The daily business briefing: February 12, 2021
Bumble shares soar after dating app operator's IPO, Disney+ surge helps offset pandemic damage, and more
Bumble stock soars in market debut
Shares of dating-app operator Bumble closed 63.5 percent higher than the stock's IPO price on Thursday in the stock's market debut. Bumble priced shares in its initial public offering at $43 each, above its target range of $37 to $39. The shares opened at $76 per share, an increase of nearly 77 percent that put the company's market capitalization at $13 billion, up from $7.7 billion at the IPO price. The shares closed at $71.72. Bumble, founded in 2014 by CEO Whitney Wolfe Herd, requires women to initiate contact for heterosexual matches. Wolfe Herd, 31, is the youngest female founder to take a company public in the United States. The company lets people join and match for free, earning most of its revenue through in-app purchases and premium subscriptions.
Disney+ surge helps offset pandemic damage
Walt Disney Co. reported Thursday that subscriptions to its Disney+ streaming service surged last quarter to 94.9 million, sending the entertainment giant's shares up by 3 percent in extended trading. Disney+ revenue helped the company eke out a $17 million profit even though the pandemic kept blockbuster films out of theaters and all but closed the company's theme parks. The profit, which came to 2 cents a share, surprised analysts after two straight quarters of losses. Disney posted sales of nearly $16.3 billion in its fiscal first quarter, up from $15.8 billion in the same period last year. "Disney+ has exceeded even our highest expectations," Disney Chief Executive Bob Chapek said in a statement, noting that the streaming service had 26.5 million subscribers in the same quarter a year ago.
Jobless claims drop but remain above pre-pandemic record
The number of Americans who filed initial applications for unemployment benefits fell last week to 793,000, down 19,000 from the revised 812,000 total from the previous week. Still, the new claims exceeded the 760,000 economists had expected, and remained above the pre-pandemic single-week record of 695,000. The U.S. economy added 49,000 jobs in January, a sign that the economic recovery had slowed during the winter surge in coronavirus infections, hospitalizations, and deaths, which forced renewed restrictions on many businesses. "Despite the surprising speed of recovery early on, we are still very far from a strong labor market whose benefits are broadly shared," Federal Reserve Chair Jerome Powell said.
CBO forecasts 2nd biggest budget deficit since WWII
The federal budget deficit is on track to reach $2.3 trillion for the current fiscal year, with or without a new round of coronavirus relief, the nonpartisan Congressional Budget Office said in new forecasts released Thursday. The shortfall would be the second biggest since World War II, behind last year's $3-trillion-plus deficit. The latest figure reflects an improving economic situation, although the deficit projection has grown since the CBO's September estimate due mostly to the $900 billion coronavirus stimulus bill Congress approved in December. Projected deficits for the next few years have declined due to the anticipation of faster economic growth, which should increase tax revenue.
Stock futures fall slightly as record-setting week ends
U.S. stock index futures edged lower early Friday after the S&P 500 posted its ninth record closing high of the year on Thursday. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were all down by about 0.2 percent several hours before the opening bell. The three main U.S. stock indexes were still on track for a positive week, after all three posted records. The rally has been fueled by signs that the winter coronavirus surge is easing, and Congress is taking steps toward a new COVID-19 relief package. The Dow is up by 4.8 percent so far in February. The S&P 500 and the Nasdaq have gained 5.4 percent and 7.3 percent, respectively. Strong fourth quarter earnings also have encouraged investors.