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Today in the Market (10/16/2023)

Good Evening! On Monday, stocks concluded the day with gains as investors readied themselves for a multitude of corporate results scheduled for this week. Wall Street prepared for increased geopolitical tensions as the US sought to escalate attempts to manage the Israel-Hamas crisis.

The S&P 500 saw notable gains with an increase of 1.06%, while the Dow Jones finished the day up 0.93%. The Nasdaq Composite surged by 1.20%.

THE ONLY WAY OUT!

Rite Aid (RAD) initiated bankruptcy proceedings on Sunday evening, worsening the downward trajectory of its shares due to diminishing revenues and the impending opioid litigation that has cast a shadow over the retail drugstore giant.

Here are the details! Rite Aid said that its decision to file for Chapter 11 bankruptcy would facilitate the settlement of litigation claims in a fair and just way. This action comes in response to a lawsuit filed by the Department of Justice in March, which implicated Rite Aid in the opioid crisis. The lawsuit accused Rite Aid of dispensing a significant number of prescriptions that failed to comply with legal standards.

The only way out? Rite Aid is of the opinion that filing for Chapter 11 will assist in reducing its retail presence. The Wall Street Journal indicated the company plans to shut down 400 to 500 of its stores. Rite Aid said in the request that the bankruptcy procedure would enable it to terminate leases in unfavorable sites, as the firm is now burdened with unproductive stores from which it is unable to withdraw

 

2024 GOALS FOR SNAP?

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Shares of Snap saw a significant increase on Monday after the unauthorized release of an internal memo from company executives to employees. The memo, authored by Evan Spiegel, the co-founder and CEO of Snap, outlined the objectives of the company for the year 2024, and the market responded positively to the contents of the document.

So what was in the memo? The Verge has claimed that  management aims to achieve a 20% increase in its annual advertising revenue compared to 2023. Additionally, it seeks to generate $500 million in revenue from non-advertising sources. The target is to have 14 million subscribers to Snapchat+ by the end of 2024. Furthermore, the objective is to generate positive free cash flow for the year.

What needs to be done? Snapchat’s user base and advertising reach have consistently expanded. However, the company’s revenue during the first half of 2023 saw a 5% decline compared to the same time in 2022 due to a decrease in its advertising prices. This issue is not exclusive to Snap; several advertising technology businesses are facing difficulties. In order to expand in 2024, Snap will rely on the resurgence of the worldwide digital advertising industry. However, the probability of this event is uncertain if major global economies see a decline in economic activity

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