US OPEN: T-Mobile and Sprint revise merger terms

• Wall Street futures point to a lower open

• T-Mobile (TMUS.US) and Sprint (S.US) revise merger terms

• California Resources (CRC.US) surges in premarket on debt exchange plans

Wall Street indices are expected to start today’s trading lower following poor performance of the European and Asian equities. However, a point to note is that major stock market indices from the Western Europe managed to almost completely erase today’s declines. Having said that, US stocks may be set for a similar rebound once the cash session opens.

Dow Jones (US30) found it hard to break to new all-time highs with the same ease as Nasdaq or S&P 500. However, the index may be set for a rebound as it managed to halt downward move at the support zone marked with the 38.2% Fibo level (28990 pts) of the upward impulse started at the turn of January and February. The near-term resistance zone to watch ranges above the 23.6% Fibo level (29200 pts) Source: xStation5

T-Mobile (TMUS.US) and Sprint (S.US) revised terms of their merger. Under amended terms, the stake of Sprint’s largest shareholders - SoftBank - would be reduced. Other shareholders will be unaffected by the decision. Once the deal closes, SoftBank will hold around 24% stake in the combined entity while Deutsche Telekom, T-Mobile’s parent company, will hold a 43% stake. SoftBank agreed to surrender 48.8 million T-Mobile shares to the new company but may get them back in case certain stock price milestones are reached.

Berkshire Hathaway (BRKB.US), the US conglomerate led by legendary investor Warren Buffett, will release 2019 full-year earnings on Saturday, February 24 at 8:00 am ET (1:00 pm GMT). The release will be accompanied with the release of Warren Buffett’s annual letter to shareholders. Given how well-known and respected Buffett is, the letter may have some impact on markets on Monday therefore it is worth attention to take a look at it.

Berkshire Hathaway (BRKB.US) managed to break above the resistance at $223 at the end of the previous year and started to trade at fresh all-time highs. The stock is being supported by a 50-session moving average (green line). Note that this stock is likely to become more active on Monday as investors will assess the outlook outlined by Warren Buffett’s letter. Near-term resistance is marked by an all-time high at around $231.60. Source: xStation5

Hewlett-Packard (HPQ.US), the US PC manufacturer, said that it will implement a poison pill provision in order to defend against hostile takeover. Xerox Holdings (XRX.US) pushed forward with a plan to acquire HP. Offer price was boosted to $24 a share after HP rejected several buyout offers. Poison pill provision aims to stop any investor from acquiring a 20% stake in the company. In case a group of shareholders amassess over 20% stake, an option offering discounted shares to all shareholders outside that group may be triggered.

Shares of California Resources (CRC.US) trade over 20% higher in pre-market after the company announced it plans exchange offers for some outstanding senior bonds. Investors who agree to tender will have an option whether to swap the debt for debt of Elk Hills RoyaltyCo or for shares of the company. Elk Hills RoyaltyCo will be a special purpose Delaware company incorporated to hold royalty interests.

Shares of California Resources (CRC.US) are expected to launch today’s trade above $8.00 handle after the company announced plans for debt exchange. The stock is expected to launch the session at the highest level since late-January. The near-term resistance levels can be found at downward trendline ($8.70 area) and $9 swing level. Source: xStation5