Microsoft to Buy Activision Blizzard in All-Cash Deal
Valued at $75 Billion
Microsoft agreed to buy Activision Blizzard Inc. in an all-cash transaction worth
approximately $75 billion, making it the company’s largest acquisition to date,
grabbing a videogame behemoth beset by allegations of workplace misbehavior.
If completed, the merger would significantly increase Microsoft’s already massive
videogame company, adding a stable of popular gaming titles such as Call of Duty, World
of Warcraft, and Candy Crush to the Xbox console business and Microsoft’s own
games such as Minecraft and Doom. After China’s Tencent Holdings Ltd. and
Japan’s Sony Group Corp., Microsoft said the deal would make it the world’s
third-largest gaming company by revenue. After accounting for Activision’s net
cash, Microsoft estimates the deal to be worth $68.7 billion.
Activision’s stock soared in premarket trade Tuesday after The Wall Street Journal
reported that the business was close to a deal with Microsoft. The stock ended the day
at $82.31, up 26%. In the midst of a broader market selloff, Microsoft shares slid 2.4
percent to $302.65 on Tuesday.
Oil prices hit more than seven-year highs after attack on
After the United Arab Emirates pledged to respond against
Yemen’s Iran-aligned Houthi militia for Monday’s fatal attack on its
capital Abu Dhabi, US and worldwide oil prices hit more than seven-year highs
Tuesday. The UAE is OPEC’s third-largest oil producer and the world’s
seventh-largest oil producer, with a daily output of little over 4 million barrels.
West Texas Intermediate crude surged more than 2% overnight to $85.56 a barrel
before reversing course.
BofA, Morgan Stanley, P&G, UnitedHealth rise on
Before the bell on Wednesday, Bank of America surpassed
profit projections thanks to record quarterly asset management and investment
banking fees, as well as the release of $851 million in reserves. Revenue for the
fourth quarter fell just short of expectations. In the premarket, shares of BofA
rose more than 4%.
Morgan Stanley reported a quarterly profit that was higher than expected on
Wednesday. Morgan Stanley, like BofA, missed sales projections in the fourth
quarter. Morgan Stanley’s stock jumped more than 5.5 percent in premarket
Procter & Gamble (NYSE:PG) posted earnings and sales for the fiscal second
quarter that beat expectations, thanks to pricing increases that helped offset
higher commodity and freight costs. The consumer products giant has raised its
full-year sales projections. In the premarket, P&G shares were up about 1%.
UnitedHealth, which is part of the Dow Jones Industrial Average, reported
better-than-expected fourth-quarter profit and revenue, aided in part by growth in
its Optum arm, which includes its medication benefits management business.
UnitedHealth’s stock jumped more than 1% in premarket trading.
SoFi soars after clearing regulatory hurdle to become a
SoFi crossed the final regulatory obstacle to become a
bank, and its stock jumped more than 18% in premarket trading on Wednesday. The
mobile-first finance firm provides banking services. However, it is not a bank in
the traditional sense. It, like many other fintech firms, relies on FDIC-insured
banks to hold customer deposits and provide loans. SoFi intends to buy a California
community lender in order to become a bank. Last year, the fintech company went
public through a SPAC transaction.
American, United see rough first quarter ahead due to
After reporting a fourth-quarter adjusted loss of $1.42 per
share on Thursday morning, American Airlines stock climbed 2% in premarket trading.
Analysts had predicted a loss of $1.48 per share. The $9.43 billion in revenue was
also higher than expected. American expects revenue to be down up to 22% in the
first quarter compared to the same period last year, when it generated $10.6 billion
United Airlines reported a narrower-than-expected adjusted loss of $1.60 per share
for the fourth quarter after the market closed on Wednesday. Due to excellent
holiday bookings, revenue of $8.19 billion was also higher than predicted. While an
increase in Covid cases due to the omicron version has harmed bookings in the short
term, the carrier anticipates a better spring and summer. United’s stock
dropped 1% in premarket trading.
