Archives for February 2021

Uber will bring the booze after acquiring Drizly for $1.1B

NEW YORK (AP) — Uber is bringing the booze.

The mobile ride-hailing company said Tuesday that it is acquiring the alcohol-delivery platform Drizly for $1.1 billion in stock and cash. Uber expects more than 90% of the consideration to be paid to Drizly stockholders in shares of Uber common stock and the remainder paid in cash.

Boston-based Drizly formed about eight years ago and delivers alcohol in 26 U.S. states where it is legal. Drizly says it partners with retailers in 1,400 cities to deliver beer, wine and spirits to customers through its mobile app.

Upon closing of the deal, expected in the first half of this year, Drizly will become a wholly owned subsidiary of Uber. The companies said that Drizly’s marketplace will be integrated with the Uber Eats app, while keeping a separate Drizly app.

Shares in San Francisco-based Uber jumped more than 8% in morning trading, to $57.14.

Stocks give up earlier gains, Google’s parent company jumps

Stocks gave up their early gains in mid-morning trading Wednesday, as investors turn their focus to some strong earnings reports from Big Tech companies and hopes for getting more economic stimulus passed in Washington.

Investors also continue to watch shares of beaten-down companies such as GameStop and AMC Entertainment, which have been the target of a community of online investors. Both stocks were up modestly in early trading, after plunging sharply the last two days.

The S&P 500 was down 0.2% as of 10:40 a.m. Eastern. The Dow Jones Industrial Average was down 0.5% and the Nasdaq Composite, which is weighed by big technology companies, was was down 0.2%.

Google’s parent company, Alphabet, jumped more than 7% after reporting a blowout quarter as its digital advertising machine regained momentum.

It’s a technology-heavy week for earnings. After the closing bell, investors will get results from technology giant Cisco Systems as well as payments behemoth PayPal.

Meanwhile shares of Amazon were down less than 1% despite the company reporting a huge rise in quarterly profits as well as the news that its founder and CEO Jeff Bezos would be stepping down as CEO to focus on broader work at the company.

With Democrats and Republicans remaining far apart on support for President Joe Biden’s $1.9 trillion stimulus package, investors are betting that the administration will opt for a reconciliation process to get the legislation through Congress.

Shares in GameStop and other recent high-flying stocks hyped by online traders were up modestly, with GameStop up 1% and AMC up 5%. The stocks have been caught up in a speculative frenzy by traders in online forums and on social media who seek to inflict damage on Wall Street hedge funds that have bet these stocks would fall.

GameStop plunged 60% to $90 a share on Tuesday, and AMC Entertainment lost 41.2% to $7.82 a share. Both companies have been in the spotlight for more than two weeks as the online community of investors pushed the stocks to astronomical levels.

GameStop, whose shares have traded mostly on investor opinion instead of actual company news, announced it was hiring a new chief technology officer which could be a reason for some investors to be buying shares Wednesday.

Investors also had some economic reports to work through. A gauge of the service sector, where most Americans work, came in at its highest level in almost two years last month. The measure published by the Institute for Supply Management climbed to 58.7% in January, up a full percentage point from the previous month.

Meanwhile a report on private sector hiring by payroll data company ADP showed employers hired 174,000 workers in January, which was much better than economists expected.

Study: Russia’s Sputnik V vaccine appears safe, effective

MOSCOW (AP) — Russian scientists say the country’s Sputnik V vaccine appears safe and effective against COVID-19, according to early results of an advanced study published Tuesday in a British medical journal.

The news is a boost for the vaccine, which governments around the world increasingly are purchasing in the race to stop the devastation caused by the coronavirus pandemic.

Researchers said that based on a fall trial involving about 20,000 people in Russia, the vaccine is about 91% effective and appears to prevent inoculated individuals from becoming severely ill with COVID-19. But it is unclear if Sputnik V can stop transmission. The study was published online Tuesday in The Lancet.

Scientists not linked to the research acknowledged that the speed at which the vaccine was made and rolled out had brought criticism of the Russian effort’s “unseemly haste, corner cutting and an absence of transparency.”

