Amazon buys MGM Studios for $8.45 BILLION 💰

Thursday, 27th May 2021 by Gotrade

Hey Gotraders,

Amazon (AMZN) will acquire MGM Studios for $8.45 billion. Does MGM sound familiar to you? It should! They own the James Bond catalog and they have made several hit shows including “The Handmaid’s Tale” and “Fargo.” They also own several popular reality TV shows such as “Shark Tank,” “Survivor” and “The Real Housewives.”

Is this a big deal? Yeah, it is! This is Amazon’s second-largest acquisition in its history! Their biggest ever acquisition was of Whole Foods in 2017 - for $13.7 billion!

This deal would give Amazon access to MGM’s library of over 4,000 films and 17,000 TV shows which it can then add to its Prime Video library. This deal emphasizes Amazon’s commitment to remaining competitive in the crowded streaming industry.

The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, Senior Vice President of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling.”

Why is this important? Amazon now has over 200 million Prime subscribers globally. They spent $11 billion on video and music content last year. It is apparent that they are more than willing to make big investments on acquiring content and using it as a strategy to buoy Prime memberships. Amazon’s CEO Jeff Bezos thinks that these investments reinforce Amazon’s “flywheel effect,” in that it attracts more Prime subscribers, who then tend to spend more on the site.

📈 Meme stocks are popping again 🎢

Here we go again. Just when you thought that meme stocks were done with their rally, they are back yet again! *shakes head*

I believe the bounce back in these thematic names are a function of two components: the oversold conditions that currently existed in GME & AMC due to the bitcoin pullback and profit-taking” - Jeff Kilburg, Chief Investment Officer at Sanctuary Wealth.

Kilburg also goes on to say “I also believe the newly injected investor confidence with U.S. equity markets hovering near all-time highs makes a difference. A high tide lifts all boats.”

GameStop (GME) and AMC (AMC) are both up 37% and 60% respectively this week. Stocks of GameStop closed at $242.56 while AMC closed at $19.56.

📈 Nvidia’s sales are up 84% 🚀

Nvidia’s (NVDA) earnings report beat analysts’ expectations on both counts. They reported $3.66 earnings per share on sales of $5.66 billion while analysts were expecting earnings of $3.28 on sales of $5.41 billion. Their earnings are up 103% year-on-year while sales are up 84%. Their stellar performance can be attributed largely to strong gaming and data-center processor sales. Interesting to note that Nvidia reported sales of $155 million purely from processors used for cryptocurrency mining. Hmm..

Stocks of Nvidia are up 19.72% year-to-date and closed at $628 yesterday.

Top movers & shakers 🎢

What else is making headline news 📰

  1. Abercrombie & Fitch (A&F) reports 61% jump in first-quarter sales.

  2. Apple (AAPL) is looking to strike deals with ‘alternative payments’ providers.

  3. Snowflake (SNOW) stock tumbles as product revenue guidance edges by estimates.

  4. Ark Invest buys nearly $20 million worth of Bitcoin.

  5. Dutch court rules oil giant Shell (RDS.A) must cut carbon emissions by 45% by 2030 in a landmark case.

Popular companies releasing earnings this week 💰

Thursday: Salesforce (CRM), Medtronic (MDT), Costco (COST), Dell (DELL), Autodesk (ADSK), CIBC (CM), Dollar General (DG), HP (HPQ), Best Buy (BBY),  Dollar Tree (DLTR), Ulta Beauty (ULTA), Plug Power (PLUG), Gap (GPS), Box (BOX)

A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.

The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.

That’s all from us for now. 

Signing out,

Gotrade Team

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