The Rundown - Microstrategy Buys Another $5.4B in Bitcoin, Macy's Employee Hid Millions in Delivery Expenses

Episode Date: November 25, 2024

Stock market update for November 25, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Monday, November 25th. In today's episode, we preview the upcoming week. There's still a lot of major earnings to drop. I'll tell you what I'm looking forward to the most. We also tell you about accounting issues at Macy's and why movie theaters might be back.

Then stick around to the end of the show to find out how many uncrustables NFL teams eat each week. The numbers are shocking. All right, let's go. The stock market got back to its winning ways last week. Both the S&P 500 and NASDAQ finished in the green, adding 1.7%. Now, for most of this year, the stock market has been carried by big tech stocks, but that wasn't the case last week.

Big tech stocks like Amazon, Google, and Nvidia were down last week, but the markets were still able to squeeze out again thanks to a nice rally in mid and small cap stocks. In fact, the Russell 2000 Index, which is entirely made up of small cap stocks, was up 4% last week. So I wonder if we see a rally in non-big tech stocks to close out the year. And we should probably talk about the Dow because I've been at Dow hater for a long time, as a lot of you listeners know, it's a flawed index. But I guess my hate is having no impact on the price because the Dow Jones was up 2% last week, closing at record highs. But you know what? Still don't care. Hate runs strong with me. And I'm sure all you Dow investors are probably loving that.

Now we have a short week coming up, though stock market will be closed on Thursday for Thanksgiving. open on half day for Friday, but there are a few notable companies reporting earnings this week, especially a ton of retailers like Best Buy, Abercrombie, Burlington, Dick Sporting Goods, all report on Tuesday morning. And then on Tuesday afternoon, we're getting earnings reports from Dell, HP, and CrowdStrike. So we should have a lot to talk about, and I'm especially looking forward to hearing what the retailers have to say. Also, I'm low-key kind of surprised that this many companies are reporting earnings this week, because I didn't know anybody was doing any real work this week. Like, this has to be one of the most unproductive weeks in America, right?

Let's run through some headlines. Let's start with Macy's because they were actually one of the retailers expected to report earnings this week, but now they're delaying their earnings, all because one employee was doing some shady accounting. This is a weird story. Macy said that their investigation revealed an employee hid more than $100 million of expenses. Apparently, this employee intentionally made incorrect accounting entries to hide about $132 million to $154 million of delivery expenses going all the way back to 2021. And no surprise here, they don't work there anymore. They got fired. Now, what's crazy is that Macy's had no idea this was going on for like three plus years.

They just found this out as they were preparing their quarterly financial statements. And as soon as they identified this issue, they got an independent investigation started. and that independent investigation found that this employee was doing this shady accounting, going all the way back to the fourth quarter of 2021. Now, the company was quick to say that these erroneous accounting entries had no impact on their cash management or Macy's payment to vendors. But now Macy's has to go back and clean up the books, which is why they're delaying their earnings release.

The company says they plan to release their earnings by December 11th. The stock market's reaction to those news was pretty interesting because as soon as this report came out, Macy's stock dropped like 8%. I'm sure investors just saw the headline and were like freaking out because, you know, accounting scandals are no joke as we found out with Super Micro over the last few months. But now that the details of this issue are starting to come out, investors realize that this might just be a one-off and the stock is actually recovered. It's down only 1% in pre-market trading. So kind of a wild morning for Macy's. On a side note, what is going on with shady accounting issues at corporations these days? Like, you know,

I know the 90s are back in style right now, but I didn't expect shady corporate accounting to be back as well. That's an Enron reference for all you zoomers out there. And speaking of the 90s, let's talk about the movies. Movie theaters just had a great weekend with two big hits. This weekend saw the release of Wicked and Gladiator 2. Both those movies pulled in a combined $170 million during their first three days in theaters. Wicked made over $114 million and Gladiator 2 made $55 million. Both those numbers are domestic box office numbers. And honestly, I'm kind of surprised that Gladiator 2 didn't make more. But, I mean, it has such big shoes to fill because the first movie is like an all-time classic.

