Category: Stock Market News

The surge in Alibaba Group Holding Ltd.’s stock Thursday is on track to be the biggest one-day price gain since the China-based e-commerce giant went public in September 2014, after the company’s upbeat revenue outlook. With 2.57 billion shares outstanding as of March 31, the price gain would add about $41.35 billion to Alibaba’s market capitalization. The shares ran up $16.07, or 12.7%, to $141.71 in morning trade. The percentage gain would place third since the initial public offering. Alibaba Chief Financial Officer Maggie Wu said overnight at the company’s investor day that fiscal 2018 revenue is expected to rise 45% to 49% over 2017 results, while the FactSet consensus implies growth 37%. The stock, which was trading at times the IPO price of $68, had closed at a record of $125.64 on Wednesday. It has soared year to date, while the Amplify Online Retail ETF has run up and the S&P 500 has gained .

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U.S. stocks struggled for direction in early trading on Thursday, with investors awaiting testimony from former Federal Bureau of Investigation Director James Comey. Comey’s comments could result in further delays to President Donald Trump’s economic agenda, something analysts see as necessary to justifying current valuations. The Dow Jones Industrial Average rose 1 point to 21,176. The S&P 500 added 1.5 point to 2,435. The Nasdaq Composite Index was up 0.2%, or 12.5 points, to 6,309, eking out an intraday record on the strength of Facebook Inc. , which rose 0.8%. Equity markets were also digesting commentary from the European Central Bank, which kept its monetary policy unchanged but suggested it might adopt a more hawkish posture in the future, as well as an election in the U.K., which could dictate the strength of the country’s negotiating position in coming Brexit talks. Among the most active names of the day, Nordstrom Inc. surged 19% after the company said it was exploring a “going private” deal.

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Pandora Media Inc. said on Thursday it is extending the pre-closing period before closing its investment deal with private-equity firm KKR. Shares of Pandora rose as much as 2% in premarket trade. The internet music streaming and radio company said it has met all conditions necessary to close its $150 million KKR investment and that both parties are “prepared to close immediately.” The extension, however, could mean Pandora is looking to capture a better strategic deal. When Pandora secured the KKR investment in May, it said it would first explore strategic alternatives before closing the deal. Liberty Media Corp.-owned satellite radio company SiriusXM has shown interest in making a bid for Pandora, but Liberty Chief Executive Greg Maffei had said previously that Pandora was overvalued and that he would consider a bid if the company were trading at $10 a share. Pandora shares closed at $8.52 on Wednesday. Pandora did not say how long the pre-closing period would be extended for, but if the investment is still the best option for the company and its shareholders following the period, it will close immediately, Pandora said. Pandora shares have declined nearly 35% in the year to date, while the S&P 500 index is up nearly 9%.

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Shares of Nordstrom Inc. rocketed 22% in premarket trade Thursday, after the high-end department store chain said it was exploring a “going private” deal. The company said member of the Nordstrom family, including Co-Presidents Blake Nordstrom, Peter Nordstrom and Erik Nordstrom; Chairman Emeritus Bruce Nordstrom; President of Stores James Nordstrom and Anne Gittinger, have formed a group to explore the possibility of acquiring 100% of the shares outstanding. Bruce Nordstrom owned 15% of the shares outstanding as of March 17, according to FactSet, and Gittinger owned 9.2% of the outstanding shares. The stock had tumbled 15.5% year to date through Wednesday, while the SPDR S&P Retail ETF had lost 8.0% and the S&P 500 had gained 8.7%.

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Internet video services are more popular than cable, according to a May study from Fluent LLC. that was reported by eMarketer. Fluent, a data and marketing company, found that 67% of U.S. internet users watch TV via a streaming service, a la Netflix Inc. , Hulu and Amazon.com Inc. , while 61% have cable subscriptions at home. Millennials, age 18 to 34, used streaming services at a higher rate and Netflix was the most popular service among them. According to the study, 77% of millennials said they use streaming services vs. 57% who have cable at home — there’s some cross over of people subscribing to both. For people aged 35 and older it was a more even split, with 65% using streaming services and 62% subscribing to cable. Of the streaming services, Netflix was the most popular, with 48% of all respondents saying they use the service. Amazon and Hulu — a joint venture by Comcast Corp. , Walt Disney Co. , 21st Century Fox Inc. and Time Warner Inc. , were tied with 16%, followed by Alphabet Inc.-owned YouTube Red’s 11% share and HBO being popular among 10% of survey respondents. More than 34% of people said low cost was the main factor in opting for a streaming service and for millennials the convenience of watching whenever and wherever was important for 29% of them, while 21% of nonmillennials said the same. And original content, which has been of increasing importance for companies, was a deciding factor for 18% of all respondents. Only 7% were interested in syndicated content.

