Tech Roundup: Elon Musk's Twitter circus comes to town
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Tech sector investors wouldn't have been faulted for thinking Wall Street was going to be relatively peaceful this past week. After all, it was a short trading week, with U.S. stock markets wrapping things up early due to the Good Friday holiday. And, with tech earnings reports set to start rolling in next week, if there was any time for things to be calm and quiet, it was the past four days.
But...Elon Musk had other plans.
Less than a week after revealing he had purchased a little more than 9% of Twitter's (NYSE:TWTR) outstanding stock, Twitter (TWTR) said on Monday that Musk had turned down an offer of a seat on the company's board of directors. In a Securities and Exchange Commission filing, Twitter (TWTR) said that while Musk wouldn't be in the company's board room, he would likely be letting Chief Executive Parag Agrawal know his thoughts about Twitter's (TWTR) business direction. And Musk didn't waste any time doing just that.
On Thursday, Musk said he was making an unsolicited offer to acquire the rest of Twitter (TWTR) that he doesn't own for $54.20 a share, or about $43 billion. Musk's offer represented a premium of 18.2% over Twtter's (TWTR) Wednesday closing price of $45.85 a share. Needless to say, Wall Street analysts had to ditch any plans they might have had for leaving work for an early start to the long weekend, and weighed in with their thoughts on what Musk's offer might mean for Twitter (TWTR). More drama was expected to emerge as Twitter's (TWTR) board assesses Musk's bid ahead of the company's first-quarter results, set for April 28.
Despite Musk and Twitter (TWTR) stealing much of the week's headlines, there were other things going on of note in the tech sector.
IBM (NYSE:IBM) got a rating upgrade from Morgan Stanley analyst Erik Woodring, who lifted his view on the tech giant to overweight with a $150-a-share price target. Woodring said IBM (IBM) was in a good position to weather issues that are expected to cast some shadows over the tech sector in the coming weeks. IBM (IBM) will also unofficially kick of the tech earnings season when it reports its first-quarter results on April 19.
China's recent efforts to lock down cities in order to stem a uptick in Covid-19 cases had some impact on Apple (NASDAQ:AAPL) this past week. Pegatron, a Taiwanese company that makes iPhones in China, reportedly suspended production at two of is plants in Shanghai and Kunshan following new edicts from Beijing.
Meanwhile, Apple (AAPL) also reportedly began building some of its iPhone 13 phones at manufacturing facilities in India.
As Apple (AAPL) remains the world's most-valuable company, and is sitting on a mountain of cash, Citi analyst Jim Suva said the company could be in line to buy back as much as $90 billion of its stock, and add tack on a 10% increase to its dividend payments.
Apple (AAPL) Chief Executive Tim Cook told a summit on network privacy that pending legislation in the U.S. and Europe could negatively impact the company's security and privacy efforts.
Along with IBM (IBM), Netflix (NASDAQ:NFLX) is scheduled to deliver its first-quarter results on April 19. As always is the case with Netflix (NFLX), the number of its new subscribers will go a long way toward determining investors' sentiment about the company over the near future. Truist analyst Matthew Thornton said he thinks Netflix (NFLX) could show positive gains in new subscribers, but also cut his price target on the company's stock to $409 a share from $470.
Meanwhile, Morgan Stanley analyst Benjamin Swinburne trimmed his price target on Netflix's (NFLX) stock to $425 a share from $450 due to what he said was some risk to the company's near-term subscriber growth expectations.