“But the outcome reported here is clear,” British scientists Ian Jones and Polly Roy wrote in an accompanying commentary. “Another vaccine can now join the fight to reduce the incidence of COVID-19.”

The vaccine was approved by the Russian government with much fanfare on Aug. 11. President Vladimir Putin personally broke the news on national television and said one of his daughters had already received it. At the time, the vaccine had only been tested in several dozen people, and the move elicited criticism from experts both at home and abroad.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund that bankrolled the development of the shot, called the study in The Lancet “check and mate to the critics of the Russian vaccine.”

“Russia was right from the very beginning,” he said.

Outside Russia, Sputnik V has received authorization in over a dozen countries, according to the fund — including the former Soviet republics of Belarus, Armenia and Turkmenistan; Latin American nations including Argentina, Bolivia and Venezuela; African nations such as Algeria as well as Serbia, Iran, Palestine and UAE.

Batches of the vaccine have already been supplied to six countries. In all, more than 50 countries have submitted applications for 2.4 billion doses, an RDIF spokesman told The Associated Press.

The latest study is based on research involving about 20,000 people over 18 at 25 hospitals in Moscow between September and November, of whom three-quarters got two doses of the Russian vaccine 21 days apart and the remainder got placebo shots.

Serious side effects were reported rare in both groups and four deaths were reported, although none were considered to be the result of the vaccine.

The study included more than 2,100 people over age 60 and the vaccine appeared to be about 92% effective in them. The research is ongoing, but Russia’s Health Ministry said in December it was cutting the size of the study from the planned 40,000 subjects to about 31,000 already enrolled volunteers, with developers citing ethical concerns about using placebo shots.

The Russian vaccine uses a modified version of the common cold-causing adenovirus to carry genes for the spike protein in the coronavirus as a way to prime the body to react if COVID-19 comes along. That’s a similar technology to the vaccine developed by AstraZeneca and Oxford University. But unlike AstraZeneca’s two-dose vaccine, the Russians used a slightly different adenovirus for the second booster shot.

“This aims to drive higher immune responses to the target ‘spike’ by using two slightly different jabs,” said Alexander Edwards, an associate professor in biomedical technology at Britain’s University of Reading, who was not connected to the Russian research. He said if you have two identical shots, it’s possible the immune system doesn’t get as big a boost from the second injection.

Roy, a professor of virology at the London School of Hygiene and Tropical Medicine, said there should no longer be any doubts about the Russian vaccine. She said the high level of antibodies produced by Sputnik V suggest that it could also protect against some of the new COVID-19 variants that have been detected recently, but more studies are needed to verify that.

“Initially, I had some concerns about what they were saying and thought they were getting too much publicity, but the data are now very strong,” Roy said.

Sputnik V was rolled out in a large-scale vaccination campaign in Russia in December, with doctors and teachers the first in line. Last month, Putin ordered mass immunizations to start.

In early January, the Russian Direct Investment Fund said over 1 million Russians had already been vaccinated. Some Russian media questioned the number, suggesting that the rollout had been much slower, with many Russian regions reporting small numbers of vaccinations.

The production of Sputnik V will span several countries, including India, South Korea, Brazil, China. “We will also manufacture vaccines in Kazakhstan, develop (production) in Belarus, in Turkey, and possibly even in Iran,” Dmitriev said, adding that the production in China will start at the end of the month.

Algeria will begin producing the Sputnik V vaccine “within the coming weeks,” Kamel Mansouri, the head of Algeria’s national agency for pharmaceuticals, said Tuesday. The first batch of 50,000 doses arrived in Algeria last week.

The European Medicines Agency said the developers of Sputnik V recently asked for advice on what data they needed to submit for the vaccine to be licensed across the 27-nation European Union.

Hungary’s first shipment of Sputnik V — 40,000 doses — arrived on Tuesday, Foreign Minister Peter Szijjarto said on Facebook. Hungary expects to get enough Sputnik V vaccine to treat 1 million people in the next three months.

