The Rundown - The SEC Investigates Coinbase, Novo Nordisk’s CEO Steps Down

Episode Date: May 16, 2025

Stock market update for May 16, 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 Zadadmani, and today is Friday, May 16th. In today's episode, we dive into the drama at Coinbase. They're facing hackers and an investigation by the SEC. We'll break it all down. We also tell you about NVIDIA's plans to build an R&D facility in Shanghai, despite some legal hurdles.

Then stick around to the end of the show to find out about the latest moves from Michael Burry that has people talking. He's going short again. We get a great show for you today. Let's go. Thursday was a mixed day for the stock market. The S&P 500 continued its winning streak by gaining 0.4%. But the NASDAQ, on the other hand, dropped 0.2% snapping a six-day win streak.

Overall, though, it was a relatively slow day, not a lot of major moves or news. United Health Group and Dick's sporting goods were two of the biggest losers. We talked about both those. companies on yesterday's episode. So check that out if you missed it. A lot of drama going on at United Health Group right now. Now, yesterday we did hear from Jerome Powell. He was given the speech at a conference in Washington, D.C. And in that speech, he said that inflation could become more erratic in the coming years because of supply shocks. I was kind of shocked to hear him say that. And he said in the long term, he thinks that interest rates are likely to stay higher because of the

constant change happening in the economy. So yet not very bullish comments from the Fed share. All the latest data shows that inflation is continuing to cool. But despite that, Jerome Powell doesn't seem to be in a rush to cut interest rates anytime soon. It's possible he changes his mind by the next Fed meeting, which is on June 18th. But right now, the markets are only pricing in an 8% chance that the Fed cuts interest rates at that meeting. Let's run through some headlines. Starting with Coinbase, because man, they are having a week over there. According to the New York Times, the SEC is investigating,

whether Coinbase misled investors by inflating the verified user count in their 2021 IPO paperwork. In the paperwork, the company claimed they had over 100 million verified users, but it turns out that number may have included duplicate accounts, like when one person signs up with multiple email addresses or phone numbers. Now, Coinbase is saying they did include a footnote about this in the filing, but the SEC isn't so thrilled with the fine print strategy, So we'll see if they end up getting in some trouble with that. Could be facing some fines.

Now, this is coming at the same time that Coinbase is dealing with a massive data breach. Hackers reportedly bribed overseas Coinbase customer support agents to steal sensitive customer data, including names, addresses, and even the last four digits of Social Security numbers. The hackers are now demanding a $20 million ransom just to get this data back. According to Coinbase's CEO, they sent like a ransom email. Coinbase says they're not going to pay the ransom, but instead they're working with law enforcement and offering a $20 million reward to track down the hackers. So I think we have the plot for the next Liam Neeson movie. Now, Coinbase says this incident could end up costing them around $400 million to clean up.

So the company's dealing with a lot right now, and this is all happening in the same week that Coinbase got added to the S&P 500. I wonder if the S&P 500 selection committee is kind of regretting their decision right now. Let's shift gears and talk about InVideo, because they're also having. having a pretty big week. Their CEO, Jensen Wong, has been in the Middle East with President Trump all week announcing deals to sell thousands of their AI chips, Saudi Arabia, and the UAE. And now the Financial Times is reporting that Nvidia is opening up a new R&D facility in China. The new facility would help Nvidia better understand the needs of the Chinese customer and recruit AI talent. Now, the timing of this is pretty interesting because remember, the Trump administration

recently blocked the sales of Nvidia's H20 chips to China, which were already a watered down version of their most powerful chips to comply with previous restrictions. NVIDIA wasn't a big fan of this. In fact, NVIDIA's CEO Jensen Huang still sees China as a massive opportunity. Estimates it could be a $50 billion market over the next two to three years. Now, if you're panicking about the potential of NVIDIA's chip secrets getting into the hands of China, well, Nvidia has made it very clear. They are not sending any GPU designs to China.

