Public Markets – Page 6 – The Fund Society

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Branding Chewy a meme stock is bad for the pet retailer, according to Wall Street analysts

Chewy shares started swinging wildly after online personality Roaring Kitty revealed a big stake , but Wall Street analysts believe being branded as a meme stock is not good for the pet retailer. The meme stock leader, whose legal name is Keith Gill, has taken a 6.6% stake in Chewy, making him the third-largest shareholder. An initial boost in the share price — it surged 18% in two days early last week — has quickly faded, with shares falling more than 5% Monday. While Chewy is in a much better place fundamentally than GameStop or AMC , analysts said the elevated volatility and the potential meme status could hurt the retailer, whose stock surged during the pandemic and retreated afterward. “We view this morning’s share price move and additional volatility as a potential exit opportunity for investors,” said David Bellinger, a Mizuho analyst with a neutral rating on Chewy. “[A]n escalating, unpredictable, and difficult to track news flow may result in a narrower institutional investor base and growing hesitation to own shares and/or increasing likelihood to exit current positions,” he wrote in a report. Selling from the biggest backer Meanwhile, Chewy’s share price has also been affected by sales of stock from the private equity firm BC Partners, which is its largest shareholder. The firm recently sold 17.6 million of its shares back to Chewy for $500 million. BC Partners also dumped more than 5.3 million shares in the open market Thursday, the day Gill posted a picture of a cartoon dog that resembled Chewy’s logo, sparking a huge rally. Many believe BC could use any rally in Chewy stock to sell more of its stake, putting a temporary ceiling on the shares. “We suppose some [Roaring Kitty] fans who plan to buy the stock today aren’t aware that BC is a seller and stands ready to take advantage of another high-volume meme spike, if one materializes for more than an hour or two,” Don Bilson, head of events-driven research at Gordon Haskett, said in a note. The dynamic could be at play Monday as Chewy’s stock opened 9% higher, only to quickly give up all the gains and turn lower. “With BC still holding ~275m shares (~66% of total diluted shares outstanding), this presents a ceiling on upside with incremental retail interest in the name likely met by

CNBC

Stocks making the biggest moves midday: Chewy, GameStop, Boeing, Norwegian Cruise Line and more

Check out the companies making headlines in midday trading: Chewy , GameStop — Chewy’s stock dropped about 6% after a regulatory filing showed meme stock trader Keith Gill, who is also known as “Roaring Kitty,” bought nine million shares, amounting to a 6.6% stake in the pet food e-commerce company. His other top holding, GameStop, also slid 6%. It is unclear if he sold shares of GameStop to buy Chewy. Boeing , Spirit AeroSystems — Boeing on Monday said it would buy back fuselage maker Spirit AeroSystems in a $4.7 billion all-stock deal. Shares of Boeing and Spirit AeroSystems rose more than 3% each. Trump Media & Technology Group — Shares of Trump Media & Technology Group rose 3% following a roughly 11% loss during Friday’s session. The stock is coming off a volatile session following the first presidential debate between President Joe Biden and former president Donald Trump ahead of the November election. Birkenstock — The shoe manufacturer advanced about 1% on the heels of a UBS upgrade to buy from neutral. UBS pointed to higher average sale prices and growth in the Asian market as reason for optimism. Nio — The Chinese electric vehicle stock rose 6% on Monday after the company said vehicle deliveries rose nearly 100% in June . Nio said it delivered 21,209 vehicles last month, up 98% year over year. Tesla — The electric vehicle stock popped 6%. Tesla is slated to report second-quarter delivery numbers this week. Floor & Decor Holdings — Shares of Floor & Decor dropped 3% after Spruce Point Capital Management published a short report , citing concerns about management and the board’s credibility. The report also revealed concerns about the company’s strategy and financial reporting accuracy. NextEra Energy Partners — The renewable energy stock dropped 5%. The Royal Bank of Canada downgraded NextEra Energy Partners to sector perform from outperform, citing a “challenging” road ahead for the company. Cruise stocks — A slate of cruise companies fell as Hurricane Beryl made landfall in Grenada as a Category 4 storm. Norwegian Cruise Line and Carnival slid more than 6%, while Royal Caribbean dropped 2.7%. — CNBC’s Jesse Pound, Michelle Fox, Alex Harring, Sarah Min and Hakyung Kim contributed reporting.

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Is the U.S. stock market too ‘concentrated’? Here’s what to know

The 10 largest U.S. companies accounted for 14% of the S&P 500 stock index a decade ago. Today, they account for more than a third. Tech euphoria has helped drive up the “Magnificent Seven” stocks: Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla. Some experts fear that such concentration may put investors at risk. Others think it’s not a big deal. Jensen Huang, co-founder and chief executive officer of Nvidia Corp., displays the new Blackwell GPU chip during the Nvidia GPU Technology Conference on March 18, 2024. David Paul Morris/Bloomberg via Getty Images

The U.S. stock market has become dominated by about a handful of companies in recent years. Some experts question whether that “concentrated” market puts investors at risk, though others think such fears are likely overblown.

Let’s look at the S&P 500, the most popular benchmark for U.S. stocks, as an illustration of the dynamics at play.

The top 10 stocks in the S&P 500, the largest by market capitalization, accounted for 27% of the index at the end of 2023, nearly double the 14% share a decade earlier, according to a recent Morgan Stanley analysis.

