The Rundown - Google Loses Epic Games Case, Roblox Gets Hit by Short-Seller

Episode Date: October 8, 2024

Stock market update for October 8, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Tuesday, October 8th. In today's episode, we tell you how the upcoming hurricane is impacting the stock market. We also dive into Google's latest L in court, and this one could be big. Let's stick around to the end of the show to find out why super microstock is booming and the latest collab coming out of Wendy's that should have happened 10 years ago. All right, let's go. Well, brutal start to the week for the stock market.

Stocks were down across the board. The S&P was down nearly 1%. The NASDAQ was down 1.2%. Pretty much every sector was down yesterday, except for energy. Energy stocks were up, thanks to oil prices continuing to climb, rising to $77 a barrel. I think markets are getting pretty spooked from the rising conflicts in the Middle East right now. I think investors also have an eye on Hurricane Milton and the impact that will have.

Yesterday, one of the best performing stocks was Generac Holdings, which is a company that makes generators. Its stock jumped more than 8% yesterday because of the demand for backup power from all the damage that Hurricane Helene has done and the potential need for generators after Hurricane Milton passes through South Florida. If you want to look up that stock, it's on the public app, ticker symbol GNRC. And this one hits close to home because when Hurricane Barrel passed through Houston back in July, I was without power for three days.

And after that, I've really considered installing a generator at a generator. my house. And in fact, some of my neighbors have already installed a generator after that experience, and Generac is one of the top generator companies. So I can see why the stock surged yesterday. The hurricanes are also causing insurance stocks to get crushed. Travelers insurance, Allstate, Chubb, were all down around 5% yesterday. The more natural disasters is generally not great for insurance companies because they're going to have to pay out more in claims. So it's a tough start to the week, and I just hope that everyone that's been impacted by Hurricane Helene, a really speedy recovery, and everyone that's in the path of this upcoming hurricane, Milton,

I mean, this one looks bad. So people in Tampa, South Florida, just hoping that you can get the safety and a speedy recovery. You know, I grew up in Florida, then I moved to Houston. So I've seen some pretty bad hurricanes in my life, and they're no joke. Let's run through some headlines. We have to start with Google first, because a federal judge yesterday is forcing Google to open up Android to other app stores and billing options. This is all part of a lawsuit that Epic Games, which is the maker of Fortnite, filed against Google back in 2020 for being a monopoly. And they're just ruling on it because it seems like the court system moves super slow. Now, as part of this ruling, Google is being forced to make it easier for developers to

offer their own app store outside of the Play Store. See, right now, every Android device comes with Google's Play Store, which is their version of the App Store. Most developers for Android have their apps on the Play Store, and Google makes a lot of money from the Play Store because they charge a 15 to 30% fee on all transactions for apps downloaded through the Play Store. Well, some developers wanted to have their own app store so they didn't have to pay Google a 15, 30% fee, and Google made it pretty difficult for them to do that. Well, because of this ruling, Google can't do that anymore. This is a pretty big deal for a company like Epic Games, which does like millions of dollars of in-app purchases through their app like Fortnite. And if they had their own app store,

they're not going to have to pay Google the 15 to 30% fee anymore. And look, Google was doing some shady stuff, right? Not only do they make it difficult for developers to launch their own app store, they also were doing some side deals with some developers, paying them millions of dollars so they wouldn't launch their own app store. They tried to protect their Play Store monopoly, and I think those side deal with developers is what really got them in trouble. There were some other stuff in this ruling like Google can't force developers

to use Google's payment platform for transactions. But overall, pretty big L for Google here. Now, this injunction by the courts only lasts for three years, so developers will have that time to launch their own app store and try to compete with Google's Play Store. But there is a chance of this could threaten billions of dollars in profit that Google makes from its Play Store if other app stores take market share from it. Google does say they plan to appeal this decision, so we'll see what happens. But like I said, the court system moves pretty slowly here.

Google stock was down 2% yesterday in reaction to this ruling. Let's talk about another tech company taking an L today. That would be Roblox. Shares of Roblox are tumbling today after the shortseller Hindenberg Research published a report today accusing the gaming company of lying about the number of people on the platform. The short seller says that Roblox purposely inflated key metrics by conflating people with daily active users. See, Roblox has said that these daily active user figures include people with multiple accounts and bots. And according to Hindenberg research, that's a rampant problem on the platform.

Hindenberg estimates the number of people Roblox says are on the platform could be exaggerated by 25 to 42% and that engagement hours could be inflated by 100% or more. Hindenberg says that their analysis found millions of zombie hours by bots that were just sitting in game rooms for days at a time. So Roblox might be exaggerating their growth metrics and that could be a big problem, especially given the fact that Roblox has reported a net loss in every quarter since going public. We'll see how Roblox response to this. Roblox shares are down more than 5% this morning. Let's talk about some stocks making moves today.

Super Micro shares are up after the company announced that they ship more than 100,000 AI chips connected to its new cooling technology. Supermicro's new cooling technology helps keep AI data centers from overheating at a more cost-effective rate, according to the company's announcements. That got investors pretty excited. Shares are up more than 4% in the pre-market, on top of the 15% of the 15% boosts they got on the news yesterday. So it's been a good couple of days for the stock. Here's the kicker, though. Super Micers still hasn't released its annual earnings report

after the firm was accused of accounting manipulations. Kind of suss that we haven't gotten their annual report yet. I mean, what's taking so long? We have a bonus winner today. Weight Watcher stock is up nearly 20% after the company added compounded GLP1 obesity treatments to its offering. The GLP1 medications are like the WeGovie and Ozempics that have been extremely popular over the last couple years. I guess Weight Watchers is also getting involved in that business. It'll come with a price tag that starts at $129.29. So cheaper than the other options. So yeah, good day for Weight Watcher investors, but SAC is still down 90% year to date. On the flip size shares of PepsiCo are down after the company cut its full year guidance. Pepsi's new

outlook calls for a single digit sales growth in 2024. The cut comes as Pepsi deals with recalls of its Quaker brand products, slower demands in the U.S., and issues internationally due to geopolitical tensions. Pepsi stock is down around 1% in the pre-market. Let's wrap the show with the fun fact. Wendy's is doing a collab with SpongeBob. They're going to release a SpongeBob crabby patty to celebrate the show's 25th anniversary. And this crabby patty is even going to have a secret sauce. I mean, talk about a momentous occasion. Fast food chains have been trying to use collabs to go viral, and honestly, it seems to work. I remember that McDonald's at a Travis Scott collab a while ago, and that was pretty successful.

I think this Wendy's SpongeBob Craby-Patti collab has a chance to go pretty viral. I mean, we're talking about SpongeBob here, which is some of the best content that mankind has ever created, at least the early era of SpongeBob. I haven't really watched some of the recent ones, but this should have been out like 10 years ago. I guess it's better late than never. Let's hope that they do the Craby Patty some justice here. All right, guys, that's the rundown for today. If you enjoyed today's episode, don't forget to hit us with a five-star rating on Apple and Spotify.

All that engagement really does help us out. 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. This is the rundown, your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell, or hold that security.

Run-down guests are not financial advisors and are not affiliated with public holdings board's subsidiaries. You should make your own financial and investment decisions or consult. Respected professionals. Learn more at public.com disclosures. In partnership with Zayidimani, brokerage services for U.S. listed registered securities are offered by open to the public investing incorporated, member FINRA and SIPC.