Monday’s Pre-Market: Here’s What You Need To Know Before The Market Opens

U.S. stock futures rallied in Monday’s pre-market session on Joe Biden’s presidential victory and progress related to the advancement of a COVID-19 vaccine. Futures tied to the Dow Jones Industrial Average soared 1,201 points, or 4.3%, pointing to a gain of more than 1,200 points at the opening bell. S&P 500 futures and Nasdaq 100 futures jumped 3.6% and 2%, respectively. 

In stock specific news, Orange SA has inked a deal to buy a controlling 54% stake in Telekom Romania Communications (TKR) from Deutsche Telekom’s OTE. According to Orange, the transaction translates to a total enterprise value of €497 million. “This is a significant milestone for the Romanian telecom market that will enhance its attractiveness both in terms of converged telecoms services and high-quality infrastructure, while increasing competition… It will provide the opportunity to scale up innovative convergent services, bringing broader benefits and wider choices to the customers and also to the country’s digital economy sustainable development,” Orange Romania CEO Liudmila Climoc stated.  

Take-Two Interactive Software revealed that it has made an offer to purchase all of the issued share capital of UK-based game publisher and developer, Codemasters, at an enterprise value of £739.2 million ($973.01 million). As per the terms of the agreement, TTWO wants to buy Codemasters at a price of 485 pence (about $6.40) per share, consisting of 120 pence (about $1.58) per share in cash and 365 pence (about $4.82) per share payable in Take-Two stock. Wedbush analyst Michael Pachter has a Buy rating on the stock with a Street high $210 price target (20% upside potential), noting, “We expect stronger frontline release slates coupled with ongoing recurring momentum to result in meaningful top and bottom-line growth beginning in FY:22 for several years.” 

In addition, Amazon unveiled plans for a second infrastructure region in India by mid-2022, to meet the demand for increased adoption of its cloud solutions. The addition will allow for even more developers, startups and enterprises as well as enable government, education and non-profit organizations to run their applications and serve end users from data centers located in India, according to management. Although shares slipped 2% in pre-market trading, the stock has jumped 79% in 2020.  

According to the Wall Street Journal, activist investor Elliott Management has built up a stake in F5 Networks and reached out to the software provider’s management to find ways to boost the stock. After the news broke, shares surged 3.6% in pre-market trading on Monday. The exact size of Elliot’s position is unclear, but it’s believed to be less than 5% as anything higher would require regulatory disclosure. Based on the report, Elliot didn’t support the recent acquisitions of Shape Security and Nginx Software, implying there weren’t clear integration plans.  

On the earnings front, shares of T-Mobile gained 2% in Monday’s pre-market trading session after its Q3 revenue skyrocketed 74% year-over-year to reach $19.3 billion, easily beating the $18.34 billion consensus estimate, as a result of the higher subscriber base and benefits from the merger with Sprint. The company added 2.04 million subscribers in Q3, reflecting an all-time high and surpassing the Street’s 1 million call. According to management, the company is hoping “to deliver $43 billion of synergies and achieve the $6 billion of annualized savings from the Sprint merger from a combination of cost avoidance and expense reductions,” with it “targeting more than $1.2 billion of synergies in 2020.” 

Trade Desk rallied 26.6% on November 6 after the company posted stronger-than-expected Q3 results and issued upbeat revenue guidance for Q4. Q3 adjusted earnings of $1.27 per share climbed 69.3% year-over-year and flew past analysts’ expectation of $0.42. Additionally, revenue increased by 32% to $216.1 million, beating the $180.2 million consensus estimate. In response to the print, Wells Fargo analyst Brian Fitzgerald lifted the price target to $750 from $550 and reiterated a Buy rating based on an “increasing near-term conviction and TTD’s open-ended opportunity to facilitate a meaningful share of digital TV ad budgets long-term.”   

Meanwhile, shares slumped by 11.5% on November 6 even though it posted a beat and raise quarter. The online postage and shipping software solutions company saw Q3 revenue of $193.9 million, exceeding analysts’ forecast of $161.8 million and reflecting growth of 42% year-over-year. EPS grew by an impressive 242% year-over-year. Going forward, management now expects 2020 revenue to land between $705-$735 million, compared to the previous guidance range of $650-$725 million, and adjusted EPS of $10.35-$11.35, versus the original guidance of $6.25-$9.25.