TheChek News Flow

>>> TradeGate Pre-Market Indications

DAX:

Deutsche Bank (DBK TH) +0.4%
Delivery Hero (DHER TH) +0.4%
RWE (RWE TH) -0.5%
- Spinoffs Back in Fashion as Investors Demand Returns: ECM Watch
Deutsche Telekom (DTE TH) -0.5%
Bayer (BAYN TH) -0.7%
Adidas (ADS TH) -0.7%
- Adidas Cuts FY Margin View on Lower-Than-Expected China Sales

MDAX:

Jungheinrich (JUN3 TH) +3.1%
- Jungheinrich 1Q Revenue Beats Estimates
Varta (VAR1 TH) +1.3%
Duerr (DUE TH) +0.7%
Lanxess (LXS TH) +0.5%
Rheinmetall (RHM TH) +0.1%
- Rheinmetall 1Q Operating Profit Beats Estimates
Telefonica Deutschland (O2D TH) -1%
K+S (SDF TH) -1.3%
RTL (RRTL TH) -2.1%
- RTL 1Q Revenue EU1.56B Vs. EU1.40B Y/y

SDAX:

SAF-Holland SE (SFQ TH) +7%
- SAF-Holland SE Boosts FY Sales Forecast
Heidelberger Druck (HDD TH) +5.2%
- HEIDELBERGER DRUCK HEIDELBERG SUCCESSFULLY CLOSES FY 2021/22
AUTO1 (AG1 TH) +2.6%
PVA TePla (TPE TH) +2.4%
Nordex (NDX1 TH) +1.5%
Schaeffler (SHA TH) +0.4%
Instone Real Estate (INS TH) -1%
Encavis (ECV TH) -1.2%

>>> What to look at today - 6th of May 2022

Stocks slid with bonds Friday and the dollar rose as inflation, rising borrowing costs and China’s Covid lockdowns depressed sentiment. An Asia-Pacific share index shed over 1.5%, sapped by the technology sector amid drops in Hong Kong and China. The overall regional loss was smaller than Thursday’s slide of more than 3.5% in the S&P 500 index and 5% in the Nasdaq 100 gauge. U.S. and European futuresdipped. Australian debt and Treasuries extended a tumble that’s lifted the U.S. 10-year yield past 3%. A dollar gauge neared a two-year high and the yuan retreated.

Risk aversion has swept away a relief rally in the wake of the Federal Reserve decision Wednesday. The U.S. central bank raised interest rates by the most since 2000 while pushing back against talk of super-sized increases.

That led to temporary respite in markets as traders pared the most aggressive rate-hike bets but sentiment quickly skidded again on the cold reality of tightening financial conditions. The war in Ukraine and China’s Covid outbreak are also stirring angst and stoking concerns about the risk of a recession. Elevated commodity prices are feeding into rising costs. West Texas Intermediate crude has topped $108 a barrel on supply concerns stemming from a European Union proposal to sanction Russian oil. Meanwhile, China reaffirmed its preference for a strategy of lockdowns to eliminate Covid despite the economic cost. Top leaders warned against questioning President Xi Jinping’s so-called Covid Zero strategy. Separately, the nation ordered central government agencies and state-backed corporations to replace foreign-branded personal computers with domestic alternatives within two years. Later Friday, the U.S. jobs report may show that rising wage costs are adding to the inflationary pressures that have been undermining market sentiment. US After Hours OPEN +13.3%, SQ +8.5%, DASH +7.6%, MELI +6.5% higher on earnings; FTDR -26.4%, CGNX -9.8%, ZG -9.4%, DLB -6.3% lower on earnings; FNKO +28% jumps on investment

Nikkei +0.53% HAng Seng -3.55% CSI -2.14% Shanghai -1.86% Shenzen -1.32%

Eur$ 1.0519 CNH 6.7126 CNY 6.6805 JPY 130.64 GBP 1.2353 CHF 0.9872 RUB 65.2146 TRY 14.8810 WTI$ 108.69 +0.40% Gold 1,877 -0.05% BTC 36,470 ETH 2,750 -0.22%

S&P +0.07% NAsdaq +0.15% EuroStoxx +0.05% FTSE -0.20% Dax +0.11% SMI +0.08%

Macro :

- ECB to Discuss Rate Hike in June, Probably Act, Holzmann Says

Keep an eye on :

