📉 Aritiza Drops 25% On Earnings

Plus, the Microsoft-Activision Deal is Finally Happening?

📉 Aritzia ($ATZ) Drops 25% This Week

Aritzia, the popular Canadian fashion retailer, experienced a severe blow to its stock price this week, plummeting nearly 25%. This downturn followed the release of the brand's Q1 2024 earnings report, which delivered mixed results.

Despite a healthy 13% YoY growth in revenue (to $463 million), largely attributed to a 22% surge in its U.S. business and a 14% rise in retail net revenue, the company's overall financial outlook seemed less promising:

  • Revenue: $462 million (vs. $460 million expected)

  • Earnings: $0.08 per share (vs. $0.09 expected)

  • Outlook: Revised revenue and gross profit margins guidance down 📉

📆 Aritzia is down 44% this year with its stock price falling back to Feb 2020 levels, erasing over three years worth of gains. 

The company also noted a slowdown in sales in the first week of June, attributing this shift to macroeconomic pressures. The Bank of Canada’s most recent rate hike this week may also worsen conditions for Aritzia and other retailers.

Join the conversation 👇

👀 $ATZ was the most mentioned stock on Blossom app this week.

Bradley / @bradleytalksmoney

🎮 Microsoft-Activision Deal Approved, FTC Battle Won

This week, Microsoft won its fight against the Federal Trade Commission (FTC), securing the go-ahead from California judge, Jacqueline Scott Corley, to proceed with the acquisition of Activision Blizzard.

In her ruling, Judge Corley acknowledged the landmark nature of Microsoft's acquisition, dubbed as the largest in tech history, and praised the company's commitment to maintaining the accessibility of Activision's content across various platforms.

Despite this significant win, Microsoft still has to navigate the UK regulatory landscape. The Competition and Markets Authority (CMA) had previously blocked the acquisition, but following Judge Corley's decision, both parties agreed to pause their legal battle to negotiate a possible modification of the Activision Blizzard deal to address the CMA's concerns about cloud gaming.

This would mark the second major loss for FTC Chair Lina Khan since she assumed office in 2021. Khan's tenure has been characterized by her ambitious effort to toughen antitrust enforcement towards Big Tech companies, with this case serving as a notable setback.

📈 Activision stock ($ATVI) is up 9% on the news, bringing the stock above $90 a share - much closer to the proposed purchase price of $95 per share and showing investor confidence that the deal will go through.

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🪙 Cryptocurrency Ruled “Not A Security,” Coinbase Up +25%

In a recent development, the XRP crypto token, issued by Ripple, has been determined to be both a security and not a security, depending on the type of investor. This decision was made by a federal judge in New York amidst an ongoing case between Ripple and the U.S. Securities and Exchange Commission (SEC).

🔥 $XRP surged over 70% following this news.

In December 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs and two of its executives. The SEC alleged that Ripple had sold $1.3 billion in unregistered securities by selling XRP. They argued that XRP should be treated as a security, like a company's stock, rather than as a currency. Ripple argued that XRP is a currency and therefore should not have to be registered as an investment contract.

In the latest ruling, the judge determined that XRP sales to institutional investors are indeed securities, and these investors are entitled to the protections of U.S. securities law.

In contrast, the sales of XRP on crypto exchanges to retail investors, and others, did not meet the definition of a security. The logic behind this is based on Ripple's programmatic sales and the understanding of the buyers. For instance, institutional buyers knowingly purchased XRP directly from Ripple under a contract. On the other hand, most retail investors who bought XRP from digital asset exchanges did not invest their money directly in Ripple.

Several cryptocurrency exchanges including Coinbase, Gemini, and Kraken have relisted XRP following this news.

📈 Coinbase stock $COIN surged up ~25% and is up over 250% in 2023.

🇨🇦 Kartik (Blossom’s CTO) is in Canada!

You guys are already familiar with me (Max), Gonzalo, Emily, and Brandon, but behind the scenes, Kartik and our amazing development team have worked tirelessly over the past two years to build the amazing app we have today! 💖

Kartik and I met 6 years back at a competition in Hong Kong and 2 years ago started on the journey together to build Blossom - me in Vancouver, and him in Delhi India. Over the past 2 years, we’ve told him stories and shown him photos of our amazing country, but on Wednesday Kartik touched down in Canada for the first time! 🇨🇦

If you want to meet the man, the myth, and the legend, Kartik will be joining us on our cross-Canada meet-up tour - including Calgary tomorrow!

If you want to see us show Kartik around Canada, make sure you follow the Blossom Instagram where we post lots of behind-the-scenes content! 😍


🎙 Top Discussions This Week

Invest Smart / @investsmart94

Brandon Beavis / @brandon

BD Investing / @canadianstocks

🗞️ What else you might’ve missed:

  • Meta ($META) is bracing to launch a commercial version of its artificial intelligence model.

  • Disney ($DIS) CEO Bob Iger has opened the door to selling the company’s linear TV assets.

  • PepsiCo ($PEP) reported Q2 sales growth of 10.4% year-over-year.

  • Amazon ($AMZN) Prime Day saw $12.8B dollars spent in the U.S. this year.

  • Bank of America ($BAC) is paying $250M after “double dipping” on overdraft fees and opened accounts.