Hey Gotraders,
Coinbase (COIN) is back in the news again. The crypto exchange revealed that they received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) saying that the regulator intends to sue them over its interest-earning product, Coinbase Lend, which they were planning on launching in the coming weeks. Uh oh…
What is Coinbase Lend? Coinbase Lend allows users to earn a 4% annual percentage yield on a so-called stablecoin (USD Coin) by allowing Coinbase to lend those funds to verified borrowers.
How did Coinbase respond? Well, Coinbase’s CEO, Brian Armstrong, posted a series of tweets on Twitter (TWTR). 🤦 According to him, Coinbase gave the SEC a heads up before releasing the product. “They responded by telling us this lend feature is a security.” “They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.”
Paul Grewal, Coinbase’s Chief Legal Officer, also posted a blog titled “ The SEC has told us it wants to sue us over Lend. We don’t know why” on its website.
Grewal says the following in his blog - “The SEC told us they consider Lend to involve a security, but wouldn’t say why or how they’d reached that conclusion. Rather than get discouraged, we chose to continue taking things slowly. In June, we announced our Lend program publicly and opened a waitlist but did not set a public launch date.”
Why is this important? Uhh… If the U.S. regulator tells you that you can’t launch something, why would you go ahead and open a waitlist for that product? Isn’t that asking for trouble? *Shakes head*
CNBC’s Jim Cramer has also publicly blasted Coinbase’s CEO over his tweets by saying that ‘You can’t go to war with the regulators.’
Shares of Coinbase closed at $258.20, 3.23% lower for the day.
📈 BlackRock has a new investment fund in China 🇨🇳
BlackRock (BLK), the world's largest asset manager, now has a new investment fund in China. The fund was established this week and has already raised more than $1 billion from 111,000 Chinese investors.
"We are very proud of achieving this milestone for our China fund management business, and are grateful for investors' overwhelming support" - Rachel Lord, BlackRock's Chair and Head of Asia Pacific.
Not everyone is excited about BlackRock’s new fund though. 😬 Billionaire philanthropist George Soros thinks that BlackRock’s initiatives in China are a “tragic mistake.” “It is likely to lose money for BlackRock's clients and, more importantly, will damage the national security interests of the [United States] and other democracies.”
Talk about bursting BlackRock’s bubble, eh?
Shares of BlackRock are up 30.04% year-to-date and closed at $924.34.
📉 GameStop down over 7% after earnings ⏬
Shares of meme stock, GameStop (GME) are down over 7% in extended trading as the company reported earnings. The company reported an adjusted loss of 76 cents per share on $1.18 billion revenue. Wall Street was expecting a loss of 67 cents a share on $1.12 billion revenue. GameStop did not take any questions during the call, and they did not give any future guidance. They also mentioned on the call that the SEC has requested additional documents for the ongoing probe, which they had already disclosed in May. 😐
Shares of GameStop closed at $198.80 and are down 7.22% to $184.44 in extended trading at the time of writing.
Top movers & shakers 🎢
What else is making headline news 📰
Ford’s (F) Chair Bill Ford on automaker’s stock rally, SPACs, and investors.
Microsoft (MSFT) launches a personalized news service, Microsoft Start.
Twitter (TWTR) is testing big ol’ full-width photos and videos.
Popular companies releasing earnings this week 💰
Thursday: Oracle (ORCL), Affirm (AFRM), National Beverage (FIZZ), FuelCell Energy (FCEL)
Friday: Kroger (KR)
A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.
The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.
That’s all from us for now.
Signing out,
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The legal stuff 🤓
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