Amazon Is Officially Buying MGM Studios For $8.45 Billion

Plus, Royal Dutch Shell has been ordered to slash emissions by 45% by 2030, Ford is boosting its spending on electric vehicles to $30 billion over the next four years, and Dick’s Sporting Goods delivered an earnings beat.

Stocks were higher at the open on Wednesday with the Dow rising by 24 points, or less than 0.1%. The S&P 500 rose less than 0.1%, while the Nasdaq gained 0.3%.

Amazon announced this morning that it is buying MGM Studios for $8.45 billion, marking its boldest move yet into the entertainment industry. The e-commerce giant said it hopes to leverage MGM’s catalog of 4,000 films and 17,000 TV shows to help bolster Amazon’s film and TV division, Amazon Studios. “The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling.” In other dealmaking news, Mondelez is buying European snack maker Chipita SA for $2 billion. Mondelez said in a statement that Chipita has “a proven track record of consistent growth from its portfolio of croissant and baked snack brands,” and had around $580 million in revenue in 2020. 

Royal Dutch Shell has been ordered by a Dutch court to slash its emissions by 45% from 2019 levels by 2030. The lawsuit was filed in April 2019 by seven activist groups—Greenpeace and Friends of the Earth included—on behalf of 17,200 Dutch citizens, and claimed Shell’s business model “is endangering human rights and lives” by posing a threat to the goals laid out in the Paris Agreement. The court ruled that Shell’s current pledge to reduce its emissions of greenhouse gases by 20% by 2030, and to net-zero by 2050, is insufficient. While only legally binding in the Netherlands, the ruling could be scrutinized in other countries given a rise in lawsuits related to climate change.

Ford is boosting spending on electric vehicles by at least 36% to $30 billion over the next four years and said four out of its 10 models will all-electric by the end of this decade. The automaker said ahead of its first investor day under CEO Jim Farley that the event’s “presentations will detail where, why and how the company is headed with fully electric vehicles, commercial solutions and connected services – and how customers will benefit.” Under Farley’s Ford+ plan, the company says it plans to achieve an 8% adjusted profit margin before interest and taxes in 2023. “I’m excited about what Ford+ means for our customers, who will get new and better experiences by pairing our iconic, world-class vehicles with connected technology that constantly gets better over time,” Farley said in a statement. “We will deliver lower costs, stronger loyalty and greater returns across all our customers. This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T, and we’re grabbing it with both hands.”

Virgin Galactic shares are up more than 4% this morning following an upgrade from Canaccord Genuity analyst Ken Herbert to Buy with a $35 price target. Herbert calls Virgin Galactic “a leader in the emerging space-tourism market,” adding that after the recent delays, flight activity should pick up culminating with commercial space flights. “As tourist flights gain traction, we believe the stock should benefit from multiple potential catalysts,” the Canaccord analyst added. Ark Invest’s space exploration ETF sold off its last remaining shares of Virgin Galactic on Tuesday, exiting its position from one of the few publicly traded pure-play space stocks.

And Dick’s Sporting Goods shares are up nearly 16% this morning after the retailer reported fiscal first quarter earnings that beat estimates and raised its full-year financial outlook on rising momentum. Dick’s posted adjusted earnings per share of $3.79 on revenue of $2.92 billion, versus analysts’ estimates for earnings of $1.12 per share on revenue of $2.18 billion. The company said it now expects adjusted earnings of between $8.00 and $8.70 in fiscal 2021, far above analysts estimate for earnings of $5.32 per share this year. “We are very pleased to deliver another exceptionally strong quarter, achieving record first quarter sales and our highest-ever quarterly earnings, both significantly exceeding our expectations. The strength of our diverse category portfolio, supply chain, technology capabilities and omni-channel execution helped us continue to capitalize on strong consumer demand across golf, outdoor activities, home fitness and active lifestyle. We also saw a resurgence in our team sports business as kids began to get back out on the field after a year in which many youth sports activities were delayed or cancelled,” Lauren Hobart, President and Chief Executive Officer, said in the earnings release. “Looking ahead, we remain very enthusiastic about our business and are pleased to increase our full year sales and earnings outlook.”

Stocks We’re Watching

iMedia Brands Inc (NASDAQ: IMBI): iMedia shares gained as much as 19% yesterday after the company reported first quarter earnings. “Q1 was another strong performance for us,” said Tim Peterman, CEO of iMedia Brands, “and when we combine our strong operating fundamentals with the recently announced growth catalysts like Christopher & Banks and ShopHQ’s launch in 20+ million high-definition homes in June, iMedia is positioned well for a strong 2021.”