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DJ Tech, Media & Telecom Roundup: Market Talk

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The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1527 ET - Investors might've expected TJX to beat 1Q earnings expectations by more than it did, which could be sending shares lower, Jefferies senior vice president for apparel and footwear Janine Stichter, tells WSJ, noting that the broader market also is trading lower. Stichter says she was hoping the company would see its comparable-store sales improve from 4Q to 1Q, and that the measure beat expectations. In addition, the traffic the company saw is encouraging, Stichter adds. TJX on Wednesday logged net sales of $10.09B for 1Q, which more than doubled from a year earlier, while earnings were 44 cents a share, compared with a year earlier's loss of 74 cents a share. Shares trade 6.1% lower at $66.84 a share. (allison.prang@ wsj.com; @ AllisonPrang)

1322 ET - Bill Gates pointed to some of the lasting benefits that emerged from the pandemic, such as the acceleration of digital offerings like telehealth, and what that means for workers going forward. Gates, speaking at a US Chamber of Commerce event, said remote work had some upsides, from employees no longer having to deal with long commutes to employers' ability to hire employees who live in more affordable areas, unlocking opportunities. Gates said that at almost every call, he's told that they look forward to seeing him in person. But some of those meetings don't need to be in person, he said, adding that he now meets with African leaders in shorter, more frequent virtual meetings rather than longer, few-and-far-between meetings that required air travel. (maria.armental@wsj.com; @mjarmental)

1251 ET - Investors have a couple of price benchmarks for Squarespace's public listing, expected to occur today. The company, which provides web-development and other digital tools for consumers and businesses, sold shares in a fundraising round in March at about $68.42. And the New York Stock Exchange established a so-called reference price for the shares at $50 because Squarespace is going public through a direct listing that doesn't include valuing shares as is traditional with IPOs. (micah.maidenberg@wsj.com; @MicahMaidenberg)

1222 ET - TJX sees more room for physical store growth, CEO Ernie Herrman tells analysts on the company's earnings call. Herrman says he thinks that in countries TJX is currently in, it can open more than 1,600 additional stores which would grow its store count over the long term to 6,275 locations. "Availability of real estate is terrific, and we see plenty of opportunities to open new stores or relocate existing stores," Herrman says. Locations in Canada and Europe were closed for chunks of 1Q. Shares off 2.5% midday to $69.37. (allison.prang@wsj.com; @AllisonPrang)

11:10 ET - TJX Cos. quarterly earnings show that customers are not only going back to physical stores, but also buying apparel again. The parent of T.J. Maxx, Marshalls and HomeGoods, said that 1Q comparable sales for stores that are open grew 16% over the same period in 2019 and net sales gained 8.7% from the 1Q 2019. The company suffered during the pandemic, because only a small portion of sales are digital. Same-store sales for open stores at the division that houses T.J. Maxx and Marshalls, which mainly sell apparel, grew 12%, while its HomeGoods division posted 40% growth over 1Q 2019. The sales growth was driven by the US. Sales in Canada, Europe and Australia remained below pre-pandemic levels. But the company's shares were down 4.6% in morning trading, even though its earnings beat Wall Street estimates. (suzanne.kapner@wsj.com)

1057 ET - Streaming apps, when looking at downloads of the top 30 streaming apps from Google Play and the App Store for the US, had 81 million installations in 1Q, according to a SensorTower report looking at the streaming-app market. These rose 13% from a year earlier but still were below the quarterly record in 4Q of 2019 when installations were a little under 90 million. US quarterly gross revenue of the top 30 grossing streaming apps rose 48% from a year ago to $605M in 1Q, according to the report. HBO Max was the most downloaded streaming app during 1Q when looking at the top streaming apps by US downloads for Google Play and the App Store, followed by Netflix, Disney+, Hulu and Amazon Prime Video, according to SensorTower. (allison.prang@wsj.com; @AllisonPrang)

1032 ET - French media giant Vivendi is looking to sell 10% of Universal Music Group to an undisclosed American investor, or alternatively launch a public offering of up to 10% of the record label's shares, in a move that could push Universal's valuation above EUR30 billion ahead of its listing in Amsterdam, Deutsche Bank says. "Vivendi might be looking for a higher UMG valuation and a stake sale before the distribution might help to push valuation for the asset above EUR30 billion, which was implied by the previous Tencent transactions," the German bank says. A consortium led by Chinese internet company Tencent Holdings previously bought two 10% stakes in Universal Music for EUR3 billion each. (mauro.orru@wsj.com; @MauroOrru94)

