Trading Stocks Trilogy-1: The Psychology

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Sears’ unsecured creditors get their day in court today, protesting Eddie Lampert’s $5.2B transaction to buy the 126-year-old retailer out of bankruptcy through his hedge fund ESL Investments – the only deal that would stave off liquidation. In a litany of filings that piled up over the past two weeks, they have accused Sears’ (OTCPK:SHLDQ) Lampert of everything from “stealing assets” to “years of misconduct” that reads like a Shakespearean tragedy.

General Motors is expected to begin the next round of layoffs today, according to the Detroit Free Press. The automaker is estimated to have as many as 5,750 white-collar workers that need to be eliminated as part of the slimming down process. Analysts have been fairly supportive of GM‘s new focus on restructuring the business amid the shift to electric vehicles and autonomous services.

Beating out a joint bid from Pratt & Whitney (NYSE:UTX) and Honeywell (NYSE:HON), General Electric (NYSE:GE) has secured a $517M contract to build engines for the U.S. Army’s next generation of helicopters. T901 engines will be supplied for Boeing AH-64 Apaches (NYSE:BA) and Sikorsky UH-60 Black Hawks (NYSE:LMT), replacing an older GE-built model – the T701 – which currently powers the two vehicles. The T901 could also “potentially outfit the Army’s next generation reconnaissance helicopter in the Future Vertical Lift family of systems,” GE Aviation CEO Tony Mathis said in a statement.

The New England Patriots beat the Los Angeles Rams 13-3 on Sunday in the lowest scoring Super Bowl ever, capturing the NFL championship for a record-tying sixth time and cementing their dynasty of nearly two decades. Casinos and sports betting providers likely saw a windfall with sports gambling now legal in eight states, as well as broadcaster CBS, which charged a base price of about $5.25M per 30-second commercial. Related stocks: MGM, DRAFT, CZR, SGMS, DUEL, NYNY, WYNN, PENN, BYD

Starboard Value has taken a stake in Bristol-Myers Squibb (NYSE:BMY), the pharmaceutical giant that agreed to acquire Celgene (NASDAQ:CELG) in a record $74B deal last month, according to Bloomberg. The size of the stake and any plans couldn’t immediately be learned, but one thing the activist fund may be trying to do is to push Bristol to consider a sale. BMY +1.7% premarket.

It’s a rough start to the week for Sony (NYSE:SNE) after the company cut its revenue outlook for the fiscal year on the back of weaker-than-expected sales of cameras and smartphones. Operating income from PS4 gaming also fell 14% to ¥73B during the holiday quarter. Sony shares tumbled in Tokyo, closing down 8% to ¥5,055, echoing other large technology companies that have lowered forecasts on slowing global economic growth.

Fresh pressure on Huawei… An upcoming U.K. government report will find the Chinese telecom equipment supplier failed to address security concerns raised in 2018, sources told The Telegraph. It will also criticize the company over the security of its technology as it prepares to roll out 5G networks across Britain. Bad news for Huawei has generally been seen by investors as an opportunity for Nokia (NYSE:NOK) and Ericsson (NASDAQ:ERIC).

More smart footwear? Alphabet’s (GOOG, GOOGL) life sciences arm, Verily, has been looking for partners to co-develop shoes with embedded sensors to monitor the wearer’s movement and weight, as well as to measure falls, CNBC reports. The Google sister company has in recent months shown a prototype of the design in private meetings, hoping to attract partners to build the shoes and take them to market, but it’s very early in the process.

Spotify is looking to splurge on podcasts. According to Recode and the WSJ, the music streaming giant is currently in talks to acquire Gimlet Media for over $200M, marking the first time Spotify (NYSE:SPOT) has purchased another company. It would also be a huge deal as far as podcasts go, with another example being iHeartMedia’s (OTCPK:IHRTQ) acquisition of Stuff Media last year in a notably smaller $55M transaction.

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2019-02-04