Monday's Headlines: Amazon Eyes Up Another Acquisition
Here were the biggest movers in the MyWallSt shortlist on Friday:
Moving Up ⬆️
Bill.com (BILL) +16.7%
Hain Celestial (HAIN) +2.6%
Hasbro (HAS) +1.7%
Casey's (CASY) +1.5%
Trip.com Group (TCOM) +0.7%
Moving Down ⬇️
StoneCo (STNE) -22.3%
Stitch Fix (SFIX) -14.7%
Redfin (RDFN) -11.6%
Lemonade (LMND) -11.2%
Farfetch (FTCH) -10.3%
Amazon Joins Bidders for Signify 💰
Amazon (AMZN) is reportedly interested in acquiring healthcare provider Signify Health. That news has sent the stock up 36% in pre-market trading, with investors anticipating a bidding war over the company.
Signify is reportedly for sale in a deal that could value them at around $8 billion, with potential suitors expected to have their bids in by Labor Day. Signify’s value has increased dramatically since rumors of a sale began earlier this summer.
Signify uses analytics and technology to help healthcare providers offer in-home care. It went public in February last year but has seen its share price decrease significantly amidst a broader market sell-off. Shares of the company now sit above their $24 IPO price, but still below the $38 it reached shortly after going public. Last month, the company announced it was winding down one of its business units after a change in government payment policies.
Two weeks ago, The Wall Street Journal reported that CVS was interested as it expands beyond its drugstore and insurance operations. CVS was reportedly also interested in acquiring One Medical before Amazon agreed to buy them for $3.9 billion in July. That was the first major acquisition announced under new CEO Andy Jassy. It was followed shortly after by the news that Amazon would acquire iRobot (IRBT) — makers of the Roomba vacuum.
Buffett Bets Even Bigger on Oil 🛢
Shares of Occidental Petroleum spiked some 10% on Friday after Warren Buffett’s Berkshire Hathaway (BRK.B) received permission from the Federal Energy Regulatory Commission (FERC) to up its stake in the company to as much as 50%.
The news builds on increased interest from the Oracle of Omaha in the oil company since the start of the year. Berkshire Hathaway already owns a 20% stake in Occidental, with further warrant options allowing it to increase its stake to 27% if exercised.
Of course, the news that Buffett has sought permission to up his stake to 50% has inevitably led to speculation of a takeover of the oil giant. The old-world company would sit nicely within the existing Berkshire Hathaway portfolio, which includes other energy businesses like PacifiCorp and MidAmerican Energy Company. Buffett has also been public in his praise of Occidental CEO Vicki Hollub in the past.
However, the Wall Street Journal has reported that Buffett has made no approach regarding plans to acquire a controlling stake in the business, which would be expected given his long-standing aversion to hostile takeover bids.
In any case, it’s no surprise why Buffett might want to get more exposure to Occidental. Its shares have been some of the best-performing in the S&P 500 to date this year — up 130% versus a decline of almost 12% for the broader index.
MGM Fights to Stay in Macau 🥊
MGM China is readying to pump $600 million into its Macau casinos as the company prepares to bid for its new gambling license at the end of 2022.
Macau recently revised its gambling laws for the first time in more than two decades in an attempt to increase regulatory oversight and align players with China’s national security interests. Under the new regulations, businesses seeking one of the six illustrious licenses will need to hold more than $619 million in capital to ensure that they have sufficient financial resources. Casino operators will also be required to have a director who is a Macau citizen and controls more than 15% of the company’s shares.
MGM China’s co-chairperson, Pansy Ho, has been named managing director and will be transferred 730,000 Class B shares to meet the new requirements.
The duration of the licenses has also been cut in half — from 10 years to 5 years — meaning operators will have to rebid in 2027.
MGM China (HKG: 2282) trades on the Stock Exchange of Hong Kong, but more than 54% of its shares are controlled by its parent company, MGM International, which trades on the New York Stock Exchange (NYSE: MGM).
Importantly, MGM isn't the only big American player running to realign itself with the desires of the Chinese government. Wynn Resorts and Las Vegas Sands Corp. also own casinos in Macau and must renew their licenses.