Pagaya Technologies (PGY) +96%, a little-known Israeli fintech company shooting for the moon on an apparent short squeeze a month after the company went public through a special-purpose acquisition company (SPAC) merger. Pagaya is an artificial intelligence network helping consumers get credit approval. The business model is similar to Upstart’s, but with more diversified revenue base. Pagaya appears to be growing meaningfully faster than Upstart, however Pagayas market cap is more expensive than it appears on the surface. Shares initially climbed by almost 130% during trading on Nasdaq. This was just the latest twist in the company’s roller-coaster ride on Wall Street since it went public one month ago. The SPAC merger between Pagaya and EJF Acquisition Corp. was completed one month ago at a valuation of $8.5 billion, only for Pagaya shares to plummet by over 20% during their first day of trading. The drop continued throughout the past month, with Pagaya losing 85% of its value at one stage and falling to a market cap of $1.7 billion. However, Pagaya, which uses machine learning and big data analytics to manage institutional money with a focus on fixed income and alternative credit, was riding high once more on Wednesday, climbing to a valuation of $4.2 billion after its stock surged by almost 130%.
Pagaya's float is just 336,000 shares out of the stock's 458 million total shares outstanding, meaning only a tiny percentage of the stock is actively traded and not held by insiders. Of that float, roughly 50% is sold short, making the stock a prime candidate for a short squeeze.
American Express — Shares of the credit card company climbed 2.9% as growth in travel and entertainment spending helped American Express beat Wall Street estimates. The company reported $2.57 in earnings per share on $13.40 billion of revenue in the second quarter.
Snap — Snap plunged 39.1% after the company reported disappointing results in the second quarter. The Snapchat parent company, which also said it plans to slow hiring, cited Apple iOS changes and slowing demand for its online advertising platform among the reasons for the miss on the top and bottom lines. Snap got hit by a wave of Wall Street downgrades on the back of the results.
The stocks of tech companies that are reliant on online advertising slipped on the back of dismal results from Snap. Shares of Meta Platforms, Alphabet and Pinterest fell 7.6%, 5.6% and 13.5%, respectively, on fears slowing online ad sales could also hit these names.
What Else Happened?
Verizon shares dropped 6.7% after the company cut its full-year forecast and said it added 12,000 net retail phone subscribers, far below the 144,000 estimated by Street Account. Adjusted quarterly earnings fell short of estimates, according to Refinitiv.
Shares of the toymaker Mattel fell more than 7% despite the company reporting a beat on the top and bottom lines for its most recent quarter. American Girl sales slid almost 20%, Mattel said.
Paramount Global Shares shed 2.9% after Moffett Nathanson downgraded the company to underperform and slashed its price target for the stock. The firm said its lower rating was due to the potential for an upcoming recession, which would slow advertiser spend and put additional pressure on the company.
Capital One shares dipped 4.7% after the financial services company missed earnings and revenue estimates in the recent quarter. The company reported earnings per share of $4.96 on $8.23 billion in revenue.