Hungarian health authorities were the first in the EU to approve the vaccine on Jan. 21, but the National Public Health Center must still give its final approval before shots are distributed to the public.

The minister took the opportunity to blast the EU’s own vaccination rollout, which has been much slower than ones in Israel, Britain or the United States.

“Brussels’ centralized vaccine procurement has been a failure, which has risked the lives of Europeans and the swiftest restarting of the European economy,” Szijjarto said.

“We were the first, but we probably won’t be the only ones” in the EU to consider using Russian and Chinese COVID-19 vaccines, he added.

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Maria Cheng reported from Toronto. Associated Press writers Aomar Ouali in Algiers, Algeria, Lori Hinnant in Paris and Justin Spike in Budapest, Hungary, contributed.

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Follow all of AP’s pandemic coverage at https://apnews.com/hub/coronavirus-pandemic,https://apnews.com/hub/coronavirus-vaccine and https://apnews.com/UnderstandingtheOutbreak

Google’s rebounding ad revenue spells big 4Q for Alphabet

SAN RAMON, Calif. (AP) — Google’s digital advertising empire is regaining the momentum it lost during the pandemic’s early stages as its YouTube video service matures into a major marketing magnet and other companies pour more into promotions aimed at cooped-up consumers with money to spend.

The comeback highlighted the latest quarterly results released Tuesday by Alphabet Inc., Google’s corporate parent.

As usual, Alphabet generated all but a small fraction of its revenue from Google’s internet-leading ad network, while other companies in its portfolio were mostly a financial drain.

Alphabet earned $15.2 billion on revenue of $56.9 billion during the October-December period, a showing that easily outstripped the projections of Wall Street analysts. The Mountain View, California, company also disclosed that a change to account for Google’s computer servers and other equipment lasting longer than expected could boost its operating results this year by as much as $2.1 billion

Investors hailed the news by driving up Alphabet’s stock price by more than 7% in extended trading. That sets up the shares to hit a new all-time high during Wednesday’s regular session.

Google’s fourth-quarter ad revenue totaled $46.2 billion, a 22% increase from the same time in the previous year. The growth in the past quarter surpassed the 10% year-over-gain in Google’s ad revenue during the July-September period.

Those increases came after Google’s ad revenue fell 8% during last year’s April-June period that unfolded after most of the U.S. economy had shut down. That marked the first time Google’s quarterly ad revenue had ever declined from the previous year since the company went public in 2004.

“It was a great end to a challenging year,” Ruth Porat, Alphabet’s chief financial officer, told analysts during a conference call. “We feel really good about the level of activity” among advertisers.

When the pandemic first hit, advertisers clamped down on the spending, especially airlines, hotels, cruise lines and other businesses tied to travel. But advertising in those sectors are now recovering in anticipation people will be itching to hit the road later this year, although the travel and hospitality marketing still remains down by 30% to 40% from the pre-pandemic levels, according to a recent analysis by Canaccord Genuity.

While people haven’t been traveling as frequently or as far as they once did, they are watching more video streamed over the internet than ever. That trend has helped attract even more eyeballs to YouTube, a phenomenon that is spurring more advertising on the world’s most watched video site.

Advertising on YouTube during the past quarter rose 46% from the previous year to $6.9 billion.

Things are expected to get even better for Google from here, assuming the COVID-19 vaccines ease the pandemic and enable the economy to reopen as the year progresses. Canaccord Genuity is projecting this year’s worldwide spending on digital ads will climb 15% to $389 billion. That is more in line with the industry’s annual growth during the past decade, except last year when digital ad spending rose by just 8% because of the recession triggered by the pandemic.

Google is well positioned to continue to capture the largest portion of the digital ad market, although it faces a potential challenge to its dominance from several lawsuits filed by the U.S. Justice Department and state attorneys general seeking a court order that could either break up the company or impose reforms undercutting its power.

But the main antitrust case brought by the federal government isn’t scheduled to go to trial until September 2023, leaving Google plenty of time to try to grab an even bigger piece of the advertising pie.

