Plus, China wants TikTok and WeChat to be on the agenda in upcoming trade talks with the U.S., the U.S. government will purchase at least 100 million doses of Moderna’s coronavirus vaccine, and Stein Mart just became the latest retailer to declare bankruptcy.
Stocks were higher to start Wednesday, with the Dow adding 268 points, or just under 1%. The S&P 500 added 1.3%, while the Nasdaq traded 1.8% higher.
China wants TikTok and WeChat to be on the agenda in the next round of trade talks with the U.S. A virtual meeting is likely to take place between negotiators as soon as this week, though a date hasn’t yet been finalized. Alongside agricultural purchases and the dollar-yuan exchange rate, Chinese officials plan to bring up Trump’s planned ban of the social media and communication apps on national security grounds. Chinese Foreign Ministry spokesman Zhao Lijian said China’s position on the phase one trade deal remains consistent, but said that TikTok “is just a platform for providing entertainment, leisure, the show of talents and sharing for American people and people around the world. It has nothing to do with national security.” China is seeking to defuse an unpredictable confrontation with the U.S. that’s seen several of its tech champions targeted, with the Trump administration’s latest actions spurring a potential sale of TikTok-owner ByteDance’s U.S. operations to Microsoft before Trump’s ban is set to take effect in September.
Moderna shares rallied at the open following Trump’s announcement that the U.S. government will purchase 100 million doses of Moderna’s experimental coronavirus vaccine, which is currently in late-stage human trials. Moderna said the deal for its vaccine, mRNA-1273, is worth $1.53 billion and will give the government the option to purchase up to 400 million additional doses. The U.S. has already invested $955 million in Moderna’s vaccine development, bringing its total investment up to $2.48 billion. The company is in the midst of late-stage human trials, which will test the efficacy and safety of mRNA-1273 in 30,000 people, and has said it expects results as early as October. “Today’s investment represents the next step in supporting this vaccine candidate all the way from early development by Moderna and the National Institutes of Health, through clinical trials, and now large-scale manufacturing, with the potential to bring hundreds of millions of safe and effective doses to the American people,” HHS Secretary Alex Azar said in the statement.
Tesla shares are up more than 9% this morning after the electric car maker announced a five-for-one stock split late Tuesday. The split goes into effect on August 31, and has been approved and declared by Tesla’s board in an effort “to make stock ownership more accessible to employees and investors,” according to the company’s press release on the matter. Tesla shares are up more than 228% so far this year, and up 500% over the last 12 months. It’s recent gains have made Tesla the most valuable car company in the world, surpassing Toyota Motor in value earlier this year.
Uber CEO Dara Khosrowshahi said the company will likely temporarily shut down its ride-hailing service for several months if a court doesn’t overturn the ruling this week requiring it to classify its drivers as full-time employees. “If the court doesn’t reconsider, then in California, it’s hard to believe we’ll be able to switch our model to full-time employment quickly,” Khosrowshahi said in an interview with MSNBC. Rather than classifying drivers as full-time employees, Khosrowshahi has advocated for a scenario that would maintain drivers’ independence while allowing gig companies to provide some protections without risking being viewed as full-time employers. The CEO has said companies like Uber could pay into a fund that workers could dip into for paid time off or healthcare benefits based on the number of hours they’ve worked. Khosrowshahi said that if its appeal over this week’s decision doesn’t work out, Uber will shut down in California until November, when voters in the state decide on Proposition 22, which would exempt drivers for app-based transportation and delivery companies from being considered employees.
Another retailer down. Stein Mart shares are down more than 36% today after the off-price chain announced it has filed for Chapter 11 bankruptcy protection and plans to permanently close most, if not all, of its stores. Stein Mart said that it has already launched a liquidation process to kick off going-out-of-business sales, and that it is evaluating alternatives, including the sale of its e-commerce operations and intellectual property. “The combined effects of a challenging retail environment coupled with the impact of the Coronavirus pandemic have caused significant financial distress on our business,” said Stein Mart CEO Hunt Hawkins. “The Company lacks sufficient liquidity to continue operating in the ordinary course of business.” Stein Mart operates 281 stores across 30 states in the U.S., and the company joins more than 40 other retailers that have filed for bankruptcy in 2020.
Stocks We’re Watching
Eyenovia Inc (NASDAQ: EYEN): Eyenovia shares gained as much as 90% yesterday after the clinical stage ophthalmic biopharma company announced that it has entered an agreement with Arctic Vision for it to develop and commercialize MicroPine for the treatment of progressive myopia and MicroLine for the treatment of presbyopia in Greater China and South Korea. Under the agreement, Eyenovia may receive a total $45.75 million in up front payments as well as additional payments based on various development and regulatory milestones. “This licensing agreement with Arctic Vision grows our commercial reach to address some of the largest progressive myopia markets in the world,” said Dr. Sean Ianchulev, Eyenovia’s Chief Executive Officer and Chief Medical Officer. “With the continued validation of our therapeutic approach, the agreement also provides non-dilutive capital to further support our planned launch of MicroStat in the United States next year, as well as the ongoing development of our late stage ophthalmology pipeline including MicroPine for progressive myopia and MicroLine for improvement in near vision.”