Markets Defused aims to give an easy-to-understand and straightforward recap of the week’s most engaging stock market news.
- Royal Mail takeover will get Govt, says Hunt
- GameStop sales will fall this year and next year
- Bitcoin highest for month, above $66,000
- Boeing shareholders greenlight CEO pay rise
- Reddit stock surged on OpenAI tie-up
- Take-Two stock dips as GTA 6 slips to ‘Fall 2025’
- Burberry sales drop as luxury demand slows
- AMC sold stock into meme rally
- NatWest gained a new major shareholder
Royal Mail takeover will get Govt, says Hunt
Royal Mail’s £3.5 billion takeover will face scrutiny by the UK Government, Jeremy Hunt has confirmed.
Jeremy Hunt, Britain’s Chancellor of the Exchequer, on Friday, that the proposed takeover of International Distributions Services PLC (LSE:IDS) would be thoroughly evaluated in the context of the UK’s national security laws.
At the same time, UK business secretary Kemi Badenoch insisted on guarantees to maintain Royal Mail's universal service.
And, separately, the Communication Workers Union (CWU) has this week expressed its readiness to call for industrial action if worker conditions or services are compromised by any takeover.
Earlier this week it emerged that Daniel Křetínský, a Czech billionaire and already a significant shareholder in International Distributions Services (IDS), Royal Mail’s parent company, had proposed to buy-out the rest of the shares in a deal that would be worth £3.5 billion.
On Wednesday, Royal Mail’s board revealed it would be “minded” to accept such an offer in the interests of its shareholders.
Křetínský, referred to often in the media as “Czech sphinx”, is also a major shareholder in West Ham United Football club, owning 27% of the business.
GameStop sales will fall this year and next year
GameStop Corp (NYSE:GME) will see sales drop this year and again next year, even with the stimulus of a new Grand Theft Auto game and a new Nintendo console – that’s according to California-based stockbroker Wedbush.
Wedbush analyst Michael Pachter, who reckons GameStop shares are really worth around $7 each, published a note following the news that GameStop was recapitalising helped by this week’s frenzied share price rise.
GameStop stock took traders on quite a journey this past week.
The share price more than doubled from around a starting point of $17, spiking to highs around $64 on Tuesday, before crashing on the news that the company intends to sell new stock to raise fresh capital for the business.
Now, having closed Friday’s session the price is down to $22.21, the heat appears to have come right out of ‘memestock’ rally 2.0.
For GameStop, the key will be to secure its cash injection and use it wisely.
“We do not believe GameStop can ‘save its way to prosperity’, and expect the mix of software sales to continue to shift to digital and away from physical … we think GameStop will see continuing sales declines next year as well,” Pachter said in a note.
“Ultimately, the company must deploy its cash productively or continue to hope that it can issue more shares at elevated levels to forestall the inevitable.”
Bitcoin highest for month, above $66,000
Bitcoin finished the regular trading week on the front foot, rising above $66,000 despite the downturn in global stock markets.
It comes amid softer US inflation figures and, according to reports, significant institutional interest in bitcoin ETFs.
On Saturday morning, Bitcoin was up 1.3% for the past 24 hours with the price marked at $66,985.
Last night, trading above $67,250, the leading cryptocurrency was at its highest level for nearly a month.
Elsewhere in crypto, Ethereum was 2.5% higher on Saturday morning at $3,112.
Boeing shareholders greenlight CEO pay rise
Boeing Co (NYSE:BA, ETR:BCO) chief executive Dave Calhoun, who recently announced he will leave his role, has just been approved for a big pay-rise and a seat on the aircraft maker’s board.
At $33 million, Calhoun’s compensation package marks a 45% increase on last year – largely due to stock bonuses.
Calhoun previously announced he will retire by the end of the year, had his reappointment to Boeings board confirmed by shareholder vote despite proxy adviser Glass Lewis recommending investors vote against it.
It comes as Boeing is currently grappling with multiple challenges, including scrutiny over safety, maintenance, production and quality control. Earlier this year, a door plug panel blew out mid-flight on a Boeing 737 Max 9, leading to heightened concern over safety protocols.
Reddit (NYSE:RDDT) stock surged on OpenAI tie-up
Reddit (NYSE:RDDT) shares traded significantly higher, rising 14% on Thursday, on the news that it had partnered with ChatGPT creator OpenAI.
Content from the Reddit databases will be brought into OpenAI’s ChatGPT system for AI training and other purposes. OpenAI will also become a Reddit advertising partner.
“Reddit has become one of the internet’s largest open archives of authentic, relevant, and always up to date human conversations about anything and everything,” Reddit chief executive Steve Huffman said in a statement.
“Including it in ChatGPT upholds our belief in a connected internet, helps people find more of what they’re looking for, and helps new audiences find community on Reddit.”
Take-Two stock dips as GTA 6 slips to ‘Fall 2025’
Take-Two Interactive Software Inc (NASDAQ:TTWO), parent to Rockstar Games, on Thursday conceded that Grand Theft Auto 6 will not be released during the game studio’s current financial year.
The hotly anticipated game is now not expected to be released until ‘Fall 2025′, rather than ‘early’ in the year – which could’ve landed in the window for the fiscal year.
TTWO executives were not more specific than that, and, TTWO chief executive Strauss Zelnick told investors that it would be the Rockstar subsidiary that would formally announce a release date for the game.
A formal timetable had not previously been communicated either, and, recently there were rumours that the release date would slip even further, into 2026.
Raspberry Pi revealed 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.
AMC sold stock into meme rally
AMC Entertainment Holdings (NYSE:AMC) has completed a well timed $250 million stock sale as ‘meme-stock’ traders keeps pushing the share price higher.
According to a filing, some 72.5 million shares were sold on Monday at $3.45 each, a price that quickly looked meagre amidst the subsequent rally.
AMC stock, meanwhile, ended the week at $4.34 per share after much of the week’s trading gains fizzled out.
NatWest gained a new major shareholder
Capital Group, an American investment firm, on Monday revealed it had acquired over £110 million in shares of NatWest Group PLC (LSE:NWG).
It comes as the UK government’s stake (acquired through the $46bn bank bailout in the 2008 crisis) was reduced to less than 27%.
The UK aims to exit its holding, to fully reprivatize the bank, either by 2025 or 2026. By the end of the year its expected to have less than 10%.
According to reports, the American’s transaction came after the UK government’s sale.