SONY - Wall Street Breakfast Podcast: Microsoft Battles FTC In Court

2023-06-23 06:36:07 ET

Summary

• Microsoft faces off against the FTC in court over its planned $69 billion acquisition of Activision, with the trial scheduled to last five days.
• Ford is reportedly planning more layoffs in the coming weeks to reduce costs and streamline operations, mainly affecting U.S. salaried workers in its gas-engine, EV, and software divisions.
• Virgin Galactic Holdings aims to raise an additional $400 million through a new stock offering, with proceeds to be used for development of its spaceship fleet and infrastructure to scale its commercial operations.

Listen on the go! Subscribe to Wall Street Breakfast on Apple Podcasts and Spotify Microsoft ( MSFT ) battles with FTC in court over $69B Activision ( ATVI ) deal (00:25). Ford ( F ) preps for another round of layoffs - report (01:55). Virgin Galactic Holdings ( SPCE ) files to sell another $400M worth of stock (02:38).

Microsoft is facing off against the FTC over its planned acquisition of Activision. Ford is reportedly prepping for another round of layoffs and Virgin Galactic files to make a new offering.

Today is day two in a trial between Microsoft (NASDAQ: MSFT ) and the Federal Trade Commission.

The two are facing off in a San Francisco court as the regulator tries to block the $69 billion planned acquisition of Activision (NASDAQ: ATVI ). Thursday Activision rose 1.7%.

The trial is scheduled to last five days.

The FTC last Monday filed for a preliminary injunction to block Microsoft’s acquisition of Activision ( ATVI ), saying that the regulator feared Microsoft ( MSFT ) may try to close the purchase even though the FTC had originally challenged it in December.

Microsoft’s ( MSFT ) CEO, Activision’s ( ATVI ) CEO and Phil Spencer, who heads Microsoft's Xbox unit, are set to appear in court as witnesses.

Jim Ryan, head of Sony's ( SONY ) videogame business, is expected to testify through a video deposition. Sony has voiced its opposition to the deal for months.

The Activision/Microsoft deal has a termination deadline of July 18, after which the parties can walk away, extend, or renegotiate the deal.

While the FTC trial is important, M&A investors are also keenly focused on the appeals court in the UK, where the country's antitrust regulator blocked the deal e arlier this year. A UK appeals court is set to hear the appeal next month.

Following the first day of the trial Microsoft released a statement that said, “Today showed Sony has known all along we’ll stand by our promise to keep games on its platform and made clear its work to lobby against the deal is only to protect its dominant position in the market.”

Ford (NYSE: F ) is planning more layoffs in the coming weeks to further reduce costs and streamline operations.

This according to a report from the Wall Street Journal, citing people familiar with the matter.

The layoffs will mostly affect U.S. salaried workers in Ford's ( F ) gas-engine business, as well as its EV and software divisions.

a Ford ( F ) spokesperson told WSJ, "Part of the ongoing management of our business includes aligning our global staffing to meet future business plans, as well as staying cost competitive as our industry evolves.”

Previously, Ford ( F ) announced 1,000 job cuts at its European plant . It is also reportedly looking at cutting 1,300 jobs in China .

Virgin Galactic Holdings (NYSE: SPCE ) disclosed on Thursday that the space tourism company aims to raise an additional $400M through a new stock offering that followed closely on the heels of a $300M at the market offering.

As part of the SEC filing , Virgin Galactic ( SPCE ) said it intends to use any cash proceeds it receives from stock sale for development of its spaceship fleet and infrastructure to scale its commercial operations, and for general corporate purposes, including working capital and general and administrative matters.

Shares of Virgin Galactic ( SPCE ) were down 6.8% during the regular session Thursday.

Premarket SPCE is down nearly 18%.

Other headlines to look out for on Seeking Alpha:

J&J talc bankruptcy unit to establish $750M trust fund with insurers

Ouster announces layoffs, reaffirms second-quarter revenue outlook

Amazon pops as Loop Capital says AWS slowdown likely to 'bottom' soon

3M to pay up to $10.3B in PFAS water pollution settlement

Warner Bros. Discovery in talks for $500M sale of half of music publishing assets

On our catalyst watch for the day, Notable companies due to report include CarMax ( KMX ). Options trading implies 11% move for the stock following the report. CarMax ( KMX ) rallied 10% after its last earnings report.

U.S. stocks ended largely higher on Thursday, as investors digested a host of policy tightening decisions from UK to Norway to Turkey.

The Nasdaq ( COMP.IND ) outperformed the other two major averages, adding 0.95%. The S&P 500 ( SP500 ) rose 0.37%, while the Dow ( DJI ) fell 0.01%.

Of the 11 S&P sectors, six ended trading in the red, led by Real Estate and Energy. Consumer Discretionary and Communication Services topped the gainers.

Treasury yields were higher on rate concerns. The 10-year yield ( US10Y ) was up 8 basis points while the 2-year yield ( US2Y ) - was also up 8 basis points.

On the domestic front, the number of Americans filing for initial jobless claims came in flat for a second week at a revised 264K.

In other economic data, existing home sales for May rose slightly and came in above estimates.

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 in the red. The Dow is down 0.4%, the S&P 500 is down 0.5% and the Nasdaq is down 0.6%. Crude oil is down 0.8% at less than $69 a barrel. Bitcoin is down 0.2% and is above 30,000.

In the world markets, the FTSE 100 is down 0.2% and the DAX is down 0.6%. The China market is closed.

On today’s economic calendar, this is the final day of a 3-day summit by the Federal Reserve Bank of Cleveland. And at 140pm Loretta Mester is set to speak.

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