US stock futures were down on Monday as the earnings season draws to a close but investor concerns regarding inflation still seem to continue.
While the Dow Futures were down 0.4%, S&P Futures and Nasdaq Futures fell 0.3% each.
Today, companies expected to report before the opening bell include Hostess Brands (TWNK), China Online Education Group (COE), and RumbleOn Inc. (RMBL) while Tencent Music (TME), Verra Mobility (VRRM), and Fisker (FSR) are expected to report after the market close.
Telecommunication giant AT&T (T) was the most actively traded stock in pre-market trading as the company announced that its media asset, WarnerMedia, will be spun-off into a separate company in combination with Discovery, Inc (DISCA) where AT&T will receive $43 billion and will hold 71% of the new company while Discovery will hold the remaining 29%.
HighPeak Energy (HPK) was the biggest gainer as the stock shot up 18.6% in pre-market trading. There was no fundamental news explaining the rise in price of the stock.
SuRo Capital Corp (SSSS) was the biggest laggard in pre-market trading as the stock had dropped 12.8% at the time of writing. There was no fundamental news explaining the price drop.
In M&A news, General Mills (GIS), the food company, has put in a $1.2 billion takeover bid for Tyson Foods’ (TSN) pet food unit as it looks to strengthen its Pet portfolio. GIS also stands to benefit from a tax subsidy of $225 million. The acquisition is expected to close in the first quarter of next year.
General Mills’ CEO Jeff Harmening said, “Today’s announcement reinforces our commitment to using all capital allocation levers – including investment in the business, dividend growth, strategic acquisitions, and share repurchases – to drive top-tier shareholder returns over the long term.”
Meanwhile, American fuel company Marathon Petroleum (MPC) has completed the sale of its convenience-store chain Speedway for $21 billion to retailer 7-Eleven. The company plans to use the sale proceeds for stock buybacks and pay off debt.
“The close of the Speedway transaction marks a significant milestone in our ongoing commitment to strengthen the competitive position of our portfolio,” said Marathon CFO, Maryann Mannen.
Marathon will retain $16.5 billion in cash after paying off taxes related to this divestiture. The company plans to use up to $7.1 billion for share buybacks and including the $2.9 billion remaining from its previous stock buyback plan, the company is now set to buy back up to $10 billion of its stock.
Digital imaging and instrumentation company Teledyne Technologies (TDY) has completed the acquisition of thermal imaging camera supplier FLIR Systems (FLIR) in a cash-and-stock deal valued at approximately $8.2 billion, including net debt.
According to the terms of the agreement, FLIR shareholders received $28 in cash and 0.0718 shares of Teledyne common stock for each share held. The acquisition was announced in January this year.
Teledyne’s Executive Chairman Robert Mehrabian said, “As a combined company, Teledyne FLIR will uniquely provide a full spectrum of imaging technologies and products spanning X-ray through infrared and from components to complete imaging systems. Teledyne FLIR will also provide a complete range of unmanned systems and imaging payload across all domains ranging from deep sea to deep space.”
In earnings news, food delivery company DoorDash (DASH) reported strong first-quarter results and issued an upbeat outlook for the second-quarter and full-year 2021. DASH posted revenue of $1.1 billion, a huge jump of 198% year-over-year. That was supported by a 222% increase in marketplace gross order volume (Marketplace GOV) to $9.9 billion. Net losses narrowed to $110 million in Q1 from $129 million in the same quarter last year.
DoorDash CEO Tony Xu and CFO Prabir Adarkar said, “We are proud of the progress we made in Q1, as we increased the number of partner merchants we support across multiple categories, generated more earnings for more Dashers than in any previous quarter, and served more consumers than we ever have,”.
Meanwhile, global investment firm KKR & Co. (KKR) will invest $95 million in Indian eyewear retailer Lenskart. According to the terms of the transaction, initial investors in Lenskart, TPG Growth, and TR Capital will partially divest their stakes.
KKR Partner Gaurav Trehan said, “As a technology-driven business, Lenskart is a strong, homegrown disruptor in India’s rapidly expanding eyewear industry, We are truly excited to work with Peyush (Lenskart CEO) and Lenskart’s impressive management team to support Lenskart’s growth and innovation in India and internationally, in addition to advancing its mission to provide affordable, accessible eyewear products for everyone.”
