Here's what went on this past week with Tesla, Pfizer, and Adobe shares; and S&P 500, Dow Jones Industrial Average, and NASDAQ Composite US stock indices.

Pfizer announced the acquisition of Arena Pharmaceuticals

On Monday 13 December 2021, the American pharma giant published a press release on its website announcing that it was acquiring the US biopharma company Arena Pharmaceuticals.

According to the deal, each common share of Arena Pharmaceuticals, which on Friday closed at $49.94, will cost Pfizer $100. The overall sum of the agreement is $6.7 billion.

Pfizer's management is confident that the drugs created by Arena Pharmaceuticals for treating gastroenterological, cardiologic, and dermatologic diseases are promising and can help increase sales noticeably in the next few years.

Pfizer and Arena Pharmaceuticals shares grow

The shares of both mentioned companies reacted by seeing growth. On 13 December 2021, the shares of Pfizer, Inc. (NYSE: PFE) closed with 4.59% growth at $55.2.

On the same day, Arena Pharmaceuticals Inc. (NASDAQ: ARNA) shares leapt by 80.38% to $90.08. Since January 2021, the shares of the former company have increased 59.7% and of the latter 20.9%.

Elon Musk sells Tesla stock again

According to filings with the US Securities and Exchange Commission, on 13 December 2021 Elon Musk sold another 934,091 of Tesla shares for $906.5 million.

Over the course of the last 5 weeks, the CEO of the world's most expensive car manufacturer has sold company stock worth $12.7 billion. Musk has managed to offload almost 12 million Tesla shares in a stock-selling spree that started in November 2021.

Tesla’s market capitalisation shrinks under $1 trillion

These latest stock sales affected the share price of the most popular electric car manufacturer. On Monday 13 December 2021, Tesla Inc. (NASDAQ: TSLA) shares dropped almost 5%, closing at $966.41 per share.

For the first time since 22 October 2021, Tesla's market cap fell under $1 trillion. The negative trend persisted on Tuesday 14 December 2021, with Tesla shares losing almost an additional 1%, closing at $958.51.

How did the US indices react to the PPI publication?

On 14 December 2021, the US published the November Producer Price Index. Compared to the statistics of the same month last year, the PPI has grown by almost 9.6% – this is the largest increase since 2010.

The growth of the US wholesale prices, announced on Tuesday, resulted in declines in the three key indexes: the NASDAQ Composite (NAS100) saw a 1.14% decline to 15237.6 points, the S&P 500 (US500) dropped 0.75% to 4634.09 points, and the Dow Jones Industrial Average (US30) fell 0.3% to 35454.69 points.

The outcome of the Fed conference changed the course of stock indices

On 15 December 2021, the US Federal Reserve System's two-day conference had come to an end. It was decided to speed up the taper of the stimulus bond-buying programme. Buyback of bonds would be cut down, not by $15 billion a month but by $30 billion.

This year, the interest rate on federal loans will remain at 0-0.25%. However, in 2022, interest rates will be raised to fight inflation. The Fed is planning a 1% increase over three rate hikes in 2022, while in 2023 interest rates would rise to 2%.

On Wednesday 15 December 2021, after the outcome of the Fed conference was announced, the NASDAQ Composite grew 2.15% to 15565.6 points, the S&P 500 increased 1.63% to 4709.84 points, and the Dow Jones Industrial Average (IXIC) grew 1.07% to 35926.77 points.

Adobe’s Q4 2021 revenue dropped 45%

On Thursday 16 December 2021, before the start of the trading session, American software developer Adobe Systems Incorporated published its Q4 2021 report.

The company reported that in the September-November period, revenue grew 20% to $4.11 billion, compared to the statistics of the same period last year. However, net profit dropped 45% to $1.23 billion, and the EPS declined 44.6% to $2.57.

The forecast for the next financial year did not impress Adobe's investors and Wall Street. Adobe's management expects that in the financial 2022 targets revenue will reach $17.9 billion, and the amended EPS $13.7. Analysts forecast that Adobe's annual revenue will have increased to $18.2 billion, and its EPS to $14.26.

Quarterly report sent Adobe stock down 10%

On Thursday 16 December 2021, following the company's report and forecast, Adobe Systems Incorporated (NASDAQ: ADBE) stock dropped 10.19% to $566.09. Since January 2021, the total growth of Adobe shares is 13.2%.

Summing up

Pfizer is acquiring Arena Pharmaceuticals for $6.7 billion to expand on its assortment of drugs and thereby increase sales – the shares of both companies grew as a result of the acquisition.

Elon Musk sold Tesla shares once again. The car manufacturer's stock fell almost 5% as a result. Tesla's market capitalisation fell below $1 trillion.

The growth of the PPI in November made stock indices in the US fall, yet the outcome of the Fed conference changed their course, and the indices grew in consequence.

Adobe Systems published its Q4 2021 financial report with a 45% decline in profit, which made the shares drop over 10%.


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