Why did the NVIDIA-Arm deal fall through? What is happening with Peloton? Did Walt Disney's and Twitter's quarterly reports succeed in meeting the expectations of investors and analysts? The answers to these questions are in this article.

The deal between NVIDIA and Arm is cancelled

On Monday, 7 February 2022, NVIDIA, the American manufacturer of GPUs and microchips, made the final decision to call off the deal with SoftBank to acquire semiconductor design company Arm Ltd.

The deal was first announced in September 2020. According to the Financial Times, the trade value was initially $38.5 billion, but it eventually rallied up to $66 billion. Under the terms of the agreement, SoftBank and Arm have the right to keep $2 billion in the event that the deal is cancelled.

The main reason for what happened on 7 February was the resistance of the regulating authorities of the US, the EU, China, and the UK, and also such corporations as Microsoft, Qualcomm, Amazon, and Intel.

RResponse of the NVIDIA stock, and Arm’s future plans

The information that such an expensive purchase won’t work impacted the shares of NVIDIA Corporation (NASDAQ:NVDA), which rose 6.36%, up to $267.05 per share. The first rumours spread in late January and since then, the stock leaped up 21.7%.

Arm is now preparing to file for an IPO in spring 2023. So far, there is no exact information on what stock exchange it is planning to trade on. British authorities view the chip manufacturer as a strategic national asset and therefore want its shares to trade on the London Stock Exchange.

However, SoftBank is planning to hold the IPO in New York because American markets offer higher prices for IT stocks. In addition, it will help the Japanese holding to contain the influence of British national regulators.

Peloton announced its business reboot

Peloton sells stationary bicycles and treadmills as well as subscriptions to remotely participate in a variety of its exercise classes. The company has demonstrated impressive growth in the midst of the COVID-19 pandemic and the quarantine restrictions; however, it is currently going through difficult times.

In 2021, Peloton Interactive Inc. (NASDAQ:PTON) stock plummeted 76.4%, dropping from $151.72 to $35.76 per share. On Monday, 7 February 2022, speculations of a possible acquisition of Peloton by a major corporation made the stock leap up almost 21%, to $29.75 per share.

Peloton: new management and corporate restructuring

On Tuesday, Peloton announced that the company’s co-founder John Foley would be replaced in his CEO position by the former Spotify and Netflix executive Barry McCarthy. Many experts believe that Foley is to blame for a lot of issues the fitness startup has been facing.

The new management was informed straight away about the global changes in the company: the factory project went into abeyance, the workforce was reduced by 20%, salaries and bonus plans were revised, warehouses and delivery services were closed, and the company has started to improve its cooperation with the leading logistics service providers.

On the same day, 8 February 2022, the news made Peloton Interactive Inc. stock leap up 25.28% and reach $37.27 per share. Growth continued on the following day: +4.02%, up to $38.77.

Walt Disney report: streaming audience gain

On Wednesday, 9 February, Walt Disney released its financial statement for October-December 2021. The biggest contribution to the company’s revenue was made by theme parks, +101.6% in comparison with the result of the same quarter the year before, up to $7.2 billion.

The total number of Disney+ subscribers added 11.8 million during the reporting period, reaching 129.8 million, while the experts had expected 8.17 million new users. The management of the company remains confident that the audience will reach 260 million subscribers by 2024.

Important data from the report

  • Revenue — $21.8 billion, +34%, forecast — $20.3 billion.
  • Return on share — $1.06, +231.3%, forecast — $0.
  • Operating profit— $3.3 billion, +144.6%.

The Walt Disney stock response

The Walt Disney Company (NYSE:DIS) stock started growing even before the report was released. On 9 February, it added 3.33%, up to $147.23 per share.

After the quarterly report release, the stock continued seeing growth and added 3.35%, up to $152.16 per share. Since January, the shares lost almost 2%.

Twitter report: profit squeeze and stock repurchase

On Thursday, 10 February 2022, Twitter reported on the fourth quarter and the whole of 2021. This is the first quarterly statement since Jack Dorsey left the company.

In October-December 2021, the number of active Twitter daily users increased 13% in comparison with the same period of 2020, up to 217 million. The reading almost matched the predicted one of 218.5 million users.

The company announced its intentions to increase the stock repurchase volume from $2 billion to $4 billion. Experts believe this statement by the company’s management should distract investors from the rather weak data in the quarterly report and clouded prospects.

Important data from the report

Revenue$1.57 billion (+21.6%)$5.1 billion (+36.6%)
Return (loss) on share$0.21 (−22.2%)$0.28 (−80.6%)
Net profit (loss)$181.7 million (−18.2%)$221.4 million (−80.5%)

Response of the Twitter stock

On 9 February, a day before the reports were released, the shares of Twitter Inc. (NYSE:TWTR) demonstrated a 5.14% gOn 9 February 2022, one day before the reports were released, the shares of Twitter Inc. (NYSE:TWTR) demonstrated a 5.14% growth, up to $37.83. However, the weak data did not impress investors, and on 10 February the stock lost 1.98%, down to $37.08. Since the beginning of 2022, the stock dropped 20.2%.

Summing up

NVIDIA and Arm confirmed that their deal was called off — the NVIDIA stock grew 6%. Arm is planning to file for an IPO in spring 2023.

Peloton announced the change of its CEO, workforce reductions, and the reboot of its business. The stock responded with a 25% growth.

Walt Disney released its financial statement for October-December 2021. The company’s revenue from its theme parks leaped up 102%, adding 3% to the share price.

Twitter reported on the fourth quarter and the whole of 2021 and also announced the stock repurchase worth $4 billion. The stock dropped 2%.

Video Feature: Tesla, NVIDIA and Peloton shares analysis

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Server is the guru of searching for market insights. Since 2019 he writes about everything that might be useful to the investor, focusing on the stock market and its assets.