TheChek News Flow

After Hours Summary: SONO +16.8%, ZG +10.8%, PI +9.7%, IRBT +8.6% jump on strong earnings; ELY -10.1%, QLYS -5.5%, UBER -4.8%, MGM -3.6% fall on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SONO +16.8%, TLND +15.7%, ZG +10.8% (also to acquire ShowingTime for $500 mln), PI +9.7%, IRBT +8.6%, NTB +7.5%, PGRE +5.5%, CINF +4.7%, ZNGA +4.4%, NVST +2.8%, TTGT +2.8%, CXW +2.5%, MFC +2.4%, RUSHA +2.3%, XPO +2.2%, EXEL +2%, PAYC +1.6%, EQR +1.5%, KGC +1.5%, TRMB +1%, AVLR +0.8%, VNDA +0.6%, RP +0.6%, COHR +0.6%, ACLS +0.5%, STAG +0.5%, CPA +0.4%, WTS +0.3%, EQC +0.2%, DCP +0.1%

Companies trading higher in after hours in reaction to news: MVIS +46.8% (announces progress on its automotive Long Range Lidar A-Sample), DMTK +25.5% (enters into agreement with BCBS of Texas), AMKR +8.7% (to be added to the S&P MidCap 400), HNI +5.7% (to be added to the S&P SmallCap 600), TVTX +3.8% (stock offering), BLDP +3.6% (BLDP signs non-binding MOU with GTLS for heavy-duty mobility onboard hydrogen solutions), IRDM +1.9% (announces $300 mln stock buyback auth), GTLS +1.6% (BLDP signs non-binding MOU with GTLS for heavy-duty mobility onboard hydrogen solutions), MA +1.1% (to begin supporting select cryptocurrencies on its network this year), CRTX +1% (promotes Chris Lowe to COO and CFO), MSBI +1% (to acquire ATG Trust Company), NCNO +0.8% (CRM discloses 11.7% stake in NCNO), RGP +0.5% (forms a new Digital Technology Practice in the Asia Pacific region), APPH +0.4% (stock offering), WPM +0.1% (exceeds 2020 production guidance midpoint and provides 2021 and long-term outlook), SNOW +0.1% (Jennison Assoc discloses 7.2% stake), BIP +0.1% (to acquire Inter Pipeline)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FLDM -16.8% (also announces collaboration with PLT Tech in China), ELY -10.1%, QLYS -5.5% (also CEO to take medical leave of absence; also authorizes additional $100 mln share repurchase program), ATUS -4.8%, UBER -4.8% (also says it remains on track to turn EBIDTA positive in 2021), ENS -4.2%, BLBD -3.8%, MGM -3.6%, LUMN -3.5%, MC -3.5% (also increases dividend by 44%), MOH -3.3%, HIBB -2.2% (raises 4Q20 EPS guidance above consensus, comps +21.9%), WU -2.1% (also increases dividend), EFX -1.5%, ASGN -1.4%, AZRE -1.4%, CERN -1.3%, BHF -1% (also announces $200 mln stock buyback auth), REXR -0.8%, WH -0.8%, FR -0.7%, HR -0.6% (also increases dividend), NLY -0.6%, ORLY -0.3% (also announces additional $1 bln share repurchase program; Q4 comps +11.2%), PDM -0.2%, TRUP -0.2%, EQIX -0.1% (also increases dividend)

