Altria, Fannie Mae, Nike: Stocks That Defined the Week
By Francesca Fontana
Altria Group Inc.
Waiting for the smoke to clear surrounding the future of
Juuling, tobacco giants Altria Group and Philip Morris
International Inc. called off talks about merging after a decade
apart. The discussions were spurred in part by the threat from the
trendy smoking alternative to their traditional businesses. Juul
Labs Inc.'s chief executive abruptly stepped dow n on Wednesday
amid U.S. efforts to combat underage vaping. He was succeeded by an
executive at Altria, which owns a 35% stake in the e-cigarette
maker. Altria shares fell 0.5% Wednesday while Philip Morris shares
Marathon Petroleum Corp.
Activist hedge fund Elliott Management Corp. suggested in a
letter to the Marathon Petroleum board Wednesday that Marathon
separate its Speedway gas-station chain and pipeline business into
their own companies, leaving its refining business as the new
Marathon. "There is little to no 'synergy' value to retaining the
three businesses in Marathon," Elliott said in the letter. Another
shareholder, hedge fund D.E. Shaw, is also supportive of Marathon
breaking up, according to a person familiar with the matter.
Marathon said it would "continue to evaluate opportunities to
deliver more value for our shareholders." Marathon shares rose 8.4%
Mortgage-finance companies Fannie Mae and Freddie Mac are
expected to start keeping their profits again, The Wall Street
Journal reported Sunday. The move puts on hold a yearslong
arrangement in which the companies handed nearly all of their
earnings to the Treasury Department. In an expected agreement
between the Trump administration and the companies' federal
regulator, this would be an initial major step in allowing Fannie
and Freddie to build up capital so they can operate as private
companies again. The government effectively nationalized them
during the 2008 housing crisis. Shares of Fannie Mae gained 2.6%
Monday, while Freddie Mac added 2.5%.
EBay Chief Executive Devin Wenig left the online marketplace
Wednesday, citing conflicts with the company's new board. The
company has been evaluating its business since March after activist
investors Elliott Management and Starboard Value criticized its
performance and proposed breaking it up. "In the past few weeks it
became clear that I was not on the same page as my new Board," Mr.
Wenig tweeted from his personal account. Mr. Wenig served as CEO
for more than four years after joining the firm in 2011 as
president over its marketplace. He also stepped down as a board
director. EBay shares fell 0.8%.
Shares of Nike reached an all-time high Wednesday as the
athletic-footwear company reported better-than-expected sales for
its latest quarter, driven by an increase in revenue from China
despite trade tensions. Nike shares rose 4.2% Wednesday, hitting a
high of $92.79 during the session. The effects of U.S. tariffs on
Chinese goods would be more prominent in the current quarter, Chief
Financial Officer Andrew Campion said, as President Trump's
announcement of the tariffs in August and their imposition in
September didn't give the company much time to manage any of the
levers within its overall portfolio.
Peloton Interactive Inc.
Thursday was a bad day for the IPO market: Shares of Peloton,
the maker of interactive exercise bicycles, fell on their first day
of trading and Endeavor Group Holdings Inc. yanked its planned
offering. Peloton opened at $27 a share, lower than its IPO price
of $29, and ended 4.6% lower at $25.76. Its poor debut was partly
what prompted Endeavor's decision, according to people familiar
with the matter. WeWork's parent company also pulled its offering
earlier this month as signs grow investors are shunning companies
that lose large amounts of money.
Beyond Meat Inc.
Beyond Meat has gained another fan. McDonald's Corp. said
Thursday it is testing Beyond Meat patties at restaurants in Canada
for 12 weeks starting Monday with a sandwich called the "P.L.T."
for plant, lettuce and tomato. Many of McDonald's rivals have
already introduced meat substitutes made by Beyond Meat or rival
Impossible Foods Inc. Sales of plant-based burgers and other
products from those companies have surged this year. A few months
ago, McDonald's executives said they were watching whether the
trend would last and meat-substitute companies could maintain
supply before adding meatless products to its menu. Beyond Meat
shares gained 11.6% Thursday.
Write to Francesca Fontana at firstname.lastname@example.org
(END) Dow Jones Newswires
September 27, 2019 17:54 ET (21:54 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.