What Cramer is watching Wednesday — Disney CEO must go no Red wave Meta job cuts
What I am looking at Wednesday, Nov. 9, 2022 Undecided Congress: No Red Wave but the scope of the Republican “defeat” is stunning. The GOP had everything, inflation, crime, immigration, Biden, Harris, Schumer, Pelosi — they had it all and theoretically should have won it all. Exit polls show women HATE the Republicans. U.S. stocks lower the day after the midterm election. Investors await results from too-close-to-call races that could shift the balance of power on Capitol Hill, and they also look ahead to Thursday’s consumer price index (CPI). Interestingly the S & P 500 has been solidly higher 12 months after the midterms in every cycle since 1954, according to Yardeni Research. We looked how Club stocks did a year after the past five midterms. Club holding Meta Platforms (META) cuts 11,000 jobs, or 13% of workforce. Generous severance. But revenue stays the same and losses stay the same. The Facebook-parent gets a 3.5% bump in the premarket but the stock is still down around 70% year to date. It’s one of the worst performers among the S & P 500 companies in 2022. CEO Mark Zuckerberg gets religion. Club holding Disney (DIS): The coach must be fired. We have seen enough. CEO Bob Chapek can’t even do Parks right. Direct-to-consumer too hard for him. Embarrassing. He acted as if nothing wrong. Chapek was known for being such a great operator, but we cannot give him this title after Disney’s terrible quarter and guidance . Price targets cut across Wall Street, including Barclays going to $98 per share from $105. Bitcoin down another 4% on Wednesday, trading under $18,000. From Reuters: Bitcoin down almost 75% over the past 12 months, suffered a peak-to-trough swoon of 20% this week. Uncertainty around Binance’s deal to buy Samuel Bankman-Fried’s FTX. FTT, the token native to crypto exchange FTX, lost most of its value . Affirm (AFRM): Many price target cuts and the stock down 12% in the premarket. I think that the balance sheet is safe. The loans aren’t kept on the balance sheet very long. No problem funding problem. But CEO Max Levchin is going for profitability. He admits to macro problems. Sees no problem with competitors Takes market share . Morgan Stanley says all systems go. Elon Musk sale of at least $3.95 billion of Tesla (TSLA) stock shows that Twitter his bid can easily be paid for. I expect a snap back in Tesla share s . Upstart (UPST): I have no idea what they are going for. They keep loans on the books too long. Morgan Stanley cuts price target to $11.50 per share from $15; keeps underperform (sell) rating. Shares sink 20% in the premarket. Tyson Foods (TSN) downgraded to underperform from neutral (sell from hold) at Bank of America, ahead of next week’s release of quarterly results . BofA cuts price target to $61 per share from $73. Fundamentals continue to deteriorate. Is this a good sign for the CPI. Evercore ISI sees the Kroger (KR)- Albertsons (ACI) supermarket deal getting through; upgrades to outperform from in line (buy from hold) and raises price target to $56 per share from $49. Gutsy call. I think the FTC will try to block it. 35% accretion and $70 target. (Jim Cramer’s Charitable Trust is long META and DIS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
