After Hours Summary: ESTC +14.9%, BE +9.7%, SOUN +9.2%, ICUI +5.9%, FOXF +5.6% higher on earnings; ENTG +7.5% to join the S&P MidCap 400; NTAP -14.1%, PUBM -11.9%, DUOL -6.9%, HPQ -3.6%, DELL -1.5% lower on earnings
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: ORGO +17.3%, PGNY +15.7%, ESTC +14.9% (also names new CFO), TPC +9.8%, BE +9.7%, ALHC +9.3%, SOUN +9.2%, COLL +7.4%, ICUI +5.9%, FOXF +5.6%, TMDX +5.4%, SYRE +4.9% (also files $500 mln mixed shelf securities offering), RKT +4.4%, OPK +4.3%, RUN +2.9%, MNST +2.8%, ERIE +2.6%, CODI +2.4%, TLN +2.2%, FIGS +1.7% (also authorizes new $50 mln share repurchase program), MAIN +1.7%, MTZ +1.6%, NTRA +1.5%, PCRX +1.5% (also acquires remaining stake of GQ Bio), ADSK +1.2% (also announces restructuring, including a 9% workforce reduction), DNLI +1.1%, AES +0.9%, CLDX +0.9%, LIF +0.2%, EIX +0.1%, PBA +0.1%
Companies trading higher in after hours in reaction to news: WCC +19% (increases dividend), ENTG +7.5% (to join the S&P MidCap 400), RGTI +7.2% (announces collaboration with Quanta Computer), IGT +2.5% (IGT PlaySports announces sports betting agreement with Golden Nugget parent), MOD +2.3% (announces $180 mln in orders for data center cooling systems), RMNI +2.3% (files $200 mln mixed shelf securities offering), AKAM +2.1% (CEO confirms purchase of $3 mln in shares), DNLI +1.1% (files mixed shelf securities offering), BLX +1% (increases dividend), OLLI +0.8% (acquires 40 former Big Lots store leases), COIN +0.8% (SEC announces dismissal of civil enforcement action against Coinbase), ABCL +0.7% (files mixed shelf securities offering), META +0.5% (to debut a standalone AI app to compete with ChatGPT, according to CNBC), MATX +0.2% (increases share buyback auth by 3 mln shares), CCK +0.1% (increases dividend), JILL +0.1% (names new CEO), SF +0.1% (reports January operating data)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: IOVA -19.2%, DLO -18.8%, DCGO -16.3%, DV -15.7%, NTAP -14.1%, ACHR -13.3%, ACHC -12.7%, ARRY -12.7%, RKLB -12.6% (also secures eight electron missions with iQPS), RDFN -12.4%, AVPT -12.1%, PUBM -11.9%, AMRC -11.8%, AMPH -11%, DH -9.6%, LMAT -7.8% (also increases dividend), BLND -7.5%, DUOL -6.9%, RDNT -6.3%, GSAT -6%, ASTH -5% (also to delay 10-K), ICFI -4.9%, OPEN -4.9%, EOG -3.7%, CUBE -3.6%, HPQ -3.6%, ALKT -3.3% (also to acquire Fin Technologies), CYTK -3.1%, RCKT -3.1%, SOLV -2.9%, ACEL -2.7% (also increase share buyback auth to $200 mln), GDOT -2.3%, ACIC -2.3%, ACA -1.8%, TDW -1.8% (also increases share repurchase auth by $90.3 mln), DELL -1.5%, VRRM -1.3%, TMCI -1.1%, MSDL -1%, XENE -0.8% (also CFO to step down), ACLX -0.8%, ETNB -0.8%, LASR -0.4%, GPCR -0.3%, CABO -0.2%, JAMF -0.2%, MTUS -0.2%, PRGO -0.2%, AHR -0.1%, DRH -0.1%, PGRE -0.1%
Companies trading lower in after hours in reaction to news: CRDF -4.4% (files $400 mln mixed shelf securities offering), CYTK -3.1% (files mixed shelf securities offering), HCAT -2.5% (announces deal with Signature Healthcare), PSNL -2.1% (stock offering by selling shareholders), ARLP -1.6% (files mixed shelf securities offering), LTH -1.2% (18 mln share offering by selling shareholder), ALT -1.1% (files $400 mln mixed shelf securities offering), ACRS -1% (files $300 mln mixed shelf securities offering), JBLU -0.3% (files mixed shelf securities offering), NXDT -0.2% (submits competing proposal for UDF IV), SPSC -0.1% (stock offering by selling shareholders)
Stripe finalizes tender sale at a $91.5B valuation, says payment volumes grew to $1.4T in 2024
Digital payments platform Stripe has yet to lay out plans to go public, but in the meantime the company has thrown past and present employees a line for some liquidity. The company on Thursday confirmed a tender offer where investors will buy up shares from those employees at a valuation of $91.5 billion. Stripe said it will also repurchase shares as part of the transaction.
