Monday’s Headlines: Zoom Drops $14.7 Billion
Here were the biggest movers in the MyWallSt shortlist on Friday:
Moving Up ⬆️
nCino (NCNO) +3.0%
Twilio (TWLO) +2.4%
DocuSign (DOCU) +1.8%
Zoom Communications (ZM) +1.4%
Moving Down ⬇️
Ericsson (ERIC) -10.8%
Stitch Fix (SFIX) -4.6%
Trip.com Group (TCOM) -4.4%
Under Armour (UAA) -4.1%
Coupa Software (COUP) -3.8%
1. To fuel post COVID-19 growth, Zoom (ZM) announced on Sunday that it’s acquiring Five9, a cloud contact center provider, for $14.7 billion in an all-stock transaction. With the buy, the video conferencing platform is preparing for employees returning to offices by expanding its offerings so it can pull in more revenue per customer. Five9’s revenue jumped 33% to $435 million last year as demand for call center technology that allowed employees to do their jobs remotely skyrocketed. After Zoom’s massive growth in 2020, a slowdown is imminent as physical meetings resume so it needs to find a way to add new revenue streams especially as Microsoft (MSFT) Teams gains in popularity. See more here.
2. Over in China, Tencent has agreed to buy video game company Sumo Group Plc in a deal valuing the firm at $1.27 billion. The world’s largest gaming company is offering a 43% premium to the British company’s previous close. Adding to its string of gaming investments, the purchase is part of Tencent’s plan to plow a larger percentage of its incremental profits into cloud services, games, and video content this year. The buy will hopefully also help it fend off rivals ByteDance and growing scrutiny from Beijing regulators. Read more here.
3. U.S. stock futures fell in overnight trading yesterday after major indexes recorded their first negative week in a month due to inflation fears. The Dow Jones Industrial Average (DIA) slid 169 points whilst the S&P 500 (VOO) and Nasdaq 100 (QQQ) also traded in the red. On Friday, a U.S. consumer sentiment index from the University of Michigan showed that people expect prices to increase 4.8% over the next year, which would represent the steepest jump since 2008. In more positive news, retail sales figures released at the end of the week came in above expectations, rising 0.6% in June compared to estimates of a 0.4% decline. More here.
There is one company on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.