In other words, for every $100 invested in the index, about $27 was funneled to the stocks of just 10 companies, up from $14 a decade ago.

That rate of increase in concentration is the most rapid since 1950, according to Morgan Stanley.

It has increased more in 2024: The top 10 stocks accounted for 37% of the index as of June 24, according to FactSet data.

The so-called “Magnificent Seven” — Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla — make up about 31% of the index, it said.

‘A bit riskier than people realize’

Some experts fear the largest U.S. companies are having an outsized influence on investors’ portfolios.

For example, the Magnificent Seven stocks accounted for more than half the S&P 500’s gain in 2023, according to Morgan Stanley.

Just as those stocks helped push up overall returns, a downturn in one or many of them could put a lot of investor money in jeopardy, some said. For example, Nvidia shed more than $500 billion in market value after a recent three-day sell-off in June, dragging down the S&P 500 into

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Stocks making the biggest moves premarket: Chewy, Birkenstock, GameStop and more

Chewy shares rally 20% after SEC filing reveals ‘Roaring Kitty’ Keith Gill has 6.6% stake

Keith Gill, aka Roaring Kitty, hosting a YouTube livestream on June 7th, 2024. Source: Roaring Kitty | YouTube

Shares of Chewy popped in premarket trading Monday after a Securities and Exchange Commission filing showed meme stock trader “Roaring Kitty” took a stake in the pet food e-commerce retailer.

The filing showed Roaring Kitty, whose legal name is Keith Gill, bought just over 9 million shares — amounting to a 6.6% stake in the company. That makes him the third-biggest Chewy shareholder, according to FactSet. Based on Friday’s close, that stake is valued at more than $245 million.

Stock chart icon CHWY rallies

The stock was up more than 20% before the bell.

The SEC filing also included a section that read: “Check the appropriate box to designate whether you are a cat.” There was an “x” next to a response that read: “I am not a cat.” This line was included in Gill’s statement in a series of congressional hearings about 2021’s GameStop trading mania.

Arrows pointing outwards SEC filing

Chewy shares took a wild ride last week after Gill posted a picture on social media platform X of a cartoon dog that resembled Chewy’s logo. Shares were up as much as 34% on Thursday but ended the day down slightly.

CNBC emailed Chewy PR seeking comment on the new shareholder.

Gill is known to be a champion of GameStop and has been stirring up trading in the video game company in the last few months. In mid-June, he disclosed a stake of 9.001 million GameStop shares after exiting his massive call options position. It’s unclear if he sold his GameStop bet to fund the purchase of Chewy.

GameStop shares fell 6.5% in premarket Monday following the news.

There’s a big connection between GameStop and Chewy. GameStop CEO Ryan Cohen was the founder and CEO of Chewy, who was instrumental in PetSmart’s takeover of Chewy in 2017 and its subsequent initial public offering in 2019.

Cohen joined the GameStop board of directors along with two other Chewy executives in January 2021, partly helping fuel the initial GameStop rally. He later took over as GameStop CEO in 2023, leading a turnaround in the brick-and-mortar video game retailer.

In a recent YouTube livestream, Gill said GameStop is in the second stage of a reinvention, and

CNBC

China rivalry helps drive US carbon pricing debate

This article is an on-site version of our Moral Money newsletter. Premium subscribers can sign up here to get the newsletter delivered three times a week. Standard subscribers can upgrade to Premium here, or explore all FT newsletters.

Visit our Moral Money hub for all the latest ESG news, opinion and analysis from around the FT

Welcome back. Economists have long viewed international carbon pricing as one of the most important policy tools — arguably the most important — in the fight against climate change. The EU has been the key mover so far, with a long-standing industrial carbon trading scheme and an incoming levy on carbon-intensive imports.

Now, momentum is growing around a similar move by the US, as was clear from the conversation that FT climate correspondent Attracta Mooney and I had in London with John Podesta, the White House senior adviser on international climate policy. Such a step could be a major development for the global energy transition — even if it’s the US economic rivalry with China that gets it over the line.

Carbon pricing US looks beyond its borders in new approach to carbon pricing

Joe Biden’s weak performance at Thursday’s debate with Donald Trump has added weight to predictions that his administration is now entering its final months.

But our conversation with John Podesta underscored the growing political support in the US around carbon pricing, especially on imported goods. The momentum could conceivably grow even under a second Trump administration, thanks to the bipartisan concern about Chinese industrial competition.

So far, the Biden White House appears to have made a conscious decision not to prioritise a national carbon pricing system, as has now been rolled out in various forms in most other high-income economies and in China. That concept has long been seen as politically toxic in the US, the world’s biggest oil and gas producer. Biden’s clean energy strategy has put much more emphasis on carrots than on sticks, notably through the lavish incentives proffered under the Inflation Reduction Act.

But Podesta made clear that carbon pricing in international trade is now a focus for the administration. “The global trading system doesn’t properly take account of embodied carbon in tradable goods,” said Podesta, who announced a new “task force” to tackle this issue in April. “So we’re undertaking a review of that, trying to deepen the data that we are going to need to implement a policy framework for

The fate of dollar rests on the US election

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China’s central bank moves to address bond frenzy

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