The judge in a contentious lawsuit that tried to stop the long-in-the-works merger between T-Mobile and Sprint is planning to rule in favor of the deal, according to three people briefed on the matter.
The verdict, expected Tuesday, will come at the end of an unusual suit filed in June by attorneys general from 13 states and the District of Columbia. The challenge came after federal regulators gave their blessing to the deal, which would combine the nation’s third- and fourth-largest wireless carriers and create a new telecommunications giant to take on the two largest, AT&T and Verizon. The states argued that the combination of T-Mobile and Sprint would reduce competition in the telecommunications industry, lead to higher cellphone bills and place a financial burden on lower-income customers.
Judge Victor Marrero of United States District Court in Manhattan presided over the case. Final arguments took place last month.
None of the parties have read the ruling yet, the three people said, leaving open the possibility that the decision includes conditions or restrictions. Both companies are planning to make announcements on Tuesday, the people said. Shares in Sprint shot up more than 60 percent and T-Mobile stock rose about 10 percent in aftermarket trading.
The lawsuit was the final roadblock to the merger, which made steady progress through the approval process since it was announced in April 2018. If the judge’s ruling goes in favor of the two companies, the deal will create a new telecommunications giant, called T-Mobile, that will have more than 100 million customers.
T-Mobile and Sprint have long said the merger was crucial to their futures in an industry challenged by pricing wars that have undercut profits and stalled growth. By combining with Sprint, T-Mobile has said it would be able to accelerate its development of 5G, the next generation of cellular networks.
The deal is also important to Sprint, which has bled cash and subscribers in recent years. SoftBank, the Japanese conglomerate the controls Sprint, has been looking to raise cash for its newest tech investing fund.
The new company will be led by Mike Sievert, a T-Mobile executive who will take over for John Legere, the face of the company whose contract is up in April.
Mr. Legere, the flamboyant, social-media-savvy chief executive of T-Mobile since 2012, helped drive the merger, which won the approval of the Justice Department and the Federal Communications Commission last year. To get the nod from the government, T-Mobile and Sprint agreed to sell off significant portions of their businesses to the pay-television operator Dish Network as part of a plan to create a potential new major wireless company.
Marcelo Claure, the executive chairman of Sprint, became a close ally of Mr. Legere’s throughout the campaign to secure approval for the deal. Mr. Legere made numerous visits to both the Federal Communications Commission and the Justice Department. Mr. Claure hosted a fund-raiser for Representative Marsha Blackburn, a Tennessee Republican who was eventually elected to the Senate in November 2018.
Several lawmakers expressed misgivings over Mr. Legere’s Washington visits, noting the dozens of times that he and other T-Mobile executives stayed at the Trump International Hotel there. The companies have denied doing anything inappropriate to curry favor with federal officials.
The deal also represents a victory for Masayoshi Son, the billionaire entrepreneur and outspoken leader of SoftBank, which has recently come under pressure from the activist investor Elliott Management. SoftBank’s outsize investments in tech start-ups, including WeWork, have failed to deliver for investors, and Mr. Son has struggled to raise more cash for a new investment fund. He has been trying to unload Sprint for years.
President Trump speaks during an event at the White House in Washington, D.C., on Thursday, Feb. 6, 2020.
Al Drago | Bloomberg | Getty Images
President Donald Trump's proposed budget would reportedly kill a loan program that assisted automakers such as Ford Motor and Tesla in producing more environmental-friendly vehicles, including Tesla's all-electric Model S.
The proposed cut, according to the 2021 budget proposal, is to the U.S. Energy Department's Advanced Technology Vehicles Manufacturing Loan Program, which has distributed more than $8 billion in loans to companies to produce such vehicles, according to the program's website.
Most recently, electric vehicle startup Lordstown Motors, which purchased GM's shuttered Lordstown Assembly plant in Ohio, was in discussion with government leaders about a loan from the Advanced Technology Vehicles Manufacturing Loan Program.
Lordstown Motors, in an emailed statement on Monday to CNBC, said it had not yet applied for the loan. It said the company continues to evaluate its options for financing: "We are continuing conversations with government leaders as we explore our options, but we see it as one of our many options to consider. We will factor this new information into our decision making process, but our business model stands on its own without it."
A spokesperson for the federal program, which awarded its first loan in 2009, did not immediately respond for comment. The budget refers to the program and others as "costly, wasteful, or duplicative programs."