- ARL GY : Aareal Boards Recommend Accepting Advent/Centerbridge Offer

- AC FP : Marriott Vacations Boosts FY Adjusted EPS Forecast

- ADS GY : Adidas and Foot Locker Announce New Long-Term Partnership

- ADS GY : Adidas Cuts FY Margin View on Lower-Than-Expected China Sales

- APAM NA : Aperam 1Q Adjusted Ebitda Meets Estimates

- IAG LN : *IAG 1Q ADJ. OPER LOSS EU754M, EST. LOSS EU521.2M

- CS FP : Axa 1Q Revenue Meets Estimates

- BAMI IM : Banco BPM to Securitize ~EU700m of Unlikely to Pay, Bad Loans

- BMPS IM : Paschi Swings to Quarterly Profit Ahead of Planned Capital Hike

- BPOST BB : Bpost 1Q Adjusted Ebitda Beats Estimates

- CTY1S FH : Citycon Narrows FY EPRA EPS Forecast

- CTT PL : CTT 1Q Net Income EU5.4M Vs. EU8.7M Y/y

- BN FP : Lactalis Could Look at Some Danone Brands: Les Echos

- DPW GY : U.S. Postal Service Posts 2Q Adjusted Loss About $1.7 Billion

- EDP PL : EDP 1Q Net Loss EU76M, Est. Loss EU43.4M (2 Est.)

- ECMPA NA : Eurocommercial 1Q Net Property Income EU40.1M Vs. EU36.0M Y/y

- FER SM : Ferrovial 1Q Ebitda Misses Estimates

- FCT IM : Fincantieri 1Q Ebitda EU118M Vs. EU101M Y/y

- FLYR NO : Flyr Offering of 208.3m Shares Prices at NOK1.2/Share

- GLPG NA : Galapagos 1Q Revenue Beats Estimates

- G1A GY : GEA Group 1Q Adjusted Ebitda Beats Estimates

- INGA NA : ING 1Q Net Income Misses Estimates, EU834m Russia Risk Costs (1)

- INW IT : INWIT 1Q Revenue Meets Estimates

- DEC FP : JCDecaux Sees 2Q Organic Adjusted Revenue Above +15%

- JUN3 GY : Jungheinrich 1Q Ebit EU77.9M Vs. EU72.1M Y/y

- KBC BB : KBC Names Frank Jansen as CEO of Irish Unit

- KRN GY : Krones 1Q Ebitda Beats Estimates

- LDO IM : Oto Melara Sale Is Not Frozen, Leonardo CEO Says

- MB IM : Caltagirone Raised Stake in Mediobanca to 5.499%: Filing

- MCLS LN : McColl’s Says Increasingly Likely be Placed Into Administration

- NOVN SW : Novartis Suspends Radioligand Therapy Production in Italy, U.S.

- RHM GY : Rheinmetall 1Q Operating Profit Beats Estimates

- RTL LX : RTL 1Q Revenue EU1.56B Vs. EU1.40B Y/y

- RUI FP : Rubis 1Q Revenue Beats Estimates

- SFQ GY : SAF-Holland SE Boosts FY Sales Forecast

- SCATC NO : Scatec 1Q Ebitda Misses Estimates

- SCR FP : Scor 1Q Net Loss EU80M Vs. Profit EU45M Y/y

- STR AV : Strabag Appoints Klemens Haselsteiner as New CEO

- TRUEB SS : Truecaller 1Q Ebit SEK175.5M Vs. SEK40M Y/y

- VIV FP : Vivendi’s Canal Plus Working on Bid for Starz Minority Stake: FT

- WDP BB : WDP to Buy Shares of WVI Joint Venture From VIB Vermogen

(BFW) Lactalis Could Look at Some Danone Brands: Les Echos

>>> Europe : Brokers Upgrades & Downgrades - 6th of May 2022

>>> Up

* Elmera Group ASA Raised to Buy at Pareto Securities

* Fastighets AB Trianon Raised to Hold at Handelsbanken

* Sievi Capital Raised to Buy at Inderes; PT 1.80 euros

* SR-Bank Raised to Buy at Arctic Securities; PT 137 kroner

>>> Down

* Addex Therapeutics Cut to Add at Baader Helvea

* Centrica Cut to Reduce at HSBC; PT 70 pence

* Peab Cut to Hold at Handelsbanken

* Rathbones Group Cut to Hold at Jefferies; PT 2,100 pence

* Sparebanken Vest Cut to Hold at Arctic Securities; PT 100 kroner

>>> Initiation

* Nexus Rated New Outperform at Exane; PT 65 euros

* Petrofac Reinstated Buy at Goldman; PT 170 pence

>>> Call

* Banco BPM Outlook Encouraging, Core Revenue Solid: Jefferies

>>> US After Hours Summary: OPEN +13.3%, SQ +8.5%, DASH +7.6%, MELI +6.5% higher

After Hours Summary: OPEN +13.3%, SQ +8.5%, DASH +7.6%, MELI +6.5% higher on earnings; FTDR -26.4%, CGNX -9.8%, ZG -9.4%, DLB -6.3% lower on earnings; FNKO +28% jumps on investment

