Sprint Sizzles, Airbnb Disappoints and Earnings Season Drags On

Major U.S. stock indexes set fresh highs this week, but the coronavirus still dominated the news with more questions than answers.

Is it contained? Is it spreading? Can central bankers blunt its effect on the economy? The answers seemed to change by the hour, resulting in an erratic week of trading. Still, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite are all on track for a second consecutive week of gains.

Who were this week's big winners and losers?

WINNER: Sprint (S)

Shares of Sprint Corp. (S) surged Tuesday, rising more than 75% after a judge approved its deal to merge with T-Mobile US Inc. The combined company will still be third to Verizon and AT&T -- but it won't be a distant third.

The $26 billion tie-up had long been opposed by state attorneys general, who tried to block it on antitrust grounds. They can appeal, but for now, the T-Mobile-Sprint deal is on.

T-Mobile's longtime chief executive, John Legere, had more than $100 million of stock bonuses tied to getting the deal done. And shares of SoftBank Group Corp., the Japanese conglomerate that bought Sprint (S) in 2013 and has been under considerable pressure lately, rose 12% on Wednesday in Tokyo.

LOSER: Airbnb

If you're a banker looking to market an initial public offering to the investing public, then Airbnb Inc. has just about everything you could want: a recognizable name, a high-tech sheen, and profits.

Well, two out of three isn't bad. On Tuesday, the Journal reported that Airbnb lost $322 million in the first nine months of 2019, driven by sharply rising expenses. That's a stark reversal from the $200 million profit reported for the same period in 2018.

Airbnb was on track to file papers to go public at some point this year and was expected to buck the trend of other high-profile companies like Uber Technologies Inc. and Lyft Inc. that had disappointing IPOs. Those are companies with losses and no clear path to profits, and the new report seems to dump Airbnb back into a bucket with Uber and Lyft. That's something that could affect the IPO.

Honorable mention: Tech giants. The Federal Trade Commission on Tuesday began an aggressive new probe of the past 10 years' worth of acquisition activity at Microsoft Corp., Facebook Inc., Apple Inc. and Alphabet Inc. Heavy selling in those stocks alone was enough to erase the market's gains on Tuesday.

The Week Ahead: After the Presidents Day holiday Monday, investors will have more earnings reports to digest: Walmart Inc. on Tuesday, Viacom Inc. on Thursday and Berkshire Hathaway Inc. on Saturday. On the economics front, monthly existing homes sales are on tap for Friday.

Write to Paul Vigna at paul.vigna@wsj.com

Corrections & Amplifications

This article was corrected at 4:17 p.m. ET because an earlier version incorrectly stated Viacom was reporting earnings on Wednesday, and Berkshire Hathaway on Friday in the 13th paragraph. Viacom reports earnings on Thursday. Berkshire Hathaway reports earnings on Saturday.


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  02-14-20 0814ET
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