Previous loans, according to the program's website, have included $465 million to Tesla for production of the Model S in 2010; $5.9 billion to Ford to upgrade 13 facilities in six states for a variety of vehicles in 2009; and $1.45 billon for Nissan Motor for a new advanced battery manufacturing plant and facility upgrades for a plant in Tennessee for to produce the all-electric Nissan Leaf in 2010.
As of September 2017, both Tesla and Nissan had fully repaid their loans, according to the website. Ford, according to a company spokeswoman, is scheduled to repay its loan in September 2022.
As of 2016, the Advanced Technology Vehicles Manufacturing Loan Program was authorized to loan more than $16 billion to continue "helping the auto industry grow local economies across the United States while increasing American economic competitiveness around the world," according to the website.
This isn't the first time Trump has wanted to cut funding for the auto industry. The White House last year proposed eliminating a tax credit worth up to $7,500 on the purchase of new electric vehicles, a move it said would save the U.S. government $2.5 billion over a decade. The credits were eventually saved.
Slack Technologies Inc. CEO Stewart Butterfield stands on the trading floor during the company's IPO at the New York Stock Exchange (NYSE) in New York, U.S. June 20, 2019.
Brendan McDermid | Reuters
Slack filed an 8-K Monday downplaying a news report that sent its stock surging more than 15%.
Shares of Slack fell as much as 8% after hours following Slack's filing.
The stock was halted shortly before the end of the trading day, and the filing was released after hours. Earlier in the day, Business Insider reported that Slack had "just scored its biggest customer deal ever," saying IBM had recently decided to deploy its technology to all of its 350,000 employees.
In the filing, Slack said "IBM has been Slack's largest customer for several years and has expanded its usage of Slack over that time." The company added it would not update its financial guidance for the fourth quarter or its fiscal year ended January 31, 2020.
Business Insider reported that an IBM executive said more than 300,000 of its employees already had access to Slack and the company was working to onboard the last 50,000. The report said the expansion means "IBM is now Slack's single largest customer." Slack's filing confirmed IBM has long been its largest customer.
U.S. stocks kicked off the week slightly higher, shaking off earlier declines as the coronavirus death toll overtook that of the 2002-2003 SARS outbreak.
Later this week, investors will receive a myriad of corporate earnings results, January retail sales data and semi-annual congressional testimony from Federal Reserve Chair Jerome Powell.
—
4:43 p.m. ET: Slack says IBM has been its largest customer for years, addressing earlier media reports
Slack, in an SEC filing late Monday, said IBM has been slowly expanding its usage of Slack and has been Slack’s largest customer for several years.
The filing was in response to a Business Insider article earlier Monday saying that IBM had purchased Slack’s software for its employees to use worldwide. After the report, Slack shares were up as much as 21% intraday before paring some gains.
Slack also added that it is not updating its financial guidance for the fourth quarter or full year of the fiscal year ending January 31.
Shares of Slack resumed trading after market close at 4:43 p.m. ET.
—
4:02 p.m. ET: Stocks close higher, S&P 500 and Nasdaq see closing highs
Here’s where the major indices were as of 4:02 p.m. ET:
S&P 500 (^GSPC): +0.73% or +24.42 points to 3,352.13
Slack (WORK) stock was halted at 3:49 p.m. ET, possibly ahead of an announcement, according to Bloomberg. The stock is up more than 15% so far on Monday.
Earlier Monday, reports suggested IBM (IBM) was going to have its more than 350,000 employees use Slack’s workplace communications technology, immediately unlocking a huge new user base and corporate customer for the newly public company.
__
1:55 p.m. Earnings are topping expectations, but...
An electronic screen at the Nasdaq MarketSite shows the decline in the price of Apple shares, center, at the start of the trading day Wednesday, Oct. 8, 2008 in New York. Wall Street extended its huge decline Wednesday as an emergency interest rate cut failed to alleviate investors' fears that the paralysis in the credit markets will set off a global recession. (AP Photo/Mark Lennihan)
All things considered, it’s been a banner earnings season as nearly70% of S&P 500 companies beat estimates, Refinitiv data showed — well above the long-term average.
Still, Blackrock thinks the bar is being set too high, and all but guarantees a letdown:
“Analysts currently expect U.S. earnings to grow about 9% in 2020, a hair lower than the typical range for the start of the year. Yet we see that as an ambitious goal given potential for rising wages and other cost increases to further compress corporate margins. Our analysis of U.S. corporate profit margins over the stages of the business cycle since 1965 showed that profit margins have tended to contract in late-cycle periods. High earnings expectations, combined with these late-cycle dynamics and more attractive valuations in other regions, set a high bar for sustained U.S. outperformance.”
