The daily business briefing: February 7, 2019
SoftBank announces a huge share buyback, Chipotle's stock surges after a strong earnings report, and more
SoftBank's stock skyrockets after it announces a big share buyback
SoftBank shares soared by nearly 18 percent on Thursday after the Japanese conglomerate's CEO, Masayoshi Son, announced a stock buyback after a strong quarterly earnings report. SoftBank Group, which reported a 50 percent surge in net income for the first three quarters of its fiscal year, said it would repurchase 112 million shares worth $5.46 billion over 11 months, or about 10 percent of its total outstanding shares. One investor called the move "enormous." "It's definitely going to ... propel the stock, at least in the coming months," Andrew Jackson, head of Japanese equities at SooChow CSSD Capital Markets (Asia), told CNBC's Squawk Box.
Chipotle surges after its earnings smash expectations
Chipotle shares jumped by 10 percent in after-hours trading on Wednesday after the embattled Mexican grill chain reported quarterly earnings and revenue that exceeded analysts' expectations. "I'm very pleased to report strong fourth quarter results with 6.1 percent comparable restaurant sales growth that included 2 percent transaction growth," CEO Brian Niccol said in a statement. The company, which benefited from rising foot traffic and higher menu prices, posted earnings per share of $1.72, smashing the $1.37 expected. Same-store sales growth rose by 6.1 percent, compared to estimates of 4.5 percent, as the company struggles to bounce back from a flurry of food safety issues.
Spotify to invest $500 million in podcast acquisitions
Spotify, the streaming giant, will invest $500 million in podcast ventures, CEO Daniel Elk announced in a blog post on Wednesday. While the platform primarily streams music, the company acquired Gimlet Media and Anchor in recent weeks, and plans to prioritize non-music content in 2019. Elk also said that the company will work to include more exclusive podcasts eventually, but will first work on acquisitions of podcasting brands. Spotify previously attempted to move toward video streaming, but the effort was largely unsuccessful. Elk said he expects 20 percent of all Spotify listening to eventually come from non-music content.
CFPB plans rollback of Obama-era restrictions on payday loans
The Consumer Financial Protection Bureau announced Wednesday that it is proposing a rollback of Obama-era restrictions on payday and vehicle title loans. Many experts view these loans as predatory, and the Obama administration's rule required lenders to make an effort to determine whether borrowers could afford to pay back payday, vehicle title, and other high-cost installment loans. The Trump administration's CFPB argued that rescinding the rule would give consumers easier access to credit. "The Bureau is concerned that these provisions would reduce access to credit and competition in states that have determined that it is in their residents' interests to be able to use such products, subject to state-law limitations," the agency said.
U.S. stock futures edge lower after the S&P 500 snaps a winning streak
U.S. stock index futures edged lower early Thursday ahead of more corporate earnings reports. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq-100 were all down by around 0.5 percent. Twitter shares fell by about 8 percent in pre-market trading after it reported better-than-expected earnings but gave disappointing guidance for this year, saying it expected spending to increase. The S&P 500 snapped a five-day winning streak on Wednesday on a mixed batch of earnings. U.S.-China trade relations also were in focus as Treasury Secretary Steven Mnuchin confirmed that trade representatives from Washington and Beijing would try to reach a deal next week ahead of a March 2 deadline marking the end of a truce in the trade war between the two countries.