Now, there was some chatter about how Wicked and Gladiator 2 was this year's Barbenheimer. Now how last summer where Barbie and Oppenheimer opened on the same weekend and essentially turned into a meme, I don't think that Wicked and Gladiator 2 got to the same level of cultural relevance. And just looking at the numbers, Barbenheimer brought in $235 million in its opening weekend. So I made a lot more money. But I wonder if we're going to see Hollywood embrace this marketing. strategy where they release two movies that are on the opposite end of the spectrum on the same weekend to try to turn it into a meme and get people to go see the movies in theaters. Because I'm not

going to lie, I think the only reason I saw Oppenheimer last year was because of the Barbenheimer phenomenon. I mean, personally, I didn't think that Oppenheimer was that good. I mean, like, did we really need all those courtroom scenes? Come on. Ooh, I think I just opened up a can of worms. Let's talk about some stocks making moves today. Shares of Bath and Body Works are up this morning after they released earnings and raised their forecast for full year profits saying that sales won't fall as much as they initially anticipated. That's always good. Sales in the recent quarter were up 3% from a year ago, which beat analyst estimates. And what seems to be driving this demand is the strength in its core categories like personal care and items like fragrance. That was

a nice surprise because the overall trend in beauty products has been softer sales, especially from rivals like Estee Lauder and Luriel. But Bath and Body Works doesn't seem to be impacted as much. And as a result, their shares are up more than 10% this morning in reaction to these earnings. Another stock having a great morning is Micro Strategy. This morning, the company reported they bought another $5.4 billion worth of Bitcoin last week. They bought 55,000 Bitcoins for an average price of around $98,000. The company now holds over 386,000 Bitcoin worth like $37 billion. And don't expect Micro Strategy to stop buying Bitcoin anytime soon.

The company's CEO Michael Saylor recently revealed a plan to raise $42 billion in capital over the next three years to buy more Bitcoin. This dude is not slowing down. According to research firm Bernstein, Micro Strategies on track to own 4% of all Bitcoin over the next decade. So there you have it. Michael Saylor's single-handedly propping up the price of Bitcoin. Now, what's interesting is that the initial reaction to this news was that MicroSrategy's stock went up like 5% in pre-market trading. But now the stock is down 5%. So maybe investors are kind of getting tired of the whole buy more Bitcoin strategy.

I don't know. Another stock having a tough morning is Kosovo Sciences. Their shares are down 80% after the drug company's Alzheimer disease trial failed to meet its goals. The patients who received the drug did not show a significant reduction in cognitive or functional decline compared to the placebo group. The stock is now trading around $4 a share after hitting a 52-week high of $42 back in August. Some of these pharma stocks, they go on wild source. swings. Let's wrap the show with a fun fact. NFL players love uncrustables. According to reporting from The Athletic, the average NFL team eats around 4,000 uncrustables a week. The most being the

Denver Broncos, which consume 7,000 uncrustables a week. Maybe that's why they're outperforming expectations this season. I mean, uncrustables have to go down as one of the greatest food products ever created, right? I mean, they definitely belong in the Snack Hall of Fame. First ballot snack hall of for me. Shout out Uncrustibles for being one of the best to ever do it. Well, all right, guys, that's the rundown for today. It's a short week. The stock market will be closed on Thursday, so no show for us, but we will do a short show on Friday to kind of recap the week, so make sure you guys tune in for that. Also, we're putting out episodes on Saturdays now where we do a deep dive on one topic. This past weekend, we did a deep dive on Spotify and their plans to compete with

YouTube and be a media juggernaut moving forward thanks to their investments in podcasts. Go give it a listen if you missed it, and let us know what you think. And leave this comment to let us know what topics we should cover in future deep dives. Thank you guys again 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.

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