Wall Street’s main stock indexes appreciated amid investor optimism for a COVID-19 relief package coupled with the continued distribution of vaccines, which is hoped would help jumpstart an economic recovery.
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The tech-heavy Nasdaq Composite Index climbed 0.5% and the Dow Jones Industrial Average gained 0.4%. The S&P 500 Index rose 0.3%.
Shares of Tesla increased 2% after the electric vehicle maker disclosed that it bought $1.5 billion worth of bitcoin as part of a new investment policy and seeks to start accepting the digital currency as a form of payment for its products in the near future. “We updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. We believe our bitcoin holdings are highly liquid. However, digital assets may be subject to volatile market prices, which may be unfavorable at the time when we want or need to liquidate them,” Tesla stated in an SEC filing.
In M&A news, shares of Dialog Semiconductor, a major chip supplier to Apple, spiked more than 15% after announcing that it is in discussions with Renesas to sell its 72 million outstanding shares for around $6 billion. Dialog was awarded a range of new contracts in 2019 by Apple to develop and supply mixed-signal integrated circuits.
Hyundai and Kia put a halt to preliminary discussions with Apple to produce a self-driving electric Apple Car beginning in 2024. The iPhone maker has ambitions of building autonomous self-driving vehicles for the mass consumer market. Wedbush analyst Daniel Ives, who has a Buy rating on the stock with a $175 price target, argues that now the question is “when not if” Apple will enter the EV race over the next few years. “Apple with the right partner would be a major force in the EV industry and could disrupt market share from the likes of Tesla, GM, Ford if the company is able to get the Apple Car on the road by 2024,” Ives commented.
British online fashion retailer Boohoo has put the final nail in the coffin of Sir Phillip Green’s Arcadia Group with the £25.2 million acquisition of the Dorothy Perkins, Wallis and Burton brands from Arcadia’s administrator, Deloitte. The purchase of the e-commerce and digital assets related to the three brands will allow Boohoo to expand its market share and demographic base, according to Executive Chairman, Mahmud Kamani. The deal does not include the purchase of any of the stores, which means that thousands of workers employed in them will lose their jobs.
In earnings news, Global Payments reported a mixed set of 4Q financial results, together with the announcement of a strategic partnership with Google. For 4Q, the company posted an 11% year-on-year increase in adjusted EPS, with the figure landing at $1.80 and beating analysts’ estimates of $1.77. Revenues, however, declined almost 3% to $1.75 billion, falling short of forecasts of $1.77 billion. Meanwhile, the multi-year partnership with Google will see Global Payments migrate its merchant acquiring technology to the Google Cloud, which will streamline its operating environment. Global Payments stock advanced 1%.
Hasbro generated over $1 billion from e-commerce sales globally during 2020, as the COVID-19 pandemic drove online demand for its toys and entertainment products. The company’s 4Q earnings per share (EPS) of $1.27 came in ahead of analysts’ estimates of $1.14. Revenue was up by 4% year-on-year at $1.72 billion, beating consensus estimates of $1.69 billion. Hasbro’s CEO Brian Goldner commented, “We integrated our acquisition of eOne and while live-action TV and film production was limited, we made substantial progress developing Hasbro IP for storytelling that we believe will lead to enhanced revenues and earnings power from Hasbro brands from multiple income streams.” Shares declined 2.8%.
Last, but not least, Elbit Systems, has been awarded two separate contracts worth a combined value of $128 million. The first of these contracts, worth $82 million, was awarded by BAE Systems Hägglunds and will see Elbit help modernize the operational and protection systems of the Royal Netherlands Army (RNLA). In addition, Elbit won a $46 million contract to supply Armored Personnel Carriers (APC) over the next three years to the army of an un-named country in Asia-Pacific. Shares added less than 1%.
