Markets Defused gives an easy-to-understand and straightforward recap of the week’s most engaging business and stock market news.
- Tinder owner boosted by activist stakebuilding
- Hugo Boss shares plummeted on profit warning
- Ocado surprised the market with much better trading
- Yandex founder launched Nebius, a European AI firm
Tinder and Hinge owner boosted by activist stakebuilding
Shares in Tinder and Hinge owner Match Group Inc (NASDAQ:MTCH) gained around 9% after the news that activist investor Starboard Value had acquired a 6.5% stake in the company.
Starboard is reportedly pushing for operational changes including product innovation and margin improvement.
The activist, alternatively, calls for Match to be put up for sale if a business transformation can’t be successfully executed.
Following this announcement, Match Group's shares increased by 8%. The company
It comes as the dating app firm has faced slowing growth and increased competition.
Starboard has called for cost reductions, product innovation, and share buybacks.
Match is said to be engaged in ongoing discussions with Starboard and other investors – with other activist investors like Elliott Management and Anson Funds also undersood to also have shareholdings in the company.
In New York, Match stock was up $2.92 or 9.12% trading at $34.94.
Hugo Boss shares plummeted on profit warning
Hugo Boss (ETR:BOSS) shares plummeted, falling 7.5%, as the German designer became the latest in the luxury retail segment to issue a profit warning.
On Tuesday, in a trading update, Hugo Boss downgraded its full-year sales outlook whilst warning about slowing consumer spending on luxury goods.
It said sales had fallen 1% to €1.02 billion in its second quarter.
Hugo Boss said it now expects full-year sales between €4.2 billion and €4.35 billion, down from previous expectations of €4.3 billion to €4.45 billion. Earnings are projected to be between €350 million and €430 million, down from €430 million to €475 million.
The company blamed macroeconomic and political challenges among the reasons for its gloomier outlook.
Hugo Boss shares closed 7.48% lower at €37.35, and for 2024 to date its down 43%.
Elsewhere, this week Burberry and Swatch also warned of weaker sales and reduced demand.
Ocado surprised the market with much better trading
Ocado Group PLC (LSE:OCDO) finished Tuesday’s session up 8.5% after a much better-than-expected performance, with a material reduction in its first-half loss thanks to improved revenue.
Its pre-tax loss narrowed to £154 million, from £290 million in the same period last year.
Ocado also raised its annual profit margin guidance for its technology division, which sells warehouse robots to other retailers, it is now expecting a ‘mid-teens’ EBITDA margin.
Revenue from the technology business increased by nearly 22%, whilst Ocado’s retail revenue grew by 11%.
Ocado, operating its joint venture with Marks & Spencer, has been described as the fastest-growing grocer for five consecutive months.
It comes at a time when Ocado’s shares have struggled – the price has nearly halved in value in 2024 to date.
Such was the optimism in the market, Ocado's share price spiked as much as 18% earlier on Tuesday.
Closing at 369.20p, the price was 8.46% higher for the day.
Yandex founder launches AI business Nebius
Alongside a deal to sell ‘Russia’s Google’ to a consortium of Russian investors, the Europe-based owners of Yandex have spun-out AI focussed subsidiaries into a new company, called Nebius Group.
The core Yandex business was sold in a deal worth $5.4bn.
Nebius, comprising the ‘foreign’ interests of Yandex, is headquartered in Amsterdam and is being positioned to focus on 'AI-centric' cloud platforms.
“We now have an exciting opportunity to invest in building the leading AI infrastructure player in Europe with a multi-billion annual revenue potential,” Yandex and Nebius founder Arkady Volozh said in a statement on Tuesday.
“Overcoming the current AI infrastructure deficit is a challenge for the entire industry if the AI revolution is to deliver on its promise. This is something foundational, like the railways in the industrial revolution.”
“What we bring is a unique and specific combination of expertise to address some of the fundamental bottlenecks in AI today.”
Volozh added: “Europe’s challenge in the global AI race is competing for talent. This is what we have – very smart and talented people, capable of creating essential innovative technologies.”
Nebius comprises Toloka AI which is described as a ‘data partner for generative AI development’, TripleTen which is an education technology business focussed on reskilling people for tech careers, and Avride, which is a developer of autonomous driving for self-driving cars and delivery robots.
In their exit of the Yandex business, the Nebius-backers have sealed largest corporate exit from Russia since the invasion of Ukraine.