NVIDIA, GameStop, Tencent, and UBS: Weekly Stock Market Digest (20-24 March)
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UBS Group, Credit Suisse, GameStop, Tencent Music Entertainment, and NVIDIA were in the spotlight this week. Below is a review of how their shares reacted to recent developments.
UBS Group takes over Credit Suisse
On Sunday 19 March, it became known that UBS Group AG acquired the struggling Credit Suisse Group for 0.76 CHF (Swiss franc) per share. Note that at the close of trading on Friday 17 March, the securities of Credit Suisse Group cost 1.86 CHF per unit. The total sum of the agreement amounted to 3 billion CHF or 3.24 billion USD.
The Swiss National Bank provided the country’s two largest and oldest banks with a 100 billion CHF liquidity guarantee in addition to a 50 billion CHF loan. Moreover, the authorities have allocated 9 billion CHF to UBS Group AG to cover potential losses the bank may incur as part of the deal.
Under the agreement, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held. The Swiss Financial Market Supervisory Authority (FINMA) said that Credit Suisse Group bonds worth about 16 billion CHF would be impaired. American bondholders are preparing to sue the Swiss government for making such a decision.
Over Monday and Tuesday 20-21 March, UBS Group AG (NYSE: UBS) stock gained 15.66% to 21.05 USD per share but dropped to 19.17 USD by the end of the week at the time of writing. The shares of Credit Suisse Group (NYSE: CS) have fallen 59.72% to 0.87 USD since the beginning of the week.
GameStop report: first revenue in two years
GameStop Corp., the US-based retailer of gaming consoles, computer games, and gaming accessories, released its fourth-quarter and fiscal year 2023 report on Tuesday 21 March.
The November to January period saw revenue decline by 1.22% to 2.23 billion USD from the same period in fiscal 2022. Fourth-quarter net income reached 48.21 million USD or 0.16 USD per share, while the year before the company reported a loss of 147.52 million USD or 0.49 USD per share. GameStop Corp. recorded its first net profit in two years.
Revenue for the full fiscal year amounted to 5.93 billion USD, losing 1.39%; while the net loss dropped by 17.89% to 313.13 million USD or 1.03 USD per share. On 22 March, the quarterly and annual results triggered an increase in GameStop Corp. (NYSE: GME) shares by 35.24% to 23.87 USD per unit.
Tencent report: annual profit dropped 17%
Chinese technology giant Tencent Music Entertainment Group reported fourth-quarter and full-year 2022 revenues on Wednesday 22 March.
Revenue for October-December last year rose 0.53% to 144.95 billion RMB (renminbi), a figure gradually increasing after declining for two consecutive quarters. Profit increased by 11.7% to 106.9 billion RMB and EPS rose 12.15% to 10.98 RMB. Annual revenue dropped by 1 % to 554.55 billion RMB, and earnings fell 17.16 % to 188.71 billion RMB or 19.34 RMB per share.
The board of directors of Tencent Music Entertainment Group has recommended a dividend of 2.4 HKD (Hong Kong dollar) per share for 2022. The dividend for 2021 was 1.6 HKD per share. The company also repurchased 45.6 million of its securities worth 12 billion RMB in the fourth quarter.
Tencent Music Entertainment Group (NYSE: TME) stock reacted negatively to the release of the company’s quarterly and annual reports, falling 9.16% to 7.14 USD at the close of trading that day. However, the share price reversed course on Wednesday and Thursday, rising to 7.59 USD.
NVIDIA strengthens its position in the AI market
Since the beginning of the week, the securities of the American manufacturer of graphics processors and chipsets NVIDIA Corporation (NASDAQ: NVDA) have gained 5.5% to 271.91 USD per unit. The increase in the share price was caused by investors’ positive reactions to the latest news.
NVIDIA GTC (GPU Technology Conference), a global conference on artificial intelligence that brings together developers, engineers, researchers, and IT specialists, was held on 20-23 March. At the event, NVIDIA Corporation announced the launch of a wide range of products for the rapidly growing AI market, including new GPUs, equipment for data processing centres, and artificial intelligence software models. The company's recently announced development vector – Artificial Intelligence as a Service – is of particular interest.
At the NVIDIA GTC, it was announced that the corporation is partnering with leaders in the global technology marketplace. Here are the headlines from the official press releases:
- Microsoft Corporation, Tencent Music Entertainment Group, and Baidu Inc. are introducing a CV-CUDA (an open-source library by NVIDIA) for computer vision AI
- NVIDIA Corporation alongside Microsoft Corporation will provide hundreds of millions of corporate users with access to a powerful industrial metaverse and supercomputing artificial intelligence resources via the Azure cloud
- Adobe Systems Incorporated and NVIDIA Corporation will collaborate to develop a new generation of cutting-edge generative AI models
- NVIDIA Corporation and Google Cloud are offering a powerful new platform for generative AI
- Amazon Web Services Inc. (AWS) owned by Amazon.com Inc. and NVIDIA Corporation are collaborating on next-generation infrastructure for developing large machine learning models and creating generative AI applications
GameStop Corp. and Tencent Music Entertainment Group released their quarterly and annual earnings this week, and their quotes reacted by going in opposite directions. UBS Group AG acquired Credit Suisse Group: the stock of the first company rose in value, while the shares of the second one declined sharply. NVIDIA Corporation announced the launching of a wide range of products for the AI market, and its share price has been growing since Monday.