Plus, GameStop shares sink after the company reported disappointing earnings results, Pfizer has begun human testing for a pill to treat the coronavirus, and Robinhood confidentially filed to go public.
Stocks were higher at the open on Wednesday with the Dow added 48 points, or 0.1%. The S&P 500 rose 0.2%, while the Nasdaq gained 0.5%.
Intel announced that it will spend $20 billion to build two new chip factories, or fabs, putting it in competition with foundry Taiwan Semiconductor Manufacturing, the world’s most advanced chipmaker. “Intel is back. The old Intel is the new Intel,” said CEO Pat Gelsinger. “We’re going to be leaders in the market and we’re going to satisfy the new foundry customers, because the world needs more semiconductors and we’re going to step into that gap in a powerful and meaningful way. … Intel is and will remain a leading developer of process technology, a major manufacturer of semiconductors, and the leading provider of silicon globally.” Gelsinger added that Intel’s foundry business will compete in a market potentially worth $100 billion by 2025 and will manufacture a range of chips, including chips based on ARM technology for mobile devices.
Speaking of chips, General Motors said it will suspend production of its mid-size pickup trucks due to the ongoing global semiconductor shortage. “GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs for our customers,” GM spokesman David Barnas said in a statement. “We have not taken downtime or reduced shifts at any of our full-size truck plants due to the shortage.” Consulting firm AlixPartners estimates the global chip shortage will cut $60.6 billion in revenue from the automotive industry this year.
GameStop shares are down more than 20% this morning after the company posted disappointing fourth-quarter earnings and said it’s considering a share sale that would capitalize on soaring demand. GameStop said it earned $1.34 per share on revenue of $2.12 billion, while analysts had expected earnings per share of $1.35 on revenue of $2.21 billion. “The highly anticipated 4Q20 earnings report from GameStop was a bit anti-climactic,” Telsey Advisory Group analyst Joseph Feldman said after the earnings release. “While EPS met the consensus, it was completely driven by a tax benefit that offset much worse than expected operating profit. Moreover, while everyone was expecting big new about some massive digital transformation in the mold of the new tech-oriented board members, nothing was said.”
Pfizer is up 1.5% at the time of writing after the pharmaceutical giant said that it has begun human safety testing of a new pill—PF-07321332—to treat the coronavirus that could be used at the first sign of illness. If the pill proves successful, the pill could be prescribed early in an infection to block viral replication before a patient gets very sick.”Given the way that SARS-CoV-2 is mutating and the continued global impact of COVID-19, it appears lily that it will be critical to have access to therapeutic options both now and beyond the pandemic,” Pfizer Chief Scientific Officer Mikael Dolsten said in a statement. We have designed PF-07321332 as a potential oral therapy that could be prescribed at the first sign of infection, without requiring that patients are hospitalized or in critical care. At the same time, Pfizer’s intravenous antiviral candidate is a potential novel treatment option for hospitalized patients. Together, the two have the potential to create an end to end treatment paradigm that complements vaccination in cases where disease still occurs.”
And free trading platform Robinhood confidentially filed to go public. The company has selected Nasdaq as the venue for its listing and could go public as soon as late in the second quarter though the timing could change, according to a person familiar with the matter. Robinhood said it has yet to set terms for the offering, including the number of shares to be offered and the price range for the proposed offering. Robinhood has become immensely popular amid the coronavirus pandemic as homebound young people turned to the online trading platform to pass the time and make money, and its surge in popularity with last month’s massive surge in GameStop shares has led to scrutiny from politicians and regulators concerned about the so-called gamification of trading and the company’s role at the center of the men-stock frenzy.
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Mogo Inc (NASDAQ: MOGO): Mogo announced yesterday that it has entered into a binding letter of intent to acquire 100% of Moka Financial Technologies Inc, one of Canada’s leading saving and investing apps, in an all-stock transaction. “This acquisition represents another significant milestone for Mogo on our journey to building the leading digital wallet for Canadians,” said David Feller, Mogo’s Founder and CEO. “Like Mogo, Moka is driven to help users improve their financial health, and they have built an innovative solution to enable consumers to easily save and invest money. By adding these digital saving and investing products – along with Moka’s technology platform and experienced fintech team – we will dramatically enhance what is already one of the most compelling and differentiated value propositions in Canadian finance. Moka will complement our existing MogoCrypto account and form the core of MogoWealth, making Mogo’s digital wallet the most comprehensive solution in Canada.”