1031 ET - The slide in SPACs and companies they take public coincides with a drop in overall stock-market trading activity by individual investors. Such activity peaked in January and February, when shares of GameStop and SPACs soared. It has decreased in recent weeks, data compiled by JPMorgan show, with some investors moving on to cryptocurrencies or other areas of the stock market. "The party really is over," for SPACs, said Jeremy Chavis, a 31-year-old project engineer for a construction company who has liquidated nearly all of his blank-check company holdings and is favoring value stocks instead. (amrith.ramkumar@wsj.com; @AmrithRamkumar)

1023 ET - An opportunistic bid for Dutch telecommunications operator Royal KPN will almost certainly fail, and any bid will have to exceed EUR3.50 a share and be closer to EUR4 a share to stand a chance of success, Berenberg says. While this might look too expensive to generate returns from the deal, a long holding period might allow potential bidders to pay big upfront premiums, Berenberg says. Media reports suggest that a bid for KPN from EQT and Stonepeak Infrastructure Partners is coming, but the question is if it will be high enough to succeed, Berenberg says. Earlier this month, KPN said it had rejected an unsolicited takeover offer from investment firm KKR and a separate offer from EQT and Stonepeak. (adria.calatayud@dowjones.com)

1017 ET - Shares of companies that have gone public through SPACs and so-called blank-check companies that have yet to complete mergers are falling again Wednesday, extending a recent bout of turbulence. The Defiance Next Gen SPAC Derived ETF is down 2%, paring most of this week's modest rebound. It is down 32% in the past three months. Shares of DraftKings, Virgin Galactic and QuantumScape are down 4% or more today, also extending a recent reversal. The losses come after many individual investors piled into the sector when it was hot in January and February. Worries about rising inflation and tighter regulation are now making the speculative wagers less attractive. "It's nothing short of a slaughter," said Garrick Tong, a 42-year-old physician in Southern California who has more than half of his six-figure portfolio tied to SPACs. (amrith.ramkumar@wsj.com; @AmrithRamkumar)

1011 ET - The cyberattack-caused shutdown of the Colonial pipeline lasted less than a week but still caused further increases to already-soaring gasoline prices. And analysts say more price hikes are in store if Michigan Gov. Whitmer succeeds in her efforts, voiced Friday, to permanently shut down a 645-mile Enbridge pipeline over environmental concerns. "There is a possibility of more pipeline shutdowns, believe it or not, not this time because of terror attacks but because the governor of Michigan," Price Futures' Phil Flynn tells Fox News. "That would be an absolute disaster for gas prices that are only starting to stabilize." Today's national average is $3.04 a gallon versus $1.89 a year ago, says AAA. (dan.molinski@wsj.com)

1005 ET - Tesla shares have lost roughly a quarter of their value in May, but few bearish investors in the company stuck around long enough to declare a win from the selloff. Short interest in Tesla hit around 4% of outstanding shares in May, the lowest level in eight months. Such bearish investors profit when shares decline, and Tesla had grown to be one of the biggest short bets in the entire market in recent years as a vehement camp of investors said that the electric-vehicle maker was wildly overvalued. These wagers were painful for many investors as the stock price skyrocketed over the past year and the company joined the S&P 500. That led many to exit the trades, unable to take advantage of the tumbling share price in May. (gunjan.banerji@wsj.com; @gunjanjs)

Corrections & Amplifications

This market talk item was corrected at 9:04 p.m. ET to reflect that TJX Cos. said that 1Q comparable sales for stores that are open grew 16% over the same period in 2019 and net sales gained 8.7% from the 1Q 2019. Same-store sales for open stores at the division that houses T.J. Maxx and Marshalls, which mainly sell apparel, grew 12%, while its HomeGoods division posted 40% growth over 1Q 2019. The original version incorrectly compared this year's first-quarter sales to 2020, rather than 2019, and did not make the distinction between comparable store sales and net sales.

(END) Dow Jones Newswires

May 19, 2021 16:50 ET (20:50 GMT)

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