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: IRTC +28.7%, FNKO +28% (also investor consortium, including EBAY, will make a $263 mln investment in Funko), OPEN +13.3%, VRAY +11.6%, CCXI +10%, NTRA +9.9%, SQ +8.5%, GDYN +8%, AVLR +7.9%, DASH +7.6%, PBH +7.1%, PBYI +7.1%, MELI +6.5%, PGNY +6.5%, VIR +6.5%, HUBS +6%, STEM +6%, ATEC +4.9%, PLYA +4.7%, BBDC +4.5%, ATSG +4.3%, SKT +4%, NOG +4%, TXRH +3.9%, UNM +3.8%, DBX +3.3%, RDFN +3.2%, MDRX +2.9%, SPWR +2.8%, TWST +2.8%, AL +2.6%, FND +2.4%, NKTR +2.3%, AES +2.2%, OLED +2.2%, MP +1.9%, FLT +1.7%, KTOS +1.7%, SG +1.5%, TWOU +1.5%, VTR +1.5%, WPM +1.5%, WW +1.4%, SYNA +1.3%, EGLE +1.3%, BCC +1% (also declares supplemental dividend of $2.50/sh), LYV +0.9%, LCID +0.7%, MAX +0.7%, WISH +0.6%, KWR +0.3%, OEC +0.3% (also to build only acetylene-based conductive additives plant in US), EOG +0.2%, HTA +0.1%, ILMN +0.1%, RGA +0.1%

Companies trading higher in after hours in reaction to news: BBIG +31.5% (sets date for planned business separation of Cryptyde), AES +2.2% (AES enters into renewable energy Power Purchase Agreements with AMZN), FL +0.3% (announces new long-term strategic partnership with adidas), AMZN +0.3% (AES enters into renewable energy Power Purchase Agreements with AMZN)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FTDR -26.4%, ENDP -20.8%, PRCT -20.2%, BILL -17.6%, NET -10.6%, FUBO -10%, CGNX -9.8%, ZG -9.4% (also approves an additional $1 bln share repurchase authorization), BE -9.3% (also to install 1.5MW of solid oxide fuel cells), LESL -8.9%, CFLT -8%, LAZR -6.9%, CMP -6.5%, DVA -6.5%, DLB -6.3%, AOSL -4.9%, HCC -3.7%, AMN -3.4%, BGS -3.4% (also acquires frozen vegetable ops of Growers Express), APPN -3.3%, IHRT -3.2%, CRSR -3.1%, INGN -3%, NWSA -3%, MCK -2.8%, SPCE -2.5%, YELP -2.4%, GDOT -2.3%, BECN -2.2%, SHAK -2%, VLDR -1.6% (also names new CFO), GH -1.4%, PODD -1.4% (also CEO to step down, names new CEO), TDC -1.4%, CMBM -1.1%, CLNE -1%, CABO -0.6%, ED -0.5%, SEM -0.5%, VRTX -0.5%, MNST -0.4% (also plans market wide price increase), MTZ -0.4%, SXI -0.3% (also authorizes new $100 mln share repurchase program), AEE -0.2%, MTD -0.2%, NLOK -0.2%, PRI -0.2%, SGMO -0.2%, USM -0.2%, XNCR -0.2%, ALKT -0.1%, AXNX -0.1%, COLD -0.1%, ENV -0.1%, HMN -0.1%, NFG -0.1%, PBA -0.1%, SAIL -0.1%, TVTY -0.1%, Y -0.1%

Companies trading lower in after hours in reaction to news: PTON -4.4% (exploring sale of 15-20% minority stake, according to WSJ), MUSA -0.6% (increases dividend), SONY -0.6% (FTC aiming to open investigation into SONY's $3.6 bln purchase of Bungie Gaming, according to The Information), LFG -0.2% (RSG and LFG launch joint venture to develop 39 RNG projects), TDS -0.1% (files mixed securities shelf offering)

>>> US Close Dow -3,12% S&P -3,57% Nasdaq -4,99% Russell -4,04% VIXX 31,20 +22%

Closing Stock Market Summary

The S&P 500 dropped 3.6% on Thursday in a terribly disappointing session. The Nasdaq Composite (-5.0%) and Russell 2000 (-4.0%) sold off even more than the benchmark index while the Dow Jones Industrial Average fell 3.1%.