Companies trading lower in after hours in reaction to news: KDMN -7.3% (convertible notes offering), ONTX -6.9% (stock offering), TXMD -6% (stock offering), WSR -2.6% (increases dividend), AMK -1.8% (reports January-end platform assets), ARCC -1.4% (stock offering), THS -1.3% (comments on JANA Partners 13D filing and nomination of director candidates), APLT -1.1% (stock offering), VIAV -0.9% (announces planned manufacturing capacity expansions), EMKR -0.7% (stock offering), VECO -0.6% (Paradigm Capital Mgmt discloses 5.51% stake), GMAB -0.3% (SGEN and GMAB submit BLA to FDA seeking accelerated approval for tisotumab vedotin), CSX -0.3% (increases dividend), TRNO -0.3% (stock offering), GILD -0.2% (announces findings from new analysis of ZUMA-1 trial of Yescarta), BBY -0.2% (planning some layoffs, according to WSJ), TTD -0.2% (Jennison Assoc discloses 5.3% stake (prior 4.7%)), ARI -0.1% (authorizes $150 mln increase to share repurchase plan)

Closing Stock Market Summary

The Dow Jones Industrial Average (+0.2%) eked out a closing record high on Wednesday, while the S&P 500 (-0.03%), Nasdaq Composite (-0.3%), and Russell 2000 (-0.7%) closed lower after setting intraday record highs early in the session. 

The market's highs came shortly after the open, as investors remained confident in the growth prospects of the economy, but the market quickly descended into negative territory amid a sense that stock prices had increased too much, too fast. The S&P 500 went from a 0.5% intraday gain to a 0.7% intraday decline in about 45 minutes. 

Price action stabilized, and the benchmark index wavered around its flat line for the rest of the session. The energy (+1.8%), communication services (+0.6%), and real estate (+0.6%) sectors advanced the most today, while the consumer discretionary sector (-0.9%) underperformed amid profit-taking weakness in Tesla (TSLA 804.82, -44.64, -5.3%). 

In the afternoon, Fed Chair Powell reiterated in a speech that interest rates will remain near zero until the Fed achieves its dual mandate of maximum employment and a 2.0%+ inflation rate over time. Mr. Powell added that the central bank will maintain its $120 billion in asset purchases per month.

On a related note, total CPI was up 0.3% m/m in January (Briefing.com consensus 0.4%), and Core CPI, which excludes food and energy, was unchanged (Briefing.com consensus 0.2%). Core CPI decelerated to 1.4% from 1.6% in December. While the CPI data isn't the Fed's preferred inflation gauge, it still signaled muted inflation pressure for consumers. 

The 10-yr Treasury note yield decreased two basis points to 1.13% after trading at 1.17% prior to the data. The 2-yr yield decreased two basis points to 0.10%. The U.S. Dollar Index finished little changed at 90.43. WTI crude futures increased 0.6%, or $0.36, to $58.71/bbl.

Separately, Coca-Cola (KO 49.60, -0.10, -0.2%), Cisco (CSCO 47.24, -1.26, -2.6%), and General Motors (GM 54.88, -1.18, -2.1%) closed lower despite beating earnings estimates, while Twitter (TWTR 67.77, +7.90, +13.2%) and Lyft (LYFT 56.21, +2.57, +4.8%) pleased investors with their results and commentary. 

Reviewing Wednesday's economic data:

• Total CPI for January was up 0.3% m/m ( consensus 0.4%) following a downwardly revised 0.2% increase (from 0.4%) in December. Core CPI, which excludes food and energy, was unchanged ( consensus 0.2%) after also being revised to unchanged (from 0.1%) in December. On a year-over-year basis, total CPI held steady at 1.4%, yet core CPI decelerated to 1.4% from 1.6% in December.
  • The key takeaway from the report is that it shows all is still mostly quiet on the inflation front as far as the Fed is concerned, which implies to the market that it can continue to count on the Fed not to run interference with its rally effort by raising rates or tapering its bond purchases prematurely.
• Wholesale inventories increased 0.3 m/m in December (consensus +0.1%) following a revised 0.1% increase in November (from 0.0%).
• The weekly MBA Mortgage Applications Index decreased 4.1% following an 8.1% increase in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report on Thursday. 