Big Tech leads stocks to broad gains; GameStop, AMC tank

Big Tech companies and banks helped power a broad rally on Wall Street Tuesday, though shares in GameStop and other recent high-flying stocks hyped by online traders plunged.

The S&P 500 rose 1.4%, extending gains from a day earlier, as investors sized up the latest batch of company earnings reports. Rising crude oil prices and solid earnings results helped lift energy companies, including Exxon Mobil and Marathon Petroleum. Treasury yields rose and the VIX, a measure of fear in the market, fell sharply, a sign volatility was easing.

The wave of buying coincided with a skid in GameStop and AMC Entertainment, stocks that have been caught up in a speculative frenzy by traders in online forums and on social media who seek to inflict damage on Wall Street hedge funds that have bet these stocks would fall. The price of silver, which spiked 9% Monday, fueling speculation the precious metal was also being hyped up by online traders, sank by more than 10%.

“Certainly, there’s been some profit-taking in these names,” said Ross Mayfield, investment strategist at Baird. “You saw with silver, there was an attempt to try a similar cornering of the market, and that didn’t even last two days.”

The S&P 500 index rose 52.45 points to 3,826.31. The Dow Jones Industrial Average gained 475.57 points, or 1.6%, to 30,687.48. The tech-heavy Nasdaq composite climbed 209.38 points, or 1.6%, to 13,612.78. The Russell 200 index of smaller companies also rose, adding 25.28 points, or 1.2%, to 2,151.44. The major indexes remain near their all-time highs set last month.

Treasury yields rose in another sign of investor confidence. The yield on the benchmark 10-year Treasury note rose to 1.10% from 1.06% late Monday.

GameStop plunged 60% to $90 a share, and AMC Entertainment lost 41.2% to $7.82 a share. Both companies have been in the spotlight for more than two weeks as an online community of investors pushed the stocks to astronomical levels.

Trading in those and several other stocks have been restricted by the popular online trading platform Robinhood since last last week following the bouts of extreme volatility. Robinhood needed to secure funding in order to meet deposit thresholds required by organizations that handle the trading orders placed by investors on its platform.

Robinhood eased some of the trading limits on GameStop and select other stocks Tuesday. For example, it now allows users to buy up to 100 shares and options contracts in GameStop and 1,250 in AMC. On Monday, the brokerage was limiting users to 5 shares in GameStop and 75 in AMC.

An online army of traders using the online site Reddit banded together for the past two weeks to snap up shares of GameStop, AMC and other struggling chains, stocks that have been heavily shorted (bets that the stock will fall) by a number of hedge funds. In the process, they’ve done heavy damage to those hedge funds in a stunning reversal of financial power on Wall Street.

But it’s not clear how much longer the Reddit traders can hold the line. Intense media and Wall Street interest pushed many traders into these stocks late last week, with GameStop going as high as $483 last Thursday. They began trading this year at just over $17 a share. The huge run-up in the stock price appears to have little to do with the future prospects of the mall-based retailer, which has been losing money consistently.

While a lot of people seem to be holding a line on some of these positions, the broader market is not showing many signs of strain because of it, said Darrell Cronk, chief investment officer of Wells Fargo Wealth and Investment Management.

“I hope the markets are moving away from some of the issues it dealt with last week and focusing on more of the true fundamentals,” Cronk said.

Uber rose 7% after the company said it would buy liquor delivery service Drizly for $1.1 billion in cash and stock. Solid earnings reports helped lift shares for several companies. Lab equipment maker Waters rose 8.4% for the biggest gain in the S&P 500 after easily beating analysts’ fourth-quarter profit and revenue forecasts. Exxon rose 1.6% and Marathon Petroleum rose 3.9%.

Investors continue to focus on Washington. President Biden invited 10 moderate Republicans to the White House to discuss his proposed $1.9 trillion economic aid plan. Republicans earlier countered with an offer of $600 billion, or less than one-third of Biden’s proposed amount.

Investors bid up stocks heading into 2021 in expectation the rollout of coronavirus vaccines would allow global business and travel to return to normal. That optimism has been dented by infection spikes and disruptions in vaccine deliveries.

Archives for February 2021

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