A spokesperson declined to say who is in the secondary round except to confirm that it is “largely” existing investors. Past backers of the company number at over 150 investors per PitchBook data. They include General Catalyst, GV, Silver Lake, Atomico, Elon Musk, Salesforce and many more.
The tender offer is a decent jump on the company’s valuation from its last secondary sale a year ago, which was valued at $70 billion. However, Stripe still fell short of its high-watermark $95 billion valuation back in 2021. That round came at a time when e-commerce itself was booming due to the COVID-19 pandemic, and it made Stripe, at the time and only on paper, the most valuable privately-held tech company in the world.
The news coincides with Stripe’s annual letter penned by CEO and co-founder Patrick Collison, which noted that payment volume in 2024 grew to $1.4 trillion, up 38% on the year before.
It’s a big number for Stripe, but to put it into some context, Visa said that its payment volume for 2024 was $13.2 trillion. The margin that Stripe makes on transactions (which are what make up payment volume) remains thin, and so this business remains one where it still has room to (and needs to) scale.
Stripe also added that it is now used by half of the Fortune 100 companies, underscoring how it has catapulted from a startup working with other startups, into a major enterprise player.
The tender offer was originally reported to be in the works earlier this month.
UK competition regulator will review fewer global deals, says boss
CMA head also warns it will not be ‘open season’ for takeovers harmful to consumers
The UK’s competition regulator is likely to scrutinise fewer global deals as the government pushes it to adopt a more pro-growth agenda, the head of the agency said.
Sarah Cardell, chief executive of the Competition and Markets Authority, said that “a handful of global deals” may now proceed without CMA interference, while stressing that it would not be “open season” for mergers that harm consumers.
“I think at the margins there will be perhaps a handful of global deals that we would have looked at previously that perhaps we decide we don’t need to look at,” she said on Thursday at a London antitrust conference hosted by the Economist.
However, Cardell cautioned that this “is not an invitation, open season for every single anti-competitive merger under the sun. If we see a wave of those coming through then I think that our reviews will go up.”
The agency has already said it will cut timelines on some merger consultations in a bid to speed up the process for business, after ministers urged it to be “more agile”.
The government said in its draft “strategic steer” for the agency this month that the CMA should seek to avoid duplication where other regulatory bodies are looking at deals that will also address UK concerns.
The CMA has faced intense scrutiny in recent months, becoming a focus of the government’s frustration with regulators for inhibiting business investment in the UK. Ministers ousted the agency’s chair Marcus Bokkerink last month in a shock move, replacing him with the former head of Amazon UK, Doug Gurr.
On Thursday, Cardell acknowledged that change was needed at the CMA, but advised business “against spending an awful lot of time lobbying into government on individual deals”, warning it would not be “fruitful”.
She admitted there was an impression that the CMA’s involvement previously had a “chilling effect [on mergers] and that I have a responsibility . . . to act on that”.
She added: “There is an internal coherence and cohesion to what we’re doing. We haven’t suddenly gone into this state of erratic uncertainty.”
Italian oil major Eni accelerates its energy transition strategy
Group will create two new businesses focused on offering green AI computing power and capturing CO₂ emissions
Italian oil major Eni is accelerating its energy transition strategy as it creates two new businesses this year focused on offering green artificial intelligence computing power and capturing carbon dioxide emissions, it said on Thursday.
The group has already created two other transition businesses, Plenitude and Enilive, which focus on renewables and biofuels respectively, and sold stakes in them to private equity investors.
Claudio Descalzi, Eni’s chief executive, said it would create a “new kind of business” around the company’s supercomputer in northern Italy, where Eni also owns a significant tract of land, a power plant and a carbon capture facility.
He said Eni could sell green computing power to IT companies or anyone looking to develop power-hungry AI applications.
Separately, he said Eni would also announce in 2025 a new company based on its carbon capture and storage assets. “We have almost three gigatons of storage capacity available,” he said, adding that the company would shortly approve HyNet North West in the UK, a large project to capture industrial emissions and store them in the Irish Sea.
Eni confirmed its commitment to the energy transition one day after BP, the UK oil major, abandoned all of its renewable energy targets and pivoted back to oil and gas after pressure from shareholders to improve its performance. On Thursday, BP’s chief executive Murray Auchincloss said he expected “tremendous” demand for oil and gas past 2050.
In a presentation to investors, Eni said its renewable power capacity was on track to grow fourfold to 15 gigawatts by 2030 while its biofuels business should triple its earnings in the same period. After recently selling another 5 per cent of its biofuels arm Enilive to US private equity fund KKR, Eni put another 20 per cent of its renewables company Plenitude up for sale.
