Top US stocks to watch before the bell: Cloudera, AMC and Moderna

Cloudera could go private in $4.7 billion deal, AMC raises equity after shares soar, Moderna applies for full US approval of its vaccine, supply chain pressures set to push up the price of Tesla cars, and Canopy Growth fails to convert topline growth into higher profits.

USA (1)

Cloudera

Cloud-computing data firm Cloudera is set to be taken private by KKR and Clayton Dubilier & Rice in a $4.7 billion deal.

The private equity firms have agreed to pay $16 per share for Cloudera, representing a 24% premium to the company’s closing share price on Friday. The deal is expected to close in the second half of this year and, notably, Cloudera has the option to evaluate any potentially better offers over the next 30 days.

It was reported earlier this year that Cloudera was exploring a potential sale as interest from other companies increased after a number of big-name players in the cloud-computing market started launching new services to rival those offered by Cloudera.

AMC Entertainment

AMC Entertainment plans on raising $230.5 million by selling 8.5 million shares to Mudrick Capital Management for $27.12 each.

AMC, which has seen its shares more than double in value over the past two weeks alone, said it would use the proceeds to acquire more theatre leases, invest in its existing sites and help deleverage the business.

‘Given our scale, experience and commitment to innovation and excellence, AMC is being presented with highly attractive theatre acquisition opportunities. We are in discussions, for example, with multiple landlords of superb theatres formerly operated by Arclight Cinemas and Pacific Theatres. With this agreement with Mudrick Capital, we have raised funds that will allow us to be aggressive in going after the most valuable theatre assets, as well as to make other strategic investments in our business and to pursue deleveraging opportunities,’ said chief executive and president Adam Aron.

Moderna

Moderna has applied for full approval of its coronavirus vaccine in the US.

The vaccine is currently only used under emergency approval and applying for full approval is a natural route for vaccine makers, with Pfizer having recently made the same application for its vaccine made with BioNTech.

Over 124 million doses of the Moderna vaccine have already been given in the US alone.

Eli Lilly

Pharmaceutical giant Eli Lilly & Co has secured emergency approval in India for its antibody drug combination designed to treat people suffering from the coronavirus.

The combination of its antibodies bamlanivimab and etesevimab will be allowed for restricted use in hospitals to help people with mild to moderate coronavirus. Eli Lilly said it is in talks with officials about donating doses and providing other possible treatments.

The company has already secured emergency approval in India for another treatment combination of its arthritis drug baricitinib and remdesivir.

Tesla

The price of Tesla cars is set to increase as its supply chain comes under pressure and the cost of raw materials increases, its founder and chief executive warned on Twitter.

‘Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially,’ Elon Musk said in a Tweet.

This is set to be the fifth incremental price increase of its Model 3 and Model Y cars in a matter of months, according to the Electrek website.

Facebook and Alphabet

Facebook and Google’s parent company Alphabet have signed multi-year deals with Australian broadcaster Nine Entertainment for its content and news.

Nine Entertainment is the owner of news platforms like the Australian Financial Review and Sydney Morning Herald. The deal means the three largest media firms in the country have struck deals for their news content with the two US tech giants, which have yielded to pressure to negotiate fair deals for news publishers, after News Corp and Seven West Media agreed terms earlier this year.

Nine Entertainment will provide articles and clips for Google’s News Showcase platform for the next five years, while a similar deal with Facebook will last for three years.

Equinor and ExxonMobil

Oil giants Equinor, ExxonMobil and Petrogal Brasil will push ahead with the $8 billion development of the Bacalhau oil discovery made in Brazil.

Equinor and ExxonMobil each hold a 40% stake in the discovery, with the local firm owning 20%. Equinor will operate the field and is aiming to produce first oil in 2024, with hopes of producing up to 220,000 barrels daily. There is thought to be well over 1 billion barrels of recoverable oil to tap into during the first phase.

Goodyear

Goodyear Tire & Rubber is being accused of violating labour rules by its workers at its factory in Malaysia, including failing to pay wages, forcing staff to work overtime and threatening foreign employees.

Reuters, citing court documents, several unnamed workers and Malaysian officials, said Goodyear has incorrectly deducted sums from worker’s salaries and denied certain staff access to their passports, while also forcing staff to work excessive hours.

It was revealed that hundreds of workers sued Goodyear in 2019 and 2020, and that regulators fined the firm last year for overworking and underpaying staff. The ruling on the latest case, which is seeing workers claim for around $1.2 million, is expected in the coming weeks.

Canopy Growth

Canopy Growth reported strong topline growth as demand for marijuana increased during the pandemic, but reported significantly wider losses.  

The company said net revenue rose 38% in the fourth quarter to $148.4 million and booked a net loss of $616.7 million. For the full year, Canopy reported a 37% rise in revenue to $546.6 million while its net loss ballooned to $1.67 billion from $1.38 billion the year before.

Topline growth did not translate to higher profits despite the fact it significantly cut operating expenses because of impairments and restructuring charges. Canopy said it expects to turn profitable on an adjusted basis in the second half of its new financial year.

Uber

Ride-hailing firm Uber said there are signs that drivers are gradually returning to its platform after many left during the pandemic because of reduced demand for travel.

Uber said more drivers returned to its platform in the week of May 17 than any other since the start of 2021, with 33,000 of them joining its US platform alone. It did not state how this compares to pre-pandemic levels. This has helped reduce waiting times for customers and should lead to lower prices. Uber has been introducing fresh incentives to attract more drivers so it can fully capitalise on the recovery opportunities this year.

‘With the economy bouncing back, drivers are returning to Uber in force to take advantage of higher earnings opportunities from our driver stimulus while they are still available,’ said Carrol Chang, the head of Uber’s US and Canada driver operations.

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