Oura Pulls it’s IPO Last Minute, FICO’s Monopoly Comes Under Fire

0:00public.com presents the rundown your daily market update in 10 minutes. My name is Zaid Admani and today is Tuesday September 29. In today's episode we'll break down why many stocks in the S&P are making lows despite the overall index sitting in your record high. We'll also tell you why Aura Ring just delayed their highly anticipated IPO just hours before they were supposed to go a lot. Then stick around to the end of the show to find out why many vans are making a comeback. We got a great show for you today. Let's go. Stock started the week in the red yesterday the S&P 500 fell 0.8% which was its worst day in more than a month while the NASDAQ dropped by 0.9% as oil and bond yields kept climbing. And by the way the Dow Jones which we haven't talked about has had a rough month. It's now on track for its worst September in 3 years but nobody cares about the Dow.

1:04All things considered though I'd say the stock market is holding up pretty well given the elevated oil prices and bond yields both the S&P and NASDAQ are near record highs. But there is something weird happening when you dig in a bit deeper in the indices. According to Goldman Sachs about 45% of stocks in the S&P 500 have had a negative beta over the last 3 months. Basically what that means is that nearly half the stocks in the S&P have been moving in the opposite direction of the overall market. Now a big reason that this is happening is the concentration at the top. A handful of mega cap tech and AI companies have gotten so large that they have so much weight and influence on the S&P 500 that they can make the index look stronger even when the large chunk of the market isn't doing so hot. And that's because oil prices and bond yields keep climbing which is a drag on many companies because it means higher input costs and borrowing costs for businesses. A 10 year treasury yield keeps going up and jumped to 5.25% yesterday which is a 19 year high and the 30 year yield hit 5.57% which is its highest since 2004. An oil is still hovering year

2:10100 dollars a barrel. Now there was some good news to report on that front Saudi Arabia just got their east-west pipeline back online. This pipeline lets Saudi Arabia move oil to the red seat and buy passage toward infirmuse but it was damaged earlier this month by a drone strike. Before the attack so this pipeline carried 4 million barrels a day which is about 4% of the global oil supply. So this pipeline coming back online should help improve supply and hopefully bring down prices. And the other good news here is that negotiations are still happening between the US and Iran so that actually goes somewhere we could get even more relief on oil prices. We'll continue to keep an eye on the oil market bonds and stocks along with everything else happening. By the way there are some interesting earnings happening this week as well. Micron reports on Wednesday and Nike reports on Thursday and then of course we have the big jobs report on Friday. We'll break all that down later in the week so definitely get subscribed to the podcast if you haven't already and tune in every day to stay in the loop. Let's run through some headlines starting with

3:14aura ring. aura was supposed to go public today but at the last minute the smart ring maker postponed their IPO blaming uncertainty in the IPO market. Now this is very strange for a company that pulled the plug like this last minute. Before we dive into that a quick background on the company aura was founded back in 2013 they make those smart rings that you've probably seen some people wear that track things like sleep, heart rate, body temperature and activity. Now these rings are pretty expensive they cost like four to five hundred dollars and then aura also has a subscription service on top of that which is like seventy dollars a year which gives you more detailed health data and AI powered insights. And look these rings are popular business has been growing fast aura has 5.7 million paying subscribers and revenue for the first nine months of the year jumped 74% to 1.21 billion dollars the company said they also recently turned profitable as well. So given all that the expectation for this IPO were pretty high aura was planning to raise around

4:14two billion dollars and start trading on the Nasdaq this week at a valuation of about 13.5 billion dollars. And that's why this whole market uncertainty explanation by the company is a little strange to me. I mean the Nasdaq went a hundred literally hit a record high last week. Barons thinks the real reason that aura delayed their IPO was because they were asking for too much money and existing shareholders were trying to cash out. One of the red flags about this IPO was that roughly three quarters of the shares being offered were coming from existing investors selling their stake rather than new shares raising money for the company itself. aura itself was expected to net just five hundred million dollars from this IPO and almost all that money would have gone towards taxes related to employee stock options. So that means very little of the money being raised from this IPO was actually going towards the business. And you know I think it's possible that aura's bankers got a sense that the stock could potentially tank on its first day of trading and the company decided to pull the plug last minute to avoid the optics. Now the company said the IPO is postponed

5:18and not canceled. Maybe the company will come back with less aggressive valuation because at 13.5 billion dollars aura would have been valued at more than eight times its sales. For context that's the same valuation that Apple currently trades at today. So we'll have to see what aura does. Personally though I don't really understand the aura hype. Like I'm all for tracking your health and sleeping all that stuff but there are more and more companies like Apple working on their own screenless health devices. So I think it's going to be hard for aura to hang onto their customers. But then again I'm not an aura user myself. If you are someone that wears the aura ring let me know in the comments on how you like it. And if you would consider investing in this IPO. Let's talk about some stocks making moves today. Car Mac shares are jumping this morning after the used car retailer reported surprisingly strong earnings and showed some real signs that their turnaround might finally be working. Revenue's last quarter jumped 20% from a year ago to 7.9 billion dollars while adjusted earnings came in at $1.16 a share which was up from the 64 cents a

