Elon Musk Takes Surprise 9% Stake in Twitter, Sending Shares 27% Higher
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Elon Musk disclosed a 9% stake in Twitter Inc., turning one of the social-media company’s most famous users into its largest shareholder. Twitter shares led the S&P 500, surging $10.66, or 27%, to $49.97, after Tesla Chief Executive Elon Musk reported that he held a stake of 9.2% in the social-media company as of March 14. Twitter added $8.53 billion in market value, its largest one-day gain on record. The Tesla Inc. chief executive has previously revelled in the attention from his more than 80 million Twitter followers and criticised the service broadly. In a securities filing Monday, Mr. Musk reported owning almost 73.5 million shares of Twitter as of March 14, representing a stake valued at $2.9 billion based on Friday’s closing price. That gives Mr. Musk more Twitter shares than even company co-founder and former CEO Jack Dorsey, as well as large investors such as the Vanguard Group Inc. Mr. Musk’s arrival as an investor adds a jolt to what has been a somewhat stagnant social-media platform. The outspoken entrepreneur hasn’t been shy about questioning Twitter’s values. In recent weeks, he has mused publicly about its commitment to free speech and has said he was considering starting a rival of his own.
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The SMI gained 1.3 per cent to 12,341 points and thus ranked clearly on top in Europe alongside the Vienna stock barometer. Among the 20 SMI stocks, there were 16 price gainers and four price losers. 31.16 (Friday: 29.1) million shares were traded. The index heavyweights, which are considered defensive, contributed significantly to the strong increase in the SMI. Roche gained 3.1 per cent and Novartis 1.4 per cent. Nestle was up 0.9 per cent. At Novartis, the news that the pharmaceutical company is implementing a new organizational structure to better achieve its growth targets in the next ten years sparked share price momentum. Novartis plans to merge its Pharmaceuticals and Oncology business units and create two separate sales organizations with a stronger geographic focus. Logitech shares led the SMI with a plus of 5.1 per cent. It was driven, among other things, by an upgrade from Goldman Sachs to "buy". Richemont (+2.7 per cent to CHF 120.30) also rose considerably. UBS raised its price target to 167 francs and continued to advise buying the stock due to positive earnings momentum and the still-achievable agreement on a majority sale of YNAP to the US online marketplace Farfetch.
European stocks edged higher to start the new week and oil prices rose, with investor attention focused on monetary policy from the Federal Reserve and the economic impact of the Russian invasion of Ukraine. Investors continue to monitor developments in the Russia-Ukraine war, which has roiled commodity and equity markets alike since it erupted in February. Allegations of Russian war crimes came to the fore over the weekend, renewing debate in the European Union about wider sanctions on Russian energy. Europe, and especially the region's largest economy, Germany, is highly reliant on exports of Russian natural gas. Fears over more disruption to global energy markets helped oil prices approach $100 a barrel, a level that they fell below last week.The Stoxx Europe 600 index rose 0.8% to 462.2 points. The CAC 40 and the SBF 120 gained 0.7% each. The DAX 40 in Frankfurt rose 0.5%, while the FTSE 100 in London gained 0.3%. Sanofi gained 1.3%. The pharmaceutical company announced that the US Food and Drug Administration (FDA) had granted priority review to its drug Dupixent for the treatment of patients aged 12 and over suffering from eosinophilic oesophagitis. On Tuesday, the group raised its sales target for Dupixent from €10 billion to over €13 billion "at cruising speed". Unibail-Rodamco-Westfield lost 1% despite announcing the sale of a German-based asset valued at €116 million. The shopping centre operator held 51% of the asset. In Dublin, Ryanair gained 0.9%. The low-cost carrier said it expects a loss before exceptional items of between €350m and €400m for the year to 31 March 2022, compared with a previous forecast of €250m to €450m.
U.S. stocks climbed Monday as investors scooped up some of the technology stocks that came under pressure to start the year. The tech-focused Nasdaq Composite Index gained 271.05 points, or 1.9%, to 14532.55, while the S&P 500 added 36.78 points, or 0.8%, to 4582.64. The Dow Jones Industrial Average rose 103.61 points, or 0.3%, to 34921.88. The indexes have rallied over the past three weeks after the Federal Reserve raised interest rates for the first time since 2018 in a bid to curb inflation. The S&P 500 and the Dow industrials are about 5% below their January highs, while the Nasdaq is off about 10% from November’s record. Tesla shares gained $60.86, or 5.6%, to $1,145.45. Meta Platforms added $9.04, or 4%, to $233.89. Netflix gained $18.03, or 4.8%, to $391.50, and Alphabet rose $56.42, or 2%, to $2,859.43. All three stocks are still in the red for 2022. Tech and other growth stocks have lost some of their allure as the Fed raises rates. Higher rates place a premium on corporate earnings now, which tends to make shares of firms whose profits may lie in the future less attractive. Shares of Starbucks fell $3.40, or 3.7%, to $88.09 after the company said it is suspending billions of dollars in share repurchases, a move that interim CEO Howard Schultz said would free up cash to invest in cafes and employees. Lifestyle and culture company Hypebeast is bringing its stock to the U.S. through a merger with blank-check company Iron Spark I, whose shares were up 17 cents, or 1.7%, to $10.17. Hertz Global Holdings agreed to purchase up to 65,000 electric vehicles over five years from the Swedish auto maker Polestar, part of the rental-car company’s goal of expanding its plug-in offerings. Hertz shares rose $2.26, or nearly 11%, to $23.38.
Major indexes in Asia are displaying no clear direction on Tuesday. The World Bank has lowered its growth forecast for East Asia and the Pacific region, which includes China. Markets in Hong Kong and China are closed today for the Tomb Sweeping Day holiday. The Nikkei-225 is up 0.1 per cent at 27,759 points. The Kospi is little changed in Seoul. The sharp rise in commodity prices has prompted the Bank of Korea to forecast that inflation in South Korea will far exceed its February estimate of 3.1 per cent for 2022.
The Treasury yield curve remained inverted on Monday as investors weighed remarks by Federal Reserve officials and awaited the release later this week of the central bank’s March meeting minutes. The 2s/10s and 5s/30s spreads briefly shrank to as little as minus 10 and minus 15.8 basis points, respectively. The deepening inversions occurred amid a broad-based selloff of government bonds that pushed yields higher across the board. The ten-year US Treasury rate rose 3 basis points to 2.408%. The two-year rate ended less than 1 basis point lower at 2.440%. Such an inversion of the yield curve is often seen as a precursor to a recession.
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