Tuesday brought more concerns to Wall Street as the steep rise in interest rates continued to plague the bond market. Stock index futures were also down, extending losses from a poor month in September.
However, some stocks managed to buck the negative sentiment and move higher on Tuesday morning. Below, you'll learn about two under-the-radar companies, Oddity Tech (ODD 1.48%) and Sculptor Capital Management (SCU), that saw their share prices post some solid gains early Tuesday.
Oddity tells investors to expect the best
Shares of Oddity Tech jumped 14% in premarket trading on Tuesday morning. The consumer artificial intelligence company said that it sees some encouraging signs that should help it post better results than most investors had anticipated for the quarter that ended on Sept. 30.
Oddity said that it expects its third quarter to be the best in the company's history, projecting that net revenue growth for the first three quarters of 2023 should be at least 58%. Adjusted pretax operating earnings should come in at $89 million or higher for the nine-month period as well.
Oddity co-founder and CEO Oran Holtzman attributed the strength in the company's financial results to the impact that it has had on the global beauty and wellness market, particularly with respect to the Il Makiage and SpoiledChild brands that it has fostered. In addition, Oddity has made a foray into biotechnology through its April 2023 purchase of Revela, and it is increasingly optimistic that the Oddity Labs segment will build out its molecule discovery platform faster than previously thought and support the rest of the business with cutting-edge ingredients.
With Oddity expecting third-quarter revenue to rise 29% to 31% year over year and with boosts to gross margin and adjusted pretax operating margin estimates, investors are excited about the company's prospects. The key question, though, is whether the newly public stock can sustain this pace of growth even as it gets larger. Many investors appear skeptical, which is why even after today's gains, Oddity's stock price remains below its $35-per-share IPO price from July.
Sculptor benefits from hedge fund consolidation efforts
Meanwhile, shares of Sculptor Capital Management climbed 6% in premarket trading. The company's fortunes have shifted dramatically since it started getting interest from some industry peers.
In July, Rithm Capital announced that it had entered a definitive agreement to acquire Sculptor Capital in a deal worth $639 million. Under that deal, Sculptor shareholders would receive $11.15 per share in cash. However, shortly thereafter, a group of high-profile investors that included Boaz Weinstein, Bill Ackman, and Marc Lasry made a rival offer, reported to be $12.76 per share.
Sculptor rejected the rival bid, saying that the unsolicited moves from Weinstein and his consortium of investors didn't constitute a superior proposal. Yet in an unusual move, the founding partners of Sculptor called on the company to make further disclosures. Since then, Weinstein's group has attempted to strengthen its bid and take out some of the factors that the Sculptor board found objectionable.
Now reports are surfacing that a new bid from the Weinstein consortium topped $13 per share. It's unclear whether Rithm will boost its own $11.15-per-share offer in response or simply rely on its current agreement.
In either case, Sculptor clients hold a key bargaining chip. If enough clients would leave under a particular takeover deal, then it could squash an acquisition before it happens. That will likely be the determining factor in who ends up winning the fight to buy Sculptor.