Top US stocks to watch: Didi, Twitter and oil stocks

Didi shares set to plunge amid crackdown in China, Twitter loses liability protection in India, oil stocks are in play as prices climb to six-year highs, Ali Group ups its bid for Welbilt, and social media platform Nextdoor and banking platform Blend Labs outline plans to go public.

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Didi

Didi shares plunged as much as 28% in pre-market trading today following the long weekend, as markets get their first chance to react news that China’s cyber security regulator has ordered Didi to be taken off domestic app stores.

The app has been removed because the ride-hailing firm’s platform had ‘problems of seriously violating laws on collecting and using personal information’. It is also one of a number of Chinese businesses, including others to have recently listed in the US, to be put under the spotlight by a new investigation by the regulator. 

It marks a disastrous start for the company following its blockbuster IPO less than one week ago. Didi said it was unaware of these issues before its IPO but reports from the Wall Street Journal today suggest Didi was advised by Chinese regulators to postpone the US listing and review its security weeks ago.  

The news has also knocked confidence in other Chinese firms listed in the US, with the likes of Baidu, JD.com and Pinduoduo all reported to be trading lower in premarket trade.

Twitter

Twitter has lost liability protection applied to user-generated content on its platform in India, the government said in a new court filing, as tensions over new rules for the digital sector continue to escalate.

Officials had previously warned that Twitter had breached new rules brought into play earlier this year, but this is the first time the government has formally acknowledged that the US company has lost liability protection as a result.

The protection meant Twitter wasn’t held responsible for content made by its users. Twitter has previously said it was doing all it can to adhere to the new rules and smooth things out with officials.

Oil stocks

Oil stocks are in play today after WTI prices continued to rally and hit their highest level in six years, driven by the breakdown in talks by major oil-producing countries.

OPEC+ met twice last week and again on Monday but failed to strike a deal on the level of output, with reports suggesting the United Arab Emirates was proving the barrier by blocking proposed increases in output.

No new date has been set for talks to resume, signalling that output will not rise for the foreseeable future and pushing prices higher. This support in oil prices should translate to oil stocks today such as Occidental Petroleum and ConocoPhilips.

Welbilt

Italy’s Ali Group said it has submitted a higher bid to buy Welbilt for $24 per share, trumping the existing offer on the table from Middleby.

Ali Group had previously offered $23 per share and said the new all-cash bid is at a 3.5% premium to Welbilt shares closing price on Friday and over 11% higher than the all-stock offer from Middleby, which submitted its offer back in April in the hope of expanding its commercial foodservice platform.

Welbilt supplies equipment to the foodservice sector, spearheaded by its smart digital systems that can be tailored to individual customer needs.

Tencent

Tencent’s plans to merge China’s top two videogame streaming sites – Douyu and Huya - have been scuppered after the country’s antitrust regulator blocked the deal, according to reports from Reuters on Sunday.

The plan has been blocked because Tencent has failed to put forward satisfactory proposals to alleviate concerns over exclusive rights, the report said. Tencent came up with the plan last year to consolidate its stakes in each company. It has a 36.9% stake in Huya and over one-third of Douyu.

Verizon

Z Holdings Corp, part of Softbank’s internet business, has agreed to pay Verizon JPY178.5 billion, equal to around $1.6 billion, to acquire the rights to the Yahoo brands in Japan.

The deal is expected to close in the second half of this year and give Z Holdings the trademark rights to Yahoo brands and technology in perpetuity in Japan. Verizon is offloading its media businesses as the brand has struggled to maintain ground in many countries, but Yahoo still performs well in Japan.  

Amazon

Amazon’s new chief executive Andy Jassy formally took over at the helm of the company yesterday after Jeff Bezos stepped down to mark the end of a 27-year career building the business from an online bookstore into the behemoth it is today.

Bezos will remain involved by transitioning to the role of chairman, but has stepped down to put more effort into his other ventures, including the Bezos Earth Fund, his spaceship company Blue Origin, The Washington Post, and the Amazon Day 1 Fund. 

A filing on Friday showed Amazon intends to award over $200 million worth of extra stock to Jassy over the next decade.

Nextdoor

Nextdoor, the social platform focused on connecting local neighbours and businesses, has said it plans to go public by merging with blank-cheque company Khosla Venture Acquisition Co II.

The deal will raise around $686 million for the company to help accelerate its growth plans, which includes hiring more staff and expanding into new countries. It will give Nextdoor an initial valuation of around $4.3 billion.

Nextdoor currently operates in 275,000 neighbourhoods around the world, and one in three households in its core market of the US are thought to be using the platform. Its business model is based on providing local access to businesses and organisations looking to tap-into local areas.

Blend Labs

Blend Labs, the digital banking platform specialising in mortgage lending, has said it is targeting an initial valuation of around $4 billion through its IPO.

An updated filing with the SEC revealed Blend Labs is planning to sell 20 million shares between $16 to $18 each to raise a maximum of $360 million. The company prides itself on bringing ‘simplicity and transparency’ to financial services and is rebuilding banking software around the consumer.

Blend Labs said it processes over $5 billion in loan volumes every day on behalf of leading financial services firms such as Wells Fargo and Lennar Mortgage. The company originally filed for its IPO back in April and was valued at $3.3 billion in its last funding round in January 2021.

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