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Carvana Co. has experienced a remarkable recovery, with its stock soaring over 10,000% from a late 2022 low to an all-time high, inflicting $7.42 billion in losses on short sellers. The online used-car dealer's recent surge follows blockbuster second-quarter results, including record revenue, signaling a potential turnaround. Carvana's innovative online platform, which allows customers to buy cars remotely, sets it apart from traditional brick-and-mortar competitors like CarMax and AutoNation, contributing to its high valuation. Market conditions, such as increased demand for used cars due to tariffs, have further boosted its performance. Despite a 5.7% drop on Friday, the stock ended the week up over 10%, with analysts optimistic about future growth. This rally, reminiscent of retail-trading frenzies like GameStop, highlights the risks of shorting volatile stocks and marks Carvana as one of the most dramatic recoveries in recent market history.
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Tom Lee, chairman of BitMine Immersion Technologies, emphasizes the growing trend of companies aggressively accumulating Ethereum as part of their crypto treasury strategies, inspired by Michael Saylor’s Strategy, which holds over 3% of Bitcoin’s supply. BitMine has rapidly amassed over $2 billion in Ether, aiming for 5% of the total supply, and is introducing an “ETH per share” model while planning to generate income through staking. Lee sees Ethereum as the decade’s biggest macro trade, driven by its role in the $272 billion stablecoin market, bolstered by new US legislation like the Genius Act. However, the trend raises concerns, with critics like Jim Chanos and Coinbase analysts warning of systemic risks and financial instability in the crypto market. Lee compares crypto treasury companies to traditional giants like ExxonMobil, arguing they are valued for controlled resources—here, digital assets—transforming capital markets. Despite the optimism, risks and skepticism persist around this aggressive accumulation strategy.
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Jim Cramer, a prominent CNBC anchor, recently shared a stark warning on X about three high-flying stocks—Figma (FIG), Circle (CRCL), and CoreWeave (CRWV)—calling them "BORROWED TIME" due to their overbought status. Figma, a design software firm, debuted on the NYSE on July 31 with a 198% surge, peaking at $148 from a $33 IPO price, though it later settled at $114.05. Circle, the issuer of USDC stablecoin, saw a 700% rally since its June 5 debut but dropped to $169.76, reflecting an 8% decline. CoreWeave, an AI data center with crypto origins, also fell to $104.28 from $114.13. These declines align with a broader crypto market correction, exacerbated by an $805 million liquidation following President Trump’s proposed tariffs. Cramer’s caution comes amid heightened excitement for tech and crypto-adjacent firms going public, highlighting potential risks in their current valuations.
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President Trump has initiated a major overhaul of US trade policy by imposing sweeping tariffs on over 70 countries, ranging from 10% to 40%, as part of his plan to reshape global trade. Key actions include a 35% tariff on Canada, effective immediately, and specific rates like 15% on South Korea and the EU, alongside a 50% tariff on Brazilian goods with exemptions for certain imports. Mexico received a temporary reprieve, while negotiations with China and India continue amid looming deadlines and penalties. The tariffs, which also target sectors like Swiss watches (39%) and copper products (50%), have led to a decline in global stocks and raised concerns about economic fallout, with Swiss industries warning of job losses. Additional measures include ending exemptions for low-value imports and addressing transshipment issues, though details on enforcement remain unclear. This aggressive trade strategy, accompanied by ongoing talks and last-minute delays in implementation for some rates, signals a significant shift in the US trade landscape with potential impacts on economies worldwide.
