Plus, Senate Majority Leader McConnell blocked efforts to pass $2,000 direct payments, Third Point urged Intel to seek “strategic alternatives,” and Tiffany’s shareholders approved LVMH’s takeover deal.
Stocks were higher to start Wednesday with the Dow adding 164 points, or 0.5%. The S&P 500 gained 0.5%, while the Nasdaq rose 0.4%.
AstraZeneca shares are up this morning after its coronavirus vaccine developed in partnership with the University of Oxford was approved for emergency use in the U.K. The shot is expected to be rolled out next week “so that vaccinations may begin early in the New Year,” AstraZeneca said, adding that it “aims to supply millions of doses in the first quarter” as part of its deal with the U.K. government to supply up to 100 million doses in total. As a two-dose vaccine, the agreement means up to 50 million people in the U.K., with its population of around 66 million. AstraZeneca CEO Pascal Soriot said in a statement, “today is an important day for millions of people in the U.K. who will get access to this new vaccine. It has been shown to be effective, well-tolerated, simple to administer and is supplied by AstraZeneca at no profit.”
In other COVID-19 news, the U.S. recorded its first official case of the new, more infectious strain of the virus on Tuesday in Colorado. The infected individual doesn’t have a recent history of travel, indicating community spread of the new strain. “There is a lot we don’t know about this new COVID-19 variant, but scientists in the United Kingdom are warning the world that it is significantly more contagious,” said Colorado Governor Jared Polis. “The health and safety of Coloradans is our top priority and we will closely monitor this case, as well as all COVID-19 indicators, very closely. We are working to prevent spread and contain the virus at all levels.” Polis added that public health officials are working to identify other potential cases of the new strain through contact tracing measures.
Senate Majority Leader Mitch McConnell blocked Senate Minority Leader Chuck Schumer’s bid to unanimously pass a bill to increase direct payments in the coronavirus relief bill to $2,000. McConnell instead said that the Senate would consider higher stimulus checks only in conjunction with two other issues sought by President Donald Trump: an investigation into alleged election fraud and reworking a law that shields technology companies from liability for user content. McConnell initialed the process later Tuesday to put a bill on the Senate floor that would increase the direct payments to $2,000, create an advisory committee to review the 2020 election results, and repeal Section 230, but the combined proposal is likely to draw opposition from both sides of the aisle.
Intel shares are down this morning after news broke late yesterday that Third Point, the hedge fund led by Dan Loeb, is urging the company’s board of directors to hire an investment adviser to explore “strategic alternatives” after the chipmaker lost market share to Taiwan Semiconductor, Samsung, and AMD. Reuters recently reported that Third Point, which is known for its activism, recently took a significant stake in Intel worth $1 billion. “The loss of manufacturing leadership and other missteps have allowed several semiconductor competitors to leverage TSMC’s and Samsung’s process technology prowess and gain significant market share at Intel’s expense,” Loeb wrote in a letter to Intel’s board where he also suggest the company divest of “failed acquisitions.” Intel said it will work with Third Point on its ideas to increase shareholder value, writing in a statement, “Intel Corporation welcomes input from all investors regarding enhanced shareholder value. In that spirit, we look forward to engaging with Third Point LLC on their ideas towards that goal.”
And Tiffany’s shareholders voted today to approve the $15.8 billion takeover deal by LVMH, ending what has been an acrimonious dispute between the two luxury retailers that has stretched on for more than a year. In a special virtual stockholder meeting, more than 99% of votes cast were in favor of the deal. The deal, which has to now be cleared by regulators, is expected to close in early 2021. LVMH will pay $131.5 per share for the U.S. fine jewelry house.
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Gannett Co. (NYSE: GCI): Gannett shares are up more than 29% over the last week after the company announced that it was terminating its external management agreement with FIG LLC, an affiliate of Fortress Investment Group LLC, a year ahead of schedule. “The Board thanks Fortress for the support and guidance it has provided to the Company,” said Michael E. Reed, Chairman and CEO of Gannett. “When New Media acquired Gannett in November 2019, we amended the external management agreement to establish a termination date of December 31, 2021. Since the closing of the acquisition, we have made significant progress integrating the legacy companies and are ready now to move forward independently. We believe the termination of the management agreement will enable the Company to realize meaningful savings in 2021 and beyond.