The Rundown - Amazon Sued Over Ad Prices, Shein's IPO Falls Flat

Episode Date: September 1, 2026

Market update for September 1, 2026Check out the Public app for incredible investing tools and to support the show (LINK)Follow us on Instagram (@TheRundownDaily) for bonus content and instant reactions.In today’s episode, Zaid covers:Why September could bring more market volatility as oil prices and bond yields move higherThe FTC’s lawsuit accusing Amazon of secretly inflating advertising pricesShein’s disappointing Hong Kong IPO and how its valuation fell from roughly $100 billion to about $26 billionDuolingo’s analyst upgrade and why NIO shares are falling after earningsHow YouTuber Markiplier became GoPro’s largest shareholder and sent the stock surging

Public.com presents the rundown. Your daily market update in 10 minutes. My name is Zadadmani, and today is Tuesday, September 1st. In today's episode, we'll break down why September could get a lot more volatile for stocks, with oil and bond yields both moving higher. We'll also tell you why the FTC is suing Amazon over its advertising business and why Sheehan's long-awaited IPO was such a disappointment. Then stick around to the end of the show to find out why one of the biggest YouTubers in the world just became GoPro's largest shareholder. We've got a great show for you today.

Let's go. Stocks ended the month of August on a down note. The S&P 500 fell 0.3% on Monday, while the NASDAQ dipped just 0.1%. Overall, though, when you zoom out, August was a great month for the stock market. the S&P gained 2.6% while the NASDAG added 3.9%. Both indices having their best August since 2021. Now we're officially in the month of September and historically September has been the worst month for the stock market. Going all the way back to 1928, the S&P has averaged a 1.1% declined for the month of September. And you know, there's a lot of uncertainty this year

heading into this month. On one hand, you have corporate America continuing to crush it. Q2 earnings season was strong. for the S&P 500 were up nearly 16%. And earnings per share were up 53% from a year ago. Now, to be fair, some of that growth did come from investment gains in AI companies at Amazon and Google, plus tariff-free funds flowing through retailers like Walmart, Target, and Apple. But even setting aside those investment gains, profit growth was still the strongest since 2021, and companies are raising guidance left and right.

So despite all the concerns about the economy, consumers are still spending and, corporate earnings are holding up really well. But then on the other hand, the macro picture is still pretty messy. Oil prices are still elevated and jumping again right now after renewed fighting between the U.S. and Iran around the Strait of Hormuz. And then you have the bond market chaos. Bond yields are surging everywhere in the world. The U.S. 10-year treasury yield is around 4.79 its highest level in about 20 months. And yields in Japan and the UK have also hit multi-decade highs. And then you add in what could happen with the Fed and interest rates. You know, Fed share Kevin Warsh was pretty hawkish in his Jackson Hole speech on Friday,

and traders are now pricing in a roughly 66% chance that the Fed will hike interest rates at the September meeting. So given that backdrop, September is shaping up to be a very interesting month. I think we're going to see more volatility, especially now that Wall Street is coming back from summer vacation. So personally, I'm looking forward to having more things to talk about this month. We're going to stay on top of all of it, so definitely get subscribed to the podcast and tune in every day to stay in the loop.

Let's run through some headlines, starting with Amazon. The FTC and 22 states are suing Amazon and accusing the company of secretly manipulating their advertising auctions to charge businesses more money. Now, all of this gets a little wonky, so let me try to explain what allegedly is happening. See, right now, when you search for something on Amazon, a lot of the products at the top of the search results are ads. Sellers bid against one another for those top search results, and Amazon historically has used what's called a second price auction to determine who's going to get the top spots. So let's say I bid $10 for an ad to show up every time someone searches for a water bottle,

and some other seller bids $8 for an ad. I would win that auction, but instead of paying the $10, I would basically pay one penny more than the second highest bidder, so in this example, it would be $8.1.1. The system is designed this way to prevent bidding wars from happening, and giving merchants confidence that they won't overpay for an ad. Well, according to the FTC, Amazon secretly changed the system back in 2018 and introduced something internally called Soft Reserve.

Basically, Amazon could insert a higher minimum price after seeing the bids, which pushed up what the winners had to pay. According to the complaint by the FTC, Amazon did this for 70 to 80% of the auctions in recent years, and they increased the pay-per-click ad prices by as much as 50% during peak shopping seasons. And according to the FTC, these moves by Amazon caused $20 billion in harm to advertisers.

And the argument here by the FTC is that higher advertising costs don't just hurt the sellers. Sellers will eventually pass those costs on to shoppers through higher prices. Now, Amazon, for their part, is pushing back hard. The company called the lawsuit misguided. They said the FTC fundamentally misunderstands

how digital advertising operates. Amazon says their system sets real-time, minimum values based on ad relevancy and that sellers never pay more than their maximum bid. In fact, Amazon goes on to say that their pricing models actually saved advertisers $8 billion over four years. So we'll see how this all plays out. I mean, this is this kind of a big deal because advertising has become a monster business for Amazon. Amazon made $68 billion from ads last year, making it the third largest digital advertising platform in the world behind Google and meta. The market doesn't seem to be too concerned about this lawsuit. Amazon's

