growth and record gross profit. These results were driven by multiple products along with the expansion of our platform, following the acquisition of investing solution Moka alongside our previous acquisition of digital payments company Carta,” Greg Feller, President and CFO of Mogo, said in the earnings release. “We expect this strong momentum to continue for the rest of the year, which, along with the high recurring revenue nature of our business, allowed us to raise our guidance for subscription and services year over year revenue growth to a range of 100% to 110% for Q4 2021. We also continued to increase our investments to help support major new product launches including what we expect will be one of Canada’s first free stock trading apps, MogoTrade, along with our continued investment in our digital B2B payments business Carta including its expansion into the U.S.”