Intel plans to build a $20 billion chip manufacturing site
Intel announced Friday that it will invest $20 billion in
two new advanced chip units in Ohio, the first phase in a $100 billion
“mega-site” that will include eight semiconductor manufacturers. On the
1,000-acre site just outside of Columbus, the anticipated investment includes 3,000
permanent jobs and 7,000 construction jobs. Intel CEO Pat Gelsinger is spearheading
the company’s expansion plans, particularly in Europe and the United States,
as it strives to compete with global rivals and respond to a global microprocessor
scarcity. Intel broke ground on two plants in Arizona in September as part of its
turnaround plan to become a major chip maker for external clients.
Unilever Sets Out Ambition to Expand in Health Products
After announcing a $68 billion approach for GlaxoSmithKline PLC’s consumer-health
division, Unilever PLC said it intends to focus more on health, beauty, and hygiene
goods at the price of slower-growing food brands, spelling out its greatest strategic
shift in years.
The manufacturer of Dove soap and Ben & Jerry’s ice cream said Monday that it
will buy GSK Consumer Healthcare, which offers everything from Aquafresh toothpaste to
Advil medicines, as part of a rejiggering of its portfolio toward higher-growth sectors.
Unilever announced on Saturday that it has made a takeover offer for the company, which
is controlled 68 percent by Glaxo and 32 percent by Pfizer Inc. Unilever’s
largest-ever acquisition, if completed, would dramatically increase the company’s
reach in oral care and vitamins, as well as offer it a new footing in over-the-counter
Unilever made three approaches late last year, which Glaxo rejected because they
undervalued the firm and its future potential, according to Glaxo. The last offer,
received on Dec. 20, valued the company at £50 billion (about $68.4 billion), with £41.7
billion in cash and £8.3 billion in stock, according to the company.
U.S. Existing-Home Sales Reached a 15-Year High of 6.1
Million Last Year
Low borrowing rates and strong buyer demand propelled U.S. house sales to a 15-year high
in 2021, and the market is likely to remain hot in the first months of 2022.
However, given the recent quick rise in interest rates, some home economists believe the
market frenzy will abate in the second half of the year.
The National Association of Realtors said Thursday that existing-home sales increased by
8.5 percent year over year to 6.12 million. Last year, home prices climbed at an
all-time high across the country.
Homes were also selling faster than ever before. Many sold within a week of appearing on
the market, forcing purchasers to make hasty judgments on one of their most important
In 2021, low mortgage rates boosted housing demand from all categories of customers,
including first-time homebuyers, luxury vacation-home buyers, and investors. During the
epidemic, many households saved more money and profited from a booming stock market.
Employees who were able to work from home were willing to live further away from their
workplaces. A high number of millennials are approaching their early and mid-thirties,
which are typical home-buying years.
Nasdaq, S&P Finish Worst Week Since Pandemic Onset
Investors are concerned about the likelihood of increasing interest rates and their
impact on valuations, as all three main U.S. indices declined for the third week in a
row, continuing their fall into 2022.
The S&P 500 and Nasdaq Composite Index both had their worst weeks since March 2020,
with the Nasdaq falling for the fourth time in a row. Since October 2020, the Dow Jones
Industrial Average has had its poorest weekly performance.
To begin the year, investors have shifted their portfolios away from riskier assets.
Higher interest rates have taken a toll on high-flying tech stocks and unprofitable
company shares, sending the Nasdaq into correction zone. Meanwhile, oil prices and
government bond yields have risen in 2022.
The Federal Reserve is widely expected to hike interest rates many times this year to
combat inflation, which has knocked on stocks. Rapid inflation, according to Fed
Chairman Jerome Powell, is a “severe threat” to a full economic recovery.
Consumer prices surged to a four-decade high in December, according to data. Despite the
hikes, interest rates will remain around historic lows, giving investors hope that
markets will recover.