00:00 Julie
Jared Blikre, Markets and Data editor, is joining me right now. But let’s talk cereal first. Yes, let’s talk about cereal first. Um, apparently not as many people are buying it. Um, so General Mills missing Wall Street estimates. Uh, organic revenue was down by 3%. The company of course makes Cheerios and lots of other food products. Um, we’ve talked a lot about how, um, staples have been doing well, uh, but here is an exception to that.
00:29 Jared
There was a rotation into staples around late last year, early this year. and so yes, they were one of the best performing sectors. Um, they’ve fallen off a little bit since then, but let’s talk about the quarter here. The quarter missed, visibility got worse, adjusted EPS 64 versus 74 coming in. You mentioned organic sales. That was down 3% versus about two and a half percent, down two and a half percent estimated. Jeffries rates the stock a hold, saying volatility in the third quarter does little to provide clarity. Um, guidance was maintained, but it leans harder on a better fourth quarter now. So full year organic full year organic sales still still seen about uh, drop of 1 and a half to 2%. Uh, adjusted operating profit still seen 16 to 20% down. Bloomberg Intelligence saying third quarter results suggest a turnaround is progressing operationally, but the reiteration of guidance despite tailwinds in the fiscal fourth quarter reinforces the recovery will be slower and more back half loaded than hoped. So pushing out just kind of a rosier expectation for the end of their uh, fiscal year. Underlying positive, investors still need proof on volume, but, uh, North American re re retail organic sales volume that was down three percentage points. Uh, pet organic sales volume down six percentage points. Mizuho rates the stock a neutral saying the slope of profitable volume recovery remains key to investor sentiment. So still negative but maybe improving a bit.
02:12 Julie
Um, and you know, when you were talking about consumer staples that have done well, General Mills hasn’t been participating in that. I think the stock is down what, at like 36% over the past year or something?
02:24 Jared
Let’s take a look at the YFi Interactive here and It’s been pretty straight down. There you go. 36%. That is from the upper left to the lower right. So indeed. Um, I like to get a six-year picture just to see what a stock has done through the the global fin, yeah, through the pandemic. You can see it had a nice bounce here, uh, kind of started in 2022, which was a bare market. So not surprisingly it outperformed, but it’s been kind of on the down slope ever since then.
02:51 Julie
All right, let’s talk about the next one. That is SoFi, uh challenging a short seller report and it’s considering legal action. The short seller we’re talking about is Muddy Waters, which has a pretty, um, it’s a well-known research shop and it is alleging aggressive financial engineering, mismanaged debt. SoFi has fired back with sort of a point by point rebuttal to Muddy Waters. You know, some companies when they get, you know, attacked by a short seller, they sort of like, they don’t deign to to reply. But SoFi is taking this seriously and is is really digging into some of those allegations.
03:32 Jared
Let’s remember in 2021, short sellers, a lot of them had to totally back away from their business. So they’re a lot more careful now, but more on that in a second. So, uh the core accusation is about accounting and structure, which you were just talking about, Julie. Muddy Waters is alleging that SoFi uses loan marks and off balance sheet structures to make borrowings look better than what they really are, and that it may have about $312 million of debt not recorded as debt. Uh, but SoFi, as you said too, pushed back hard and fast. The company called the report, quote, factually inaccurate and misleading, said it reflects a fundamental lack of understanding of SoFi’s financials and said it’s considering legal action. Um, one more thing here, Muddy Waters says it intended to begin covering a substantial majority, possibly all of its shorts after publishing. And so this is another, sometimes this is, this is kind of the way the the industry works sometimes. But if you’re thinking, oh, let me just short the stock now, keep in mind that the biggest short seller here might be buying to cover that position. So,
04:46 Julie
Interesting.
04:47 Jared
Yeah, and you take a look at the stock today, it’s up 1.87%.
04:52 Julie
But that doesn’t look like a short squeeze to me.
04:54 Jared
No, no. That doesn’t That is not a short squeeze. And indeed, if you go to a year out on the Wi-Fi Interactive, you see it’s still holding on to gains of about 48%, but it’s well off of those highs there. You can see that more in a six-month chart, down 37%. Here’s the, uh, look back into what is that? Let’s do a max actually. Yeah, that is since the IPO. And you can see just kind of, uh, down 5%.
05:24 Julie
Yeah. All right, let’s speaking of IPOs, let’s talk about the last one. And that is Swarmer, the aforementioned. Uh this is a drone company. You can envision swarms of drones. Um, who, uh, the guy behind it is Erik Prince, actually. Yeah. And so this, uh, went public, um, and I think it had the biggest increase in a single day since in an IPO what, going back a year at least.
05:54 Jared
It it was huge. Yeah, this was yesterday that it had. Yeah, it was something like a 500% pop. Um, and this this company has the whole, well, you know, a trilogy, AI, drones, defense. That’s a lot of buzz words right there. But also a huge, huge name in defense, which is Prince. Um, this, they basically create software that lets one operator of a drone manage large groups of drones instead of controlling them one by one. So hence hence the, uh, swarm name there. Uh, very early stage revenue though. 2025 revenue was about $309,000. So not even half a million, still deeply unprofitable. Uh, 2025 net loss, about 8 and a half million. Customer concentration risk. One customer accounted for substantially all of their 24, 25 revenue and the company does not expect new orders from that customer going forward. So it’s a show me story. But uh, a lot of hype. Let’s check out the charts real quick on the Wi-Fi Interactive. You can see it’s up another 33% today. Here’s a max chart from the $5 IPO. It is up 731%. So,
07:11 Julie
And by and by the way, it makes software, doesn’t make the drones themselves. It just allows the drones to work in this way, I guess.
07:18 Jared
Exactly. Software for drones.
07:19 Julie
All right. Thanks a lot.