The Rundown - GameStop Buys $500M in Bitcoin, Abercrombie Soars on Earnings Beat

Episode Date: May 28, 2025

Stock market update for May 28, 2025. This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠Public.com/disclosures⁠⁠⁠.

Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zad Admani, and today is Wednesday, May 28th. In today's episode, we recap earnings from Macy's Dick Sporting Goods and Avercromby and tell you what these retailers are saying about the impact of tariffs. We also tell you about GameStop's plans to buy Bitcoin. Then stick around to the end of the show to find out how much money only fans is worth and the awkward conversation I had to have with my wife after researching that segment. We got a great show for you today.

Let's go. Stocks got off to a hot start this week. The S&P 500 snapped a four-day losing streak, jumping 2.1%. And the NASDAQ was up 2.5%. Investors were back to buying stocks this week after President Trump delayed tariffs on the EU until July 9th. We talked more about that decision on yesterday's episodes, so go check that out if you missed it. But yeah, for now, we can go back. to enjoying the start of summer and not having to worry about tariffs.

Now, unfortunately, for Treasury Secretary Scott Bessent, he might have to cancel his summer plans because he has a lot on his plate over the next few weeks. You guys remember those reciprocal tariffs that Trump paused back in April for 90 days? Well, they're set to kick back in on July 9th, and then the pause on Chinese tariffs expire on August 12th. So we could have another tariff meltdown in the late summer if Scott Bessent doesn't get all these trade deals done.

Or the most likely scenario is that Trump will probably just delay these. tariffs again. But for now, the bulls are back and the markets are pumping. You know, one of the best performing stocks during this recent market rally has been Nvidia. Invidia stock is up more than 40% from its lows back in early April, and a good earnings report tonight could keep the rally going. Now, beyond just the numbers, what I'm looking forward to hearing is how Nvidia plans to deal with the export restrictions they have on China. Remember, the Trump administration blocked Nvidia from selling their H20 chips to China, which is expected to cost Nvidia over $5 billion in lost revenue. So I'm looking forward to hearing what CEO Jensen Huang says about that.

Are they working on another chip for the Chinese market? How are they going to make up for that lost revenue? So we'll break that down along with the rest of Nvidia's earnings highlights on tomorrow's episode. So make sure you guys tune in for that. Let's run through some headlines. Starting with earnings from retailers. Retail earnings are starting to give a little glimpsed into the early impacts of tariff. We got results from Macy's and Dick's Sporting Goods this morning, and it shows that not every company is going to be able to absorb the tariff shock equally. Let's start with Dick's sporting goods first. They delivered a solid quarter, and they didn't change their full year guidance, even after accounting for tariffs.

Management seems confident heading to the back half of the year. Now, Dix did make a big splash a couple weeks ago when they announced the acquisition of Foot Locker for $2.4 billion, which gives them deeper exposure to the sneaker market. Now, at the time, investors won't a big fan of that deal. Dick's stock dropped 15%. But the company says the strategy is built for the long term, and Dick's stock is up more than 5% today after these earnings. Now let's talk about Macy's. They actually did cut their full-year profit outlook because of the impact of Trump's tariffs, and they also had to do increased promotion to move more inventory. But their stock is also up after earnings because they did beat estimates for Q1, and they didn't change their full-year sales forecast.

so they still expect shoppers to keep shopping. Now, Macy's is in the middle of a three-year turnaround plan, which is centered around closing down their underperforming stores and investing more in stores that have potential. But their stock is down nearly 30% year-to-date because of the overall macroeconomic uncertainty. So yeah, both Macy's and Dick Sporting Goods are up this morning, but there's another retailer that reported earnings this morning,

and their stock is booming. We're going to cover them a little bit later in the show. Let's shift gears and talk about GameStop. because they have now joined the Bitcoin Club. The video game retailer announced that they bought 4,710 Bitcoin, which is worth more than $500 million at today's price. Now, in their press release, they didn't exactly say when the purchase happened

or at what price they bought it for. They bought it over the last month or so. They're probably up pretty big on their investment. But we do know that this is just the first move by GameStop. See, back in March, GameStop said they planned to raise $1.3 billion in debt to build a Bitcoin. Treasury. So if we're doing some quick math here, they probably still have about $800 million left to buy more Bitcoin. Now, initially, investors love this news. GameStop shares popped 5%

in the pre-market, but they have pulled back a bit since. But, you know, becoming a Bitcoin Treasury has become an increasingly popular strategic move by corporations after they saw it work out well for micro strategy. Even President Trump is getting in on the action. His media company, Trump Media, said on Tuesday that they plan to sell $2.5 billion. in stock and bonds to buy Bitcoin. And look, it's hard to blame them for following the Micro Strategy Playbook, which by the way, changed their name to Strategy.

