Market Outlook for Monday, February 24, 2020

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News - "Mid-Afternoon Market Update: NASDAQ Falls Over 200 Points; Ducommun Shares Gain After Q4 Results"

Toward the end of trading Friday, the Dow traded down 0.96% to 28,940.09 while the NASDAQ fell 2.09% to 9,547.08. The S&P also fell, dropping 1.27% to 3,330.30.

Leading and Lagging Sectors

Consumer staples shares climbed 0.4% on Friday. Meanwhile, top gainers in the sector included Sprouts Farmers Market, Inc. (NASDAQ: SFM), up 15%, and New Age Beverages Corporation (NASDAQ: NBEV), up 8%.

In trading on Friday, information technology shares fell 2.4%.

Top Headline

Deere & Company (NYSE: DE) reported stronger-than-expected results for its first quarter on Friday.

Deere posted quarterly earnings of $1.63 per share, exceeding analysts’ estimates of $1.26 per share. Its quarterly sales came in at $7.631 billion, beating expectations of $6.42 billion.

Equities Trading UP

Trans World Entertainment Corporation (NASDAQ: TWMC) shares shot up 95% to $6.81 after the company disclosed that its subsidiary etailz entered into a deal with Encina for $25 million 3-year secured revolving credit facility.

Shares of Ducommun Incorporated (NYSE: DCO) got a boost, shooting 31% to $55.85 after the company reported better-than-expected Q4 results. B. Riley upgraded Ducommun from Neutral to Buy and raised the price target from $55 to $60.

Dropbox, Inc. (NASDAQ: DBX) shares were also up, gaining 23% to $23.00 after the company reported stronger-than-expected results for its fourth quarter and disclosed a $600 million buyback program.

Equities Trading DOWN

Document Security Systems, Inc. (NYSE: DSS) shares tumbled 27% to $0.1786. Document Security Systems priced its 22.2 million share common stock offering at $0.18 per share.

Shares of Lianluo Smart Limited (NASDAQ: LLIT) were down 27% to $0.62 after the company priced a 3.5 million share common stock offering at $0.70 per share.

EyePoint Pharmaceuticals, Inc. (NASDAQ: EYPT) was down, falling 28% to $1.405 after the company priced its 15 million share common stock offering at $1.45 per share.


In commodity news, oil traded down 1.1% to $53.27, while gold traded up 1.8% to $1,649.00.

Silver traded up 1.1% Friday to $18.525, while copper rose 0.6% to $2.603.

Euro zone

European shares closed lower today. The eurozone’s STOXX 600 dropped 0.49% the Spanish Ibex Index declined 0.45%, while Italy’s FTSE MIB Index dipped 1.22% Meanwhile, the German DAX dropped 0.62%, and the French CAC 40 fell 0.54% while UK shares fell 0.44%.


The IHS Markit US composite PMI slipped to 49.6 in February, versus a reading of 53.3 in the prior month.

U.S. existing home sales fell 1.3% to an annual rate of 5.46 million units in January.

The total number of active U.S. oil rigs increased by 1 to 679 rigs this week, Baker Hughes Inc reported.

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Movers & Shakers - "How Shaquille O'Neal Negotiates, Picks His Portfolio"

The new face of Tonka Trucks is certainly familiar.

Over the last two decades, you’ve seen it peddling just about everything under the sun: Muscle Milk, Fruity Pebbles, Ring doorbells, Zales, Soupman, J C Penney Company Inc (NYSE: JCP), Comcast Corporation (NASDAQ: CMCSA), Vitaminwater, Dove, Nintendo, AT&T Inc. (NYSE: T), Monster speakers, Taco Bell, Icy Hot, Macy’s Inc (NYSE: M), Nestle, Oreos, American Express Company (NYSE: AXP), PepsiCo, Inc. (NASDAQ: PEP), Burger King, Buick, Gold Bond, NBA 2k, Arizona beverages, Radio Shack, Capelli slippers, Spalding, Drone watches, Toys R Us, iGO Headphones, Susta sugar substitute and a sleep apnea mask.

