Tilray, Aphria, Wish IPO, Federal Reserve: 5 Things You Must Know

Here are five things you must know for Wednesday, Dec. 16:

1. — Stock Futures Rise as Lawmakers Inch Toward Stimulus Agreement

Stock futures posted modest gains Wednesday on growing confidence that lawmakers in Washington will agree to a stimulus package and as Wall Street awaited the latest policy decision from the Federal Reserve.

Contracts linked to the Dow Jones Industrial Average rose 82 points, S&P 500 futures gained 11 points and Nasdaq futures were up 44 points. Stocks ended higher Tuesday, putting an end to the S&P 500’s four-session losing streak.

Negotiations in Congress on a coronavirus relief bill have dragged on for weeks, but progress was made during two rounds of meetings between House Speaker Nancy Pelosi and bipartisan congressional leaders.

Senate Majority Leader Mitch McConnell, following a late-night negotiating session Tuesday with Pelosi, told reporters he was “optimistic that we’re gonna be able to complete an understanding sometime soon.” Senate Democratic leader Chuck Schumer and House Minority Leader Kevin McCarthy also took part in the talks, as did Treasury Secretary Steven Mnuchin by phone.

A bipartisan group of lawmakers unveiled a detailed aid proposal on Tuesday.

As for the Fed, the central bank is expected to hold rates steady in a target range of 0% to 0.25% but could issue guidance on continued asset purchases, which are now at now $120 billion a month, heading into 2021.

2. — Wednesday’s Calendar: Federal Reserve Policy Decision, Retail Sales

The economic calendar Wednesday includes the interest rates decision from the Federal Reserve at 2 p.m. ET, followed by a press conference with Fed Chairman Jerome Powell at 2:30 p.m.

The calendar also includes MBA Mortgage Applications for the week ended Dec. 11 at 7 a.m., Retail Sales for November at 8:30 a.m., PMI Composite Flash for December at 9:45 a.m., the National Association of Home Builders Housing Market Index for December at 10 a.m. and Oil Inventories for the week ended Dec. 11 at 10:30 a.m.

Earnings reports are expected Wednesday from Lennar (LEN) – Get Report, Toro (TTC) – Get Report and Herman Miller (MLHR) – Get Report.

3. — Tilray and Aphria Merge to Create Biggest Cannabis Company

Tilray (TLRY) – Get Report and Aphria (APHA) – Get Report have agreed to merge, creating the biggest cannabis company.

The all-stock deal will create a new company with an equity value of about C$4.8 billion ($3.8 billion), Bloomberg reported, citing a statement and interviews with the CEOs of Tilray and Aphria. Annual sales at the combined company are C$874 million.

Aphria shareholders will own 62% of Tilray’s stock under the terms of the transaction, which was characterized as a “reverse acquisition of Tilray.” Aphria will pay a 23% premium to Tilray’s Dec. 15 closing price of $7.87, Bloomberg reported.

The new company will trade under Tilray’s ticker symbol on the Nasdaq.

“I realized that Aphria needed to expand out of Canada, and merging with Tilray was a great answer because it’s a U.S.-domiciled business with great international assets,” Aphria CEO Irwin Simon told Bloomberg. Simon will serve as chairman and CEO of the combined company.

Tilray shares jumped 19.57% to $9.41 in premarket trading Wednesday, while Aphria rose 11.33% to $9.04.

4. — Wish Raises $1.1 Billion in IPO

Shares of ContextLogic, the parent company of online retailer Wish, were priced at $24 a share, the top of the expected range.

Wish raised $1.1 billion in the offering, giving the stock an initial valuation of about $17 billion. The company sold 46 million shares in the offering.

The stock will begin trading Wednesday on the Nasdaq Global Select Market under symbol “WISH.”

Wish, which said it is the most downloaded shopping app, has 100 million monthly active users in more than 100 countries.

The IPO from Wish is the 31st on a U.S. exchange to exceed $1 billion this year, according to Bloomberg. It follows the blockbuster debuts last week of DoorDash (DASH) – Get Report and Airbnb ABNB.

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