• Russell 2000 +15.6% YTD
• Nasdaq Composite +8.4% YTD
• S&P 500 +4.1% YTD
• Dow Jones Industrial Average +2.7% YTD

Gapping down
In reaction to earnings/guidance:

• CPSI -13.4%, AYX -8.2%, AKAM -7% (also announces organizational changes), ATEN -6%, CSCO -4.7% (also raises dividend), PAA -4.6%, CDAY -3.6%, G -3.1% (also announces $500 mln increase to share repurchase auth; and 10% dividend increase), MTW -2.9%, VOYA -2.7%, FMC -2.5%, EQNR -1.8%, NGL -1.5%, FISV -1.5%, AIZ -1.3%, TPB -1.2%, IPG -1.1%

Other news:

• HCCI -13.7% (collaborates with Romeo Power (RMO) to invest in battery recycling)
• SAVA -12.7% (entered into a definitive agreement with several healthcare-focused and other institutional investors for the purchase of 4,081,633 shares of its common stock, at a purchase price of $49.00/share, for gross proceeds of ~$200.0 mln, in a registered direct offering)
• LMB -11.9% (prices offering of 1,783,500 shares of its common stock at a price to the public of $12.00/share)
• ENLV -10.8% (increases size of the previously announced offering of 2,296,107 ordinary shares at $20.00 per ordinary share)
• HOFV -9.9% (prices offering of 12,244,897 shares of common stock at $2.45 per share)
• VNRX -9.1% (stock offering)
• XONE -7.2% (stock offering)
• BLDP -4.8% (announces $350 mln bought deal offering)
• AUTL -4.3% (prices offering of 14,285,715 ADSs at $7.00 per ADS)
• ASRT -2.5% (prices offering of 35 mln shares of common stock at $0.98 per share)
• ITRM -1.8% (prices offering of $17.5 mln shares of common stock at $2.00 per share)

Analyst comments:

• QLYS -2.8% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
• CRSR -2.6% (downgraded to Neutral from Buy at Goldman)
• SPCE -1.5% (downgraded to Neutral from Buy at UBS)
• CHUY -1.2% (downgraded to Mkt Perform from Outperform at Raymond James)

Gapping up
In reaction to earnings/guidance:

• VERU +16.9%, MODN +15.5%, LYFT +11.5%, USNA +11.3% (also authorizes $150 mln share repurchase program), MESA +8.9%, TWTR +7.3%, STEP +7.3%, INMD +7.2%, CRTO +7%, MCFT +6.9%, ENPH +6.6%, OI +6.2%, RICK +5.8%, CCK +5.8%, URBN +5.7%, UAA +5.5%, CCJ +5%, GPRE +4.8%, ACGL +4%, BG +3.4%, MAT +3.3%, ARCC +2.7%, YELP +2.6%, TWO +2.5%, IQV +2.3%, EXTR +2%, KO +2%, DCPH +1.9%, RPD +1.7%, THC +1.6%, TEVA +1.4%, BW +1.3% (also announces stock offering), TM +1.3%, CDW +1.3%, PAG +1.1%, BDC +1.1%, QGEN +1%, TMHC +1%

M&A news:

• NEPT +48.7% (acquires controlling interest in Sprout Foods)
• ACIC +40.6% (Archer to list on NYSE through merger with Atlas Crest Investment Corp)
• CMLF +38.3% (agrees to combine with Sema4)
• EGOV +13.7% (Tyler (TYL) will acquire all outstanding shares of NIC in an all-cash transaction valued at ~$2.3 bln)
• FRX +12.9% (Forest Road Acquisition: The Beachbody Company to become a public company through three-way merger with Forest Road Acquisition and Myx Fitness Holdings)
• MTCH +3.6% (to acquire Hyperconnect for $1.725 bln in cash and stock)
• FGNA +2.3% (enters into combination agreement with Opportunity Financial)

Other news:

