Image source: Groupon.
After a good first day of the second quarter, the stock market reverted to a familiar theme to start the new week on Monday. Oil prices resumed their downward move, falling to just above $35 per barrel as hoped-for signs of a bounce in economic activity haven't yet materialized as clearly as many investors had hoped. In addition, leaked reports alleging money laundering and tax evasion among dozens of prominent politicians and leaders of the business world introduced a degree of uncertainty into the market, especially given the attention that tax inversions and other strategies designed to minimize tax have gotten lately.
Amid all of this, and even though the broad market fell about a third of a percent, several companies saw their stocks rise. Among them were Virgin America (VA), Groupon (GRPN 14.40%), and Stratasys (SSYS 1.27%).
Virgin America soared 42% after U.S. airline rival Alaska Air Group (ALK 0.44%) agreed to buy the airline for about $4 billion. The deal will put $57 per share in cash in the pockets of Virgin America shareholders, and Alaska said the acquisition will create the fifth-largest U.S. airline, creating what it called "the West Coast's premier carrier." Alaska believes the acquisition will add to its earnings within the first year after being completed, and it pointed in particular to expansion opportunities in California as a big win from the deal. Moreover, by giving Alaska more exposure to Reagan National Airport in Washington, D.C., as well as John F. Kennedy and LaGuardia airports in New York City, the deal should allow for more frequent connections to international destinations. Given the massive consolidation in the airline industry lately, Alaska's move makes a lot of sense, even though its shares traded down on the day.
Groupon climbed 9% following news of a couple of important events with strategic potential. The e-commerce company said it had received a $250 million investment from private equity company Atairos, which it says is "focused on supporting growth-oriented businesses across a wide range of industries." Atairos CEO Michael Angelakis will sit on Groupon's board of directors, and Groupon board chair Eric Lefkofsky said Angelakis' presence "will be a welcome addition to our company." In addition, Groupon said that as part of the relationship, Comcast will also work with the company to look for ways to create further partnership opportunities. Investors hope that by combining Comcast's subscriber and advertising networks with Groupon's acumen in dealing with local markets, the deal will pay off for everyone involved despite Groupon's recent struggles.
Finally, Stratasys gained 9%. The 3-D specialist released its latest product this morning, the J750 printer, which the company claims is the world's only 3-D printer to produce full-color, multi-material prototypes and parts in a single printing process. By being able to avoid post-processing steps, Stratasys believes the printer will eliminate time-consuming alternative processes, and it also brings a wide array of materials to the table to help users create the products they want. If the printer achieves the goal of allowing users to make key decisions earlier in the production process, then the time and money that Stratasys saves its clients will be well worth the cost of its printers.
