The Rundown - Telegram CEO Arrested, Intel Preps Defense Against Activist Investors

Episode Date: August 26, 2024

stock market update for August 26, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Monday, August 26th. In today's episode, we get you ready for the week. Invidia is set to report earnings, and stocks might make all-time highs. We'll tell you everything you need to know. Also, the founder of Telegram got arrested in France over the weekend, and the port of Seattle is dealing with a cyber attack. A lot of stuff happening in the tech world.

Then stick around to the end of the show to find out how many Americans to have a passport and why that number has exploded over the last 20 years. And I don't think it's just because of cheap international flights. All right, let's go. Markets were on a roll last week, thanks to an assist from Fed chair Jerome Powell. The S&P and NASDAQ both finished last week in the green, as Jerome Powell indicated in a speech on Friday from Jackson Hole that the Fed is ready to cut rates.

Honestly, it was a pretty great speech from Jerome Powell. We recapped it on Friday's episode of the rundown, so go check that out if you missed it. But yeah, it looks like rates are going to be cut in September. and that has investors pretty hype. In fact, the S&P 500 is now within 1% of making all-time highs. And that could happen this week because something big is going down on Wednesday. I'm talking about Nvidia.

They're reporting earnings on Wednesday after the market close. Earning season has pretty much come to an end. Nvidia is pretty much the only major company left yet to report. And everyone is going to have their eye on that. As always, expectations are sky high. You know, whenever Nvidia reports earnings, I feel like they carry the weight of the entire stock. market on their shoulders. Because if Nvidia fails to meet expectations, then that could be a sign

of an AI slowdown coming soon, which could spook investors and cause the markets to sell off. But then on the other hand, if Nvidia continues to meet these high expectations, stocks could continue to rally because it's a sign that the AI boom isn't slowing down. So a lot is riding on Nvidia earnings as always. We're going to be talking about Nvidia throughout the week and recap the earnings on Thursday's episode. So make sure you guys are subscribed to the pod. Hit that notification bell so you're notified as soon as an episode goes up each morning. Let's run through some headlines. The CEO and founder of the messaging app, Telegram, Pavé Durav, was arrested in France over the weekend due to alleged crimes related to the app.

Telegram is being accused of being a hub for criminal activity where drug trafficking, fraud, and other crimes are discussed. And Durav has allegedly failed to stomp out the criminal activity on Telegram, which is what led to his arrest when he landed in France in his private jet. Now, a quick background on Telegram. It was founded back in 2013. by Pavel Durov, and it was founded on the principles of neutral, open to all freedom of speech. And it's a pretty popular messaging tool in the tech community, especially the cryptocurrency community. I mean, the number of Telegram groups that popped up back in like 2021 during the crypto heydays and also NFTs. By the way, Telegram also has their own cryptocurrency called

Toncoin. It fell sharply on the news. But even after losing 17% of its value following the arrest, it's still the 10th largest cryptocurrency by market cap. So what's next? Well, Dorov is a Russian native. Embassy is in contact with France to get details and work on further steps. And this guy is a pretty big deal. And he's also extremely rich worth more than $15 billion. So I wonder how all this is going to play out. As for Telegram, the app is still operational. And it's extremely popular. It has over 900 million users up from the 500 million users back in 2021. So it's growing like crazy. And according to the CEO, the app makes hundreds of millions of dollars in revenue. In fact, the company was thinking about IPOing pretty soon. So I'm thinking those plans are on hold for a bit. We'll let you know how

this all plays out, but very interesting story that a lot of tech people are talking about over the weekend. Let's shift gears and talk about something happening here in the States, a cyber attack on the port of Seattle. The port of Seattle operates to Seattle Airport, and they reported that their website and phones went down over the weekend, which the port believes is due to a potential cyber attack. So that's causing mayhem at the Seattle-Tacoma airport right now. Long lines, delayed flights, It's canceled flights. Tons of travelers just stuck at the airport. We saw something pretty similar when the crowd strike thing happened like a month ago.

These airlines just can't get a break from these IT issues. By the way, I tried going to the Port of Seattle's website. Still down. So I expected it to be further delays at the airport. And finally, Intel might feel some pressure from activist investors. The company's preparing his defense strategy by hiring advisors like Morgan Stanley to help them prepare, according to CNBC. Now, activist investors have been very active this year.

See what I did there? Okay. Firms like Elliott Management have pressured the boards of Southwest Airlines, and Nelson Pelt actually went on a proxy war against Disney, which he ended up losing in April. The stats say there's been a record number of activists engagement for the first half of the year, with Barclays reporting a total of 147 in 2024,

compared to that to the 143 in the first half of 2018. Intel seems to be a good target for this, because Intel stock has lost more than half its value in the past six months, and they've announced a big restructuring and cost-cutting plan, they plan to cut cap-backs by 20% and employee headcount by 15%. So yeah, Intel, man, they have a lot of issues to figure

out right now. Let's talk about some stocks making moves today. Planet Fitness shares are rising after Baird called the stock a bullish, fresh pick. Baird believes the recent changes to pricing and lower cap-ax could put Planet Fitness in a good position within a lower growth environment. Basic plans

are increasing to $15 a month, up from the $10 a month. Planet Fitness shares up about 1% on the news this morning. And then on the flip side, shares of the Chinese company PDD, which is the parent company of Timu, are following this morning after they reported disappointing earnings. Revenues came in at $13.4 billion. That's much less than the $14 billion that was estimated. Company says they plan to invest heavily to bring more trust and safety to their platform,

which will hurt their profitability. Investors, not loving it, and the stock is down 15% in reaction to these earnings. All right, let's wrap the show with a fun fact. In 2023, over 50% of Americans had a valid passport as over 160 million valid passports in the U.S. This is according to the State Department. Now, what's crazy is back in 1993, 30 years ago, there were only 21 million active passports,

and back in 2003, there was only 60 million active passports. So today, over 100 million more Americans have a passport than they did 20 years ago. Now, one reason for that is international travel is getting much cheaper. I've seen flights to London and Paris for less than $500. Not even kidding. But I think the reason that more Americans are traveling internationally more is not just because of how cheap it is, but because of how easy it's gotten.

You have apps like Google Maps and Uber and all these different traveling apps that make going to new countries a lot less intimidating. Like imagine going to a new country in 1997. You would have to buy one of those paper guides to figure things out. Now you can fly to any country, look up a hotel using Google Maps, book an Uber, and you're there. And then you can find the best restaurants to eat within a walking distance of your hotel. Traveling is just so much easier and less intimidating now. And I think that's one of the biggest reasons why more Americans have passports and are traveling internationally.

Well, all right, guys, that's the rundown for today. It's the last week of August. And typically this is a slow week right before we get into Labor Day. But we got Nvidia earnings this week, so everyone's going to have their eye on that. So make sure you guys tune in. If you haven't already, don't forget to hit us with a five-star rating on Apple and Spotify. And if you're listening on Spotify, don't forget to vote in today's poll. that engagement really does help us out.

Thank you guys so much for listening. Shout out to Connor and Mike 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 or its subsidiaries. You should make your own financial and investment decisions or consult.

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