Plus, Bitcoin has fallen to its lowest level since February, GlaxoSmithKline and Sanofi said interim results for its updated COVID-19 vaccine showed strong results, and Target and Starbucks became the latest in a growing list of retailers and restaurants to allow vaccinated customers to ditch mask wearing in their establishments.
Stocks were lower at the open on Monday with the Dow dropping just 7 points, or less than 0.1%. The S&P 500 slid less than 0.1% lower, while the Nasdaq fell 0.4%.
AT&T announced that it is spinning off its media operations in a deal with Discovery. The telecom giant will get $43 billion in cash, debt securities, and debt retention as part of the deal, while AT&T shareholders will get stock representing 71% of the new company. The deal would combine Discovery’s reality-TV empire with AT&T’s WarnerMedia, including HBO and the HBO Max streaming app. Discovery President and CEO David Zaslav will lead the new company, which will have a new name to be announced in the coming days, while WarnerMedia CEO Jason Kilar’s future is yet to be determined. “This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms,” AT&T CEO John Stankey said in a statement. “It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be reinvested in producing more great content to give consumers what they want.”
AT&T’s decision to spin-off WarnerMedia comes less than three years after closing its $100 billion transaction, including debt, to purchase the entertainment company and follows the company’s decision in February to sell a 30% stake in DirecTV and its other pay-TV assets, along with operational control, to TPG in a sign that the telecom company’s media assets were an albatross around its neck. “It has been a transformational year at AT&T since John Stankey took over as CEO, and today’s announcement represents another impressive step in the company’s recent evolution,” Elliott Management said. “AT&T has now executed on its promise to streamline operations and re-focus on its core businesses, all while improving operational execution, enhancing its financial position and advancing its corporate governance. As investors, Elliott supports AT&T in its efforts to best position the company for future success.”
Bitcoin fell to as low as $42,212 in early trading after Tesla CEO Elon Musk indicated he agreed with a Twitter post over the weekend that said the electric car maker should divest its investment in the world’s largest crypto currency. In a tweet early this morning, Musk said Tesla “has not sold any Bitcoin,” helping the price recover to above $44,000. “The actions of Elon Musk have certainly discredited him to a certain extent with both some traditional and digital asset investors,” said Vladimir Vishnevskiy, co-founder of St. Gotthard Fund Management. “He once again proved his erratic nature.”
GlaxoSmithKline and Sanofi shares are both up more than 1% this morning after the companies said their experimental COVID-19 vaccine showed a robust immune response in early-stage clinical trial results. The companies were forced to restart their trial in December when the vaccine showed a low immune response in older adults as a result of a weak antigen formation. An updated version of the vaccine, “showed 95% to 100% seroconversion following a second injection in all age groups and across all doses, with acceptable tolerability and no safety concerns,” Sanofi said. “Interestingly, we also observed that our vaccine generated a higher antibody response in those with previous Covid-19 infection, we are analysing this further as it may suggest our vaccine could serve as a potential booster, regardless of what vaccine someone may have received (beforehand),” added Sanofi’s global head of medical for vaccines, Su-Peing Ng.
In other COVID news, Target and Starbucks joined a growing list of retailers and restaurants on Monday that said they will ease mask requirements for fully vaccinated customers, unless facial coverings are required by local or state law, following the CDC’s move to update mask guidelines for vaccinated Americans. In a statement, Target said its employees who are fully vaccinated will not have to wear masks, adding that they will keep in place other safety measures, such as extra cleaning and social distancing in its stores. Walmart also updated their mask requirements over the weekend, saying in a memo that it “will continue to request that non-vaccinated customers and members wear face coverings in our stores and clubs.”
Stocks We’re Watching
Vivint Smart Home Inc (NYSE: VVNT): Vivint Smart Home shares jumped as much as 28% on Friday after the company reported revenues grew by 13.2% in the first quarter to $40.1 million, and subscribers grew by 20% to 60,127. “Last year’s business momentum has carried into a good start to 2021, and we are pleased to report solid improvements in our key metrics year over year,” CEO Todd Pedersen said in an earnings release. “First quarter revenue growth accelerated to more than 13% to approximately $343 million. Adjusted EBITDA exceeded $162 million, up 20% from the prior year. We originated over 60,000 new smart home subscribers during the quarter which represented a growth rate of 20% vs. the previous year, driven by positive contributions from each of our major sales channels. As of March 31, Vivint had more than 1.7 million total subscribers, up more than 10% vs. the prior year. Notably, the last 12-month attrition rate improved for the fourth consecutive quarter and continues to exceed our expectations. Our LTM attrition rate for Q1 was the lowest in the past nine quarters, and I believe it speaks to the fact that our core value proposition, proven over two decades of reliably taking care of our customers and their families, is as relevant today as ever.”