Peloton (PTON) stock soared Thursday after the company announced a partnership with TikTok. As part of the deal, Peloton content will be featured in a dedicated fitness hub on the platform.
Shares of battery maker QuantumScape (QS) soared after Volkswagen subsidiary Powerco tested QuantumScape’s batteries and found they passed durability tests.
Shares fell after energy company APA (APA) announced it would acquire Caron Petroleum (CPE) for $4.5 billion.
Yahoo Finance’s Julie Hyman and Josh Lipton break down Thursday’s trend ticker.
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor’s note: This article was written by Ike Ntekim
video transcript
Josh Lipton: There are still about 40 minutes until the closing bell. Take a look at some of today’s top trending tickers. We’ll start with the rise in Peloton stock after the company announced a partnership with TikTok to create a fitness hub on the social media app. So the idea here, Julie, listen, if you’re Peloton, you can hopefully find a lot of new customers.
Possibly available in the US, UK, and Canada. The backstory here, when we talk about Peloton, we were talking about the pandemic, you were darling. As people are obviously going back to the gym now, we faced a tougher backdrop. So I’ve tried different approaches and strategies.
The company launched tiered membership pricing last year, deals with a variety of brands such as Lululemon, and is also looking to spike its revenue. But perhaps this will help increase subscribers. TikTok is a monster. So I think that’s the silver lining if you’re bullish on Peloton.
Julie Hyman: Okay. Is anyone bullish? — I mean, yes, there is some bullishness on Peloton. But, well, the last few years have been tough, and they’ve been really tough. It’s been declining for three years in a row, right? The highest price was $162.72 in December 2020. As you can see, the stock is trading at just over $6 today, despite such a large increase.
So I’ve been going through a really difficult time. And Peloton has really tried different things to get their numbers back. He tried these partnerships. Let’s see if that actually starts to show up in the numbers. I don’t know. Do you have a Peloton? I don’t have a Peloton.
Josh Lipton: No, I didn’t understand.
Julie Hyman: I briefly tried this app, but it wasn’t to my liking.
Josh Lipton: It’s not mine either.
Julie Hyman: So I’m just wondering, will this actually get more people to sign up? Will it bring more growth to the company? I think the next financial report and commentary on it will be very interesting.
Josh Lipton: Yes, and you’re right, inventory is a mess.
Julie Hyman: yes.
Josh Lipton: That means it’s down more than 30% in the last 12 months alone. So I want to take that time. Of course, that’s often what brings people in. Well, I guess there’s a lot of bad news. You need to set your prices at these levels. But in reality, despite this decline, most people on the streets remain bystanders.
Julie Hyman: Yes, certainly. And the fact that there is still a significant amount of short interest attached is telling us something. Let’s talk about battery maker QuantumScape’s stock. It’s soaring today. This follows successful durability tests conducted by Powerco, a subsidiary of the Volkswagen Group.
QuantumScape significantly exceeded testing requirements. According to Powerco. Completed over 1,000 charging cycles. Now I’m not going to talk about how batteries actually work, but a little bit about how they work interestingly. However, this news actually came out yesterday morning.
And the stock price fell 3%. And suddenly I think everyone realized the news. And today, the stock is up 45%. That’s kind of interesting. So this is another name that’s pretty shortened here.
It’s about 17% floating. So there is definitely a short squeeze effect here. But some investors are hopeful that these advances will come to these batteries.
Josh Lipton: Yes, as you pointed out, Bloomberg pointed out here as background, it is actually one of the 25 most shorted stocks in the Russell 1000 index. There wasn’t much love on the streets. So this clearly speaks to a broader trend of this kind.
We see EV battery manufacturers trying to bring new technologies to market to more efficiently power vehicles. That’s the theme here. But, true, the name is significantly shortened here.
Julie Hyman: By the way, this is not just a battery manufacturer. We are proceeding with the development of all-solid-state batteries. Batteries currently contain a liquid, an electrolyte, and a separator. This is replaced by a solid separator.
We have not yet been able to operate this type of battery at a large scale so that it can be scaled up. That’s what’s going on here. What makes this move even more bizarre is that QuantumScape actually mentioned this result in its last earnings call, but didn’t say who its partners were.
Josh Lipton: I didn’t give it a name. right.
Julie Hyman: However, Volkswagen is the company’s largest shareholder…
Josh Lipton: Actually, I didn’t know either. I did not know.
Julie Hyman: I don’t think I knew that either, but you’d probably think you could deduce that. But I don’t know. Maybe people are just looking for a reason to bring up the name here.
Josh Lipton: Maybe. Okay. Let’s check one last thing here. Shares in energy company APA fell today on news that it has agreed to buy Caron Petroleum in a deal worth about $4.5 billion that is expected to close during the second quarter. Namely, the news that it will acquire a shale oil driller for $4.5 billion, including debt. That’s $38.31 per share.
The CEO said here that Caron has a strong portfolio in the Permian Basin, which complements its existing assets. And of course, this is a subject we’ve talked about a lot now, Julie. That means these oil producers are moving in, buying up rival companies, and looking for new places to drill, drill, drill.
Julie Hyman: Yeah. By the way, what’s interesting here at APA (previously known as Apache) is that they are exploring several other offshore oil regions, including Suriname. But from the analysis I’ve seen, they take time. So, in the meantime, the Permian stuff is just going to hit faster, right? That way you will get profit faster. That way, in theory, APA could get faster cash flow while waiting for the long-term stuff to come into play.
Josh Lipton: Well, that’s always interesting. There are also interesting dynamics as there are many investors who invest in oil names hoping to convert capital. They want dividends. They want a check mailed to them quarterly. So it’s interesting to see these companies trying to balance competing interests, for sure.