Add in the upcoming U.S. general election and coronavirus, and companies need to brace for “the potential for a highly volatile and noisy nine months ahead [featuring] a wide range of potential policy outcomes,” the investment giant said:
The bottom line: We stick to our view that global growth will edge higher in 2020 but expect the pickup to be delayed. U.S. equities could outperform on any further growth scares triggered by the coronavirus outbreak, given their quality bias and perceived resilience. But we remain neutral on U.S. equities, given elevated political uncertainties and the risk to margins. Overall, we stand by our moderate pro-risk stance, and expect an eventual growth pickup to support cyclical equity markets such as EM and Japan. Within U.S. equities we favor quality companies with above average return on equity, low leverage and strong cash flow.
—
12:20 p.m. ET: Retail shipments see ‘sharper-than-usual’ drop
The National Retail Federation, which tracks retail shipment volumes at major U.S. ports, warned on Monday that the coronavirus epidemic is adding to the typical slowness associated with Lunar New Year. That means a usual slump is “sharper-than-usual,” the organization says:
“February is historically a slow month for imports because of Lunar New Year and the lull between retailers’ holiday season and summer, but this is an unusual situation,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said.
“Many Chinese factories have already stayed closed longer than usual, and we don’t know how soon they will reopen. U.S. retailers were already beginning to shift some sourcing to other countries because of the trade war, but if shutdowns continue, we could see an impact on supply chains.”
Accordingly, trying to forecast container volumes “has become even more challenging” and it’s far from clear when the manufacturing sector will normalize, the NRF said.
—
11:20 a.m. ET: Investors unprepared for this ‘tectonic shift’
In this photograph taken on December 8, 2016, an automated robot works on an assembly line of Highly Electrical Appliances India Pvt. Ltd. at a company air-conditioner compressor plant at Matoda, some 20 kms. from Ahmedabad. / AFP / SAM PANTHAKY (Photo credit should read SAM PANTHAKY/AFP via Getty Images)
In a lengthy study published Monday, Bank of America put a new spin on a slowly unfolding story: Namely, that global supply chains are migrating to other countries like Southeast Asia, India and even North America.
According to a BofA study, “...much more surprising was that companies in about half of all global sectors in North America declared an intent to 'reshore'. This was particularly true for high-tech sectors and industries for which energy is a key input. If borne out, this could represent the first reversal in a multi-decade trend.”
In all, multinational companies worth $22 trillion in market cap are being impacted, and the bank warns that investors may not be ready. So what’s behind the shift? BofA noted there are several reasons, but among them are tariffs, narrowing tax advantages, and national security. And the kicker:
“In our view, these movements are ‘tectonic’: slow moving, persistent with major changes to the business environment for global companies.
“...We don't think investors are fully prepared for this tectonic shift. In our view, the US could be a significant beneficiary of this process, while Chinese firms are perhaps most at risk. Even more striking, our survey found almost universal intent to use automation.”
As such, the bank recommends adding exposure in automation, industrials and banks stocks in the regions set to become beneficiaries of the shift.
—
11:00 a.m. ET: Stocks and the coronavirus outbreak
In the last couple of sessions, Wall Street has had a delayed reaction to coronavirus fears. Yet according to DataTrek, there are several reasons why stocks haven’t priced in more aggressive losses:
The illness is still largely contained to Mainland China, with 99% of the worldwide cases through today. Even if you do not trust the Chinese government numbers, the count outside the country is trustworthy.
China is addressing the outbreak aggressively, with mass quarantines and other measures enabled by its powerful authoritarian governance structure.
Markets know this means 1H global economic growth will slow, but they also assume a containment of the disease during this timeframe because of the steps outlined in the prior point.
The virus will make for a temporary truce in the US-China trade war that will extend for at least several more months. President Trump knows there is no point in pushing on the issue while the Chinese government is focused on this crisis.
...A 2H 2020 re-acceleration in global growth (post the presumed containment of the virus) will serve President Trump well going into the November US general election. Markets see him as better for the US economy than current Democratic front-runner Bernie Sanders.
Bond markets, in true on-brand form, see the economic effects of the coronavirus as modestly deflationary (more on this in a moment). Yields have therefore declined around the world, supporting equity valuations. And since central banks are fixated on deflation, the chance they will cut rates is rising.
All told, the firm points out that the stock market is more of a leading indicator, with investors pricing in where growth/earnings will end up in 6 months time. “Investors see the real possibility of a period of global economic catch-up” in the second half — and a Trump reelection bolstering next year and beyond.
