See you in court. The SEC is suing two Israeli citizens, which it accuses of using tips on planned mergers to make more than $4M in profits. The Israelis were fingered by Marc Demane Debih, a Geneva-based trader and the man (allegedly) at the center of the trading ring that nabbed him more than $70B.
Demane Debih pleaded guilty to 38 insider trading charges, and agreed in October to work with US authorities to help with their case. Snitches get stitches, Marc. Come on, we all know that. Demane Debih says he got his tips from Benjamin Taylor, a former Moelis banker, and Darina Windsor, a Centerview employee. Don’t worry, they both were arrested.
Supply and demand, and price gouging. Online retailers have had to batten down the hatches as the coronavirus storm continues to brew. People afraid of the virus (read: anyone with an internet connection) have rushed to buy face masks, hand sanitizer, and hazmat suits despite CDC recommendations not to do so. What do they know? As a result, coronavirus truthers have turned to third party online retailers on Amazon, eBay, and Walmart to find goods sold out in physical stores.
Those third-party sellers are well trained in capitalism, and have been up charging products for as much as 582%. As a result, the online marketplaces have been scrambling to shut down parties selling products with misleading claims about the virus, or overcharging to products that would otherwise be VERY affordable. The standard surgical mask sells for cents on the dollar, but you can’t put a price on a false sense of security.
Shifting inventory. Nordstrom is reshuffling its leadership after a weak Q4. The high falutin department store will be consolidating its co-presidency into a single CEO, with Pete Nordstrom dropping into a president/Chief Brand Officer role, while brother Erik will be sole CEO. The firm will also reduce its number of board members from 11 to 10.
It’s not just a weak Q4 that caused the re-shuffle, but it certainly didn’t help, considering Nordstrom shares have fallen more than 28% over the last 12 years. Nordstrom delivered a $1.42 earnings per share, compared to an expected $1.47, while revenue also missed, coming in at $4.54B against $4.56B expected. Just a few pennies off, cut them some slack. Shares were down 7.5% on the news.
Left hanging. Robinhood has had a rough start to its week. The free trading app was down for a second straight day thanks to the massive trading volume in the stock markets. While it was back online by 1 PM Eastern, markets were already way ahead of it, going crazy after the aforementioned rate cut by the Fed. Free trading… you get what you pay for, don’t you?
Most recently, Robinhood was valued at $7.6B, but you can bet the number of spurned traders leaving after Monday/Tuesday’s debacle will certainly pare that down a bit. Robinhood blamed the outage on “infrastructure that allows our systems to communicate with each other.” Even if Robinhood was up and running, you still have to call a real broker to play the VIX.