Gitlab, Amazon, and Chinese Companies – Weekly News Digest (14-18 March)
Today’s article is dedicated to several topics: the reaction of Gitlab shares to its quarterly and yearly statistics, the current situation in the Chinese market, and the details of the agreement between Amazon and MGM.
Gitlab shares soared 49% over 3 days
On Monday 14 March 2022, Gitlab Inc. published its report for Q4 and the whole of 2021. The company owns a management system for Git code repositories and an error tracking tool.
The quarterly statistics of Gitlab cheered investors up because revenue recorded an increase while net loss shrank. Moreover, the company shared an optimistic forecast for this quarter and the whole of 2022.
Gitlab expects the quarterly revenue to reach $77-78 million and the yearly revenue to hit $385.5-390.5 million. Also, the revised EPS this quarter will reach $0.27-0.28 and hit $0.97-1.02 over the year.
On 15 March, the share price of Gitlab Inc. (NASDAQ: GTLB) rose 7.76% to $35.67. Over the next two trading sessions, the stock quotes surged 19.28% and 15.58%, respectively.
|Revenue||$77.8 million (+68.9%)||$252.7 million (+66%)|
|Loss per share||$0.32 (−86.2%)||$1.95 (−49%)|
|Net loss||$46.8 million (−61%)||$157.6 млн (−18%)|
The Chinese market: the rise after the fall
At the end of last week and the beginning of the current one, the Chinese stock market lived through a massive sale, the largest one since November 2008. The main reasons for the sale were the COVID-19 surges all over the country, the substantial increase in oil prices, and the sanction risks. According to Bloomberg, on 14 and 15 March, the market capitalisation of Chinese companies dropped by $1.5 trillion.
On Wednesday 16 March, the State Council of China pledged to take measures to stabilise the country's poor stock market and support various enterprises to seek listings in the overseas markets. Also, it announced that it would ease the state regulations of IT.
On the same day, the shares of large Chinese companies demonstrated substantial growth:
- Pinduoduo Inc. (NASDAQ:PDD) — 56.06%, to $42.62.
- Didi Global Inc. (NYSE:DIDI) — 41.67%, to $2.55.
- JD.com Inc. (NASDAQ:JD) — 39,36%, до $64.08.
- Baidu Inc. (NASDAQ:BIDU) — 39.20%, to $150.87.
- Alibaba Group Holdings Ltd (NYSE:BABA) — 36.76%, to $104.98.
- Li Auto Inc. (NASDAQ:LI) — 31.90%, to $26.05.
- Xpeng Inc. (NYSE:XPEV) — 29.55%, to $27.53.
- NetEase Inc. (NASDAQ:NTES) — 25.69%, to $93.31.
- Nio Inc. (NYSE:NIO) — 25.59%, to $18.75.
Amazon acquired MGM
On Thursday 17 March, the market heard that the giant of electronic commerce, Amazon, finally acquired Metro-Goldwyn-Mayer (MGM). The company specialises in the production and rental of movies and other video products. The agreement was signed for $8.45 billion.
As we remember, Amazon announced its plans for the purchase already in May 2021. The corporation now has the rights to the whole MGM catalogue, which includes over 4,000 movies and 17,000 television series.
Further plans have not been announced yet. And it is not clear whether the management of Metro-Goldwyn-Mayer will be working at the new Amazon Prime Video studios.
On 17 March, the shares of Amazon Inc. (NASDAQ: AMZN) reacted very moderately to the second-largest agreement in the history of the company, with only a 2.7% rise to $3144.78. The stock quotes have been growing for three sessions in a row, finally reaching a total of 10.9%.
Gitlab cheered investors up with its strong quarterly and yearly statistics and an optimistic forecast. Its shares saw a 49% growth over 3 sessions.
The Chinese stock market experienced the largest sale since November 2008, to which the government reacted by pledging to support the economy and stabilise the market. The shares of Chinese corporations reacted with substantial growth.
Amazon finally acquired Metro-Goldwyn-Mayer. Nevertheless, the share price of the tech giant grew by just 3%.