In a dramatic twist in the ongoing saga of Microsoft’s acquisition of Activision Blizzard, the tech giant has put forth a fresh proposal to U.K. regulators, promising to sell the rights of current and future Activision games to French game maker Ubisoft Entertainment SA. The $69 billion deal, which has already seen approval from the European Union and a court victory over the Federal Trade Commission’s challenge, is seen taking a positive turn as Microsoft shares edged up by 0.5% in pre-market trading, while Activision shares saw a 1% increase.
Meanwhile, in another corner of the tech industry, video conferencing provider Zoom has left investors pleasantly surprised, with its shares climbing 4% in pre-market trading following a robust quarterly earnings report. The company’s enterprise business, longer sales cycles, and reduced spending on cloud services, sales, and marketing expenses were the key drivers behind the earnings beat, which saw Zoom reporting earnings of $1.34 per share in the second quarter, significantly above the $1.05 per share that analysts were expecting.
Microsoft’s New Merger Proposal and Zoom’s Earnings Beat
Microsoft’s new proposal for the acquisition of Activision Blizzard and Zoom’s earnings beat are among the top business highlights of the day. Other key business events include Kenvue replacing Advance Auto Parts on the S&P 500, Lowe’s impressive spring sales, and the predicted dip in existing home sales for July.
Microsoft Submits New Activision Merger Proposal
Microsoft has submitted a fresh proposal to U.K. regulators to push forward its $69 billion acquisition of video game maker Activision Blizzard. Microsoft has committed to selling the rights of current and future Activision games to Ubisoft Entertainment SA, a French game maker. The European Union gave the green light to the merger in May and June, and Microsoft also managed to win a court ruling over the Federal Trade Commission’s challenge to the deal. This news pushed Microsoft shares 0.5% higher in pre-market trading, while Activision shares saw an increase of 1%.
Zoom Enjoys Earnings Boost
Zoom’s shares enjoyed a 4% increase in pre-market trading following a quarterly earnings report that outperformed analyst expectations. The strong performance is credited to the strength of its enterprise business, longer sales cycles, and decreased spending on cloud services, sales, and marketing expenses. This resulted in earnings of $1.34 per share in the second quarter, surpassing the analyst’s prediction of $1.05 per share. Furthermore, Zoom’s revenue of $1.14 billion exceeded the $1.12 billion forecast by analysts.
Kenvue Joins S&P 500
Recently spun off from Johnson & Johnson, consumer health brand Kenvue will join the S&P 500 index starting from Friday’s open. This could potentially impact its stock price as index funds buy shares. Kenvue shares saw an increase of 1.3% in pre-market trading, while shares of Advance Auto Parts, which Kenvue will replace on the index, dropped 0.5%. J&J shares remained stable.
Lowe’s Spring Sales Surpass Expectations
Lowe’s reported a 1.6% quarterly decline in comparable sales, which is better than the expected 2.6% drop. The hardware retailer attributed this to a strong spring recovery and improvements in its Pro and online businesses. This helped to counterbalance the deflation in lumber and lower demand for DIY products. The North Carolina-based retailer reported earnings of $4.56 a share, exceeding analyst forecasts of $4.47 a share. Lowe’s $25 billion revenue met analyst forecasts, causing shares to increase by 2.5% in the pre-market.
Home Sales Predicted to Dip
Economists predict a slight decrease in existing home sales for July, from 4.16 million to 4.15 million. Several Federal Reserve members will be giving speeches today, including Richmond Fed President Tom Barking, Chicago Fed President Austan Goolsbee, and Federal Reserve Governor Michelle Bowman.
It’s clear that the business world continues to adapt and evolve amidst changing market dynamics. Microsoft’s new strategy to win regulatory approval for its Activision Blizzard acquisition demonstrates flexibility, while Zoom’s earnings beat reflects the continued relevance of video conferencing solutions in the business world. The shifts in the S&P 500 and Lowe’s performance underscore the impact of strategic decisions and market conditions on businesses. Despite minor fluctuations, the housing market seems to be maintaining stability.