The three major U.S. stock indexes closed flat to lower on Friday, and Monday’s premarket session indicated a lower opening. Investors’ appetite for risk is being challenged by concerns over interest rate hikes (Goldman Sachs predicts four increases for this year) and a tightening of bond-buying by the Federal Reserve.
Crude oil traded down about 0.8% at $78.25 a barrel early Monday, and Bitcoin had tumbled more than 3% to just below $41,000. The yield on a 10-year Treasury note was up just one basis point at about $1.77%, and the yield on a two-year note also increased by one basis point to 0.88%.
The big news for Monday morning was Take-Two Interactive’s cash and stock acquisition of Zynga at an implied enterprise value for Zynga of $12.7 billion, a premium of 64% to the game-maker’s market cap of $6.7 billion at Friday’s close. Zynga’s stock traded up more than 50% in premarket action, while Take-Two’s stock traded down about 10%.
Since early November, Bitcoin’s value has dropped from a high near $68,000 to right around $41,000. That’s a decline of almost 40%. Bitcoin miners are faring even worse. Hut 8 Mining Corp. (NASDAQ: HUT) has dropped more than 60% in the same period, and shares traded down more than 5% in Monday’s premarket session. The reason for the plunge in mining stocks should be abundantly clear.
Shares of Lucid Group Inc. (NASDAQ: LCID) added about 10% on Friday, when shares of other electric vehicle makers (e.g., Tesla and Rivian) were sliding. Lucid traded down about 3.5% in Monday’s premarket on no specific news. The possible entry of Sony into the EV market, combined with the well-publicized push by Ford, GM and Stellantis into the EVs, must give investors pause. Now that every automaker appears to have some skin in the game, deep pockets are going to matter more.
COVID-19 vaccine maker Ocugen Inc. (NASDAQ: OCGN) traded up by as much as 8% Monday morning following a weekend announcement that its Covaxin vaccine demonstrated a significant increase in efficacy among people between the ages of 12 and 64 who got a booster shot after receiving a second dose of the vaccine. The results were taken from a pre-print of an article at medRxiv.
Pot grower Tilray Inc. (NASDAQ: TLRY) soared by more than 13% in Monday’s premarket, following the release of its November quarter results. Revenue was a bit light, even though they were up nearly 20% year over year. Tilray broke even on earnings per share, which was much better than the expected loss of $0.07 per share.
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