Market 2018-01-08 (STX, CELG, and more)

Market is mixed today, as Nasdaq carries recent momentum and Dow Jones stays in red most of the day.

Crude +0.72% to $61.88. Gold -0.11% to $1,320.90.

AT&T is backing away from a plan to sell phones made by Chinese handset giant Huawei, on the eve of a big announcement of the deal, The Wall Street Journal reports.

Winners

NVDA +3.1%, is partnering with UBER and Volkswagen on artificial intelligence platforms for self-driving cars. Nvidia also said its first Xavier processors would be delivered to customers this quarter. AMD +3.4%

STX +7.1%, RBC Capital analyst says Seagate has a 2% to 3% stake in cryptocurrency company Ripple. In AH, STX announces preliminary financial results for Q2 with expected revenue of $2.9B (consensus: $2.74B) and gross margin of 30%. Share added another 3.3% in AH. WDC +1% in AH.

 KSS +4.7%, holiday sales were up 6.9% during the two-month holiday period. Comparable sales were also up 6.9%.

Losers

Celgene (CELG -0.8%) announced to buy Impact BioMedicines, a small biotech developing a drug to compete with the blockbuster blood cancer drug Jakafi, sold by Incyte and Novartis. Impact Bio currently has two candidates in its pipeline in phase-3 and phase-2. (LINK) Celgene's paying $1.1B upfront, and then $1.25B for regulatory approval. Then Impact's shareholders get more payments if sales pass $1B. If annual net sales total $5B – triple Jakafi's current global sales – these payments will total $4.5B. It is more like a $2.35B acquisition for one drug, which is not a bad deal. The selloff (as much as -4%) in early hour was overdone, which created an entry opportunity. RBC Capital Markets analyst Brian Abraham basically summed up the reaction saying in a note to investors that the deal, "makes strategic sense, but we see a relatively modest 'Impact'."

CELG also updates its guidance. 17Q4 revenue: $3.5B (+17%); non-GAAP EPS: $2.00. Full year: revenue: $13.0B (+16%); non-GAAP EPS: ~$7.44. 2018 guidance: revenue: $14.4-14.8B; non-GAAP EPS: $8.70-8.90. 2020 target: $19.0-20.0B in revenue and more than $12.50 non-GAAP EPS.

 EDIT -10.5%. Editas Medicine, Intellia Therapeutics (NTLA -11.8%) and CRISPR Therapeutics (CRSP -2.6%) are down amid a paper published in the journal bioRxiv that questions the viability of the cutting element, the Cas9 enzyme, in the CRISPR/Cas9 gene-editing technology, due to the presence of anti-Cas9 antibodies.

BIIB -3.8%. It is surprising because yesterday Pfizer (PFE -1.1%) announced to give up on discovering new drugs for Alzheimer's and Parkinson's disease, abandoning costly efforts to find effective treatments for the disorders. Pfizer's cutback should be good news for BIIB. Other biotech companies (IBB -1.3%) also suffer today: SHPG -4.9%, VRX-3.1%, REGN -3.3%, ALXN -2.5%, ABBV -1.6%...

PLAY -22.3%, expects FY17 revenue to be in the range of $1.138B to $1.142B vs. $1.148B  to $1.155B prior view. Comparable store sales for the full year are seen falling -1.0% to -0.7%. Other restaurants are also affected: BJ'S Restaurants (BJRI -4.5%), Brinker International (EAT -4.7%), Sonic (SONC -2.7%), Bojangles (BOJA -4.6%), Zoe's Kitchen (ZOES -2.8%), Cheesecake Factory (CAKE -3.4%)...


My Trades Today

Added CELG @ $101.6. I wish I had bought more at that price.

Bought FIT @ $5.6. I would like to own a small position because Fitbit could be a take-over target (Market cap $1.5B).

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