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6 Months : From Aug 2019 to Feb 2020
By Francesca Fontana
Altria Group Inc.
Waiting for the smoke to clear surrounding the future of Juuling, tobacco giants Altria Group and Philip Morris International Inc. called off talks about merging after a decade apart. The discussions were spurred in part by the threat from the trendy smoking alternative to their traditional businesses. Juul Labs Inc.'s chief executive abruptly stepped dow n on Wednesday amid U.S. efforts to combat underage vaping. He was succeeded by an executive at Altria, which owns a 35% stake in the e-cigarette maker. Altria shares fell 0.5% Wednesday while Philip Morris shares gained 5.2%.
Marathon Petroleum Corp.
Activist hedge fund Elliott Management Corp. suggested in a letter to the Marathon Petroleum board Wednesday that Marathon separate its Speedway gas-station chain and pipeline business into their own companies, leaving its refining business as the new Marathon. "There is little to no 'synergy' value to retaining the three businesses in Marathon," Elliott said in the letter. Another shareholder, hedge fund D.E. Shaw, is also supportive of Marathon breaking up, according to a person familiar with the matter. Marathon said it would "continue to evaluate opportunities to deliver more value for our shareholders." Marathon shares rose 8.4% Wednesday.
Mortgage-finance companies Fannie Mae and Freddie Mac are expected to start keeping their profits again, The Wall Street Journal reported Sunday. The move puts on hold a yearslong arrangement in which the companies handed nearly all of their earnings to the Treasury Department. In an expected agreement between the Trump administration and the companies' federal regulator, this would be an initial major step in allowing Fannie and Freddie to build up capital so they can operate as private companies again. The government effectively nationalized them during the 2008 housing crisis. Shares of Fannie Mae gained 2.6% Monday, while Freddie Mac added 2.5%.
EBay Chief Executive Devin Wenig left the online marketplace Wednesday, citing conflicts with the company's new board. The company has been evaluating its business since March after activist investors Elliott Management and Starboard Value criticized its performance and proposed breaking it up. "In the past few weeks it became clear that I was not on the same page as my new Board," Mr. Wenig tweeted from his personal account. Mr. Wenig served as CEO for more than four years after joining the firm in 2011 as president over its marketplace. He also stepped down as a board director. EBay shares fell 0.8%.
Shares of Nike reached an all-time high Wednesday as the athletic-footwear company reported better-than-expected sales for its latest quarter, driven by an increase in revenue from China despite trade tensions. Nike shares rose 4.2% Wednesday, hitting a high of $92.79 during the session. The effects of U.S. tariffs on Chinese goods would be more prominent in the current quarter, Chief Financial Officer Andrew Campion said, as President Trump's announcement of the tariffs in August and their imposition in September didn't give the company much time to manage any of the levers within its overall portfolio.
Peloton Interactive Inc.
Thursday was a bad day for the IPO market: Shares of Peloton, the maker of interactive exercise bicycles, fell on their first day of trading and Endeavor Group Holdings Inc. yanked its planned offering. Peloton opened at $27 a share, lower than its IPO price of $29, and ended 4.6% lower at $25.76. Its poor debut was partly what prompted Endeavor's decision, according to people familiar with the matter. WeWork's parent company also pulled its offering earlier this month as signs grow investors are shunning companies that lose large amounts of money.
Beyond Meat Inc.
Beyond Meat has gained another fan. McDonald's Corp. said Thursday it is testing Beyond Meat patties at restaurants in Canada for 12 weeks starting Monday with a sandwich called the "P.L.T." for plant, lettuce and tomato. Many of McDonald's rivals have already introduced meat substitutes made by Beyond Meat or rival Impossible Foods Inc. Sales of plant-based burgers and other products from those companies have surged this year. A few months ago, McDonald's executives said they were watching whether the trend would last and meat-substitute companies could maintain supply before adding meatless products to its menu. Beyond Meat shares gained 11.6% Thursday.
Write to Francesca Fontana at email@example.com
(END) Dow Jones Newswires
September 27, 2019 17:54 ET (21:54 GMT)
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