J.C. Penney, Viacom, General Electric: Stocks That Defined the Week
August 16 2019 - 5:11PM
Dow Jones News
By Francesca Fontana
Major U.S. stock indexes fell for the week on renewed concerns
that the economy could be headed toward a recession, fueled by an
inversion of the yield curve and other market signals flashing
red.
In individual stocks, J.C. Penney Co. said it would start
selling secondhand clothes, Viacom Inc. and CBS Corp. agreed to get
back together, and Bernie Madoff whistleblower Harry Markopolos now
has his sights set on General Electric Co.
J.C. Penney Co.
The hand-me-down is going mainstream. J.C. Penney and Macy's
both said during earnings announcements this week that they will
start selling secondhand clothes in partnership with thredUP Inc.
as department stores continue to lose shoppers to newer forms of
retailing. To be sure, the booming market for used goods isn't
immune to the pressures facing retailers that sell new products.
The RealReal Inc., an online marketplace for preowned luxury goods,
said Tuesday that discounting by department stores weighed on sales
in the most recent quarter. J.C. Penney shares gained 2.2% Thursday
after its earnings announcement.
Apple Inc.
Apple received an early Christmas present from President Trump
when the White House on Tuesday announced a delay in some planned
tariffs on Chinese-produced goods. "We're doing this for Christmas
season, just in case some of the tariffs would have an impact on
U.S. customers," Mr. Trump said. The tariffs, including 10% levies
on mobile phones and laptop computers, were originally set to take
effect on Sept. 1 and would have seriously hampered Apple's annual
iPhone launch that typically takes place in late September. Apple's
share price had fallen 6% since Mr. Trump first announced the
tariffs on Aug. 1 -- double the drop of the S&P 500 in that
time. Apple shares gained 4.2% Tuesday.
BlackRock Inc.
The world's biggest money manager now owns some of America's
best-known brands. BlackRock said it purchased a stake in the
company that controls Sports Illustrated, Nine West and
Aéropostale. The deal was the first for a new BlackRock
private-equity fund known as Long Term Private Capital, part of an
effort to bulk up alternative businesses that lock up money for
longer and charge higher fees. BlackRock's stake in Authentic
Brands Group LLC is worth roughly $875 million, according to The
Wall Street Journal. The deal was announced Sunday and shares fell
2.3% Monday
Rite Aid Corp.
Rite Aid found someone willing to nurse the pharmacy chain back
to health. The company appointed Heyward Donigan as chief executive
Monday, saying her experience leading health-care companies would
help Rite Aid confront competition that dampened sales and caused
job cuts. Shares of the third-largest U.S. pharmacy chain have
plunged more than 50% this year. "I recognized the opportunity to
really revitalize Rite Aid," Ms. Donigan told The Wall Street
Journal. Ms. Donigan was chief executive of Sapphire Digital, a
website for analyzing health-care plans that was previously known
as Vitals. She is now one of 33 women leading the largest 500 U.S.
publicly traded companies by revenue, according to
corporate-research firm Equilar. Rite Aid shares fell 2.4%
Monday.
Viacom Inc.
Viacom and CBS Corp. are getting back together. Thirteen years
after the two companies split they agreed Tuesday to merge in an
all-stock deal that would reunite the media empire of mogul Sumner
Redstone. The combined company is valued at roughly $30 billion,
combining Viacom properties such as MTV, Nickelodeon, Comedy
Central and the Paramount film and TV studio with CBS's broadcast
network and Showtime premium network. However, it would still be
much smaller than competitors. Analysts say CBS and Viacom could
become a buyout target, and further acquisitions by the merged
company could make it a more attractive one. Viacom shares gained
2.4% Tuesday while CBS shares added 1.4%.
General Electric Co.
Fraud at General Electric? That's what Harry Markopolos, the
accounting expert who raised red flags about Bernie Madoff's Ponzi
scheme, is claiming. In a research report posted online Thursday,
Mr. Markopolos alleged the struggling conglomerate has masked the
depths of its problems, resulting in inaccurate and fraudulent
financial filings with regulators. The report, reviewed by The Wall
Street Journal, is a mixture of detailed financial analysis and
sweeping claims. A GE spokeswoman told the Journal that GE stands
behind its financials. "While we can't comment on the detailed
content of a report that we haven't seen, the allegations we have
heard are entirely false and misleading," she said in an email.
General Electric shares plummeted 11.3% Thursday.
Verizon Communications Inc.
Verizon is saying goodbye to Tumblr. The telecom giant has
agreed to sell the blogging website to the owner of popular
online-publishing tool WordPress.com, the companies said Monday.
Tumblr once fetched a purchase price of more than $1 billion, but
Automattic Inc. will buy Tumblr for an undisclosed sum that The
Wall Street Journal reported isn't material to Verizon. A decision
last year by Verizon to ban adult content on Tumblr alienated some
users. Automattic's CEO says the company plans to maintain that
policy and sees the site as complementary to WordPress.com. "It's
just fun," he said of Tumblr. "We're not going to change any of
that." Verizon shares rose 1.2% Tuesday.
Write to Francesca Fontana at francesca.fontana@wsj.com
(END) Dow Jones Newswires
August 16, 2019 16:56 ET (20:56 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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