Stock futures sink; Delta variant, Robinhood IPO, Zoom/Five9 deal, and more


Wall Street set to open modestly lower amid renewed virus concerns

U.S. stock markets look likely to start the new week in the red territory amid fears the Delta Covid variant could trigger a new wave of infections.

As of 5:20 a.m. ET, futures tied to the blue-chip Dow gave away 333 points, or 0.96% to 34,231. S&P 500 futures dropped 31.62 points, or 0.73% to 4,286.88 while the tech-heavy Nasdaq 100 were down 58.50 points, or 0.40% to 14,612.

On Friday, the Centers for Disease Control and Prevention (CDC) reported that new coronavirus cases have gone up by close to 70% in just a week due to the Delta variant. The agency also said hospitalizations have jumped by nearly 36% while deaths are up 26%.

Robinhood sets terms of its IPO, which could value the company at $35 billion

Robinhood has set terms of its initial public offering, as the popular online brokerage firm that popularized free stock trades looks to raise up to $2.2 billion and be valued at about $33 billion.

The fintech startup revealed in an updated prospectus early Monday that it is offering about 55 million shares in the IPO, which is expected to price between $38 and $42 a share.

Robinhood expects its stock to begin trading on the Nasdaq Stock Market by the end of next week, under the ticker symbol “HOOD.”

Crude futures tumble after OPEC+ agrees to raise production limits

In energy markets, crude futures were trading lower this morning after OPEC and its allies, a group known as OPEC+, finally struck a deal on Sunday to increase the production limits imposed on five members, resolving an earlier dispute that had tested the unity of the cartel.

OPEC+ said in a statement that from August until December 2021, it will increase production by a further 2 million barrels per day, or 0.4 million barrels per month.

The deal awarded the United Arab Emirates, Russia, Saudi Arabia, Kuwait, and Iraq higher production baselines against which their cuts are measured from May 2022.

By 5:20 a.m. ET, U.S. West Texas Intermediate (WTI) crude futures were down 1.92 points, or 2.68% to $69.64 a barrel. Global Brent crude futures were at $71.73, down $1.86, or 2.53% a barrel.

Zoom acquires cloud call center firm Five9 for nearly $15 billion

On the M&A front, Zoom Video Communications (NASDAQ: ZM) has agreed to buy Five9 (NASDAQ: FIVN) in a $14.7 billion all-stock transaction that will help it expand its presence beyond video chat.

Under the terms of the deal announced Sunday, Five9 holders will get 0.5533 Zoom shares for each Five9 share based on the closing price of Zoom shares on Friday. The deal would value Five9 at $200.28 per share.

The two companies said Five9 will become an operating unit of Zoom once the deal closes in the first half of 2022.

Zoom expanded its revenue by 326% in 2020 as businesses and schools adopted its services to hold office meetings and virtual classes amid the Covid-19 pandemic.

As of this writing, Five9 stock was marked $14.92, or 8.40% higher to $192.52 per share in the premarket trading session Monday. Zoom shares fell $6.97, or 1.93% to $355 apiece.