• GMDA +44.6% (presents Phase 3 data on omidubicel; anticipates BLA submission in 2H21)
• GNFT +31.9% (positive results from the Ph 2 clinical trial evaluating elafibranor)
• PTN +11.3% (files international patent application claiming PL9643)
• ABCL +10.6% (Eli Lilly and AbCellera (ABCL) receive FDA emergency use authorization for COVID-19 for bamlanivimab administered with etesevimab)
• CAN +8.1% (announces improved revenue visibility for 2021; says it should help company achieve profitable growth for the long run)
• KALV +7.6% (stock offering)
• OBSV +4.6% (provides business outlook for 2021; expects NDA submission for Yselty for uterine fibroids in Q2)
• ONCR +4.2% (stock offering)
• FCEL +3.4% (filed a prospectus supplement for the offer and sale of ~964K shares of common stock issuable upon the exercise of the Series C warrants to purchase common stock previously issued)
• VLDR +3.2% (announced a five-year sales agreement to provide Ultra Puck sensors to ThorDrive, an autonomous technology company)
• MREO +3% (pricing of an underwritten public offering of 34,500,000 American Depositary Shares at a public offering price of $2.90 per ADS)
• LADR +2.6% (new CFO)
• PSN +2.2% (wins US Army contract)
• FULT +1.7% (approves $75 mln stock repurchase program)
• KTOS +1.3% (stock offering)
• IVZ +1.3% (reports Jan AUM data)
• LLY +1.3% (Eli Lilly and AbCellera (ABCL) receive FDA emergency use authorization for COVID-19 for bamlanivimab administered with etesevimab)
• SRG +1.2% (new CEO)
• WYNN +1% (WynnBET receives conditional approval for online sports betting in Tennessee)
• BNTX +1% (provides update on vaccine production in Marburg)

Analyst comments:

• DNLI +5.6% (upgraded to Overweight from Neutral at Cantor Fitzgerald)
• HAIN +3.9% (upgraded to Overweight from Neutral at Piper Sandler)
• FCX +2.4% (resumed with an Overweight at JP Morgan)
• JWN +2.3% (upgraded to Buy from Hold at Gordon Haskett)
• DCPH +1.9% (upgraded to Outperform from Mkt Perform at SVB Leerink)
• GT +1.9% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
• BLKB +1.4% (upgraded to Buy from Hold at The Benchmark Company)

Early premarket gappers

• Gapping up:
  • NEPT +88.9%, GMDA +41.6%, FRX +28.3%, GNFT +26.7%, MODN +14%, ABCL +13.8%, CAN +13.3%, LYFT +12.8%, KALV +10%, USNA +9.1%, MESA +8.6%, ENPH +7.4%, STEP +7.3%, URBN +6.9%, ASRT +6.8%, OI +6.2%, RICK +5.8%, CCK +5.8%, BG +5.4%, SRG +4.7%, TWTR +4.3%, ONCR +4.2%, MTCH +3.9%, RRR +3.7%, OBSV +3.6%, YELP +3.1%, TM +2.8%, ACGL +2.7%, TWO +2.6%, KTOS +2.5%, LLY +2.1%, MAT +2.1%, DCPH +1.9%, RPD +1.9%, FULT +1.7%, BNTX +1.6%, THC +1.6%, MRNA +1.1%, TAK +1.1%, QGEN +1.1%
• Gapping down:
  • CPSI -13.4%, SAVA -12.7%, HOFV -10.9%, ENLV -10.4%, LMB -9.8%, AYX -9.1%, VNRX -8.5%, AKAM -7.9%, XONE -7.3%, CDAY -6.9%, PEAK -5%, CSCO -4.7%, MREO -4.3%, NCR -4.2%, BLDP -3.4%, MTW -3.2%, ITRM -3.1%, PAA -3.1%, AIZ -3%, VOYA -2.7%, FMC -2.5%, AUTL -2.1%, ATEN -2.1%, CDAK -2%, FISV -1.3%, EXTR -1.3%, G -1.3%, WELL -1%