Research Market strategy
By Swissquote Analysts
Published on 11.01.2022
Morning news

Take-Two Interactive to Buy FarmVille Maker Zynga

Topic of the day

Take-Two Interactive Software Inc. agreed to buy Zynga Inc. in a roughly $11 billion deal as the maker of Grand Theft Auto looks to expand its mobile portfolio with hits like Words With Friends and FarmVille. The cash-and-stock deal announced Monday is one of the videogame industry’s biggest acquisitions. Take-Two Chief Executive Strauss Zelnick said a purchase of Zynga would give it a strong position in mobile, which has been the fastest-growing segment of the global videogame industry in recent years. “More than 50% of our net bookings will come from mobile upon closing this transaction,” Mr. Zelnick said in an interview with The Wall Street Journal. He added that the combined company will have more than one billion users, creating an opportunity to cross-promote content to a broader audience. Under the cash-and-stock deal, Zynga stockholders would receive $9.86 for each share they own, including $3.50 in cash and $6.36 of Take-Two stock. The companies said the deal had an enterprise value of $12.7 billion, after adjusting for Zynga’s convertible shares, cash and debt. The deal, which is expected to close by midyear, represents about a 64% premium to Zynga’s stock price of $6 as of Friday’s close. In midday trading Monday, Zynga shares rose 42% to $8.49, while Take-Two fell 16% to $138.89.

Swiss stocks

The Swiss stock market ended trading on Monday with significant losses. The SMI fell by 1.6 per cent to 12,597 points. Among the 20 SMI stocks, there were 11 price losers and 8 price winners, and one share closed unchanged. 44.68 (previously: 39.13) million shares were traded. Banking stocks were again the beneficiaries of interest rate hike speculation, rising by 0.4 per cent in Europe. The Stoxx index of insurers went out of trading unchanged. In Zurich, shares of CS Group, Zurich Insurance, Swiss Re and Swiss Life rose between 0.2 and 1.3 per cent. UBS shares closed the session unchanged. Shares in Molecular Partners shot up 22.8 per cent. The news that the company, along with Novartis, had released positive data on its Covid-19 antiviral drug Ensovibep, provided a boost to fantasy. Novartis said in the morning it would exercise an option to pay 150 million Swiss francs to in-license Ensovibep from Molecular Partners and accelerate the production ramp-up.

International markets


European equity indices fell sharply on Monday as investors feared the prospect of a rate hike in the US in the coming months, at the start of a week that will culminate in the release of the US consumer price index for December on Wednesday. The Stoxx Europe 600 index lost 1.5% to 479 points. In Paris, the CAC 40 and the SBF 120 each lost 1.4%. In Frankfurt, the DAX 40 fell by 1.1% and the FTSE 100 in London gave up 0.5%. Atos SE said Monday its full-year results for 2021 came in below expectations, according to preliminary figures. The French IT company said it booked revenue of around 10.8 billion euros ($12.27 billion) for last year, a decrease of approximately 2.4% at constant currency compared with the previously set goal of stable revenue. Operating margin was around 4% of revenue from a target of around 6%, mainly due to lower revenue and additional costs, as well as project slippages due to supply-chain challenges and customer postponements. Volkswagen AG , one of the world’s largest auto makers, expects inflation to ease later this year but warned there would be no significant improvement in the global semiconductor shortage that has caused many auto makers to slash output as they try to find chips. The outlook comes as the automotive industry is ramping up production of electric vehicles that require raw materials and an array of semiconductors to control a car’s core systems and infotainment components, and connect them to the internet. The computer-chip shortage has left many auto makers unable to meet consumer demand for new cars, limiting their ability to grow and pushing up the price of new and used vehicles.

United States

Technology stocks erased sharp losses as government bond yields continued to rise, signaling that investors expect the Federal Reserve to move quickly in raising interest rates. The tech-heavy Nasdaq Composite edged up less than 0.1%. It fell as much as 2.7% before paring losses. Last week the benchmark posted its biggest one-week percentage decline since February, as rising bond yields punctured tech valuations. The S&P 500 also pared earlier losses, ending down about 0.1%. It was the fifth consecutive day of losses for the benchmark. The Dow Jones Industrial Average fell 0.45%. Surging yields since the start of 2022 have sent a shudder through tech stocks. By selling bonds and sending yields higher, investors are indicating that they believe the Fed could raise short-term interest rates in March and begin to shrink its holdings of bonds and other assets soon afterward. Intel Corp. removed references to the Chinese region of Xinjiang from an open letter it sent suppliers last month, after the contents of the note sparked a social-media uproar in China and led the U.S. semiconductor company to apologize to the Chinese public. In mid-December, Intel published a letter to its global suppliers on its website, calling on its business partners to avoid sourcing from the northwestern Chinese region, where the Chinese government has conducted a campaign of forcible assimilation against ethnic Muslim minorities. Within days, the Santa Clara, Calif.-based company was denounced by Chinese social-media users and state-run media for cutting business dealings with the region, while one of its China brand ambassadors pulled out in protest. The chip maker apologized on Dec. 23 on its Chinese social-media accounts, adding that the letter was written to comply with U.S. law and didn’t represent its position on Xinjiang.


Rising interest rates continue to be the dominant theme on East Asian equity markets on Tuesday, keeping buyers at bay. The Nikkei index in Tokyo is down 0.8 per cent at 28,239 points after the holiday break on Monday.


Treasury yields edged down in Asia after they mostly added to their recent gains on Monday, with the 2-year and 10-year maturities establishing fresh 52-week highs.


UBS lowers the target Novo Nordisk to DKK 660 (710) – Neutral
UBS lowers Salvatore Ferragamo to Sell (Neutral) – Target EUR 18 (19.70)
Citi raises the HSBC target to 540 (500) p – Buy

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