After Hours Summary: POOL -11.2% sinks on new guidance; SEDG -13.5% drops on convertible notes offering
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: None.
Companies trading higher in after hours in reaction to news: ARVN +7.8% (names new CFO), FAAS +5% (secures allocation of an initial tranche of 5,120 NVIDIA H200 GPUs), BA +4.4% (awarded a not-to-exceed $210.9 mln US Navy order), ORN +3.3% (announces three contract awards total value $63 mln), ADV +2.1% (CEO bought 40000 shares)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: POOL -11.2%, EPAC -10.4%
Companies trading lower in after hours in reaction to news: SEDG -13.5% (files for $300 mln convertible notes offering), SWIM -5.6% (in sympathy with weak POOL guidance), LESL -5.3% (in sympathy with weak POOL guidance), BIRK -5.1% (files for 14 mln ordinary share offering by selling shareholder), LHX -5% (awarded a $998.8 mln maximum value US Navy contract), BTSG -2.4% (to acquire hospice care providers for $60 mln), MMLP -2.1% (issues statement on statement on crude oil pipeline spill), ABG -2% (provides update on impacts related to cyber-attack on CDK Global), TREX -0.6% (in sympathy with weak POOL guidance), BROS -0.2% (former WEN CEO joins board), OMI -0.1% (CFO resigns at request of the company), TAC -0.1% (enters into automatic share purchase plan)
Experts say Telegram’s ’30 engineers’ team is a security red flag
Over the weekend, a clip from a recent interview with Telegram’s founder Pavel Durov went semi-viral on X (previously Twitter). In the video, Durov tells right-wing personality Tucker Carlson that he is the only product manager at the company, and that he only employs “about 30 engineers.”
Security experts say that while Durov was bragging about his Dubai-based company being “super efficient,” what he said was actually a red flag for users.
“Without end-to-end encryption, huge numbers of vulnerable targets, and servers located in the UAE? Seems like that would be a security nightmare,” Matthew Green, a cryptography expert at Johns Hopkins University, told TechCrunch.
Green was referring to the fact that — by default — chats on Telegram are not end-to-end encrypted like they are on Signal or WhatsApp. A Telegram user has to start a “Secret Chat” to switch on end-to-end encryption, making the messages unreadable to Telegram or anyone other than the intended recipient. Also, over the years, many people have cast doubt over the quality of Telegram’s encryption, given that the company uses its own proprietary encryption algorithm, created by Durov’s brother, as he said in an extended version of the Carlson interview.
Eva Galperin, the director of cybersecurity at the Electronic Frontier Foundation and a longtime expert in the security of at-risk users, said that it’s important to remember that Telegram, unlike Signal, is a lot more than just a messaging app.
“What makes Telegram different (and much worse!) is that Telegram is not just a messaging app, it is also a social media platform. As a social media platform, it is sitting on an enormous amount of user data. Indeed, it is sitting on the contents of all communications that are not one-on-one messages that have been specifically [end-to-end] encrypted,” Galperin told TechCrunch. “‘Thirty engineers’ means that there is no one to fight legal requests, there is no infrastructure for dealing with abuse and content moderation issues.”
“And I would even argue that the quality of those 30 engineers isn’t that great,” Galperin continued. “Also, if I was a threat actor, I would definitely consider this to be encouraging news. Every attacker loves a profoundly understaffed and overworked opponent.”
In other words, it’s unlikely for Telegram to be very effective fighting hackers, especially government-backed ones, with such a small staff.
Telegram did not respond to a request for comment, which included questions on whether the company has a chief security officer, and how many of its engineers work full time on securing the platform.
Last week, the well-known cybersecurity expert SwiftOnSecurity wrote on X that “The cost to run a company that has all the right cyber security tools and staff is absolutely obscene.”
“It’s hard to describe the numbers I’ve seen. Even saying this is a gray area. But it is [an] incredible headcount and spend,” SwiftOnSecurity wrote.
All to say, even the biggest companies on the planet probably don’t spend enough money, time and energy on securing themselves. Telegram has almost one billion users, according to Durov. It’s one of the most popular platforms for people working in crypto (who move millions of dollars), extremists, hackers and disinformation peddlers.
That makes it an incredibly interesting target for both criminal and government hackers. And it has — at most — just a handful of people dedicated to cybersecurity.
For years, security experts have warned that people should not see Telegram like a truly secure messaging app. Given what Durov said recently, it may be even worse than experts thought.
Closing Stock Market Summary
The stock market had a solid showing today despite index-level performance. The S&P 500 (-0.3%) and the Nasdaq Composite (-1.1%) closed at their lows of the session, weighed down by a solid loss NVIDIA (NVDA 118.11, -8.46, -6.7%) and declines in other mega cap stocks due to profit-taking activity.
Amazon.com (AMZN 185.57, -3.51, -1.9%), Microsoft (MSFT 447.67, -2.11, -0.5%), and Broadcom (AVGO 1592.21, -61.17, -3.7%) were standout in that respect.
Other semiconductor stocks like Super MicroComputer (SMCI 826.98, -78.28, -8.7%) and Qualcomm (QCOM 200.84, -11.69, -5.5%) were also among the influential laggards today. The PHLX Semiconductor Index (SOX) declined 3.0% today.