The most startling aspect of today's session was that yesterday's huge, post-FOMC rally was wiped out within the first hour of action. Aside from an uptick into the close, there was little interest to buy the dip and a lot of interest to hedge against further downside -- the CBOE Volatility Index spiked 22.7% to 31.20.

Selling was broad-based: all 11 S&P 500 sectors closed lower with losses ranging between 1.1% (utilities) and 5.8% (consumer discretionary), all 30 Dow components closed lower, and declining issues outpaced advancing issues by an 8:1 margin at the NYSE.

The behavior of the Treasury market was one source of angst for the stock market, especially the growth stocks with the 10-yr yield rising 15 basis points to 3.07% (hit 3.10% intraday) on pestering inflation expectations. The Vanguard Mega Cap Growth ETF (MGK 202.91, -11.00) fell 5.1%.

Inflation angst was exacerbated by a larger-than-expected 11.6% jump in preliminary unit labor costs for the first quarter (Briefing.com consensus 7.3%). This transpired during a slower growth quarter, of course, in which preliminary nonfarm productivity fell 7.5% (Briefing.com consensus -2.8%).

Strikingly, there remained a disconnect between the fed funds futures market and Fed Chair Powell's rate expectations. The former, according to the CME FedWatch Tool, was assigning an 87.1% probability for a 75-basis-point hike in June despite Mr. Powell's indication of that not being actively discussed.

The 2-yr yield, which is most sensitive to changes in the fed funds rate, jumped 11 basis points to 2.72% after dropping 15 basis points yesterday. The U.S. Dollar Index rose 0.9% to 103.50. WTI crude futures increased 0.2%, or $0.23, to $108.20/bbl.

A separate source of angst was disappointing earnings and/or guidance from e-commerce companies Shopify (SHOP 413.09, -72.40, -14.9%), eBay (EBAY 48.04, -6.38, -11.7%), Etsy (ETSY 90.93, -18.40, -16.8%), and Wayfair (W 67.45, -23.31, -25.7%).

Booking Holdings (BKNG 2171.91, +68.58, +3.3%) was one of the few positives today with an observation that gross travel bookings for the summer are currently running 15% higher than in 2019. BKNG beat top and bottom-line estimates.

Reviewing Thursday's economic data:

The weekly initial claims report showed jobless claims for the week ending April 30 rising by 19,000 to 200,000 consensus 184,000). Continuing claims for the week ending April 23 decreasing by 19,000 to 1.384 million, which is the lowest since January 17, 1970.
The key takeaway from the report is that initial claims are still running near historically low levels that point to tightness in the labor market and the likely persistence of wage-based inflation pressures.

Nonfarm business sector labor productivity decreased 7.5% in the first quarter (consensus -2.8%) following a downwardly revised 6.3% increase (from 6.6%) in the fourth quarter. Unit labor costs soared 11.6% (Briefing.com consensus 7.3%) following an upwardly revised 1.0% increase (from 0.9%) in the fourth quarter. The first quarter decline in productivity is the largest since the third quarter of 1947.
The key takeaway from this report is that it's a reflection of weak economic activity and rising labor costs that threaten corporate profit margins.

Looking ahead, investors will receive the Employment Situation report for April and the Consumer Credit report for March on Friday.

Dow Jones Industrial Average -9.2% YTD

S&P 500 -13.0% YTD

Russell 2000 -16.7% YTD

Nasdaq Composite -21.3% YTD

WSJ : Peloton Seeks Minority Investment to Shore Up Business

Peloton Seeks Minority Investment to Shore Up Business

Fitness company is pursuing potential investors that could take stake of around 15% to 20%, sources say

Peloton Interactive Inc. PTON -9.09% is exploring a sale of a sizable minority stake, in an effort to shore up its business as the once-hot bike maker’s stock continues to sink.

The fitness company is targeting potential investors including industry players and private-equity firms that could take a stake of around 15% to 20%, according to people familiar with the matter. Discussions are at an early stage and there are no guarantees the New York-based company will find a taker or agree to a deal.