—
10:34 a.m. ET: Stocks push higher, shaking off coronavirus fears
After opening slightly to the downside, the S&P 500 and Dow pushed into positive territory about an hour into the regular trading session.
Here were the main moves in markets, as of 10:35 a.m. ET:
S&P 500 (^GSPC): +0.36% or +11.85 points to 3,339.55
10:32 a.m. ET: Tesla’s stock jumps again, extending incredible run
Tesla’s (TSLA) stock rose as much as much as 9.6% on Monday to $819.99 at the highs of the morning session, as shares of the electric car-maker continued to surge.
The stock received an apparent boost over the weekend after Chinese officials said Tesla’s Shanghai Gigafactory would resume production Monday, Feb. 10, with the government helping it work through the spread of the coronavirus, Reuters reported.
Tesla executives had said during their earnings call with investors late last month that the company would see a 1-1.5 week delay in ramping production at the Shanghai Gigafactory amid the coronavirus.
Shares of Tesla were up about 80% for the year to date through Friday’s close.
—
10:27 a.m. ET: U.S. economic growth could take a hit in Q1 as coronavirus impact spreads
U.S. real gross domestic product growth could slow well below 1% in the first quarter as the impact of the coronavirus takes hold, according to a note from UBS economist Seth Carpenter Monday. These effects, however, will likely reverse in the second and third quarters this year, he added.
We see the net effect on the US as being small, but the quarterly swings are likely to be measurable. For the US, we see the effect coming through three channels: tourism, exports, and a temporary disruption to manufacturing because of delayed imports. For Q1, we have trimmed our real GDP estimate by 0.2 [percentage points] to a 0.4% [quarter on quarter] annual rate. We assume that the hit in the US from the coronavirus is mostly reversed over the course of Q2 and Q3. There are significant risks to this forecast. Our forecast change is conditional on China reopening production next week and based on the China team’s assessment that production disruptions will be small.
UBS’s prediction for U.S. Q1 GDP is below that of the Atlanta Fed. The regional bank’s closely watched GDPNow model estimates real GDP growth of 2.7% in the first quarter.
—
10:20 a.m. ET: Chinese hackers charged with Equifax breach
Four Chinese military hackers have been charged in the 2017 breach of the Equifax credit reporting agency that affected nearly 150 million American citizens, Attorney General William Barr said Monday.
—
9:35 a.m. ET: U.S. stocks open little changed amid coronavirus outbreak
The Dow and S&P 500 opened slightly in the red Monday morning as fears over the coronavirus continued to mount. However, each index pared losses from the pre-market session.
Here were the main moves in markets, as of 9:35 a.m. ET:
S&P 500 (^GSPC): -0.05% or -1.6 points to 3,326.11
7:47 a.m. ET: Stock futures mixed as coronavirus death toll rises
Contracts on the three major indices were mixed Monday morning, after falling for the first time in five sessions on Friday. Fears over the spread of the deadly coronavirus continued to be a focal point for global investors.
As of Sunday evening, the coronavirus had claimed the lives of 908 in mainland China, and total cases rose to 40,171, according to China’s National Health Commission. Ninety-seven people died from the disease on Sunday alone. More have now been killed by the coronavirus than during the SARS outbreak of 2002 to 2003, which killed 774 individuals.
Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, noted in a Twitter post Sunday that some coronavirus cases have begun to emerge even in individuals who did not travel to China.
There’ve been some concerning instances of onward #2019nCoV spread from people with no travel history to 🇨🇳. The detection of a small number of cases may indicate more widespread transmission in other countries; in short, we may only be seeing the tip of the iceberg.
In the UK, where there have so far been eight confirmed coronavirus cases, the country’s health secretary called the outbreak “a serious and imminent threat to public health.” Elsewhere, more than 3,000 people have been stuck on a cruise ship in Yokohama, Japan, in a two-week quarantine, with dozens on board having tested positive for the coronavirus. Separately, home-rental services Airbnb has halted bookings of all listings in Beijing through the end of February in effort to contain the coronavirus.
Here were the main moves during the pre-market session, as of 7:47 a.m. ET:
S&P futures (ES=F): 3,324.75, down 0.75 points or 0.02%
Dow futures (YM=F): 29,025.00, down 19 points or 0.07%
Nasdaq futures (NQ=F): 9,413.25, up points or 0.04%
Crude oil (CL=F): $50.18 per barrel, down $0.14 or 0.28%
Gold (GC=F): $1,575.10 per ounce, up $1.70 or 0.11%
A man wearing a protective face mask walks on an overpass in Lujiazui financial district in Shanghai on February 10, 2020. - The death toll from the novel coronavirus surged past 900 in mainland China on February 10, overtaking global fatalities in the 2002-03 SARS epidemic, even as the World Health Organization said the outbreak appeared to be stabilising. (Photo by NOEL CELIS / AFP) (Photo by NOEL CELIS/AFP via Getty Images)
Slack shares were up 14.5% to $26.32 Monday afternoon.
