Tesla, Microsoft, and DocuSign: Weekly Digest (5-9 December)
This week, our focus is on Tesla, Microsoft, Activision Blizzard, DocuSign, Alphabet, and Oracle. Let's see how the stocks of these companies reacted to the latest events.
Tesla cuts down on production in China
On Monday 5 December, American car company Tesla Inc. announced that it was reducing the number of electric cars produced at its Shanghai facilities.
In December, production of the Y model will drop by 20% compared to November. This is due to the demand in the Chinese market not living up to the expectations of the corporation.
This may be the first case in Tesla's history when the company voluntarily reduced the number of electric cars produced in China. Previous reductions were due to the COVID-19 lockdowns and accessory supply issues.
On Monday, the shares of Tesla Inc. (NASDAQ: TSLA) lost 6.37%, reaching $182.45. The decline continued during the next trading sessions. As a result, since the beginning of the week and up to now, the quotes lost 11%.
The agreement between Microsoft and Activision Blizzard might never materialise
On Thursday 8 December, the Federal Trade Commission (FTC) announced its plans to go to court and seek prohibition of the agreement between the tech giant Microsoft Corporation and the game developer Activision Blizzard Inc. This could be the largest agreement of its kind in the history of the gaming industry. It was earlier announced that the sum of the purchase would amount to $68.6 billion.
FTC predicts that as soon as Microsoft engulfs Activision Blizzard, it will suppress all the competition in the sector. The producer of the Xbox game console may start manipulating game prices for its rivals, deteriorate the product quality for them, as well as change the terms and expiry dates of access to content.
On Thursday, the news about the FTC actions provoked a moderate reaction in the respective stocks: the shares of Microsoft Corporation (NASDAQ: MSFT) grew by 1.24% to $247.4, while the shares of Activision Blizzard Inc. (NASDAQ: ATVI) dropped by 1.54% to $74.76. It should be mentioned that the quotes of the tech company could have felt a positive influence by some other good news that we will talk about a bit later.
DocuSign report: revenue increased by 18%
On 8 December, the report for Q3, financial 2023 was filed by DocuSign, Inc., which has developed the technology for signing electronic documents safely. Revenue in August-October, compared to the statistics of the same part of the previous year, recorded growth of 18% to $645.5 million. Revenue from subscriptions increased by 18% to $624.1 million, while professional services revenue rose 27% to $21.4 million. Net loss reached $29.9 million and the loss per share was $0.15.
DocuSign, Inc. forecasts that this quarter's revenue will reach $637-641 million, and $2.5 billion in the whole of financial 2023. The report and forecast had a good influence on the share price of DocuSign Inc. (NASDAQ: DOCU): on Thursday, the trading session closed with a 3.97% growth to $43.75, and upon closing the shares grew by 10.51% more to $48.35.
Amazon, Microsoft, Google, and Oracle signed contracts with the Pentagon
On Thursday, it became known that the US Ministry of Defense signed a contract with the leaders in the market of Cloud computations – Alphabet Inc., Amazon.com Inc., Microsoft Corporation, and Oracle Corporation. The overall sum of the agreement is reported to reach $9 billion.
Certain contracts, which will remain in force until 2028, will provide the Ministry with cutting-edge Cloud services. The agreements were signed by the Joint Warfighting Cloud Capability project.
On the same day, the shares of Amazon.com Inc. (NASDAQ: AMZN) surged 2.14% to $90.35, Oracle Corporation stock (NYSE: ORCL) rose 1.64% to $80.07, while the shares of Alphabet Inc. (NASDAQ: GOOGL) dropped by 1.3% to $93,71.
Tesla Inc. announced cutting down on production in China due to low demand in the local market: the shares consequently lost 6%. The FTC is seeking a ban on the agreement between Microsoft Corporation and Activision Blizzard Inc., but this did not crash the shares.
DocuSign Inc. published a report for Q3, financial 2023: this sent the quotes surging 11% after trades closed. Alphabet Inc., Amazon.com Inc., Microsoft Corporation, and Oracle Corporation signed contracts with the Pentagon for an overall sum of $9 billion: the shares reacted moderately.