ATVI - Wall Street Breakfast Podcast: Ford Falls After Slashing Prices

2023-07-18 06:29:11 ET

Summary

• Ford Motor Company has announced a price cut for its F-150 Lightning EV truck, leading to a nearly 6% drop in its shares.
• Shares in AT&T, Frontier Communications and Telephone and Data Systems fell sharply after Citi downgraded the stocks due to concerns related to lead covered cables.
• Microsoft and Activision Blizzard are reportedly working on an extension to the termination date of their planned $69B acquisition, following last-minute regulatory action in the UK.

Listen below or on the go on Apple Podcasts and Spotify Ford (F) falls after slashing prices on electric F-150 to make them more affordable; GM also lower. (00:31) AT&T (T), Frontier (FYBR), Telephone and Data Systems (TDS) plunge as Citi cuts on lead worries . (01:40) Microsoft (MSFT), Activision (ATVI) reportedly planning later close to $69B deal. (02:39)

This is an abridged transcript of the podcast.

Ford Motor Company (NYSE: F ) announced on Monday that it is cutting prices on the F-150 Lightning EV truck.

Following the announcement Ford fell nearly 6 percent Monday.

The company says increased plant capacity, continued work on scaling production and cost, and improved battery raw material costs are helping to lower the cost of the truck.

The Detroit automaker also noted that the Rouge Electric Vehicle Center in Michigan is temporarily closed to complete final plant upgrades to triple the plant’s annual run rate to a targeted 150,000 F-150 Lightning trucks beginning this fall.

The upgrades at the plant are expected to make it possible to lower pricing across the F-150 Lightning line.

Ford ( F ) said customers will now have greater availability of their built-to-order truck as early as October at an MSRP closer to initial Lightning pricing.

The price cut is nearly $10,000.

If you remember, we told you Monday here on Wall Street Breakfast that Tesla ( TSLA ) announced on Saturday that its first Cybertruck rolled off the assembly line in Austin, Texas.

AT&T (NYSE: T ), Frontier Communications (NASDAQ: FYBR ) and Telephone and Data Systems (NYSE: TDS ) fell sharply on Monday, continuing last week's slide as investment firm Citi downgraded the trio on worries related to lead covered cables .

Analyst Michael Rollins cut his rating on the trio's stock to neutral/high risk and lowered the per-share price targets to $16, $17 and $8, respectively, pointing out the concerns related to lead covered cables are likely to be an overhang "for at least a few months and potentially longer" until the market can get a better idea of the financial risk associated with it.

Rollins added that he is unable to quantify the risks right now and the timing to get more information could take a few months and an ultimate resolution could take "years."

AT&T ( T ) shares fell more than 6%, Telephone and Data Systems ( TDS ) fell more than 8%, while Frontier Communications ( FYBR ) plunged more than 15%.

The termination date on Microsoft's planned $69B acquisition of Activision Blizzard (NASDAQ: ATVI ) is today, and with last-minute regulatory action in the UK on Monday, the companies are reportedly looking at a slight delay, rather than canceling the deal .

According to media reports, the two companies aren't likely to close by today’s deadline, but don't intend to walk away from each other and are instead working on an extension to the termination date so that they can satisfy regulators.

The UK's Competition Appeal Tribunal will allow the UK Competition and Markets Authority challenge to the Activision ( ATVI ) sale to be paused while the sides work on a settlement with the regulator.

Those talks could take days or even weeks, and the CMA has extended the target date on its investigation to Aug. 29.

The UK is the only major jurisdiction standing between Microsoft (NASDAQ: MSFT ) and Activision Blizzard ( ATVI ).

Other headlines to look out for on Seeking Alpha:

Novartis beats top and bottom line estimates; raises FY23 outlook and board endorses Sandoz spin-off

Lithium Americas gain as court denies appeal of Thacker Pass lithium mine

Chipmaker Wolfspeed says its supply chain is safe from China export controls

Petrobras sees steady spending in upcoming plan but dividend policy to be 'adjusted'

BofA gives 10 stocks to watch during this earnings week

On our catalyst watch for the day , Microsoft ( MSFT ) will hold its biggest partner event of the year, with Microsoft’s CEO scheduled to give the Inspire keynote address. Key sessions will cover Microsoft Cloud and AI integration across products.

U.S. stocks ended higher on Monday.

The Nasdaq ( COMP.IND ) advanced 0.93%, the S&P 500 ( SP500 ) added 0.39% and the Dow ( DJI ) gained 0.22%.

Of the 11 S&P sectors, six ended in negative territory, led by Utilities and Real Estate. Tech and Financials topped the gainers.

Treasury yields were largely unchanged . The 10-year yield ( US10Y ) was down 2 basis points at 3.80%, while the 2-year yield ( US2Y ) was down 1 basis point to 4.74%.

Monday's economic calendar was fairly light, with just Empire State's gauge of New York manufacturing activity on the docket. The headline number surprised to the positive.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are pointing higher. The Dow is up 0.16%, the S&P 500 is up 0.1% and the Nasdaq is up 0.05%. Crude oil is up 0.7% at less than $75 a barrel. Bitcoin is down 0.7% at less than 30,000.

In the world markets, the FTSE 100 is up 0.2% and the DAX is up 0.1%.

Hong Kong is open following the typhoon warning.

On today’s economic calendar, at 830am the June retail sales report. Economists forecast a 0.5% month-over-month increase to accelerate from the +0.3% gain in May. And at 10am the housing market index.

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