The Rundown - Reddit Files S-1, Block Beats on Earnings

Episode Date: February 23, 2024

Stock market update for February 23, 2024. The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome to the rundown, your daily market update in under five minutes. My name is Zadadmani, and today is Friday, February 23rd. In today's episode, we do some more Nvidia talk. They broke some records in the stock market yesterday that we have to discuss. We also talk about Reddit. They just filed paperwork to go public. And there were some interesting tidbits about their business that we learned from the company's S-1 filings.

We're going to go into it. We also recap some winners and losers in the stock market today, and then we wrapped the show with a fun fact about Sam Altman, the CEO of OpenAI. He's about to get much richer, and it's not for the reasons you think. All right, let's get into it. As an investor, Thursday felt like winning the Super Bowl or something. The stock market was hyped off the backs of NVIDIA's blowout earnings on Wednesday afternoon.

The NASDAQ was up 3%. The S&P was up 2%. The Dow was up 1%. It was green everywhere. And the S&P and Dow both closed at record highs. It was good vibes all the way around. And look, I know we've talked a lot about Nvidia this week. I mean, how could you not?

But Nvidia did something yesterday that was for the record books. Yesterday, Nvidia's stock went up 16%. And the company added $276 billion to its market cap. That is the biggest daily market cap gain ever. That's more than the market cap of Coca-Cola. Invita added that to their value in just one day. And what's crazy is that META just broke this record on February 2nd after they reported their earnings.

Meta added $200 billion to their market cap in one day. And I thought that record might hold for at least, you know, a month. No, Nvidia came in, crushed that record. $276 billion in one day. I wonder if this record ever gets broken. I mean, that is just insane. Also, Nvidia's market cap crossed $2 trillion for the first time today. You know what, that's enough Nvidia talk for the week.

Let's talk about some other stuff. By the way, the good vibes are still rolling today. The Dow, S&P, and NASDAQ are all in the green at the time of this recording around 2 p.m. Eastern. Well, guys, Reddit is filing to go public. Reddit filed their S1 paperwork yesterday, which is the first step in taking the company public. And there was some interesting stuff in that S1 filing about Reddit's business. Like 73 million people visit Reddit.com every single day. And over 260 million people visit Reddit.com every single week.

And as someone that used to be a Reddit addict, I'm not really surprised to see this many people visit the website every single day. Reddit has a very strong community. But I was surprised when I saw Reddit's financial data. The company is still losing money. Reddit did $804 million in revenue in 2023, which is actually up 20% from 2022. But they had a net loss of over $90 million. The company is still not profitable. Now, on the bright side, Reddit's revenues are growing and their losses are shrinking.

But I just didn't expect to see losses that big. Now, just like every social media company out there, Reddit generates most of its revenue through ads. In fact, more than 98% of its money comes from ads. Now, Reddit is trying to change that, though. They recently announced a partnership with Google to license their content. So Google's AI models can be trained using Reddit's data. Interesting business model, so we'll see how that works.

Now, Reddit is known for their strong community, and something that Reddit plans to do is give the top 75,000 users the opportunity to buy Reddit stock at the IPO price. That is a pretty cool thing. I just wonder how these users are going to feel if the stock price ends up going down after the IPO. Because remember, everybody, stock prices don't always go up after the IPO, unless it's 2021 where everything was going up. Reddit is aiming for a $5 billion valuation and they expect to start trading next month.

I'm definitely going to be keeping an eye on this stock when it goes live. All right, let's talk about some stocks making moves today, starting with some winners. A big winner today is blocked. The stock is up more than 19% today at the time of this recording around 2 p.m. Eastern after they reported better than expected Q4 earnings. Block, the company previously known as Square, owns cash app and those payment terminals that every food truck seems to have. The company's Q4 revenues came in at $5.77 billion. and their profits came in at $562 million. The company is led by Jack Dorsey, the former founder and CEO of Twitter.

These days, Jack is solely focused on running block, and investors seem to like what they're hearing so far. Another company having a great day today is Carvana. Carvana stock is up more than 30% at the time of this recording around 2 p.m. Eastern after they reported better than expected Q4 earnings. Carvana has some good stuff going for it. They had their first ever profitable year in 2023, bringing in more than $450 million in net income. 2022, Carvana lost $1.6 billion. So they went from losing $1.6 billion to making $450 million in profit in just one year. A lot of this came from cutting costs and trimming inventories and increasing profitability. And that was enough to get investors excited. Now, the stock is still down more than 80% from its pandemic highs, which happened on August of 2021.

But the stock is up more than 500% from last year. So it's a nice little bounce back story. All right. Let's talk about a stock not doing so hot today. That would be Warner Brothers Discovery. The stock is down more than 10% today at the time of this record. around 2 p.m. Eastern after not meeting expectations for their Q4 earnings. The revenues came in at $10.28 billion and they lost over $400 million. Both of those numbers did not meet Wall Street expectations. Now there is some good news. The streaming service Max was profitable for 2023 and Warner Brothers expects it to be profitable in 2024. Some of this is a result of cutting costs in content spent. Also, Max has over 97 million subscribers now and Warner Brothers is paying off

debt. They paid off over $12 billion in debt in the last two years. The bad news is that Warner Brothers still has over $44 billion in debt still remaining. So they got a long ways to go before they pay it all off. So yeah, investors not loving that so much and the stock is down more than 10% today. All right, time to wrap up the show with a fun fact. Today's fun fact is about Reddit. We just talked about how they plan to IPO next month. Well, the fun fact is that Reddit's third largest shareholder is Sam Altman. Yes, the Sam Altman, the CEO of Open AI. Sam Altman, owns over 8% of the company. So if Reddit ends up getting the $5 billion

valuation that they're hoping for, that's going to add over $400 million to Sam's net worth. Not bad. I know he's trying to raise $5 trillion or whatever, so that's like 0.1% of the way there. So just keep going, Sam. All right, guys, that's all I got for you guys today. What a crazy week it was.

You know, it was only a four-day week, but it felt like much longer. I need the weekend to recover. I hope you guys all have a good weekend. Thank you guys so much for listening, and I'll see you guys back here on Monday. This is Public Live, your real-time resource for news events and trends in the markets. All views presented in this 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. Public Live hosts are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult. Respective professionals. Learn more at public.com slash disclosures. In paid partnership with Zaid Admani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.