Binance, FTX, Carvana, Lyft, and Veru: Weekly Digest (07 November – 11 November)
Why did Carvana shares grow? What made Veru shares crash? How did the Q3 report impact Lyft quotes? What are the outcomes of the agreement between Binance and FTX? Let's talk about what happened to these stocks this week.
Carvana shares grew because inflation has slowed down
American large retailer of used cars, Carvana Co, (NYSE: CVNA) started off this week with a stock decline of 15.64% to $7.39. The stock quotes continued the decline that was initiated last week following the publication of a disappointing report for Q3, 2022. As you remember, last Friday the shares lost 38.95%, amounting to $8.76.
However, on Thursday 10 November, Carvana Co stock closed at $9.99, which represents a 31.62% growth. The bounce happened thanks to the optimistic inflation statistics from the US.
The Ministry of Labour announced that in October the CPI grew by just 7.7% y/y. This result was the lowest this year and below the forecasts of analysts who had predicted growth of 8%. As for the base inflation, this does not account for food and energy carriers, which amounted to 6.3%.
We may suppose that investors are hoping for a softer interest rate policy from the Fed, considering that inflation has slowed down. This could make crediting less expensive for consumers, thereby fuelling growth in the demand for pricey goods, including used cars.
Unlike Carvana Co, American biopharma company Veru Inc. (NASDAQ:VERU) started this week quite cheerfully: on Monday 7 November, the shares grew by 39.52% to $14.4.
The stock quotes headed up on the verge of a voting in the Consulting Committee of the US Food and Drug Administration. The voting was to be about the emergency usage of Sabizabulin to cure moderate and high-risk cases of COVID-19.
However, on Thursday, the FDA informed the company that the Committee had voted against the drug. It must be noted that the regulator is not obliged to follow the instructions of the Committee, and has only done so in 80% of the cases. Nevertheless, this outcome had a negative impact on Veru stock, which led to the quotes dropping 53.56% to $6.97 on 10 November.
The quarterly report dragged Lyft shares down by 23%
On Tuesday 8 November, Lyft Inc., the American service of taxi, and rental of cars and scooters presented its Q3 report. Compared to the statistics of the same part of last year, earnings recorded a 21.9% growth to $1.05 billion, which was slightly behind the consensus forecast of $1.06 billion. Net loss increased 323.4% to $422.2 million, and loss per share recorded a 293.3% rise to $1.18.
Investors also got concerned by the decline in the number of active drivers, which grew by just 7.6% to 20.3 million, while experts had expected it to amount to 21.1. million drivers.
The results of July-September, alongside the layoffs of 13% of the workforce, and the strong quarterly report of Uber Technologies Inc. compromised Lyft Inc. stock (NASDAQ:LYFT): on Tuesday, the shares dropped 22.91% to $10.9. Lyft managed a reversal only on Thursday, which led to a 6.02% growth to $11.28.
At the beginning of November, CoinDesk published a report where it was revealed that the FTX cryptocurrency exchange had lost its paying ability. On 8 November, it became known that due to a serious liquidity crisis FTX had turned to its main rival, Binance, for help.
On the same day, the director-general of Binance, Changpeng Zhao, announced that the company had signed a non-binding agreement to acquire FTX. However, already on 10 November, the largest player among crypto exchanges reversed its decision to buy FTX after having thoroughly inspected its business.
Moreover, it was heard that the US Securities and Exchange Commission was launching its own investigation into the activities of FTX, suspecting the exchange of non-targeted spending of its clients’ money.
Consequently, the FTX token (FTT) lost 72% on Monday, falling from $19 to $3. This sent other cryptocurrencies also plunging. For example, the BTC renewed its two-year low, falling overnight from $20.6 thousand to $17.58 thousand. When the article was being prepared, the FTT cost $3.4 and the BTC $17341.5.
Carvana Co started the week with a 16% decline, but completed it with a 32% growth thanks to the slowing US inflation rate. Following the FDA panel's voting against the usage of oral drug sabizabulin, Veru Inc.'s quotes lost 54%.
Lyft Inc. published its Q3, 2022 report after which its stock quotes reacted with a 23% decline. The Binance crypto exchange gave up its plans to acquire FTX following a thorough investigation into the rival’s business; also, the SEC has launched its own investigation.