Not sure if I like that. You know, Micro Strategy has been buying Bitcoin for years now, and that gamble paid off. Strategy stock surged more than 6x last year, and their market cap hit nearly $100 billion. So yeah, I think we've officially entered the era where a company's entire business model is just buying Bitcoin.

Let's talk about some sense. stocks making moves today. Abercrombie stock is booming this morning after the clothing retailer posted strong Q1 earnings. Both the revenues and profits beat estimates for Q1. In fact, the revenues of $1.1. Was a record high for the company. On top of that, the company expects sales to grow by 3 to 6% this year, raising their previous estimates. Now, the company did have to cut their profits forecast for this year because of the impact of tariffs. The company says tariffs will cost them around $50 million this year. But investors didn't seem to care too much about the

margin squeeze. They're paying more attention to the sales momentum and the stock is up nearly 25% this morning in reaction to these earnings. It's a nice comeback for the stock, which was down nearly 50% this year heading into the earnings report. Looks like the Abercrombie Renaissance is still in full swing, which blows my mind a little bit. Gen Z seems to have fully embraced the brand just like the millennials did back in the day. Now on the flip side, shares of ACTA are sliding this morning despite the company beating their earnings estimates. The stock is down nearly 10% due to their conservative guidance. Octa is a tech company. They help enterprise manage user identities and access credentials. And they say they're taking a cautious approach to their financial outlook

because of the uncertainty in the macroeconomic environment and enterprise budgets. On the earnings call, ACTA CFO said they haven't seen any impacts just yet, but they are starting to see some signs of uncertainty from conversations with clients and feedback from the sales team. So yeah, while a number The numbers for Octa were good, the vibes were off a bit, and that's sending Octa shares lower this morning. Let's wrap the show with the fun fact. OnlyFans is reportedly in talks to sell itself for $8 billion.

And honestly, that might be a bargain. OnlyFans is such a fascinating company, and not just because of the content on there, the company is owned by just one guy. Leonid Redvinsky, and they only have about 40 employees. Yet the platform makes an insane amount of money. In 2023, users on the platform spent $6.6 billion. And OnlyFans takes a 20% cut of that.

So that's $1.3 billion in revenue for the company. And it's pretty high margins too because the company reported $658 million in pre-tax profit. So the platform is printing money. Just to put this into perspective, they made more profit in 2023 than Palantir made last year and yet Palantir is worth nearly $300 billion. Now obviously it's not an apples to Apple's comparison. Palantir has more growth potential and upside, but it just goes to show you how much money OnlyFans makes. But one of the reasons that OnlyFans is going to sell at a lower multiple than just a typical internet business is because of their R-rated business model.

Not a lot of investors and investment firms want to get involved with that kind of business. So OnlyFans is going to have less potential buyers, which means they're going to fetch a lower valuation than a company typically would putting up those kind of numbers. But hey, if you somehow have $8 billion lying around, you could own one of the most profitable platforms on the internet. Also, my wife was really confused earlier when she saw me looking up only fans. I mean, I told her I was doing financial research for this podcast. She kind of gave me that look, but I'll send her this segment to clear things up. Almost gotten some trouble there. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. Remember,

We have Nvidia earnings coming out tonight. Also, Salesforce is reporting earnings too, so tomorrow's episode is going to be stacked. You definitely don't want to miss that one. We might try to do an instant reaction to the earnings report on our Instagram account tonight. So follow our Instagram if you don't already. By the way, if you guys enjoy this show and have like 12 extra seconds, consider giving us a five-star rating on Apple, Spotify, wherever you listen to your podcast. And if you do listen on Spotify, don't forget to vote in today's Spotify poll.

leave us a comment on Spotify, all that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes and we'll see you guys back here tomorrow.