Still, buying activity was fairly robust in the "rest" of the market. The Dow Jones Industrial Average logged a 0.7% gain and the Russell 2000 closed 0.4% higher. The equal-weighted S&P 500 settled 0.5% higher.
Energy-related names and bank stocks were among the top performers today. This price action boosted the S&P 500 energy (+2.7%) and financial (+1.0%) sector.
Energy shares outperformed amid rising commodity prices. WTI crude oil futures settled 1.2% higher at $81.63/bbl and natural gas futures settled 3.7% higher at $2.81/mmbtu. Bank stocks outperformed in front of the Fed's stress test results on Wednesday at 4:30pm ET. The SPDR S&P Bank ETF (KBE) rose 1.9%.
There was no influential economic data today, but Tuesday's calendar includes the June Consumer Confidence (consensus 100.0; prior 102.0) report at 10:00 a.m. ET. Also, the U.S. Treasury will hold a $69 billion 2-yr Treasury note offering tomorrow with results at 1:00 p.m. ET.
The 10-yr note yield settled one basis points lower at 4.25% and the 2-yr note yield settled unchanged at 4.73%.
Lacoste Takes Over Selfridges for a Summer of Tennis
The Alto by San Carlo rooftop restaurant and terrace will be transformed into an immersive space called Le Club Lacoste.
YELLOW TURNS GREEN: This summer Lacoste‘s green hue is taking over Selfridges.
The French luxury sports brand will place itself on the second floor atrium and transform the Alto by San Carlo rooftop restaurant and terrace into an immersive space called Le Club Lacoste.
“We have decided to associate our iconic brand with the power of Selfridges, repeatedly recognized as the best department store in the world. We share a strong affinity for creativity and innovation,” said Catherine Spindler, deputy chief executive officer of Lacoste.
“This year, associating Lacoste with the summer of sport theme is a natural fit and perfectly aligns with our brand’s codes. It is also, and above all, a beautiful setting to showcase our collection from our latest fall 2024 fashion show,” she added.
At the end of last year the department store partnered with the French brand on a pop-up to celebrate Lacoste’s 90th anniversary.
It’s a special moment for Lacoste, as the collection on the shop floor will be from creative director Pelagia Kolotouros’ debut.
Upstairs on the terrace, a special drinks menu for the restaurant has been designed, taking its inspiration from tennis with cocktails taking on names such as Rene, Cucumber Deuce and Match Point Spritz.
Digital screens have been installed on the terrace for visitors to catch live tennis games from the 2024 Wimbledon Championships, which started Monday and will end on July 14.
Lacoste has decorated the space with archival images from the brand’s tennis past, from founder René Lacoste’s tennis career to the first Lacoste polo.
L Catterton is partnering with actress Naomi Watts to acquire her menopause-care brand Stripes Beauty.
Stripes was founded by Watts in collaboration with Amyris in 2022. When the latter filed for Chapter 11 bankruptcy, Stripes headed for the auction block and was sold for $500,000 to Sakana LLC in December with the “Mulholland Drive” and “King Kong” actress listed as managing member.
“This is an exciting moment for Stripes Beauty, and I’m grateful to L Catterton for believing in our brand and sharing our vision of supporting women in menopause,” said Watts. “Stripes Beauty’s mission, products and community are deeply meaningful to me, and I’m thrilled to partner with L Catterton, [which] is also dedicated to providing solutions to this underserved community.”
“As consumer-focused investors, we have followed the success of Stripes Beauty and believe in their mission to develop a community of support for women as they age,” added Whitney Casey, who led the deal for L Catterton. “We are proud to invest in women and contribute to developing a health platform to address the full range of women’s unique lifestyle needs. Led by a team of strong industry experts, we will nurture and grow the Stripes Beauty brand, its community and consumer loyalty.”
Under this new partnership with Watts, of which financial terms were not disclosed, L Catterton has tapped Debra Perelman, the former Revlon CEO, as executive chair, while Cara Kamenev, a former L’Oréal executive, has been named president.
Stripes Beauty will also expand into sleep support with The Dream Date, a clinically backed supplement featuring melatonin, magnesium and red clover. Additionally, along with scaling on its own website and on Amazon, the brand will launch at QVC and in Canada later this year.
Currently, Stripes is available on Amazon, sephora.com and direct-to-consumer. Products include Vag of Honor Intimate Hydrating Gel, Oh My Glide Intimate Play Oil, and Dew As I Do Ectoine + Vit C Brightening & Hydrating Cream.
L Catterton has invested in the likes of Tula, Oddity, The Honest Company and Nutrafol, and has been particularly active in the beauty space as of late. In April, it acquired a majority stake in Italian cosmetics brand Kiko Milano. The private equity firm also launched Elevate Beauty, a fund developed within L Catterton’s Growth Fund dedicated to investing in early-stage beauty businesses. Three recent L Catterton investments — cosmetics brand Dibs Beauty; plastic surgeon founded skin care line Eighth Day, and Irene Forte Skincare, a natural skin care label — will sit within Elevate Beauty.