New capital could bolster Peloton as it attempts a major turnaround. It could also serve as a vote of confidence if it comes from an established private-equity firm or technology giant such as Amazon.com Inc., which is among the suitors that have explored a full purchase of Peloton, The Wall Street Journal earlier reported.

Peloton enjoyed high times as a pandemic darling, with homebound customers ordering its exercise equipment and streaming its virtual classes. Its valuation soared. But the company’s fortunes sagged as lockdowns eased and gyms started to fill up again.

Peloton’s value has fallen from a high of around $50 billion early last year to around $5.6 billion this week. The shares lost around 9% Thursday amid a broader market rout.

Why Peloton Spun Out: What Happened to the Bike and Treadmill Firm

WSJ : DoorDash Revenue Rose 35% Last Quarter as Consumers Continued to Order In

DoorDash Revenue Rose 35% Last Quarter as Consumers Continued to Order In

Food-delivery company’s growth slows from pandemic peaks

DoorDash Inc.’s DASH -10.40% revenue rose last quarter, showing that consumers stuck to getting food and household essentials delivered even as more restaurants and stores reopened.

Revenue for the three months ended March grew 35% to $1.46 billion from a year earlier, when fresh Covid-19 concerns caused people to hunker down. Analysts surveyed by FactSet on average had predicted $1.38 billion in revenue.

The rate of growth for the quarter marked a sharp slowdown. The company’s revenue nearly tripled year-over-year in the corresponding quarters in 2021 and 2020.

Rival Uber Technologies Inc.’s UBER -4.52% Uber Eats, which trails DoorDash in the U.S. food-delivery market, is also experiencing a slowdown. Uber Eats’ revenue growth slowed to 12% in the first quarter from nearly tripling in the same period a year earlier. Order volume grew at DoorDash and Uber Eats but orders placed on America’s third-largest food-delivery app, Grubhub, fell during the first quarter. Grubhub is up for sale less than a year after it agreed to be acquired.

DoorDash has been one of the biggest winners of the pandemic. The app’s share in the food-delivery market in the U.S. jumped to 57% in March from 44% two years ago, according to market research firm YipitData.

Analysts say the company outflanked its rivals thanks to a strong delivery network in the suburbs, a wide selection of restaurants and greater efficiency in delivering the food itself. DoorDash expanded its options during the health crisis to include grocers and convenience stores, pinging consumers as they paid for food to ask them if they also wanted household items from a nearby store.

The value of orders placed on its platform grew 25% to $12.35 billion during the quarter, beating analysts’ forecast of $11.7 billion. Order value more than tripled in the same period a year ago.

DoorDash said it expects order value in the current June quarter of between $12.1 billion and $12.5 billion, compared with Wall Street’s expectation of $12.1 billion.

The company raised its guidance on the value of orders placed on its app for the full year. It said it expects 2022 order value to be between $49 billion and $51 billion, up from the $48 billion to $50 billion it projected last quarter. Wall Street expects $49.51 billion in order value this year.

DoorDash’s future growth will depend on whether restaurants can handle demands for delivery while taking care of returning diners, particularly as restaurants struggle with staffing. Some big chains temporarily paused delivery orders when their kitchens became too busy serving dine-in customers last year.

Food-delivery prices have inched up during the pandemic, as restaurants are raising prices on apps and the apps shift new regulatory costs to consumers.

Price-sensitive consumers could weigh on growth amid a broader economic slowdown, according to a Morgan Stanley Research report. DoorDash could be in for more competition as Uber expands into U.S. suburbs, the report said, and it will take time for DoorDash to build up its international business, on which it is placing expensive bets.

DoorDash shares were down more than 40% this year as of Wednesday’s close, more than double the decline in the Nasdaq Composite Index.

The food-delivery company said Thursday that its U.S. restaurants business will continue to be the main source of cash and that the company would spend money to scale it.

Making money off food delivery has been tough despite record sales. DoorDash and Uber Eats trimmed their losses during the pandemic, but DoorDash is the only major food-delivery company that turned a quarterly net profit during the health crisis—in the second quarter of 2020.

The company’s first-quarter net loss widened to $167 million from $110 million a year earlier; analysts on average were expecting a $141 million loss.

The company was profitable on a full-year adjusted earnings basis before taxes, interest, depreciation and amortization in 2021. It posted a profit by the same measure in the most recent quarter and also forecast a profit in the current period.

