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Hedge Funds Said to Amass Large Stakes in Swedish Match to Pressure Philip Morris Intl

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Several large hedge funds have taken stakes in Swedish Match (OTCPK:SWMAF) as they try to pressure Philip Morris International (NYSE:PM) to increase its $16 billion offer for the smokeless tobacco company.

Davidson Kempner Capital Management and HBK Capital Management have taken some of the biggest stakes in Swedish Match (OTCPK:SWMAF) and are both nearing the 5% level, according to a Bloomberg report, which cited people familiar. DE Shaw & Farallon Capital Management and Pentwater Capital Management also have taken stakes.

Along with prominent hedge fund and activist investor Elliott Management, which already reported a stake in Swedish Match, the hedge funds collectively own a 25% stake in the smokeless tobacco firm, according to the report. Some funds are said to have written to Philip Morris (PM) to push for a price increase.

Elliott disclosed in late August it had accumulated a 5.25% in the smokeless tobacco company after Bloomberg first reported in early July that Elliott had taken a stake and was against the deal under its original terms.

Bloomberg reported earlier this month that PMI was said to mull lowering the acceptance threshold for the Swedish Match (OTCPK:SWMAY) deal. The maker of Marlboro brand cigarettes’ bid is currently conditioned on getting more than a 90% stake in Swedish Match.

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Hot Stocks: Travel Stocks Fall; AMEH, FREY Rise on Upgrades; SHC Drops; XPEV Sets 52-week Low

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The major U.S. equity averages dropped on Wednesday following the announcement of the latest interest rate increase from the Federal Reserve. Worries that the Fed would push the economy into recession led to a 1.7% drop in the S&P 500.

Amid this decline, travel stocks were particularly hard hit. With investors concerned about demand in a shaky economic environment, American Airlines (AAL), United Airlines (UAL), Delta Air Lines (DAL), Carnival (CCL) and Royal Caribbean Cruises (RCL) all lost ground.

Sotera Health (SHC) was another standout decliner, adding to recent weakness as analysts responded to a recent legal setback. Meanwhile, selling pressure among Chinese EV stocks sent XPeng (XPEV) to a fresh 52-week low.

Looking to the upside, Apollo Medical Holdings (AMEH) and FREYR Battery (NYSE:FREY) both climbed on separate positive analyst comments.

Sector In Focus

As the Federal Reserve raised rates again and signaled that rate hikes would likely continue into 2023, fears about the global economy put pressure on travel stocks.

The slide included big-name airlines. American Airlines (AAL) dropped more than 5%, while United Airlines (UAL) and Delta Air Lines (DAL) each fell more than 4%.

Cruise operators were also among the notable losers. Carnival (CCL) posted a decline of nearly 7%. Royal Caribbean Cruises (RCL) was also weak, sliding by almost 6%.

Standout Gainer

A bullish analyst take encouraged buying in Apollo Medical Holdings (AMEH). Shares jumped almost 7% after William Blair initiated coverage on the healthcare management company with an Outperform rating.

AMEH finished Wednesday’s trading at $41.71, an advance of $2.57 on the day. The stock has seen significant volatility in 2022, falling from a level above $67 at the start of the year to a 52-week low of $29.52 reached in May.

Shares hit a 52-week high of $133.23 in November. Over the past 12 months, the stock has fallen nearly 54%.

Standout Decliner

Sotera Health (SHC) experienced a wave of selling after a legal setback prompted analyst skepticism about the firm’s near-term future. Shares dropped 11%.

Early this week, shares dropped after an Illinois jury found that the sterilization service provider’s Sterigenics unit was liable amid claims related to alleged carcinogenic emissions from one of its facilities. The company was ordered to pay $363M.

In response to the jury decision, JPMorgan downgraded its rating on SHC to Underweight from Overweight. “With 700+ individual lawsuits remaining, we see risk skewed to the downside relative to our coverage universe,” JPMorgan analysts, led by Casey Woodring, stated in a note.

SHC dropped 88 cents to reach $7.32. The slide added to a selloff that took place earlier this week as the jury award was first announced. The stock has now fallen 61% over the past month.

Notable New High

A positive analyst comment sent FREYR Battery (FREY) higher by 17%, with the stock reaching its highest level since coming public through a SPAC deal in mid-2021.

Morgan Stanley called the maker of rechargeable lithium-ion batteries for electric vehicles its top overall pick in the sector. In making the call, analyst Adam Jonas highlighted data points like binding offtake agreements and equipment orders.

FREY closed the session at $15.39, a rally of $2.25. During the day, shares reached an intraday 52-week high of $15.95. Overall, the stock has rallied off a 52-week low of $6.42 reached in late June.

Notable New Low

XPeng (XPEV) dropped to a new 52-week low, dragged down by a general retreat in China-based electric vehicle stocks. Shares of XPEV fell 12% on the day.

XPEV dropped $1.84 to end the session at $14.09. The stock also touched an intraday 52-week low of $13.92. The retreat extended a slide that has marked the past few months. Shares have fallen 60% since their closing price on June 24.

Wednesday’s decline took place in the context of a general sector retreat. Nio (NIO) fell about 10%, while Li Auto (LI) dropped 9%.

To see more of the Wall Street’s best- and worst-performing stocks, turn to Seeking Alpha’s On The Move section.

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Original Source: seekingalpha.com

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Aberdeen Income Credit Strategies Fund Goes Ex-dividend Tomorrow

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Hives Treatment Developer Third Harmonic Prices Upsized $185M IPO

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Mikko Lemola

Hives treatment developer Third Harmonic Bio (THRD) has priced its upsized $185M initial public offering.

The biotech company said it now plans to offer 10.9M shares at $17 per share. Underwriters will be granted a 30-day option to buy up to 1.64M additional shares.

Morgan Stanley, Jefferies and Cowen are serving as joint bookrunners, with LifeSci Capital acting as co-manager.

Based in Cambridge, Mass., Third Harmonic’s lead product, THB001, is a KIT inhibitor being developed as a possible treatment for chronic uticaria, also known as hives.

The deal was upsized from an earlier proposal this month that had the company offering 9M shares priced between $16 and $18, which would have raised approximately $153M if priced at the midpoint.

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