Monday's Headlines: Amazon to Acquire One Medical
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
American Tower (AMT) 1.6%
Prologis Inc. (PLD) 1.0%
Moving Down ⬇️
Silicon Valley Bank (SIVB) -17.2%
Pinterest (PINS) -13.5%
Peloton Interactive (PTON) -13.2%
Roku Inc. (ROKU) -9.0%
Upstart Holdings (UPST) -8.5%
Here are the stories that you need to know ahead of market-open today, Monday the 25th of July.
Amazon to Acquire One Medical for $3.9 Billion 🏥
Amazon (AMZN) has agreed in principle to acquire primary healthcare provider One Medical for $18 a share or $3.9 billion in an all-cash deal. One Medical works with over 8,000 companies in twelve major U.S. markets to provide access to primary medical care to their employees. One Medical’s stock jumped 67% on the news on Thursday to take into account the 80% premium on its current stock price, while Amazon remained fairly flat.
Amazon has long had its eye on the healthcare space with its acquisition of Pill Pack and the subsequent launch of its own online pharmacy, as well as a failed joint venture with JP Morgan Chase and Berkshire Hathaway that was intended to lower healthcare and insurance costs for its collective employees called Haven. Its latest foray may be its most significant step yet, as One Medical boasts almost 800,000 members, existing relationships within the industry, as well as a number of physical clinics too.
Senior vice president of Amazon Health Services Neil Lindsay claims that "health care is high on the list of experiences that need reinvention", and Amazon hopes to be one of the companies "that helps dramatically improve the healthcare experience over the next several years."
The deal is dependent on approval from One Medical’s shareholders, and as with any of Big Tech’s acquisitions, regulators will be sure to keep a close eye on it too. There are already question marks around whether a company like Amazon should have access to private healthcare data.
Verizon Shares Tumble as Telecoms Growth Stalls 📞
Shares of Verizon fell sharply on Friday after the company missed earnings expectations and trimmed its outlook for the remainder of the year.
Shares of the communications company are now at their lowest levels since 2017 amid weak wireless subscription growth. Verizon added just 12,000 new postpaid phone customers — a fraction of the 144,000 estimated by analysts.
For the quarter ended, Verizon took in $33.79 billion and generated adjusted earnings of $1.31 per share. While those numbers were relatively in-line with what analysts had been expecting, the company did signal that it was experiencing inventory issues and saw operating profits decline due to promotional activities. Rival AT&T said last week that it was experiencing cash flow issues as customers were waiting longer to make their phone payments.
Verizon now expects wireless service revenue to increase between 8.5% and 9.5% — half a percentage point lower than previous guidance. Adjusted earnings for 2022 are expected to be between $5.10 to $5.25 per share. Management had predicted earnings of up to $5.55 earlier this year.
"Although recent performance did not meet our expectations, we remain confident in our long-term strategy,” said Chief Financial Officer Matt Ellis. “We believe that our assets position us well to generate long-term shareholder value."
Domino’s Struggles To Deliver 🍕
Domino’s Pizza reported its quarterly earnings last week and the results were not exactly what Wall Street was hoping for.
The pizza chain reported a relatively mixed bag, with revenue of $1.07 billion outperforming estimates of $1.05 billion, but earnings per share (EPS) of $2.82 coming in below predictions of $2.91. CEO Russell Weiner made things very clear by stating that “I can assure you that nobody at Domino’s is happy with our recent performance.”
Rising food costs and unfavorable foreign currency exchange rates have wreaked havoc on the firm’s international revenue, while staff shortages have also been a cause for concern. Many locations have had to shorten their opening hours due to a widescale driver shortage, while close to 40% of restaurants are utilizing call centers to take orders to free up workers to make and deliver food. Same-store sales fell by 2.9% as the general reemergence from pandemic-induced lockdowns has stifled demand for pizza deliveries.
Domino’s is a multinational pizza restaurant chain based out of Ann Arbor, Michigan. It operates over 18,800 stores in close to 90 different markets. While food is typically a safe industry in times of economic turmoil, Domino’s has struggled to hold its value of late. It’s currently down over 27% year-to-date and problems don’t appear to be lessening anytime soon. While drastic measures might not be called for yet, investors will be keeping a close eye on Domino’s near-term performance.