Stocks rallied on Thursday as markets eagerly awaited the results from the UK’s big EU referendum vote, with results of this expected to roll in overnight.
- Dow: 18,009, +228, (+1.3%)
- S&P 500: 2,113, +27, (+1.3%)
- Nasdaq: 4,910, +76, (+1.6%)
- WTI crude oil: $50.10, +2%
- 10-year Treasury: 1.74%
Britons took to the polls on Thursday to vote in long-anticipated referendum on whether the UK should remain a member of the European Union or begin the process of exiting.
Polls weren’t scheduled to close in the UK until 5:00 p.m. ET, and so the rally we saw in markets was based simply on the anticipation that the ‘Remain’ camp would prevail, not any indications other than the polls we had already seen that this outcome would be achieved.
The British pound was also creeping higher on Thursday but was fairly volatile.
Results from the vote aren’t expected to be available until the early morning hours in the UK (which will be the middle of the night in the US).
Business Insider’s London-based team has complete coverage here, with this post being constantly updated as we know more about where the vote shakes out.
The most successful tech IPO of the year took place on Thursday with messaging service Twilio popping more than 80% in its market debut on Thursday.
Shares of the company priced at $15 on Wednesday night, raising $150 million in the process, after the company sought to sell shares between $12-$14 while marketing its deal.
Twilio shares opened for trading at $23.99 on Thursday, a roughly 60% pop, and traded as high as $28.98, or more than 90% higher than where the stock priced.
In a blog post on Thursday, New York-based venture capitalist Fred Wilson said that Twilio’s initial seed pitch back in 2008 was the best one he’s ever gotten. Which is a great reminder that phenomenal ideas and great leaders still endure a very long process to go from the early days of a business to finally making a successful public market debut.
Twilio CEO Jeff Lawson, we’re guessing, was willing to wait: Lawson is now about $100 million richer.
In unrelated venture capital news, President Obama sounds very interested in Silicon Valley and he’s going to be looking for a job in just a few months. Just saying.
When you’ve lost Adam Jonas, you’ve really messed up.
In a note to clients Thursday morning, Morgan Stanley’s Adam Jonas downgraded shares of Tesla to “Equal Weight” from “Overweight” and cut his price target on the stock to $245 from $333.
Jonas, who has been famously bullish on Tesla and Elon Musk’s grand vision for a nationwide network of Tesla charging stations, a nation full of Tesla battery-powered cars, and self-driving vehicles abounding, is no fan of the announcement out Tuesday that Tesla proposed to buy SolarCity.
In his note, Jonas said that Tesla’s offer to buy SolarCity simply does not contain many of the things you’re looking for in a merger, chief among them an ability to enhance your ability to make your current product. Which in the case of Tesla is cars.
Here’s Jonas (emphasis mine):
While there may be any number of lucid arguments supporting the strategic rationale of a combination, we believe many of the benefits could have been achieved through arm’s length/strategic partnership and without the risks inherent in exposing Tesla shareholders to the financial and capital markets risks faced by SolarCity.
Moreover, we don’t believe SolarCity will help Tesla make better cars.
Other issues raised by Jonas include an increased cash burn from a combined entity and a potentially more difficult path to raising money via capital markets with a combined cash-burning company.
Tesla shares have fallen more than 10% since the merger proposal was first announced, more than the market cap of SolarCity. In other words: the market doesn’t think it’s going to work.