6:23share last year and well above Wall Street expectations. I think the most important number from the earnings was same store sales. Sales at locations opened at least a year jumped 13% which was way above the 5.6% that Wall Street expected. And the reason that's notable is because same store sales had declined for four straight quarters. Car Mac has been trying to turn things around by cutting prices to bring customers back and it looks like that strategy is working but it is squeezing profits per vehicle a bit. Gross profit per used car sold fell by $111 compared to the same quarter last year. But the company is making it up with more volume. And management is feeling confident enough about the turnaround that they plan to restart share buybacks this quarter which is a key green light signal. That was a terrible pun. Anyways the market like what it heard in Car Mac stock is up around 5% this morning at the time of this recording. Now on the flip side shares of fair Isaac are getting hammered today. Fair Isaac is the company behind the FICO score. The

7:26stock is down more than 20% this morning after a major change in the mortgage market. See historically when you wanted to get a mortgage the lender would pull your FICO score to price the mortgage interest rate. Well late last night the head of the Federal Housing Finance Agency Bill Pulti posted that Fannie Mae and Freddie Mac are moving to include Vantage score which is FICO's direct competitor and owned by the three big credit bureaus. So that means that lenders may no longer need to pay for fair Isaac for a FICO score on every eligible mortgage. And it wasn't just Fannie Mae and Freddie Mac doing this on the same day rocket mortgage said that Vantage score will be its default for eligible loans in the fourth quarter. So it seems like the monopoly that FICO had on the mortgage market is starting to crack and the stock is getting crushed as a result. I mean their stock chart is just ugly. Fair Isaac stock was already down nearly 50% coming into today and it's down another 20% this morning. Let's wrap the show with a fun fact. Many vans are making a

8:31comeback. Americans have bought 281,000 minivans this year through the month of August which is up 8% from last year. And this is happening while overall new car sales have declined. In fact for the first time in almost a decade Americans are now buying about as many minivans as large SUVs. I don't know about you guys but I feel like in the 90s many vans were everywhere like every family had a minivan. My family had a minivan a lot of other families I knew had a minivan but then something happened around the turn of the century where minivans just stopped being cool. Minivan sales peaked back in the year 2000 and for the last 25 years or so minivans have had this stigma of just I don't know not being cool anymore. I feel like everyone just started buying giant SUVs instead but it seems like the tides might finally be turning again and people are realizing that minivans are incredibly practical and a good deal. Now minivans usually give you more space, better gas mileage and a lower price than a large SUV. In fact on average minivans are about $30,000 cheaper than a large SUV. And you know these minivans today aren't like the minivans from

9:36back in the 90s. These days minivans have all wheel drive leather seats built in vacuum. Some minivans even have a refrigerator built in. And by the way the minivan lobby isn't paying me to say this I'm just genuinely hyped about minivans. If there's a car company out there with a sick minivan my DMs are open. Earlier this year I tried to convince my wife to get a minivan when she was looking for a car. She wasn't about it at all. She ended up getting a giant SUV. So the minivan lobby still has more work to do to get people like my wife on board. But I'm glad to see that minivans are making a comeback. I might have also just set the record for the number of times someone says minivan in a 90s second span. Anyways let me know in the comments on what you guys think about the minivan resurgence especially if you own a minivan. Let me know in the comments on what we're missing out on by not owning one. Well all right guys that's the rundown for today. I hope you guys enjoyed today's episode. I apologize if my voice sounds a little weird. I started losing my voice halfway through recording this episode. I think I just got too excited talking about minivans. Hope my voice is better by tomorrow. By the way if you guys enjoyed today's episode and have like

10:37five extra seconds consider giving us a five star rating on Apple Spotify YouTube wherever you listen to your podcast you know all that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening watching and commenting shout out to Mike and V for all the work behind the scenes and we'll see you guys back here tomorrow. This episode is brought to you by Born in Roma fragrances by Valentino Beauty, the iconic fragrance duo. Donna Born in Roma O Depart Fum is a feminine fragrance featuring juicy black current central Jasmine Woody Cashmurren and warm vanilla. It's masculine counterpart. Wombo Born in Roma O Depart has notes of fresh violet leaf, aromatic sage, green vetiver, spicy ginger and mineral salt shop at macy's.com. Fall has never looked or tasted this good. Sweet greens fall harvest menu is back with seasonal

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