Monday's Headlines: Musk Pushes Back on Expedited Trial
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Pinterest (PINS) 16.2%
DraftKings (DKNG) 14.6%
Netflix (NFLX) 8.2%
StoneCo (STNE) 6.3%
Moving Down ⬇️
Google (GOOG) -95.0%
Nautilus (NLS) -4.6%
Farfetch (FTCH) -2.8%
Stitch Fix (SFIX) -2.1%
Here are the stories that you need to know ahead of market-open today, Friday, the 15th of July.
Musk Pushes Back on Expedited Trial 👩⚖️
Just when I thought I was out, they pull me back in.
We enjoyed a blissful few months there where Elon Musk was not leading the news cycle and we didn’t have to report on the bizarre, everyday ongoings of the world’s richest man. Alas, that time has passed us by, and we are back to following the eccentric South African’s every move. The latest from zany billionaire HQ is a request to the court to reject Twitter’s (TWTR) appeal for an expedited trial as the social media giant pushes to sue him for backing out of a deal to purchase the company.
Musk and his legal team claim that they need time to prepare and the trial should be pushed to next year, while Twitter seeks a hearing as soon as September.
The court filing from his attorneys claims that Twitter’s desire for a speedy hearing is a conscious effort to further “shroud the truth about spam accounts.” They argue that to try and come to a decision on a complex trial like this in such a short period of time would be an “extraordinary feat”, and they are hoping to push the court case out to February 2023.
An interesting wrinkle has also been added in the form of the judge appointed to the case. The chief judge of the Court of the Chancery, Kathaleen McCormick, was assigned the Twitter lawsuit last week and has a no-nonsense reputation (juxtaposed with Musk’s all-nonsense reputation). What makes it so intriguing is that in her recent trial history, McCormick ordered a reluctant buyer to close out an acquisition from which they tried to pull out — one of the very few judges to ever come to such a ruling.
McCormick will oversee Twitter’s motion for an expedited trial, tomorrow July 19.
Boeing Stock Takes Off Following Delta Deal ✈️
Shares in leading aircraft manufacturer Boeing are moving skyward this morning in pre-market trading following news that Delta Air Lines is set to order 100 of its new Max 10 planes. Boeing is currently trading up over 2% on the back of the news.
The deal, coupled with a smaller deal for 10 planes from German firm Lufthansa, is reportedly worth a total of over $15 billion to Boeing. Talks around this lucrative Delta deal have been ongoing since March, and appear to finally be nearing a conclusion at this week's Farnborough Airshow in England.
However, it’s not all good news for the aviation firm, as it’s still dealing with regulatory issues over its Max 10 model. Boeing is currently facing a deadline of December to receive approval for its largest single-aisle plane to date. Failing to meet requirements or secure a congressional waiver for them could see the release of the plane canceled entirely according to CEO Dave Calhoun. However, he was quick to note that that is “not a high probability path.”
With supply issues already rampant across the aviation industry and Boeing in need of a win considering its stock is currently down almost 29% year-to-date, any further complications that would jeopardize lucrative deals such as the aforementioned Delta order could be extremely damaging to the company.
Citigroup Benefits From Rising Interest Rates 💰
Shares of Citigroup surged close to 15% on Friday after the bank posted strong results from its last quarter, driven in no small part by rising interest rates.
As we head into another earnings season, the big banks were first out of the traps, but it was Citigroup’s performance that really turned heads. The investment bank posted earnings of $2.19 per share and revenue of $19.64 billion, easily beating expectations of $1.68 per share and $18.22 billion respectively.
It’s interesting to note that, while earnings beat expectations, they actually represented a drop of more than $1.5 billion from the same time last year, highlighting the conservative expectations that many investors have at the moment.
Still, Citigroup was the only one of the big four banks — JPMorgan Chase, Bank of America, Wells Fargo being the other three — to top expectations for revenue in the quarter. This was due to rising interest rates, which meant that the bank pulled in more interest income from its clients, along with strong results in its trading division and institutional services business.
Created by the merger of Citicorp and Travelers Group in 1998, Citigroup is the fourth-largest bank in the United States in terms of total assets. As with all major banks, the firm is really a holding company for multiple banking divisions, including corporate & investment banking, markets & securities services, and ordinary retail banking. Citigroup was particularly affected in the Financial Crisis of 2007 and 2008, with the company’s stock dropping more than 95% and eventually receiving a government bailout.
Like other companies in the banking sector, 2022 has been a tough year on the market thus far for Citibank, with its stock down some 20% since January.