Verizon to Sell Yahoo, AOL for $5 Billion to Apollo
Topic of the day
Wireless giant retreats from digital-media sector in deal with private-equity firm: Apollo Global Management Inc. agreed to pay about $5 billion to acquire Yahoo and AOL from Verizon Communications Inc. as the wireless company exits its ill-fated foray into the media business. The private-equity firm is paying $4.25 billion in cash for a 90% share of the media assets. Verizon will keep a 10% stake and $750 million of additional preferred stock in the new company, called Yahoo, that will be formed to operate the business. The Wall Street Journal earlier reported the potential sale of Verizon’s media assets to Apollo. Verizon Media, which mostly struggled to grow against Alphabet Inc.’s Google and Facebook Inc., generated $7 billion in revenue last year. Apollo’s strategy for the business revolves around getting more revenue from each of its 900 million active monthly users. Verizon’s positioning of the media business as a complement to its core mobile business - aimed at helping it add subscribers and reduce the number of people who qui - meant it hasn’t pursued some opportunities to maximize the value of each asset, executives at the private-equity firm said. Verizon Media’s revenue has increased more than 10% over the past two quarters, helped by rebounding demand from advertisers looking to tap an online shopping boom during the coronavirus pandemic. Digital-ad sales are expected to accelerate in the coming months as consumers start spending more cash on travel and other activities.
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The Swiss stock market closed friendly on Monday, ending a two-day dry spell. The repression of the third wave of corona and the vaccination successes in many European countries were seen as positive. In Switzerland, too, the vaccination campaign is clearly gaining momentum. The SMI gained 0.9 percent to 11,119 points. All 20 SMI stocks closed in the plus. Turnover was 29.43 (previously: 41.66) million shares. However, the premiums were widely spread. Nevertheless, shares related to the health sector were particularly firm. Lonza, Alcon and Sonova, for example, climbed by up to 1.6 percent. Defensive pharmaceutical heavyweights Novartis and Roche rose 0.8 and 1.4 percent, respectively. Germany's BASF and Novartis subsidiary Sandoz are investing in the Kundl/Schaftenau campus in Austria. Novartis also reported successful trial results. Cyclicals gained roughly in line with the overall market. ABB and Lafargeholcim, for example, each climbed 0.9 percent. Financial stocks such as Credit Suisse (+0.8%), UBS (+0.6%) and Zurich Insurance (+1.1%) were similar. The weakest stocks were Nestle and Swisscom, each up 0.3 percent.
The pan-European Stoxx Europe 600 index closes up 0.6% at 439.92, helped as purchasing managers' indexes revealed strong eurozone manufacturing activity in April, boosting optimism for Europe's recovery prospects. This offset below-forecast, albeit still relatively strong, U.S. manufacturing ISM data. Tech stocks, financials, energy and travel stocks are among the biggest risers. Nokia rises 3.6%, Nordic Semiconductor is up 6.3%, Spain's Banco de Sabadell gains 4.5%, Repsol rises 3% and Deutsche Lufthansa is up 2.6%. Among regional indexes, Germany's Dax rises 0.7%, France's CAC 40 is up 0.6%, Italy's FTSE MIB gains 1.2% and Spain's Ibex 35 rises 0.9%. U.K. markets are closed for a public holiday. Carmakers Renault and Stellantis gained 1.8% and 1.6%, respectively, after the release of French new car registration figures, which jumped 568.8% year-on-year in April but fell 25.4% from April 2019. The entire month of April 2020 had been marked by strict containment in France, including the closure of car dealerships. Biopharmaceutical company DBV Technologies (-5.6%) continued to consume cash in the first quarter and had $152.5 million (€126.9 million) in cash at March 31, 2021, compared with $196.4 million at December 31, 2020. The group confirmed that it expects its current cash position to fund its operations through the second half of next year.
Investors piled into shares of economically sensitive companies and pulled back from technology stocks Monday, leading to a divergence in major indexes as trading kicked off in May. The Dow Jones Industrial Average jumped 238.38 points, or 0.7%, to close at 34113.23, as shares of cyclical stocks ranging Chevron to Dow to Home Depot rallied. The S&P 500 advanced 11.49 points, or 0.3%, to 4192.66. The Nasdaq Composite, in contrast, pulled back, falling 67.56 points, or 0.5%, to 13895.12 after starting the day higher. Megacap technology companies including Amazon.com, Netflix and Facebook weighed on the technology-heavy index. In corporate news, Estee Lauder sank $24.87, or 7.9%, to $288.93 after its quarterly revenue came in below analysts’ estimates. In contrast, Moderna climbed by $7.20, or 4%, to $186.02. The drugmaker said Monday that it will supply 34 million Covid-19 vaccine doses to an international program that distributes the shots to developing countries. Among the S&P 500’s 11 sectors, the energy and materials groups posted the biggest gains. Companies including Halliburton, Gap and FedEx jumped, with each rising 4.9% or more. In contrast, Amazon tumbled $80.93, or 2.3%, to finish at $3,386.49, while Tesla fell $24.54, or about 3.5%, to $684.90. Facebook lost $2.50, or 0.8%, to $322.58.
Mainly on the recovery course are the stock markets in East Asia on Tuesday. The stock exchanges in Japan and mainland China are closed for the holiday. In Hong Kong, the Hang Seng Index rises by 0.3 percent. Oil stocks there are recovering from recent losses. Sinopec soars 3.1 percent, CNOOC 1.4 percent and Petrochina 3.5 percent. On the Seoul Stock Exchange, the Kospi gives up initial gains and falls 0.2 percent. SK Telecom, which had initially benefited from the company's planned capital reduction, is down 0.7 percent.
U.S. Treasury yields fell on Monday, after an indicator of factory activity showed the blistering growth in manufacturing from the depths of the COVID-19 pandemic may be starting to slow down. The 10-year Treasury note yield fell 2.6 basis points to 1.606%, marking its biggest daily decline in nearly two weeks. The 2-year note rate was steady at 0.160%. The 30-year bond yield slid 1.5 basis points to 2.287%.
DZ Bank increases Symrise's target to EUR 104 (96) - Hold
IR raises MTU target to EUR 199 (177) - Sell
NordLB lifts Beiersdorf target to EUR 87 (84) - Hold
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