And that’s just a partial list.

Shaquille O’Neal is also the CFO — “Chief Fun Officer” — of Carnival Corp (NYSE: CCL), a Papa John’s Int’l, Inc. (NASDAQ: PZZA) board member, and an advocate for the Boys & Girls Club of America.

“It’s just being in the right place at the right time, and different opportunities come in,” Shaq told The Wall Street Journal about his unique résumé.

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The Shaq Empire

Over Shaq’s storied career, he amassed 28,596 points, $292 million, four NBA championships, and a fan base in six different teams.

And when he wasn’t marketing for other businesses, he was running his own. Currently, Shaq has 150 car washes, 40 24-Hour Fitness centers, 17 Auntie Anne's Pretzels, nine Papa John’s franchises, multiple Las Vegas nightclubs, a few Krispy Kreme franchises, a Big Chicken restaurant, a shopping center and a movie theater. Until recently, he also had 155 Five Guys Burgers franchises.

“My favorite one right now is Krispy Kreme,” he told WSJ. “I love donuts, and Charles Barkley loves donuts, and he’s my biggest customer.”

How Shaq Seals The Deals

Shaq is less a passive investor than a savvy negotiator, leveraging his brand power to encourage governance changes and diversification of leading companies.

In 2019, after being approached by the beleaguered Papa John’s, Shaq agreed to become the new face of the pizza brand on three conditions. One, Papa John’s had to sever ties with Papa John Schnatter. Two, it had to give Shaq a board seat. Three, it had to give Shaq franchises.

Not only can the NBA All Star throw leverage, but he’s smart on execution.

“We’d like to see if we can create a little synergy under the Shaq umbrella,” Shaq once said at a gathering of his brands, according to the New York Times.

How Shaq Picks His Plugs

While the eclectic and massive array of endorsements might make Shaq seem a bit of a “Yes” man, he’s far from undiscerning. Shaq only puts his name on products he likes — like The General Insurance, which covered his first car.

“If something comes across my desk and I don’t believe in it, I won’t even look at it,” he told WSJ. “I can’t lie to the people.”

Like Starbucks Corporation (NASDAQ: SBUX). Shaq was once approached by Howard Schultz, who wanted to bring the coffee chain into black communities.

“I was like, I’m from the 'hood and I ain’t never seen a Starbucks,’” he told the NBA. “I told this man to his face: Black people don’t drink coffee. I never saw my folks drink coffee. Then he says ‘fine’ and goes to Magic Johnson and gives him the offer. Magic gets like 15 or 20 franchises and I felt bad, especially now, when I go and see black people drinking coffee in Starbucks.”

Starbucks is one of Shaq’s biggest business regrets, although the investment wouldn’t likely have met his other investing criteria: affordable products and funny commercials.

How Shaq Keeps Himself Busy

Shaq’s resume is replete with side hustles. The “Inside the NBA” analyst, NBA Hall of Famer and father of six — who, by the way, has an MBA from the University of Phoenix and doctorate of education from Barry University — trained as a reserve officer with the Los Angeles Port Police and Miami Beach.

He’s worked with Cartoon Network and Toys for Tots. He’s done commercial and residential real estate development, and he was an early investor in Google (NASDAQ: GOOG). He starred in “Kazaam,” produced a platinum rap album, and recently dabbled as an EDM DJ.

“I have a lot of dreams and aspirations,” he told WSJ. “First one is to be sheriff somewhere. That’s my next big dream. Second one is law school. Third one is to open up children’s schools — K through four.”

That’s just what he wants to do. What he can do is a whole different story.

“I could easily be a professor,” he once told the Times. “I could easily be a sheriff. I could easily be a CEO. I’m leaning hard towards law school. Not sure yet, though.”