Plus, Tesla said it plans to sell up to $5 billion in new stock, Walmart said it will launch its Walmart+ subscription service on September 15, and Apple is expected to announced its new iPhones in October.
Stocks were slightly higher to start Tuesday with the Dow adding 40 points, or 0.1%. The S&P 500 advanced 0.3%, while the Nasdaq gained nearly 1%.
White House chief of staff Mark Meadows said this morning that the biggest obstacle to coming to agreement with Democrats on a stimulus deal is the issue of aid to state and local governments, even as “real progress” has been made between the two camps. While Democratic negotiators have pushed for nearly $1 trillion in aid to municipalities hit hard by revenue shortfalls due to the coronavirus pandemic, Meadows said the figure is not “based on reality” and that the GOP would support only $150 billion in new funding to state and local governments in a new bill. “As we look at the number of things that we actually agree to, and the amounts of money allocated to those areas, probably the biggest stumbling block that remains is the amount of money that would go to state and local help,” Meadows said. Amid the impasse, Senate Republicans are eyeing a vote on their “skinny” $500 billion COVID-19 relief package next week in a bid to push Democrats back to the negotiating table.
Tesla said today that it plans to sell up to $5 billion in new stock. The additional shares will be sold “from time to time” and “at-the-market” prices, Tesla said in a filing with the SEC. “We intend to use the net proceeds, if any, from this offering to further strengthen our balance sheet, as well as for general corporate purposes,” Tesla said. Wedbush analyst Dan Ives called the capital raise a “smart move,” given investors’ strong appetite to “play the transformational EV trend through pure play Tesla over the coming years.” Ives added that CEO Elon Musk is “raising enough capital to get the balance sheet and capital structure to further firm up its growing cash position and slowly get out of its debt situation, which throws the lingering bear thesis for Tesla out the window for now.”
Work-from-home stock darling Zoom Video Communications shares are up nearly 34% at the time of writing after the company reported a fiscal second quarter earnings beat. Zoom posted earnings per share of $0.92 on revenue of $663.5 million, compared to analysts’ expectations for earnings per share of $0.45 on revenue of $500.5 million. Revenue grew 355% on an annualized basis in the quarter, versus revenue growth of 169% in the prior quarter. “Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform. At Zoom, we strive to deliver a world-class, frictionless, and secure communication experience for our customers across locations, devices, and use cases,” said Zoom founder and CEO, Eric S. Yuan. “Our ability to keep people around the world connected, coupled with our strong execution, led to revenue growth of 355% year-over-year in Q2 and enabled us to increase our revenue outlook to approximately $2.37 billion to $2.39 billion for FY21, or 281% to 284% increase year-over-year.”
Walmart shares are up just under 6% this morning following reports that it will launch its much-anticipated membership program on September 15, with hopes to build on the strength of its grocery business and customers’ desire for more convenient ways to shop. Walmart+ will cost $98 per year—or $12.95 a month—and will offer free unlimited delivery on orders that meet a $35 minimum, discounts of as much as 5 cents a gallon for fuel, and access to a Scan & Go app that allows shoppers to skip the checkout line in stores. Walmart+ “is about really doubling down with the customers we have and getting more share of wallet and more share of mind,” said Walmart Chief Customer Officer Janey Whiteside. “We’re not launching Walmart+ with the intent to compete with anything else. We’re launching it to meet the needs of our customers, and it really was designed to make their busy lives easier. We think that it offers a comprehensive suite of in-store and online benefits that help people save time and money across a variety of areas.”
And Apple shares are up nearly 3% today on reports that it is planning to launch four new iPhone models with 5G technology in October. According to a report from Bloomberg, Apple has asked suppliers to make between 75 million and 80 million new iPhones, and is also planning to launch a new iPad Air, two new Apple Watches, its first over-ear headphones, and a smaller HomePod. Apple and Google also announced today that future versions of the iOS and Android operating systems will include the companies’ COVID-19 notification system that previously required users to install an app. “As the next step in our work with public health authorities on Exposure Notifications, we are making it easier and faster for them to use the Exposure Notifications System without the need for them to build and maintain an app,” Apple and Google representatives said in a statement.
Stocks We’re Watching
Mirum Pharmaceuticals Inc (NASDAQ: MIRM): Mirum Pharmaceuticals announced today that it has submitted the first portion of its rolling New Drug Application (NDA) to the FDA for maralixibat, an orally administered treatment for cholestatic pruritus in patients with Alagille syndrome (ALGS). “We are thrilled to initiate the rolling NDA submission for maralixibat, taking us one step closer to making this medicine widely available for patients with ALGS,” said Chris Peetz, president and chief executive officer at Mirum. “We believe the results of our clinical program demonstrate the potential of maralixibat to transform the treatment of this life-threatening disease. We are also pleased to launch our Expanded Access Program for patients with ALGS in the United States and Canada and are evaluating ways in which we can make maralixibat available for patients with ALGS in other countries. Additionally, we are planning to broaden access to maralixibat through our anticipated Marketing Authorization Application submission for patients with PFIC2 in Europe later this year.”