Eni also said it was in talks over a joint venture with Malaysia’s Petronas, which would see the two companies combine their gasfields into a company that produced 500,000 barrels of oil equivalent a day to serve gas-hungry Asian markets such as China and India. “This will be a huge company. It will produce half of the actual gas production of Eni. It is a very, very important step that the market has not immediately understood,” said Descalzi.
He predicted that the return on capital in Eni’s transition businesses, including carbon capture and storage, would be in double figures in the next five years. In oil and gas, he said, he expected returns of about 15 per cent to 16 per cent.
“So at the end of the day, the returns on capital is comparable, but you have to consider the transition businesses are less risky than upstream investment, where 70 per cent of investment each year is written off and you have to put in all your money upfront,” he said.
“For us, the transition has really been an opportunity to diversify our business. Beforehand, everything was on the shoulders of upstream (oil and gas). But clearly you have to make money.”
He added there was still investor appetite for the energy transition despite a change of tone since the election of Donald Trump as US president.
“At the end of the day, investors are not looking at transition or not transition, they are looking at whether you are making money or losing money. There is an appetite for a good business. I don’t think the colour of the energy we produce is a problem, it is the money we produce that is the target.”
Commercial landlord Landsec pivots to residential property
FTSE 100 group sets out plans to sell £2bn of offices and scale back office developments
Landsec, one of the UK’s largest listed landlords, plans to sell £2bn worth of office buildings and scale back office developments over five years as it pivots towards residential property.
The FTSE 100 group, a major London office landlord with large holdings around Victoria, wants to reduce offices from about 65 per cent of its nearly £10bn portfolio to closer to a third by 2030, while boosting retail and housing to roughly a third each.
The strategic shift by one of Britain’s best known commercial landlords, announced on Thursday, follows a wider trend in the industry. Investors increasingly see less potential to make big returns from high profile office buildings and are attracted to the steady inflation-linked income from sectors such as housing.
However, chief executive Mark Allan insisted the company still had confidence in the office market despite headwinds from hybrid working after Covid. “This is not a call of us saying we don’t like office,” he said.
He said the move to prioritise other sectors and sell off good quality office blocks to fund new residential projects followed from a decision to focus on generating “income and income growth” for its investors.
Allan said he wanted to be “speculating less on asset values and trading in and out of the portfolio” to reduce the company’s vulnerability to market cycles.
The sharp rise in interest rates that started in 2022 sent commercial property into a sharp downturn, particularly for office properties also battling uncertain corporate demand after the pandemic.
European property prices have fallen by an average of 23 per cent since the peak, with office values falling 38 per cent, according to real estate analysts Green Street. Dealmaking fell about 45 per cent before starting to recover last year, led by hotel and apartment deals, according to index provider MSCI.
The market has shown signs of recovery. Covent Garden landlord Shaftesbury Capital’s portfolio value increased 4.5 per cent last year to £5bn thanks to rising rents, it reported on Thursday, while London office specialist Derwent saw vacancy fall and property values stabilise by mid-year and rise nearly 2 per cent in the second half.
Allan said there was still strong demand for the best quality offices, supporting high rents, but that the returns for investors were less attractive because of the higher costs of construction and of keeping tenants.
The company’s offices are 98 per cent occupied, it said in November.
Scarcely any big London office buildings have changed hands in more than two years. Landsec is counting on the market reopening in order to pull off its plan to reallocate resources to housing.
Landsec wants to devote resources to its three large residential projects located in Lewisham, Manchester and north London. Each has potential to build thousands of homes alongside retail and other uses on land previously developed for other uses, such as outdated shopping centres and car parks.
The company could also look to buy existing blocks of flats to quickly achieve economies of scale. It currently owns only a few hundred homes.
Allan has also taken a big bet on shopping centres after a brutal run for physical retail, which saw property values decimated by the rise of ecommerce. He said he was looking for more deals to buy up the country’s top 30 or so retail destinations, following the £490mn acquisition of majority control of Liverpool One.