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Forestar Group Inc. said Thursday that D.R. Horton Inc.’s unsolicited bid to buy a 75% stake in the company could lead to a “superior proposal,” as defined in its merger agreement with Starwood Capital Group. Forestar said that while it remains subject to the merger agreement with Starwood, the agreement allows Forestar to take certain actions to further consider D.R. Horton’s bid, including participating in discussions or negotiations. The termination fee of the Starwood deal is $20 million. On April 13, Forestar agreed to be acquired by Starwood for $14.25 a share, but then received on June 5 a bid from D.R. Horton to buy 75% of the outstanding shares for $16.25 a share. Forestar’s stock, which rallied 1% in premarket trade, has soared 19% year to date through Wednesday, while the S&P 500 has gained 8.7%.

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Valeant Pharmaceuticals International Inc. said Thursday it has agreed to sell iNova Pharmaceuticals to a company owned by funds managed by private-equity firms Pacific Equity Partners and The Carlyle Group for $930 million in cash. iNova makes drugs for weight management, pain management, cardio and coughs and colds, among other things. Valeant will use the proceeds of the deal to pay down loan debt. The company is working to reduce a debt burden that stood at $26.5 billion at the end of the first quarter. The deal is expected to close in the second half. Valeant shares jumped 5% premarket on the news before paring those gains, but are still down 16% in 2017 through Wednesday, while the S&P 500 has gained 9%.

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Valeant Pharmaceuticals International Inc.’s sale of iNova Pharmaceutical for $930 million in cash appears to be debt neutral, Evercore analyst Umer Raffat wrote in a note. Valeant said it plans to use the proceeds of the deal to pay down loan debt. The company is under pressure to reduce a debt burden that stood at $26.5 billion at the end of the first quarter after a series of asset sales and adjustments to loan terms. Raffat said iNova was sold at 7.4 times EBITDA, based on the company’s $125 million in EBITDA for 2017. The company’s net debt to EBITDA ratio currently stands at 7.4 times to 7.7 times. “The transaction simplifies the geographic footprint a bit for Valeant … but as I mentioned, its debt neutral (i.e., not de-levering),” Raffat wrote.The iNova business was acquired in late 2011 for $657 million and was generating about $200 million in revenue a year as of disclosures made in 2012. Valeant shares pared their initial premarket gains of about 5% and were last up 3.5%. The stock has fallen 16% in 2017, while the S&P 500 has gained about 9%.

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The European Central Bank, as expected, left interest rates unchanged Thursday but removed language from its policy statement indicating rates could go lower in the future. The ECB said it continued to expect interest rates “to remain at present levels for an extended period of time, and well past the horizon” of its asset-buying program, which is set to run at least through December. In previous statements, the ECB had said it expected rates “to remain at present or lower levels for an extended period of time.” The ECB’s refinancing rate remains 0%, while the rate paid on deposits left overnight at the central bank was held at minus 0.4%. The ECB’s marginal lending rate remains at 0.25%. The focus now turns to ECB President Mario Draghi’s news conference, which is set to begin at 8:30 a.m. Eastern.

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J.M. Smucker Co. reported Thursday a fiscal first-quarter net profit that fell to $196.7 million, or 96 cents a share, from $246.1 million, or $1.61 a share, in the same period a year ago. Excluding non-recurring items, such as an impairment charge related to indefinite-lived trademarks, adjusted earnings per share came to $1.80, above the FactSet consensus of $1.72. The consumer and pet foods seller said revenue fell 1% to $1.78 billion from $1.81 billion, but beat the FactSet consensus of $1.77 billion, as better-than-expected U.S. retail coffee and consumer foods sales offset a miss in pet foods sales. For fiscal 2018, the expects adjusted EPS of $7.85 to $8.05, surrounding the FactSet consensus of $7.93. The stock, which was still inactive in premarket trade, has edged up 2.2% year to date, while the S&P 500 has gained 8.7%.

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