Photograph by Drew Angerer/Getty Images
Slack
shares were trading sharply higher Monday after a report said the company has secured its single-biggest contract ever—a deal to provide its collaborative-communications software to the 350,000 employees at
IBM.
The news was reported Monday morning by Business Insider. “Going wall to wall in IBM—it’s basically the maximum scale that there is, so we now know that Slack will work for literally the largest organizations in the world,” Slack CEO Stewart Butterfield told the publication.
Slack shares (ticker: WORK) have floundered since their direct listing in June 2019. The stock opened for trading at $38.50, and over time drifted lower, pressured in part by the perception of increased competition from its primary rival,
Microsoft Corp.’s
(MSFT) Microsoft Teams. But the stock has picked up steam in recent sessions—up about 32% this month—and was on track Monday for its single best day since going public.
Neither Slack nor IBM (IBM) immediately responded to requests for comment.
Slack was up 14.5% to $26.32 Monday afternoon and traded as high as $27.89, the highest price since September. The
Dow Jones Industrial Average
was up 0.2%.
"President Donald J. Trump has repeatedly demonstrated his willingness to use his position as President and Commander in Chief to disrupt the orderly administration of government functions, including federal procurements, to advance personal motives," Amazon said in the court filing. "There is no question he did so here."
ADVERTISEMENT
Amazon is suing the Pentagon over its decision to award the cloud-computing contract, called the Joint Enterprise Defense Infrastructure (JEDI), to Microsoft, claiming Amazon was the clear front-runner before Trump publicly intervened in the process last year.
Now, Amazon is asking the court to move into a discovery period that could allow Amazon to amass more documents and evidence to prove whether Trump interfered in the process behind closed doors.
The Pentagon's decision to award the cloud-computing award to Microsoft last year shocked industry watchers and analysts, who had almost universally predicted that Amazon –- the market leader in cloud-computing -– would receive the award, which will allow one company to create the cloud infrastructure across the entire Department of Defense (DOD).
“The preservation of public confidence in the nation’s procurement process requires discovery and supplementation of the administrative record, particularly in light of President Trump’s order to ‘screw Amazon,' " an Amazon Web Services spokesperson said on Monday, referring to an allegation by Mattis's former speechwriter that Trump had once asked how he could best "screw Amazon."
"The question is whether the President of the United States should be allowed to use the budget of the DoD to pursue his own personal and political ends," the spokesperson said.
The Pentagon has denied all allegations of political interference, insisting that Microsoft was simply best-positioned to carry out the complex cloud-computing project. Microsoft for the most part has stayed out of the fray publicly, vowing to carry out the contract in order to help supercharge the DOD's war capabilities.
It would be unprecedented to depose a sitting president as part of a company's government contract protest.
Amazon in a footnote wrote "a deposition of a sitting President of the United States presents unique circumstances" but vowed to "develop appropriate protocols and safeguards" to navigate the sensitive situation.
British Airways just set a new record for subsonic flight -- with some help from nature. The airline has confirmed Flightradar24 data showing that one of its Boeing 747s completed a New York to London flight in just 4 hours and 56 minutes, handily beating the previous best of 5 hours and 13 minutes set by Norwegian in 2018. A typical version of this flight takes 6 hours and 13 minutes, Flightradar24 said. The aircraft was helped by a stronger-than-usual (200MPH-plus) jet stream that took the 747 up to 825MPH -- technically faster than the speed of sound, but not supersonic as the winds would have prevented the aircraft from breaking the sound barrier.
This wasn't even the only potential record-setter. Virgin Atlantic had two flights that came close, one arriving just a minute later while another was three minutes behind. The airline even took potshots at British Airways on Twitter, claiming that it came close with half as many engines (on an Airbus A350-1000) and half the fuel.
This won't come close to beating the absolute speed record. That honor still goes to a British Airways Concorde that completed the flight to London in just under 2 hours and 53 minutes, reaching speeds as high as 1,350MPH on its 1996 journey. The 747's trip is still an achievement, though, and this might be one of the quickest passenger flights you see until (and unless) supersonic airliners return to the skies.
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
