Category: Stock Market News

Rent-A-Center Inc. said Tuesday that it adopted a shareholder rights plan, also known as a “poison pill,” to reduce the likelihood that an investor would gain unsolicited control of the company. The rent-to-own operator declared on March 25 a dividend of one preferred stock purchase right for each outstanding common stock, payable on April 14 to shareholders of record on April 7. The right allows shareholders to buy one-thousandth of a share of newly created Class D preferred stock for $25, which can be exercised if an investor acquires a stake of 15% or more of outstanding common stock. If exercised, the right entitles its holder to buy a number of common shares. The rights plan comes after Engaged Capital Holdings LLC disclosed in a filing on March 23 that it now owns about 9 million shares, or 16.9% of the shares outstanding. Rent-A-Center’s stock, which edged up 0.9% in premarket trade, has tumbled 19% year to date through Monday, while the S&P 500 has gained 4.6%.

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Tencent Holdings Ltd. amassed a 5% stake in electric carmaker Tesla Inc. in March, according to a filing with the Securities and Exchange Commission on Tuesday. The Hong Kong-based Internet company said it bought about 8.2 million shares in an offering and on the open market for about $1.8 billion. Tesla shares jumped 3% premarket after the filing was published, and are up 26% in the year so far, while the S&P 500 has gained 4.6%.

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Shares of Amazon.com Inc. edged up 0.3% in premarket trade Tuesday, after Stifel Nicolaus boosted its price target by 12%, saying the company is in position to be the prime beneficiary of the carnage it has created in ecommerce. Analyst Scott Devitt raised his stock price target to $1,025, which is 21% above Monday’s closing price of $846.82, from $912. Of the 44 analysts surveyed by FactSet, Devitt now has the fourth highest price target, behind the $1,250 at Susquehanna and the $1,050 at both Cowen & Co. and Deutsche Bank. Devitt also raised his long-term revenue outlook given his belief that the momentum in ecommerce will accelerate in the U.S., that Prime membership will continue to grow, that Amazon Web Services business will keep growing and because of the emergence of non-retail lines of business. Devitt said that while continued investment in areas including logistics, cloud services, video and Alexa could weigh on margin growth, he supports Amazon’s investment strategies as he believes there is a “strong likelihood for successful outcomes.” Separately, Amazon said Tuesday it was buying Dubai-based ecommerce company Souq.com for about $700 million. The stock has rallied 13% year to date through Monday, while the S&P 500 has gained 4.6%.

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Cara Therapeutics Inc. shares surged 16% in premarket trade Tuesday, after the biotech reported positive results in a trial of a treatment for uremic pruritus, or UP. UP is a debilitating systemic itch condition that affects patients with chronic kidney disease, the company said in a statement. There are currently no approved therapies for the condition in the U.S. The results from Part A of a phase 2 to 3 trial of I.V. CR845 met primary and secondary endpoints for efficacy, said Cara. The company is planning to meet with the U.S. Food and Drug Administration to finalize the design of Part B of the study and to start recruiting patients later this year. CR845 is being developed for the treatment of acute and chronic pain as well as UP. Cara shares have gained 95% in the year so far, while the S&P 500 has gained 4.6%.

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Ride-hailing company Uber Technologies is planning to pull out of Denmark on April 18, because of a taxi law that includes the requirement that drivers use mandatory fare meters, according to media reports Tuesday. The company has been active in Denmark since 2014 but has faced opposition from local taxi driver unions, companies and politicians, who have argued that if offers unfair competition. “For us to operate in Denmark again the proposed regulations need to change. We will continue to work with the government in the hope that they will update their proposed regulations and enable Danes to enjoy the benefits of modern technologies like Uber,” Uber said in a statement quoted by Reuters.

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Yext disclosed Tuesday that it expects its initial public offering of 10.5 million shares to price between $8 and $10 a share. The company would raise up to $105 million before fees. The location-synching company granted the underwriters of the IPO options to buy up to and additional 1.585 million shares to cover overallotments. Yext has applied to have its shares listed on the NYSE and to trade under the symbol “YEXT.” Morgan Stanley, J.P. Morgan and RBC Capital Markets are the lead underwriters of the IPO. The company reported revenue for the fiscal year ended Jan. 31, 2017 of $124.3 million, up from $89.7 million the previous year, while reporting net losses that widened to $43.1 million from $26.6 million.

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Royal Bank of Scotland Group PLC has proposed a 43.5 pence-per-share settlement with the RBoS Shareholder Action Group over the lender’s cash call in 2008, said a Sky News report on Tuesday. That is up slightly from a 41.5p-per-share settlement reached by the U.K. bank with four other claimant groups, Sky noted. The RBoS Shareholder Action Group is the last remaining claimant seeking redress over the £12 billion ($15 billion) cash call that came before RBS collapsed into government control.

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Tesco PLC has agreed to pay a fine of £129 million ($162 million) for overstating its expected profits in a trading statement in August 2014. The supermarket operator must also fulfill other requirements under the deferred prosecution agreement with the Serious Fraud Office announced Tuesday. In addition, Tesco has agreed to a finding of market abuse by the U.K.’s Financial Conduct Authority, the company said in a statement. As part of the deal with the FCA, Tesco has set up a compensation scheme for certain investors who bought stocks or bonds between 29 August and 19 September, 2014. The scheme will provide compensation of 24.5 pence per share purchased, plus interest of 1.25% per year for institutional investors or 4% a year for retail investors.

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Whole Foods Market Inc. has experienced a 3% traffic decline over the last year and a half, or about 14 million customers, according to a Barclays note published Monday. Traffic has declined six consecutive quarters, according to their analysis. Barclays estimates that the loss is in the range of 9 million to 14 million transactions annually, with an average basket size in the range of $30 to $50. Kroger Co. , with $16 billion in natural and organic sales, has the “most meaningful overlap” with Whole Foods and stands to gain the most, the note said. Barclays calls the loss “staggering” because “as most retailers know, once traffic has been lost, those patterns rarely reverse.” And nearly half of Kroger’s stores (47%) are within three miles of a Whole Foods. More than half (51.8%) are within five miles. Analysts say it would be a headwind for Kroger if Whole Foods manages a turnaround. Whole Foods shares closed down 1.4% and are down 11.2% for the past year. Kroger shares closed Monday down 0.6% and are down 23.2% for the last 12 months. The S&P 500 index is up 15% for the past year.

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Elevate Credit , which had postponed its initial public offering in January 2016, set a $12 to $14 price range for its offering Monday. Elevate plans to sell 7.7 million shares to raise up to $107.8 million. The venture-backed company is an online service that offers small loans and has been criticized for the high interest rates it charges. The stock has been approved to list on the New York Stock Exchange under the symbol “ELVT.”

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