From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
AMC may want to think about expanding to theme parks because it's been a roller coaster ride this week for the movie theater chain. Embraced by retail investors this year, the stock has been soaring. Tuesday AMC decided to sell more than $230 million of its shares to Mudrick Capital to invest further in the company, which Mudrick immediately sold off the same day. Wednesday, it announced an investor loyalty program, complete with free popcorn. That sent the meme stock, which started the year at about $2 a pop, to more than $72 in intraday trading. And then...Thursday happened. AMC started the day announcing it would offer 11.5 million additional shares, and that sent the stock into freefall. Trading was halted shortly after the open — and still rallied later in the day to close at $51, up from a low of almost $42. With summer blockbuster season upon us, it should traditionally mean the wind is blowing the right way for AMC, but these crazy conditions have nothing to do with movies. So, we'll have to wait and see if investors give a hoot about whether tickets are actually selling. AMC ended down at $47.99 while stocks in general ended the week up.
Old Is In
Etsy got a bump on Wednesday when it announced plans to acquire Depop. The ecommerce platform popular with crafters and vintage-lovers says it will pay $1.6 billion for the app which will help tap into a young consumer base. Depop, an app for buying and selling fashions secondhand, has millions of Gen Z shoppers, which should be a boon to the seller. Rent the Runway also announced it's going to dip its toes in the resale market. Business dropped off for the clothing rental company when everyone stopped going to work, weddings, and other special events last year, so it's hoping this will jumpstart business once again.
Activists Nab Another Exxon Seat
Last week we mentioned the reckoning Big Oil is facing with climate activists making inroads for change. It's not over for ExxonMobil, as we saw this week when Engine No. 1, a hedge fund that focuses on sustainable investments, claimed another seat on its board. That makes this the third seat, one-quarter of the board, which has been nabbed by interests that want to see the company get serious about addressing climate issues caused, in part, by the fossil fuel industry.
J&J On the Hook
Johnson & Johnson took a hit on Tuesday when the U.S. Supreme Court refused to hear an appeal of the $2 billion verdict it owes to a group of women who argued they developed ovarian cancer from the company's talc products which contained asbestos. By deciding not to take up the case, it leaves the award in place and leaves the pharmaceutical company with no more options to appeal. The $2 billion figure is actually less than half of the original award, but J&J is still facing thousands of similar lawsuits. You can't buy the company's iconic talc-based baby powder in the U.S. and Canada anymore, but it is still available elsewhere in the world.
Zoom stock slunk down most of the week after its earnings report, which came out right after the holiday weekend. Revenue soared last quarter and even tripled since the same time last year during the very beginning of pandemic lockdowns. But the guidance seems to spook some investors. Although the video conference company foresees a 50 percent increase in revenue by the end of the year, return-to-work is clearly weighing on its mind. Still, shares popped back up again on Friday to close out the week strong.