Amazon Sued By DC Attorney General On Antitrust Grounds

Plus, Tesla’s Musk said he’s having discussions with Bitcoin miners regarding the coin’s sustainability, Moderna said its COVID-19 vaccine was 100% effective in teens ages 12 to 17, and Square is reportedly gearing up to launch checking and savings accounts.

Stocks were higher at the open on Tuesday with the Dow adding 35 points, or 0.1%. The S&P 500 gained 0.2%, while the Nasdaq traded 0.4% higher.

Amazon shares dropped lower after Washington D.C. Attorney General Karl Racine announced he’s suing the company on antitrust grounds, claiming the e-commerce giant’s practices have unfairly raised prices for consumers and suppressed innovation. Racine aims to end Amazon’s allegedly illegal use of price agreements to edge out competition, recover damages, and impose penalties to deter similar conduct. Racine’s office claimed third-party seller contracts create “an artificially high price floor across the online retail marketplace,” harming both consumers and third-party sellers by reducing competition and choice.

In other Amazon news, the e-commerce giant isreportedly nearing a deal to acquire MGM Studios for between $8.5 billion and $9 billion, with the deal expected to be announced as soon as today. The deal would mark Amazon’s biggest acquisition since buying Whole Foods in 2017 for $13.7 billion. The agreement would bring a vast library of movies and shows to Amazon’s Prime Video streaming service including the James Bond, Rocky, Legally Blonde and The Pink Panther film franchises, as well as TV shows including “The Handmaid’s Tale,” “Fargo,” “Shark Tank,” “Survivor,” “The Real Housewives,” and “The Voice.” MGM also owns Epic, a premium pay-TV service that was valued at $1.3 billion in 2017.

Another day, another Musk tweet sending Bitcoin for a ride. Bitcoin is nearing $38,000 this morning after Tesla CEO Elon Musk tweeted that he’s having active discussions with miners regarding the sustainability of the world’s largest cryptocurrency. Musk tweeted late Monday, “Spoke with North American Bitcoin miners. They committed to publish current & planned renewable usage & to ask miners WW to do so. Potentially promising.” Miller Tabak’s Matt Maley said, “If the market continues to see wild swings based on Elon Musk tweets, it’s going to be a big set back for this asset class. The fact that it see such wild swings to the tweets from one person takes away the legitimacy of the asset class.”

Moderna shares are up more than 3% this morning after the company said its COVID-19 vaccine was 100% effective in a study of adolescents ages 12 to 17, making it the second shot behind Pfizer to demonstrate efficacy in the younger age group. No significant safety concerns have been identified with the shot in the age group, and side effects were generally consistent with those seen in an earlier trial with adults, including headache, fatigue, muscle pain, and chills. “We are encouraged that mRNA-1273 was highly effective at preventing COVID-19 in adolescents,” Moderna CEO Stephane Bancel said in a press release. “We remain committed to doing our part to help end he COVID-19 pandemic.” The company said it plans to ask the FDA to expand the emergency use of the vaccines for teens early next month.

Square shares are up 3% today after reports that it is preparing to offer checking and savings accounts to customers, taking direct aim at banking behemoths like JPMorgan Chase. Bloomberg reported that evidence of the yet-to-be-announced plan were found in hidden code in a recent update to Square’s app for Apple’s iPhone and iPad, with the code reportedly referencing both types of accounts and indicates that the checking version will integrate with Square’s existing debit card for businesses, and the savings coming with an interest rate of 0.5% through 2021.

Stocks We’re Watching

Novan Inc (NASDAQ: NOVN): Novan announced this morning a one-for-ten reverse stock split effective 5:00PM Eastern Time today, with the stock expected to begin trading on a split-adjusted basis when the market opens on Wednesday. “We believe that the Reverse Stock Split is an important step for the Company and its stockholders to optimize our position as we work to execute strategic initiatives across all fronts. Our management team and Board of Directors believe that it is in the best interest of our stockholders and the Company to implement the Reverse Stock Split in order to enable us to be prepared for success with our anticipated upcoming milestones,” said Paula Brown Stafford, President and Chief Executive Officer of Novan. “Implementing the Reverse Stock Split will make available an increased number of authorized but unissued shares allowing us to pursue additional financing activities and/or other strategic transactions to support the development and potential commercialization of our product candidates, and we believe it will also help us maintain compliance with Nasdaq’s $1.00 minimum bid price requirement and potentially make our stock more attractive to a broader range of institutional and other investors.”