Breakfast News: Microsoft In For TikTok?
January 28, 2025
| Monday's Markets |
|---|
| S&P 500 6,012 (-1.46%) |
| Nasdaq 19,342 (-3.07%) |
| Dow 44,714 (+0.65%) |
| Bitcoin $101,502 (-3.01%) |
Source: Image created by JesterAI.
1. Microsoft Reportedly Eyeing TikTok Bid
Microsoft (MSFT 1.25%) is in talks to purchase TikTok, according to President Trump. Although Microsoft has declined to comment so far, it was the top bidder back in 2020, before talks collapsed alongside Trump's departure from office.
- "There's great interest in TikTok": Trump suggested there would be a bidding war for the social media company, after he granted a 75-day reprieve for the parent business, ByteDance.
- "They're dominant at what they do, and their business is so diversified": In an edition of Motley Fool Scoreboard last month, Fool analysts Emily Flippen and Asit Sharma praised Microsoft for its strategic investments across various sectors.
2. Starbucks Set to Report
Investors will find out if CEO Brian Niccol has been 'fully caffeinated' in the first few months of his tenure, as Starbucks (SBUX 0.84%) releases Q1 results after the market closes. Analysts anticipate a modest 1.2% fall in revenue but a 26.7% drop in earnings versus the same quarter last year.
- "[If the] U.S. business starts working again, it would be hard to argue that the Starbucks brand is fundamentally weak": The longtime Stock Advisor rec is expected to show an improvement in U.S. same store sales. Bank of America (BAC 0.07%) analyst Sara Senatore believes if this trend continues, it's supportive of a longer-term turnaround.
- Key initiatives to help drive growth: Investors should watch out for updates on the pricing and promotional strategy, with the planned reduction in discount promotions likely helping profit margins but potentially reducing overall demand. Expect news on the simplified menu and ordering process (aiding the four-minute end-to-end coffee goal!).
3. Next Up: Boeing & General Motors Earnings
Founded within eight years of each other at the start of the 20th century, Boeing (BA +0.40%) and General Motors (GM 1.06%) both report ahead of the opening bell.
- Jumping the gun on bad news: Boeing released some Q4 figures early last week, with a disappointing loss that was much higher than expected. This was partly due to the strike by union machinists that brought production to a halt. Despite the early release, today brings some much-needed commentary around the numbers, alongside the outlook from here.
- "Outstanding" 2024 performance: General Motors CFO Paul Jacobson pointed to growth in its electric vehicle and traditional internal combustion engine businesses as the company beat both earnings per share and revenue estimates after releasing Q4 results before the bell. Concerns around the changing regulatory landscape under the new President could be addressed on the earnings call at 8:30 ET.
4. MicroStrategy Making More Moves
MicroStrategy (MSTR +2.05%) announced a fresh round of Bitcoin (BTC +1.58%) buying, alongside a preferred securities sale that offers an attractive 8% yield. It retains the title of the largest corporate Bitcoin holder, having 471,107 as of Monday.
- Seeking to raise $250 million: The preferred stock is a hybrid investment that receives a regular dividend and has the option of being converted into common stock at the holder's discretion. MicroStrategy has set a conversion level of $1,000, well above the current price of $348, with a conversion ratio of 0.1.
- Stock premium offers risk if crypto falls: Convertible securities are an attractive way to raise capital without immediately diluting existing shareholders. MicroStrategy has previously used similar funding rounds to simply buy more crypto, with the stock value nearly double that of the Bitcoin holdings.
5. Foolish Fun
What adjective best characterizes your feelings about social media from an investing perspective? Discuss with friends and family, or become a member to hear what your fellow Fools are saying!