Early premarket gappers
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Gapping up:
- ROOT +20.8%, CORZ +17.7%, NTNX +15.2%, SNOW +13%, MARA +12.7%, LTBR +12.2%, AMBA +11.4%, MQ +11.1%, CPRX +11%, LZ +8.6%, MNKD +7.1%, GRBK +6.5%, LFST +6.1%, BLTE +5.9%, ARDT +5.6%, CERT +5.4%, EVTC +5.1%, ATEC +5%, URBN +4.9%, ZVIA +4.8%, TWI +4.8%, WHD +4.6%, SPCE +4.4%, HEI +4.3%, PSTL +4.1%, INVH +3.9%, BLND +3.8%, MIRM +3.7%, ORA +3.7%, SDGR +3.7%, KROS +3.7%, ADTN +3.7%, JOBY +3.7%, SBGI +3.7%, TALO +3.6%, ONC +3.5%, PRG +3.3%, SNPS +3.2%, RSI +3.1%, VTOL +2.9%, KW +2.8%, UHS +2.7%, ZLAB +2.7%, GTN +2.6%, JOE +2.5%, NMFC +2.4%, MGNI +2.3%, VSEC +2.3%, GOGO +1.9%, VAC +1.9%, APA +1.8%, VIST +1.5%, VRNA +1.5%, WES +1.4%, SDRL +1.4%, HHH +1.4%, EXLS +1.3%, SEMR +1.3%, HRL +1.3%, TASK +1.2%, DORM +1.2%, IOSP +1%, AMSF +1%, NVDA +0.9%
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Gapping down:
- IBTA -33.6%, TNDM -16.9%, TDOC -15.7%, EFXT -12.4%, ERII -11%, SG -9.9%, FWRD -9.1%, HAFN -9.1%, PSTG -8.7%, GEO -8.5%, AI -8%, EBAY -7.8%, AAOI -6.5%, DQ -5.8%, BAK -5.6%, XRAY -4.9%, BYND -4.5%, TKO -4.1%, PBR -4.1%, ECPG -4%, GDRX -3.9%, OVV -3.7%, MRNA -3.5%, CRM -3.4%, RACE -3.3%, MFH -3.3%, HNST -3.2%, RVMD -3.1%, HLN -3.1%, SMCI -3%, IONQ -3%, KDP -2.6%, KTOS -2.6%, MDXG -2.5%, PRVA -2.3%, FSK -2.1%, BWLP -2.1%, BBSI -2%, AIN -1.9%, CRGY -1.8%, STAA -1.7%, ACAD -1.7%, DCO -1.7%, FE -1.5%, PARA -1.5%, INVA -1.2%, CDNA -1.1%, ACIW -1.1%, IIPR -1%
Research Calls I
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Upgrades:
- Banco Bilbao Vizcaya Argentaria (BBVA) upgraded to Hold from Reduce at Kepler
- Check Point Software (CHKP) upgraded to Outperform from Neutral at Robert W. Baird; tgt raised to $255
- EVERTEC (EVTC) upgraded to Neutral from Negative at Susquehanna; tgt raised to $30
- Freeport-McMoRan (FCX) upgraded to Buy from Hold at Jefferies; tgt raised to $48
- Kilroy Realty (KRC) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $44
- Pebblebrook Hotel Trust (PEB) upgraded to Outperform from Mkt Perform at Raymond James; tgt $14
- Spok (SPOK) upgraded to Buy from Neutral at B. Riley Securities; tgt raised to $20
- Steel Dynamics (STLD) upgraded to Peer Perform from Underperform at Wolfe Research
- Sterling Infrastructure (STRL) upgraded to Buy from Neutral at DA Davidson; tgt $185
- Triumph Financial (TFIN) upgraded to Mkt Perform from Underperform at Keefe Bruyette; tgt lowered to $74
- Westlake Corporation (WLK) upgraded to Neutral from Underweight at JP Morgan; tgt lowered to $110
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Downgrades:
- Arhaus (ARHS) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $12
- AvidXchange (AVDX) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
- Constellation Brands (STZ) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $202
- Geron (GERN) downgraded to Neutral from Buy at B. Riley Securities; tgt lowered to $2
- Global Blue (GB) downgraded to Perform from Outperform at Oppenheimer
- Goldman Sachs (GS) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt lowered to $660
- NVIDIA (NVDA) downgraded to Hold from Buy at Summit Insights
- Olin (OLN) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $28
- Sempra Energy (SRE) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $72
- Standard BioTools (LAB) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
- Taboola (TBLA) downgraded to Neutral from Buy at B. Riley Securities; tgt lowered to $4
- Taboola (TBLA) downgraded to Market Perform from Outperform at Citizens JMP
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Others:
- Certara (CERT) initiated with a Buy at TD Cowen; tgt $16
- COMPASS Pathways (CMPS) initiated with a Buy at Stifel; tgt $11
- Disc Medicine (IRON) initiated with a Buy at TD Cowen
- Hannon Armstrong Sust. Infr. (HASI) initiated with an Overweight at Wells Fargo; tgt $33
- Millrose Properties (MRP) initiated with a Buy at Goldman; tgt $25
- Plumas Bancorp (PLBC) initiated with an Overweight at Piper Sandler; tgt $60
- Sandisk (SNDK) initiated with a Mkt Perform at Raymond James
- Super Micro Computer (SMCI) resumed with an Equal Weight at Barclays; tgt $59