Wednesday's Headlines: No Slowdown In Acquisitions
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Activision Blizzard (ATVI) +25.9%
Lululemon (LULU) +1.1%
TrueCar (TRUE) +0.5%
Prologis Inc. (PLD) +0.5%
Moving Down ⬇️
StoneCo (STNE) -9.1%
Hain Celestial (HAIN) -9.0%
nCino (NCNO) -7.7%
Bumble (BMBL) -7.5%
Duolingo (DUOL) -6.8%
1. Microsoft (MSFT) will be buying Activision Blizzard (ATVI) in its largest acquisition ever — an all-cash deal worth $68.7 billion — which values Activision at $95 per share or a 45% premium to where shares traded just last week. Among Activision’s catalog of top-grossing games is the 'Call Of Duty', 'World of Warcraft', and mobile-native 'Candy Crush' franchises. The deal supports Microsoft’s in-roads to the $200 billion gaming market with CEO Satya Nadella stating it will “play a key role in the development of metaverse platforms”. Activision CEO Bobby Kotick has been under fire in recent months amid workplace relation issues making his future role unclear but Microsoft have noted the Activision business will be reporting directly to Phil Spencer, CEO of Microsoft Gaming, upon completion of the deal. Read our breakdown of the deal in-app or check out the press release here.
2. Pandemic darling Peloton (PTON) is bringing in outside assistance to help with its cost structure. McKinsey, a strategic management consultancy firm, has been hired to review and advise Peloton as the company looks to eliminate unnecessary expenses to support the longevity of its business. According to insider leaks, there are 15 stores on the brink of closure, while an anonymous employee even stated “morale is at an all-time low”. This change comes amid a hiring freeze enacted in November and weaker-than-expected results in Peloton’s Q1 2022 earnings. Subscriber growth is still strong however, so this could be exactly what the company needs to get back on track. Read the full story here.
3. Shopify (SHOP) is entering into a strategic partnership with one of the largest e-commerce players in China, JD.com. The deal opens Shopify up to an audience of 550 million annual active users and the collaboration aims to have merchants set up for selling in just 3-4 weeks so there will be an immediate impact on its business. JD.com’s logistics network spans 1,300 warehouses and the company has 200,000 staff employed in its delivery network, and it will also manage currency handling to make the transition as smooth as possible. Shopify has had very limited exposure to the Chinese market to date, so this move could mark tremendous growth ahead by moving into one of the fastest-growing economies in the world. Read the full story here.
One company on the MyWallSt shortlist will report earnings today:
Get this week’s full earnings calendar here.