Thursday (May 15) Focus:
Although Foot Locker's stock price has stabilized at over $20 for most of 2024, its stock price has been hit since the beginning of the tariff war and has been losing ground. This is mainly because the tariffs are mainly aimed at China and other Asian countries, which happen to be the main producers of sports shoes and other footwear.
Foot Locker IncDick’s Sporting Goods CEO Lauren Hobart said in his first quarter results in March: “The footwear business has become a very, very important business for us.”
Foot Locker's stock price has stabilized at over $20 for most of 2024. But since the tariff war began, its stock price has been hit by blows, because these tariffs are mainly aimed at China and other Asian countries, which happen to be the main producers of sports shoes and other footwear. (Archive Photo)After acquiring Foot Locker, one of the largest sneaker retailers in the United States, Dick’s Sporting Goods will be able to consolidate its footwear market share and expand its store size, thereby gaining an advantage in competition in a larger business. This is an opportunity for Foot Locker and Dick’s Sporting Goods to expand profitability.
UnitedHealth, the U.S. insurance leader, fell 6.51% before trading tonight, and was at $287.95. Previously, the Wall Street Journal reported that the U.S. Department of Justice is investigating possible health insurance frauds by companies. The report quoted people familiar with the matter as saying that the relevant investigation had already begun last summer. The focus of the federal investigation is on the company's Medicare Advantage business. According to a person familiar with the matter, coffee chain giant Starbucks has contacted private equity companies, technology companies and other institutions and plans to sell its business in China, including related equity. Starbucks sent a letter to several potential investors through a financial adviser to solicit their opinions on China's business and development direction, people familiar with the matter said. The deal could value these assets to billions of dollars, people familiar with the matter said. Starbucks shares rose 0.83% before trading tonight, at $87.25. Shares of AI server maker Super Micro Computer fell 1.80% before trading tonight, at $44.19. The company's stock price rose 16% overnight to close at $44.99. Super Micro Computer's $20 billion deal with Saudi Arabian data center company DataVolt this week boosted the company's stock price, driving it to rise for three consecutive trading days, with a cumulative increase of 41%. On Thursday, let’s take a look at the acquisition of sportswear retail chain Foot Locker. The stock soared 82.44% before trading tonight, at $23.48. Pre-market active stocks are in sequence: Nvidia, Tesla, Super Micro Computer, Palantir Technologies and Intel. At the time of press time, the stock prices of these five active stocks all fell. (NYSE: FL) Major index futures in the Wall Street stock market in the United States fell on Thursday (May 15). Market investors are closely watching the upcoming speech by Federal Reserve Chairman Powell today to better understand how the central bank plans to advance loose monetary policy. This is also Powell's first public speech since last week's policy meeting. At last week's policy meeting, the Federal Reserve kept interest rates unchanged for the third time. The United States will also release its April producer price index (PPI) and latest retail sales data tonight. At the time of 7:00, the Standard & Poor 500 futures fell 29.80 points or 0.51% to 5862.80 points; the Nasdaq 100 futures, dominated by technology stocks, fell 131.3 points or 0.62% to 21,187.90 points; the heavyweight Dow Jones Index futures also fell 158.60 points to 41,892.50 points. U.S. stock markets rose and fell overnight (Wednesday) and ended up slightly higher. The Standard & Poor 500 index rose slightly by 6.03 points overnight to close at 5892.58 points. The Dow Jones Index fell 89.37 points and closed at 42,051.06 points. The Nasdaq 100 index rose 0.57% or 121.51 points to close at 21,319.21 points. The U.S. stock market was active overnight, with the total trading volume on the exchange being 19.73 billion shares, which is more than the average trading volume of 16.77 billion shares in the past 20 days.
Pre-market trading focus:
The first news came out was the Wall Street Journal. Dick’s Sporting Goods plans to acquire Foot Locker for $24 per share, the report quoted people familiar with the matter as saying. This acquisition price is nearly 90% higher than the $12.87 closing price of Foot Locker during the normal overnight trading hours. The report also said that unless there is a last-minute change, the deal may be completed as early as tonight.
In addition to Foot Locker, earlier this month, sneaker maker Skechers USA also agreed to be acquired by investment company 3G Capital. The deal is valued between $9 billion and $10 billion, 30% higher than the 15-day volume-weighted average share price of Skechers USA before the deal was announced.
At the end of the overnight trading, the market suddenly rumored that Dick’s Sporting Goods will reach an agreement with sportswear retail chain Foot Locker to acquire Foot Locker for US$2.3 billion. After the news spread, Foot Locker's stock price immediately soared by 69.31% to $21.79 during the after-hours extended trading hours.
However, some analysts said on various social platforms that excluding the impact of the tariff war, the acquisition price of $24 is actually understandable. Dick’s Sporting Goods may take advantage of the current market’s somewhat “chaotic” and quickly “seize market opportunities” to acquire a company that will help it achieve its long-term expansion goals at a reasonable price. After all, one of Dick’s Sporting Goods’ key growth strategies is to expand its footwear business.