The Score: The Business Week in 7 Stocks -- WSJ
June 16 2018 - 3:02AM
Dow Jones News
By Laine Higgins
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 16, 2018).
AT&T Inc. - 6.2% Wednesday
In a landmark decision Tuesday, the U.S. Justice Department's
attempt to block AT&T's proposed $81 billion acquisition of
Time Warner Inc. was struck down, touching off a rally for other
media stocks. The ruling clears the way for further large-scale
media mergers, and investors speculate the industry-wide
consolidation could be a boon to companies struggling to compete
with the deep cash reserves of industry-disruptor Netflix Inc.
"If you're going to be a modern media company, you're going to
need a variety of offerings," John Stankey, the AT&T executive
charged with overseeing the combined company's assets, told the
Journal.
Shares of AT&T fell 6.2% on Wednesday before closing the
Time Warner deal a day later, while Comcast Corp.'s stock jumped
4.6% on Thursday after making an unsolicited $65 billion offer for
21st Century Fox Inc. assets and sparking a bidding war with Walt
Disney Co.
USG Corp. - 3.9% Monday
Warren Buffett last year called his nearly 20-year investment in
building-materials maker USG "disappointing," and in recent months
his Berkshire Hathaway Inc. strayed from its usual playbook to urge
the company to consider a sale. The effort paid off Monday, when
the Chicago-based maker of Sheetrock gypsum drywall said it had
agreed to be acquired by Gebr. Knauf KG for $7 billion. The sale
allows Berkshire to unload its 31% stake without pushing down USG's
stock price. Back in May, shareholders including Berkshire voted
against the election of four directors to the USG board after it
spurned Knauf's first two approaches--the first time Mr. Buffett
said he could recall that his conglomerate has opposed a company's
slate of nominees.
Dave & Buster's Entertainment Inc. - 17% Tuesday
Shares of Dave & Buster's Entertainment rose 17% on Tuesday
after the company beat analysts' expectations for first-quarter
earnings and announced that its current finance chief will replace
longtime Chief Executive Stephen King. The gain was one of the
largest since the company's 2014 initial public offering and
brought shares into positive trading territory this year.
Executives also touted the rollout of a line of proprietary
virtual-reality video games, with its first Jurassic World-themed
title debuting Thursday. The company is hoping that patrons come
for the dinos and stay for dinner to end its streak of quarters
with declining comparable sales, including last quarter's 4.9%
dip.
Boston Scientific Corp. - 6.2% Wednesday
Boston Scientific shares took a wild ride over the past week,
first soaring on a Journal report Monday that medical-device maker
Stryker Corp. had made a takeover approach, and then tumbling back
to where they started when Stryker said Wednesday it wasn't
currently in merger talks. A deal would create a company with more
than $20 billion in annual sales, offering a range of medical
devices from knee and hip replacements to heart valves and
endoscopes. But for now it appears the two companies aren't on the
verge of being stitched together.
H&R Block Inc. - 18% Wednesday
Before the Republican tax bill passed late last year, President
Donald Trump predicted that H&R Block would be "the only people
that aren't going to like this." On Tuesday, the company said it
plans to close about 400 U.S. offices and adjust pricing for its
tax-preparation services, in part because the new tax law is
expected to reduce the complexity of filing returns for millions of
Americans. Another culprit: more filers are using digital tools to
prepare their taxes. "We aren't as relevant as we need to be to
today's consumer," CEO Jeff Jones said as he vowed to reposition
the firm. The stock's 18% drop was its worst decline in 30
years.
Amazon.com Inc. - 0.4% Wednesday
Less than a month after passing it unanimously, the Seattle City
Council voted Tuesday to repeal a per-employee tax on big companies
that had been projected to raise about $47 million for homeless
services. Skyrocketing home prices spurred by Seattle's tech boom
are behind the city's large concentration of homeless people, which
ranks third in the U.S. according to the Department of Housing and
Urban Development. Seattle is also home to business giants like
Starbucks Corp. and Amazon, which took an uncharacteristically
aggressive tack in lobbying against the tax. Amazon, the city's
largest employer, threatened to halt the planned expansion of its
headquarters if the $275-per-head tax took effect, but said it
would resume construction in light of the repeal.
ZTE Corp. - 42% Wednesday
Chinese telecommunications firm ZTE saw $2.7 billion of market
value erased on Wednesday, as the Hong Kong-listed stock plummeted
42% in its first day of trading since the middle of April. ZTE
shares were initially halted after the U.S. Commerce Department
banned American companies from doing business with the Chinese firm
for violating the terms of previous U.S. sanctions against Iran and
North Korea in 2017. Then last week, Mr. Trump extended an olive
branch, and Commerce Secretary Wilbur Ross offered to keep ZTE
afloat in exchange for fines and management changes. The policy
reversal caused the end of ZTE shares' trading hiatus, though
investors are wary of the company's future viability.
(END) Dow Jones Newswires
June 16, 2018 02:47 ET (06:47 GMT)
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