Markets Defused aims to give an easy-to-understand and straightforward recap of the day’s engaging stock market news.
- GameStop and AMC dip, so is the ‘meme’ done?
- Royal Mail in takeover crosshairs
- Raspberry set for London IPO
- Burberry sales drop as luxury demand slows
- Imperial Brands sees sharp rise in vape sales
- Britvic boosted as top brands drive growth
GameStop and AMC dip, but is the ‘meme’ done?
GameStop Corp (NYSE:GME) and AMC Entertainment Holdings (NYSE:AMC) shares backed off, presumably on profit taking, as the past three-days of ‘meme-trading’ cooled.
In New York, GameStop was down 23% at $38.00 per share, and AMC was down 21% at $5.38.
Elsewhere, to complete everyone’s meme-stock bingo cards, market analysts were making headlines by dismissing the skyrocketing share tradings as “pure hype”.
Really, that’s not much of a revelation as at this stage practically everyone following these stocks understand that the so-called retail traders buying the shares up are not doing so based on traditional investment analysis.
Practically by design, this trading activity it tapping into a deliberate herd mentality in, let’s say enthusiastic, pockets of the internet.
Royal Mail parent IDS up on takeover bid
Royal Mail's parent company International Distributions Services PLC (LSE:IDS) soared 20% at one stage on the news that a new £3.5 billion bid was proposed by Daniel Křetínský's EP Group.
Trading at 317.53p the London-listed share was up around 46p or 17%.
An offer of 360p per share represents a substantial premium over previous valuations, and, evidently, it is being taken seriously by the stock market.
Daniel Křetínský's offer would include a final dividend and a special dividend, to sweeten the pay-out to shareholders.
The board's inclination to recommend this offer underscores the strategic value and growth potential seen in IDS.
What it means for the Royal Mail and its universal service obligations to the British public remains to be seen, and, similarly it is also unclear how much of a political football it will become given that the UK is heading toward a general election.
Raspberry Pi confirms London IPO plan
Raspberry Pi, known for its affordable single-board computers, announced plans for an initial public offering (IPO) in London.
It has been taken as a significant boost for the London market, which has been struggling for new listings of late and, in particular, has been short of tech companies.
The announcement has been well received, and may yet support interest in London IPOs.
“In an ever more connected world, the market for Raspberry Pi's high-performance, low-cost computing platforms continues to expand,” chief executive Eben Upton said in a statement.
“We have the technology roadmap to play an increasingly significant role, and we are excited to embark on the next stage of our growth.”
Burberry sales drop as luxury demand slows
Burberry Group PLC (LSE:BRBY), the luxury English fashion brand, reported a 34% drop in annual operating profit which led to a 6% decline in its share price, down to 1,115p in London.
Its revenue amounted to £2.97 billion for the year to 31 March, reflecting a 4% fall on a ‘constant currency’ basis (i.e. excluding differences in foreign exchange rates).
Giving its outlook, Burberry described “a still uncertain external environment" and said its trading is expected to remain challenging.
"Executing our plan against a backdrop of slowing luxury demand has been challenging,” chief executive Jonathan Akeroyd said.
Imperial Brands sees sharp rise in vape sales
Tobacco firm Imperial Brands PLC (LSE:IMB) reported financial results in line with expectations, with revenue coming in at just over £15 billion for its first half.
It reported an underlying profit of £1.67 billion in the six months to 31 March, down 2.7% compared this this time last year.
Notably, vapes - or as the industry prefer to call them “next-generation products” – saw a near 17% improvement in sales with growth coming in the Europe, Africa and Asia-Pacific territories.
Britvic boosted as top brands drive growth
Britvic PLC (LSE:BVIC), the soft drinks company, got a boost of more than 10% after announcing stronger-than-expected financial results and a new £75 million share buyback program.
The company behind the Robinsons, Tango and J2O brands reported a 17% improvement in first-half profit to £100.4 million, on £880 million of revenue which was up 11% compared to the same period last year.
A ‘delighted’ Simon Litherland, Britvic chief executive, described it as an excellent performance.