Markets Defused gives an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Apple first to be charged under EU’s DMA rules
- London Tunnels turned its back on the City
- Frasers lands THG's luxury brands
- Nvidia shares drop as selling continued
Apple first to be charged under EU’s DMA rules
Apple Inc (NASDAQ:AAPL, ETR:APC) was found to be in breach of the European Union's Digital Markets Act (DMA) by the European Commission.
The breach centres on Apple's App Store policies, which according to the EU, limit competition by preventing app developers from steering users to alternative purchasing options.
Preliminary findings of the European Commission, released on Monday, indicated that Apple's rules "prevent app developers from freely steering consumers to alternative channels for offers and content."
It followed an investigation that was launched in March, and Apple has 12 months to comply with the DMA regulations to avoid fines that could reach up to 10% of its global revenue.
Apple is the first company to be charged under the DMA rules, which came into force last year.
Other tech giants, including Meta and Google, are also being scrutinised.
In comments, Apple said had already made several changes to comply with the DMA.
"We are confident our plan complies with the law, and estimate more than 99% of developers would pay the same or less in fees to Apple under the new business terms we created," the company said.
London Tunnels turned its back on the City
Somewhat awkwardly, London Tunnels Plc is not listing in London and will instead list its shares in a European capital.
London Tunnels is developing a tourist attraction in a network of underground tunnels, but, has decided to float its shares on Euronext Amsterdam, foregoing an earlier plan to float on the London Stock Exchange (LSE).
The company has announced its intention to raise £30 million through the IPO in Amsterdam, which would value the company at £130 million.
It is only the latest example of the City of London’s recently waning appeal for companies seeking new listings.
Angus Murray, London Tunnels chief executive, said his company could take advantage of the size and scale of both the equity capital markets and debt capital markets of Europe.
“The listing on Euronext, Europe’s largest regulated stock exchange, is in the best long-term interests of the company, its shareholders and the future ambitions for the development of the project in Central London,” Murray said.
Despite opting against the City, Murray had some positive things to say about the UK capital: “London is undoubtedly one of the world's leading tourist destinations.
“It is one of the most visited cities in the world, with millions of visitors each year, all of whom we hope will be interested in visiting the Tunnels.”
The company aims to draw 2 million visitors annually to its tourist attraction which would include interactive exhibits and the city’s deepest bar. It plans to open in 2027.
Frasers lands THG's luxury brands
Frasers Group PLC (LSE:FRAS) shares gained 3.5% in Monday’s dealing, boosted by its deal to acquire luxury goods websites from THG PLC (LSE:THG).
The transaction includes the Coggles brand, and, will also see THG’s Myprotein brand protein powders sold in Fraser’s Sports Direct shops.
Frasers will also use THG's technology in certain areas of its business.
It is seen to be part of Mike Ashley's strategy to shift Frasers' focus towards premium brands, alongside its Sports Direct business.
The deal involves deeper integration of the businesses, with Frasers will set to manage couriers and run THG’s Australian delivery operations. THG will also see Frasers integrating its buy-now-pay-later platform into THG's checkout system.
It potentially gives THG’s online retail business greater foothold.
THG’s market value is down significantly since its IPO in 2020, from a valuation of £5.6 billion to approximately £800 million today.
The company’s luxury division had sales of about £43 million in the 2023 financial year and was closer to break even.
The Coggles brand, founded in 1974, sells men's and women's clothing, shoes, and home products.
Nvidia shares drop as selling continued
NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) shares were falling further on Monday, down 5%, as the selling pressure continued – with the price now close to 10% lower for the past week.
Amongst the stock sellers was Nvidia founder and chief executive Jensen Huang, who via a ‘Rule 10b5-1 trading plan’ – an arrangement that allows company insiders to sell a specified number of shares at a specified time – sold around $95 million.
‘Overbought’ is the phrase most often bandied around in the market analysis, and, it should not be forgotten that the chip-maker is still up a remarkable 150% in 2024 to date.
The surging price rise saw Nvidia, briefly, become the world’s most valuable company with its market capitalisation piercing the $3 trillion marker.
With such an advance some pause or pullback should be somewhat expected, but nonetheless the decline of recent days appears to have captured the anxieties of some.
“One minute it’s the world’s most valuable company and the next minute it is down 7% in 5 days and is lagging the broader US blue chip stock indices,” XTB research director Kathleen Brooks said in a note.
“Interestingly, the sell off in Nvidia has not been followed by declines in other Magnificent 7 stocks today.
“Apple and Microsoft, the other tech megaliths, are higher so far on Monday, and Tesla is the best performer in the Nasdaq 100 index on Monday and is up nearly 3% at the start of this week.”
Brooks pointed to potential ‘tech fund rebalancing’, profit taking amongst retail investors, and broader volatility as factors in the sell off.