SEC charges Andrew Left, one-time GameStop nemesis, with fraud

Short-seller Andrew Left, who became a sort of public villain to retail traders taking part in the 2021 GameStop drama, faces multiple counts of securities fraud. The SEC says he used his ability to move prices through his public statements “so that he could quickly reverse direction and profit from the price moves following his reports.”

Prosecutors alleged he made at least $16 million of illegal profit from 2018 to 2023. Left hasn’t commented on the charges and didn’t immediately respond to a request for comment.

Short-seller Andrew Left charged with fraud by prosecutors, SEC

Prosecutors alleged he made at least $16 million of illegal profit from 2018 to 2023. Left hasn’t commented on the charges and didn’t immediately respond to a request for comment.

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Duolingo’s stock is plunging and the company is blaming its slower growth on less “unhinged” posting

The company intends to spend more on educational app technology, structure its product so it’s less focused on extracting payments, and pay more attention to boosting social media engagement.

Matt Phillips37m

Luke Kawa1h

e.l.f Beauty plunges as tariff headwinds wreak havoc on Q2 results, full-year outlook

The same day that tariff-exposed stocks soared as traders judged that the Supreme Court was likely to rule against a large portion of President Trump’s tariffs, e.l.f. Beauty showed just how much these changes to cross-border commerce are crushing select businesses.

The beauty retailer reported disappointing Q2 results after the close on Wednesday, with both net sales and adjusted earnings per share well below estimates, and offered full-year guidance that was shy of the Street’s view on both of those metrics as well.

The stock is down roughly 34% in early trading, which would be a record loss if it fails to recover during today’s session.

On the conference call, Chief Financial Officer Mandy Fields laid out in stark terms just how onerous the operating environment is for the retailer:

“To set the foundation, about 75% of our global production today comes from China. Between April 9 and May 13, we were subject to tariffs at the 170% level. From May 14 through the end of October, product imports to the U.S. were subject to tariffs at the 55% level. As of November, we are now subject to a lower tariff at the 45% level given the recent reduction announced by the administration.”

Every 10% tariff increases e.l.f.’s cost of goods sold by $17 million on an annualized basis, per the company’s earnings presentation. The company delivered an across-the-board $1 increase in a bid to offset higher costs, but that wasn’t nearly enough to prevent gross margins from sinking by about 165 basis points compared to the same quarter a year ago.

Luke Kawa2h

Krispy Kreme jumps as traders applaud turnaround efforts

Krispy Kreme is leaning on some of America’s biggest retailers in a bid to make sure its doughnuts aren’t the only dough it’s making.

Josh Charlesworth, CEO of the glazed snack seller, told The Wall Street Journal the company is focusing on its distribution partnerships with the likes of Walmart, Target, and Costco — places with heavy foot traffic — as part of an optimization push to boost profitability.

On the company’s Q3 earnings call Thursday morning, management indicated that they’ve outsourced 54% of their US logistics and plan to outsource 100% next year.

Krispy Kreme might be known more for its belt-widening efforts, but it’s the belt-tightening moves that have traders enthusiastic on Thursday. The heavily shorted company is catching a bid as traders warm to these turnaround and cost-cutting efforts amid a mixed bag of Q3 results. Net revenues of $375.3 million were shy of the consensus estimate for $381 million, but the company did manage to book adjusted earnings per share of $0.01, while the Street had anticipated a loss of $0.07 per share.

And, as expected from this sporadic meme stock, call activity is running hot: a little more than half an hour into the session, call volumes of 7,555 have nearly eclipsed the stock’s five-day average of 7,957 for a full session. The three most active contracts are call options that expire this Friday with strike prices of $4, $5, and $4.50.

Vistra misses sales and profit estimates, stock drops

The mainstay of the AI energy trade also posted meh guidance for the rest of the year.

Matt Phillips2h

Max Knoblauch3h

CarMax plunges on weak preliminary sales results and the sudden firing of its CEO

CarMax shares are down more than 11% in premarket trading on Thursday following the sudden termination of its CEO, Bill Nash, who’d served as chief executive for nine years.

The announcement came as CarMax posted preliminary third-quarter results, including an expected comparable-store unit sales decrease of 8% to 12%.

“CarMax is the nation’s largest used car retailer because we have built a business that customers trust,” said CarMax Board Chair Tom Folliard, who has been named the company’s interim CEO. “However, our recent results do not reflect that potential and change is needed.”

Folliard previously served as CarMax’s CEO for 10 years until Nash succeeded him.

The leadership change comes as CarMax rival Carvana closes its unit sales gap quarter by quarter. Despite selling more used vehicles, CarMax’s market cap is less than a tenth of Carvana’s.

CarMax Terminates CEO Nash

Folliard previously served as CarMax’s CEO for 10 years until Nash succeeded him.

The leadership change comes as CarMax rival Carvana closes its unit sales gap quarter by quarter. Despite selling more used vehicles, CarMax’s market cap is less than a tenth of Carvana’s.

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