Adobe Leads Day Of Breakups

Most of today’s stories were related to hookups in the market, but we also need to touch on some major breakups. 💔

The first and most prevalent news story was that Adobe and Figma have called off their $20 billion acquisition. The two companies have faced intense scrutiny from European regulators, today saying, “There is no clear path to receive necessary regulatory approvals from the European Commission and the U.K. Competition and Markets Authority.”

Adobe first announced it would acquire cloud-based design tool Figma in September 2022 in an all-cash-and-stock deal. Although it said the acquisition would be a natural complement to its portfolio, regulators argued it was anti-competitive by reducing consumer options to an unacceptable level.

As such, the two companies have decided to part ways, with Adobe paying Figma the $1 billion “breakup” fee it agreed to. 💵

Next up, gene sequencing company Illumina said it would divest cancer diagnostic test maker Grail after two years of fighting with regulators and activist investor Carl Icahn. The deal was heavily scrutinized by European Regulators, who hammered Illumina for completing the acquisition without seeking regulatory approval first. 🧬

It had first spun off Grail in 2016 and reacquired it in 2021 despite competition concerns. Now, its $7.1 billion deal must be undone, and the company will be sold off by the second quarter of 2024.

Next up, the Farfetch and Richemont breakup is continuing, with the luxury clothing and beauty e-commerce platform securing a lifeline from South Korea’s Coupang Inc. It will lend Farfetch $500 million, buy the assets, and delist the company’s shares from public markets. JPMorgan Chase has been hired to run a marketing process for all of Farfetch’s assets. 🛒

Ultimately, the company’s common shareholders will be wiped out if this deal goes through. It comes after a proposed tie-up between Farfetch and Swiss Cartier owner Richemont (its largest holder) failed to materialize, with the company also declining to invest or lend more capital.

And lastly, while not a breakup, SunPower issued its delayed 10-Q filing, breached a credit agreement, and said there is “substantial doubt” about its ability to continue operating. With shares falling 31%, we guess shareholders are breaking up with the company. Several solar stocks received analyst downgrades on the news. 🌦️

A Chip Off The Holiday News Flow

It’s a slow week in the market, but as usual, there’s some news out of the semiconductor space. Let’s take a look. 👀

First up is Israel granting Intel $3.2 billion to support the company’s biggest investment in the country. Intel will not only build a $25 billion factory that creates thousands of jobs but will also buy $16.6 billion in goods and services from Israeli suppliers over the next decade. It is anticipated that the plant will open in 2028 and operate through at least 2035. 🏭

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Nio & Nikola’s Never-Ending Story

No matter the day, there seems to be an endless stream of electric vehicle (EV) industry news. Let’s get into today’s headlines. 📰

First up is China’s Nio, which just received an additional $2.2 billion investment from Abu Dhabi’s CYVN Holdings, which raised its stake to 20.1%. The fund had last invested in Nio during July, with a $1 billion investment. 

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DWAC Bounces Back (Again)

We mentioned last week that investors were preparing for a politically driven 2024, and boy, that accelerated quickly. 😜

Trump-linked stocks Digital World Acquisition Corp, Phunware, and Rumble jumped sharply today after Ron DeSantis canceled his presidential run.

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Only Some EV-Makers Delivered

Electric vehicle (EV) manufacturers came out with their fourth-quarter delivery numbers today, sending their stocks all over the place. 📊

First, let’s start with everyone’s favorite, Tesla, which delivered mixed news to investors. It managed 1.81 million EV deliveries around the globe in 2023, meeting its full-year guidance and narrowly topping the consensus estimates. That was up 38% YoY but slowed from 2022. 

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