Those will be kept here in the U.S. But they are walking a very fine line here. they're trying to please U.S. regulators without losing the AI market in China. I'm sure Nvidia investors appreciate the effort, but it's a tricky situation. Good luck with that, Jensen. Let's talk about some stocks making moves today. Shares of charter communication are up big today after the cable giant announced a $34.5 billion merger with their rival Cox communication.

This is one of the biggest deals of the year so far, and this merger would create one the largest broadband players in the country, combining Charter's 31 million customers with Cox's 6 million. See, both these companies offer broadband service and also cable TV, and they're facing competition in both segments of their business. Obviously, everyone knows about streaming, leading to cord cutting. That's been happening for years now. But recently, these companies have started to lose broadband customers too, as more people turn to wireless carriers like AT&T and T-Mobile for at-home 5G internet. So Charter and Cox are hoping that by combining they can better take on the competition. The market seemed to like this move for Charter.

Their stock is up nearly 8% this morning in reaction to this merger announcement. Now, on the flip side, Kava stock is down this morning, despite the fast casual Mediterranean chain posting strong Q1 earnings. Their same store sales grew by 10.8%, which was better than expected. And overall, the company is showing some strong growth. Traffic to their restaurants were up in Q1. Spending per person was up in Q1. And the company said that people are adding high margin items like pita chips to their order as well, which makes a ton of sense because if you've ever tried kava's pita chips, they are addicting. If I eat one, I'm usually eating the whole bag. So Kava continues to crush it. Their growth is making them stand out from their competition because other

fast casual and fast food places like Chipotle and McDonald's have reported slowing sales. Now, despite all the good stuff that I just got done saying about Kava, the stock dropped around 5% after the earnings came out. I was kind of surprised to see that. It could be because the company is keeping the same growth outlook for this year? Maybe Wall Street was hoping for something better. Speaking of looking for something better, Nova Nordist stock is down this morning after the company announced that their longtime CEO, Lars Jorgensen, is stepping down. Nova Nordisk is based out of Denmark, and they kind of became a household name over the past couple years because of their popular weight loss drug, Ozempic. But recently, they've been getting smoked by the competition,

especially from Eli Lilly and their blockbuster weight loss drug Zepbound. In fact, Nova Nordist stock has lost half its value over the last 12 months and it's down another 3% this morning following the news of the CEO departure. I say departure, but he got fired. The company's board of directors admitted the stock price being down so much over the last year is the reason that they're making the switch. It kind of gives me the same vibes of a head coach getting fired in the middle of a season after a bad losing streak.

So now Nova Nordis is looking for their next CEO and hoping that they can turn things around. Still crazy, the stock has dropped 50% over the last 12 months. I mean, this was the hottest stock in the world at one point. Now, not so much. Let's wrap the show with a fun fact. Michael Burry, the guy from the big short, has gone bearish again. According to the latest 13F filings with the SEC, Burry's hedge fund, Scion asset management,

sold off nearly all of their stock holdings in Q1. They only have one long position at this point, which is Esté Lauder, the cosmetics company. Michael Burry also bet against Nvidia and several major Chinese tech stocks like Alibaba, JD.com, and Baidu by buying put options. Now, I know this is making a lot of headlines, but keep in mind, these 13F filings are from Q1. So this data is already a few months old. And obviously, a lot has changed since the end of March.

So these aren't exactly real-time signals. Like, if he stayed bearish into Q2 and held on to his put options on Nvidia, he is down a lot of money right now. Well, all right, guys, that's the rundown for today. That's the rundown for this week. Looks like the markets are headed for the third positive week in the last four. Vives are good right now, and we're about to wrap up earnings season. I think the only major company yet to report earnings is InVideo.

They're always the last ones to report. And we have to wait all the way till May 28th to hear from them. But as always, we're going to stay on top of all this stuff. You never know what could happen. So make sure you guys are tuning into the podcast every day. And also check out our weekend deep dive episodes. Last weekend we did it about Palantir. Got a lot of great feedback about that.

So keep an eye on your podcast feed this weekend for another deep dive. And while you're at it, don't forget to leave us a five-star rating on Apple or Spotify. And if you're listening 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 this weekend for the deep dive.

Thank you.