Trump Media Shares Tumble Again After Trump's Return to X

Good morning. It’s August 13th, and today we’ll take a look at Home Depot’s mixed results, Trump Media’s precipitous fall, and a tiny tech stock rallying by 58%.

Previous Close 📈

U.S. indices ended Monday on a muted note, with the Nasdaq managing to stay in the green zone while the Dow Jones fell below its previous closing.

Futures

Futures are rising today as traders await the release of key inflation data.

What to Watch

Home Depot, Tencent Music Entertainment Group, and Madison Square Garden Sports will all report their numbers today before the opening bell.

Keep an eye out for the Producer Price Index data, which will be released at 8:30 a.m.

NU Holdings and XP will be sharing their quarterly results after the close of the day’s trade.

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Home Improvement

Home Depot Lowers Full-Year Expectations Amid Mixed Q2 Results

Home Depot reported a slight increase in its second-quarter sales, bolstered by the recent $18 billion acquisition of SRS Distribution.

Sales rose to $43.18 billion, narrowly surpassing Wall Street's expectations. The acquisition added $1.3 billion to the quarter's revenue, aiding the company in recovering from a previous sales slump.

Despite the uptick, the stock is down 3.77% so far today in premarket trade.

Customer spending remains cautious due to rising costs and high interest rates. Home Depot’s average transaction value dipped to $88.90 from last year's $90.07, and transactions themselves fell by 1.8%. Additionally, sales at stores open for over a year dropped by 3.3%, with a 3.6% decline in the U.S. market.

The company is projecting a 3% to 4% decline in annual sales at stores open for at least a year, a more pessimistic outlook than the previously expected 1% decline. Earnings per share for the year are also expected to decrease to 4%.

As per CEO Ted Decker, while the long-term demand for home improvement is solid, higher interest rates and economic uncertainty have dampened consumer spending.

Homeowners are delaying larger projects, further pressured by elevated mortgage rates that have prolonged the U.S. housing slump into its third year.

Technology

Trump Media Shares Sliding After Former President's X Comeback

Trump Media & Technology Group is falling by over 3.5% in premarket trade today, continuing a downward trend that began Monday afternoon.

The drop started after former President Donald Trump made his first post on X (formerly Twitter) since August 2023 following his highly anticipated interview with Elon Musk.

Shares of DJT, the parent company of Truth Social, closed approximately 5% lower on Monday.

This follows a challenging second-quarter report on Friday, where the company revealed a net loss of $16.4 million, partly due to expenses from its SPAC deal. Revenue for the quarter fell by 30% year-over-year to just under $837,000.

Earlier in April, Trump Media's regulatory filings showed total sales of just over $4 million for the year ending December 31, with net losses nearing $60 million. The company has indicated that it expects ongoing profitability challenges.

The stock has experienced volatility in recent months, with significant movements tied to political events. In June, shares briefly surged and then fell after President Joe Biden's stumble during the first 2024 presidential debate with Trump.

Trump holds a 60% stake in DJT, valuing his share at approximately $2 billion, down from $4.5 billion shortly after the company went public. Despite this, stakeholders are still under a six-month lockup period, limiting their ability to sell or transfer shares.

Biotech

Carlyle Expanding Healthcare Portfolio With $3.8 Billion Vantive Acquisition

The Carlyle Group is acquiring Baxter International's kidney-care division, Vantive, for $3.8 billion. The deal, set to close by early 2025, is expected to help Baxter reduce its debt load, which stood at $13.8 billion at the end of 2023.

Baxter, which previously paid down $2.8 billion in debt following the sale of its biopharma unit, has been exploring options for its kidney-care operations since its $10.5 billion acquisition of Hill-Rom in 2022. The process to separate Vantive began in early 2023.

Vantive, which generated $4.5 billion in revenue last year and employs over 23,000 people, will become a standalone global business under Carlyle’s ownership. Atmas Health, a healthcare investment platform created by Carlyle in 2022, is partnering on the acquisition.

Carlyle’s active deal-making continues this year, highlighted by its recent partnership with KKR to acquire a $10 billion student loan portfolio from Discover Financial Services.

Additionally, Carlyle is exploring the sale of StandardAero, potentially valuing the aircraft maintenance company at $10 billion.

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CXApp Inc. [CXAI] - Last Close: $1.47

CXApp is soaring in premarket trading today due to a significant new deal with Google Cloud.

The company announced on Monday that it has entered into a multi-year agreement with Google Cloud to develop and deliver advanced AI tools.

Even though their quarterly revenue and profit were lower than expected, this partnership with Google Cloud is giving investors confidence in the company's future.

The deal is seen as a major opportunity for CXApp to enhance its technology and grow its business, leading to a 58% jump in premarket trade.

GCT Semiconductor Holding, Inc. [GCTS] - Last Close: $3.40

GCT Semiconductor is rallying by nearly 30% today in premarket after announcing a new partnership with Samsung.

The company is signing a Memorandum of Understanding (MOU) to speed up the development of 4G and 5G chipsets and modules.

This partnership is aimed at expanding its reach in the 5G ecosystem globally, including in critical areas like public safety and industrial applications.

Samsung will help GCT with testing and certification, which is important for making sure their products work well with various devices.

Rumble Inc. [RUM] - Last Close: $5.75

Rumble is rising by nearly 6% in premarket trading due to its strong second-quarter financial results.

The company reported $22.5 million in revenue, which was 27% higher than the previous quarter and exceeded analysts' expectations of $19.69 million.

Additionally, Rumble's loss per share was 13 cents, which was better than the expected loss of 15 cents per share.

Everything Else

• Technical issues disrupted the Musk-Trump interview on X, and Musk blamed a cyberattack.

• New Zealand faces an exodus amid economic challenges and job shortages.

• Small-business optimism in the U.S. grows despite economic uncertainties.

• Rating agencies are skeptical of Boeing's ability to hit year-end production targets.

• Chinese authorities intervened in the bond market, ordering banks to halt settlements.

• A New York Fed survey revealed record-low inflation expectations for the next three years.

• HelloFresh shares surge after exceeding profit estimates, driven by their ready-meal expansion.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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