Companies often point to an adjusted metric that strips the business of certain costs to show investors a path to profitability.

An important factor in DoorDash’s potential profitability going forward will be the fees it can charge consumers and restaurants, its main source of revenue.

Commissions have long been a point of contention between apps and restaurants. Big chains have used their scale to negotiate better terms compared with independent restaurants, which paid as much as 30% of an order in app fees before the pandemic.

The company began offering concessions to restaurants last year, such as allowing them to choose from a sliding commission scale of 15% to 30% of an order with varying degrees of support based on the level chosen.

Many cities temporarily capped what apps could charge during the health crisis, hurting apps’ earnings. The apps sued some cities that made them permanent.

The Information : FTC Opens Inquiry Into Sony’s $3.6 Billion Bungie Gaming Purch

FTC Opens Inquiry Into Sony’s $3.6 Billion Bungie Gaming Purchase

The Federal Trade Commission has opened an in-depth investigation of Sony’s proposed $3.6 billion takeover of Bungie, the gaming studio behind Destiny and Halo, according to people familiar with the matter. While the FTC may not be able to block the deal, its decision to review it is the latest example of how aggressive the agency is becoming in reviewing mergers.

The Bungie deal was announced at the end of January, and was part of a broader consolidation underway in the gaming industry. Two weeks earlier Microsoft had announced its blockbuster $69 billion billion purchase of Activision Blizzard. The FTC is also reviewing that transaction.

THE TAKEAWAY

• Investigation opened end of April

• Focus is on Sony’s incentive to withhold Bungie titles including Destiny

• Follows investigation intoMicrosoft’s $69 billion Activision purchase

The FTC last week sought additional information about the deal from Sony and Bungie, the people said. The FTC investigation could delay closing by six months or more, potentially pushing it into early 2023.

Both the Activision and Bungie deals were struck as the gaming industry started moving toward a subscription model, which would make exclusive games important for bringing in new subscribers. Microsoft, for example, has launched a subscription service called Xbox Game Pass while Sony plans to launch a similar offering for the Playstation. While neither Microsoft nor Sony have indicated any plans to use their proposed games to increase the number of exclusive games on their subscription services, the FTC may be concerned the gaming market will eventually move in that direction. Video-streaming services, for example, now emphasize exclusive programming.

In the inquiry, the FTC is at the moment focused primarily on whether Sony would have the incentive to hinder or completely withhold access to Bungie games from companies that offer competing consoles and services, including Microsoft’s Xbox. Agency lawyers are looking to determine whether players consider Bungie titles such as the popular first-person shooter franchise Destiny must-haves, and whether restricting access to such games would harm rival companies. Sony is a powerful player in gaming: Industry analyst Ampere Analysis estimates that Sony held 46% of the global game console market in 2021, maintaining a significant lead over Microsoft and Nintendo.

Sony has pledged to keep Bungie games available across multiple platforms. Next month, Sony plans to launch a new subscription service that will grant access to hundreds of PlayStation games but will not include the company’s most recent releases. Microsoft, by contrast, began making its newest games available at launch on its subscription service in 2018.

An FTC spokesperson declined to comment. Spokespeople for Sony and Bungie did not immediately respond for comment.

The FTC is examining the same game exclusivity issue as part of its Microsoft-Activision review. Microsoft has committed to make Activision titles available on competing consoles, including Sony’s PlayStation, but it’s less clear whether Microsoft will allow Call of Duty and other titles to be part of subscription services other than its own, such as Sony’s. Microsoft so far has not indicated its plans; two of the people familiar with the deal said the company has not decided, but the subject is expected to become a topic of negotiations between the companies and the regulator.

The FTC’s review of the Activision deal also encompasses the combined companies’ access to consumer data, as well as the labor market for game developers, The Information previously reported. It couldn’t be learned whether the FTC is investigating similar issues in the Sony deal.

The FTC’s Mergers II team, which focuses on deals involving hardware, software and entertainment companies, is conducting both merger reviews.

The decision to open an investigation of the Bungie acquisition is yet another sign that FTC Chair Lina Khan is looking closely at mergers in the technology sector. Still, while the bar to opening a probe is virtually nonexistent, it’s an entirely different matter to convince a federal judge to block a deal.

Both the FTC and the Department of Justice are currently working on a new policy for reviewing deals that could potentially make the process more difficult for companies but it would not have the force of law. And while several bills introduced in Congress in the past year would in some instances outright ban many large deals, there is little chance they will be signed into law anytime soon.