Cisco Moves Forward on the M&A Front; Tesla Dips After Odd Earnings Call--ICYMI

It was a tumultuous Thursday. Stocks were mixed following the Federal Reserve's hawkish tone on interest rates and as the U.S. began two days of trade talks with China. A slew of earnings pulled the markets in opposite directions throughout much of that day. The Dow Jones Industrial Average finish higher, but only slightly, after being down as much as 390 points. The S&P 500 declined 0.23% and the Nasdaq dropped 0.18%.

Tesla (TSLA)  , Spotify (SPOT)  , Square (SQ)  and others reported mixed results. Perhaps most interesting was Spotify's first-over earnings release as a public company. Though by no means terrible, Spotify's first post-IPO earnings report has left those hoping that the pre-IPO guidance the online music leader issued would be conservative feeling a little disappointed, explains TheStreet's Eric Jhonsa. The report also does little to quell a pair of pre-IPO concerns, he explains: That revenue growth will continue trailing subscriber growth, and that Spotify's business model makes substantial margin improvement very difficult. Spotify continues to grapple with high prices from the music labels which are gaining digital outlets to distribute their content (i.e. Google (GOOGL)  , Facebook (FB)  and others). Spotify's costs could go up, and so in turn could the price it offers customers. When will users begin to look elsewhere, Jhonsa wonders.

Cisco (CSCO)  has been quietly active on the M&A front this week. The company sold a video software unit to U.K. private equity firm Permira and announced it would acquire artificial-intelligence relationship tech developer Accompany Inc. for $270 million in cash and assumed equity awards. Accompany, called the "LinkedIn Killer" by one analyst, is a key acquisition for the company. Accompany's CEO and founder Amy Chang was previously head of product for Alphabet's Google Ads Measurement and was an independent board member of Cisco before stepping down Tuesday. Accompany uses artificial intelligence to gather information ranging from Twitter (TWTR)  feeds and news articles to bios about people, explains Chris Nolter over on The Deal. The profiles serve as meeting-prep dossiers for executives or sales people.

You didn't miss it, but let me just remind you how odd Tesla's conference call was last night. At one point during the call CEO Elon Musk cut off one analyst and said: "We're going to YouTube. These questions are so dry. They're killing me," as he threw the Q&A to retail investors streaming on YouTube. He also threw the stock into a downturn after hours on the back of a so-so quarter from his company. Tesla shares closed down 5.5% on Thursday to $284.45.

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Photo of the day: Antitrust concerns decades ago

The folks in Washington, D.C. have been busy lately dealing with AT&T's (T) proposed acquisition of Time Warner (TWX) and looking ahead to the would-be merger of Sprint (S) and T-Mobile (TMUS) . Well, 70 years ago almost to the day things were equally hairy. In May 1948, the U.S. Supreme Court ruled that Paramount Pictures and seven other major Hollywood movie studios violated antitrust law via various anti-competitive tactics. As a result of the decision the movie houses would be forced to sell their theatre operations, among other things, molding the motion picture industry for decades to come. Today, we mull just how efforts in Washington will shape not only the world of entertainment but also the world where entertainment and telecommunications collide. Read More

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