fell more than 2% yesterday and it's down another 2% this morning. I think regardless of how this lawsuit plays out, I don't think sellers will pull back on ad spending on Amazon anytime soon. That being said, I mean, I personally find it very annoying that like the first five to six results on Amazon are now ads at this point. But again, I don't think that's going to be changing anytime soon. Let's shift gears and talk about Xi'em. This is a company that some people thought was a threat to Amazon at one point, but things

haven't been so great lately. The Chinese fast fashion company finally went public on Tuesday in Hong Kong and it didn't go so well. The stock dropped as much as 10% out of the gate, but then did claw its way back in the final minutes to close basically flat for the day. It definitely wasn't the kind of IPO pop that company's dream about. Cheyenne is now valued at around $26 billion, which is way down from the hundred plus billion dollars the company was valued at in private markets back in 2022. And there are a couple of reasons why Xi'an is struggling right now. A year, A huge part of Xi'an's business model was shipping really cheap individual packages from China directly to American customers under something called the de minimis exception.

Basically in the U.S., if packages were worth less than $800, they could enter the U.S. without paying tariffs. But the Trump administration eliminated that exception last year, making Shian's cheap clothes more expensive to import, and Europe also tightened their rules around the minimis as well. At the same time, that was happening, competition started heating up. She and started losing market share from Gen Z shoppers to platforms like Timu and TikTok shop. In fact, Sheehan actually posted a $99 million loss in the first quarter of this year. So Sheehan is a great example of how tough of a market this is and how quickly things can change

if your entire business model relies in a loophole in the law. And is a great example of how timing matters too when it comes to markets. Sheehan probably wished they IPOed back in 2021 or 2022 when investors were obsessed with e-commerce. But these days, all investors seem to care about is like AI, robotics and semiconductors, especially in China. Let me know in the comments on what you guys feel about Sheehan. Are you still using it at all, or have you moved on to other apps like Timu or TikTok shop? Let's talk about some stocks making moves today.

Shares of Duolingo are popping this morning after Evercore upgraded the stock and doubled their price target from $105 up to $210 a share, which implies more than a 4 40% upside from Monday's close. Evercore is comparing Duolingo today to what Netflix was back in 2022. See, back then, Netflix's growth had slowed and investors gave up on the stock, but cheaper ad-supported offerings and password sharing crackdowns help restart growth for Netflix. Duolingo is kind of going through their own reset right now. The stock is down nearly 60% from its highs back last October, but the actual app continues to grow pretty quickly.

According to their latest earnings report, daily active users jumped 23% last quarter to nearly 59 million, while paid users grew 17% to almost 13 million. And if you look at revenues, those were up 18% as well. And despite the concern that chat GPT and other AI tools could replace language learning apps, Evercore survey found that people are using AI alongside Duolingo and not instead of it. So Evercore sees some high upside for Duolingo, and as a result, shares are up more than 5% this morning in reaction to this upgrade. Now, on the flip side, shares of the Chinese EV maker Neo are falling this morning after the company reported earnings.

Honestly, the quarter itself was pretty solid for the company. Revenues were up 69% from a year ago to $4.7 billion. And Neo even broke even on an adjusted basis while Wall Street was expecting a loss. But the stock is still following this morning because of the company's outlook. Neo expects around $5 billion in revenue this quarter while Wall Street was looking for around $5.3 billion in revenue. And even though vehicle deliveries are growing for Neo, investors are still nervous about the overall Chinese EV market. Our competition over there is brutal right now and companies are constantly cutting prices to win customers. Even BYD, the market leader in China, saw China deliveries fall roughly 33% this year.

So that's why investors are nervous about Neo. The stock is down around 4% this morning at the time of this recording. And if you zoom out, the stock has dropped nearly 17% this year coming into today. Let's wrap the show with a fun fact. A YouTuber just became the largest shareholder of GoPro, and the stock is surging on this news. The YouTuber that I'm talking about is Marketplower. He's one of the biggest creators on YouTube with nearly 40 million subscribers. He's been posting on YouTube for 15 years.

And earlier this year, he even released his own movie called The Iron Lung, which made $51 million at the box office on a $3 million. budget. So this guy has a big and dedicated following. So when he disclosed yesterday that he now owns an 8.5% stake in GoPro, making him the largest shareholder in the company, the market absolutely loved it. GoPro stock jumped 46% on Monday, and it's up another 70% today in pre-market trading at the time of this recording. Apparently, Markiplier is a big GoPro fan and user himself, and he thought the company was undervalued, especially after he saw GoPro's new internet. interchangeable lens camera, which he thinks could make professional filmmaking more accessible. And when you look at GoPro stock, I mean, it's had quite a journey as a publicly traded

company. The company IPOed back in 2014 at $24 a share and at a $3 billion valuation. And at its peak back in 2014, the company was valued at over $11 billion, but today, the stock is essentially a penny stock worth around $100 million. The company has been struggling for years now. Revenues fell 31%. last quarter and the company lost $51 million as a result. Personally, I don't think GoPro has done a good job competing with cameras from Chinese brands like DJI and Insta 360, which are just better and cheaper. So maybe now with MarketPlyer getting involved and with this massive audience,

I don't know, he can bring some juice back into the company. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. Thank you guys so much for listening, watching, and commenting. shout out to Mike and V for all the work behind the scenes. And we'll see you guys back here tomorrow.