Amazon (AMZN) announces a partnership with Hyundai Motor Company (HYMTF) as the online retailer will let auto dealers to sell cars through its website and app. The Korean automaker will be the first car brand available through the new feature. Online auto dealer stocks like CarMax (KMX) and Carvana (CVNA) are sinking Thursday afternoon amid this news.
SoFi Technologies (SOFI) shares trend lower ahead of the closing bell as investors react to the fintech company's confirmation of a loss-sharing agreement in its loans.
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Transcription de la vidéo
JULIE HYMAN: Time now for a look at some of today's trending tickers. We start with Amazon and Hyundai or Hyundai Motor announcing a broad strategic partnership. As part of this team up in 2024, auto dealers are going to be able to sell vehicles in Amazon's US store. Hyundai is going to be the first brand available for customers to purchase.
So you buy the car in Amazon, you still have to pick it up through the dealer. What's been notable today is it's sort of a good old fashioned Amazon gets into a business and there's sort of a mini panic in the stocks of the companies--
JOSH LIPTON: Yeah, ripple effect.
JULIE HYMAN: --that are in theory affected. So we are seeing a number of the auto dealer stocks trade lower today. Amazon shares aren't doing much of anything. But you're seeing these companies fall. It's unclear to me exactly why because it doesn't cut out the dealers. You still have to go to the dealership to get your car. Maybe they get a smaller cut. I'm not sure what the financials are behind this. But it is interesting to see this reaction.
JOSH LIPTON: Yeah. And to your point, anytime you see big tech moving in with those kind of deep pockets, that kind of brain power, the flexibility they have, people get a little nervous. Sometimes you do see these knee jerk reactions. It wasn't clear to me, Julie, how many dealers exactly were talking about jumping in here exactly right away, whether that really is across the country where this is going to be available or what demand is going to be.
I mean, I myself, I think I'd be kind of uncomfortable purchasing a car online. But I realize, listen, that it is something that more people are getting comfortable with. You could see some momentum there, especially when you have a name like Amazon moving in.
JULIE HYMAN: Well, and especially, say, if you're a repeat buyer, right? Say you're a Hyundai customer, you've owned them before, it's a known quantity to you there are two more interesting parts of this announcement, I thought. One is that Hyundai is going to be partnering with AWS as its preferred cloud provider.
But the other thing is, starting in 2025, you can have Alexa in your Hyundais. So you're going to be able to talk to Alexa like you can at home and get her to do stuff in the car. But also, you can say like talk to Alexa in the car and get her to do something for you at your house also.
JOSH LIPTON: Does all this sound so exciting that you're kind of thinking about a Hyundai now maybe?
JULIE HYMAN: I have had them before.
JOSH LIPTON: Yeah.
JULIE HYMAN: But that's not enough alone to put me over the edge.
JOSH LIPTON: All right. Maybe later. We'll see how it takes. Moving on, shares of SoFi technologies slide as the company confirms what Wedbush notes was many investors fearing in that there's a loss-sharing component to SoFi's loan sales. And this, Julie, is really tagging this stock today. And I mean, impressive move to the downside.
JULIE HYMAN: It is. It is complicated. To be clear, these are loans that the company is selling. And it all has to do with the value of those loans. SoFi has what is a somewhat unusual loss-sharing agreement. So even after it sells the loans, it can participate in the upside and downside.
And David Chiaverini over at Wedbush basically wrote a note and talked about this that said it has to do with how SoFi is marking the loans, and has it made them seem more attractive, these sales more attractive than they are in reality? So the market does seem to be having some questions about this, and we're seeing a sell-off. It has to do with some comments, by the way, that SoFi made at an analyst conference today that then some folks are picking up on.
JOSH LIPTON: Yeah. And we should note, Wedbush does have an underperform on the name. So the equivalent of a sell. And they're definitely in the minority there. Only about 9% have a sell. That doesn't mean, of course, David's wrong.
JULIE HYMAN: Yes.
JOSH LIPTON: Most are on hold even with today's-- the bump in the stock here. And it is taking it on the chin. It has had a strong year. I mean, even with today's sell-off, you're still up about 45% year-to-date.
JULIE HYMAN: Right, exactly. And also we're looking at Alibaba today. It is scrapping its plans to spin off its cloud business. The company citing uncertainties created by US export curbs on chips used in AI applications. The shares tumbling by 9%. In fact, we're seeing a broad downdraft in China-related shares today. Alibaba is just one of them. But man, what a like sort of whipsaw couple of years for Alibaba investors.
It was a surprise when they said they were going to spin off the cloud business. We didn't have details on exactly what it was going to look like. Now it's not doing it, at least not for now. And it's also, obviously, fascinating timing because we've just had the meeting of President Biden and Xi Jinping, where things at least didn't get any worse and yet we're hearing this from Alibaba at the same time.
JOSH LIPTON: Yeah. And they clearly pin it on that. I think the money quote here is when they say, "The recent expansion of US restrictions on export of advanced computing chips has created uncertainties for the prospects of cloud intelligence group." Now, if you read through the reports today Julie, there are some analysts out there suggesting this might not all be about US export controls, that the cloud business--
JULIE HYMAN: Maybe it's an excuse.
JOSH LIPTON: Well, that the cloud business, they'll note, has been slowing, losing market share. But it is certainly one to watch. And you see how, yes, the US government doesn't want the Chinese government to have access to these advanced chips. They see it as a national security interest. And it is interesting how this is now causing some ripple effects in private companies.
JULIE HYMAN: Yeah. And then Baba shares are down about 11% this year. So this just the latest sort of downdraft we've seen for it.