O Dow Jones Industrial Average (DJINDICES: ^ DJI) it dropped about 0.37% at 2:20 pm on Monday, when political turmoil and the worsening of the pandemic collided with the highest highs ever. The House of Representatives presented impeachment articles on Monday, accusing President Trump of inciting insurrection related to his actions that led to deadly US Capitol protests last week.
Turning to individual actions, Boeing (NYSE: BA) crashed after a fatal accident involving one of the company’s oldest planes over the weekend. Meanwhile, Cisco Systems (NASDAQ: CSCO) shares rose after a court temporarily stopped Acacia Communications (NASDAQ: ACIA) terminate your merger agreement.
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Boeing shares fall after fatal crash
A Boeing 737-500 crashed shortly after takeoff from Jakarta, Indonesia, over the weekend with 62 people on board. The 26-year-old plane was flown by the airline Sriwijaya Air.
This accident is not related to the two fatal accidents that landed the 737 MAX, a more recent model of the Boeing 737 line. Older models of 737 planes do not have the flight control system that was responsible for the 737 MAX crashes, including one near Jakarta in October 2018.
The 737-500’s own design is unlikely to be the cause of the accident, since the plane has been widely used for decades. But Boeing only recently got the 737 MAX approved again for commercial flights. Any fatal accident involving one of its planes will not help the company’s efforts to rehabilitate its image after the 737 MAX disaster.
This accident occurs shortly after Boeing signed an extension agreement with the United States Department of Justice over the company’s 737 MAX related actions. It will pay a $ 243.6 million criminal fine, set aside $ 1.77 billion for customer claims, and spend $ 500 million in damages to the families of the 737 MAX victims.
Boeing’s shares fell about 2% early Monday afternoon. It is too early to know what caused the accident, but it is unlikely to lead to a grounding, as the plane involved has been flying for a long time. Boeing’s shares fell about 38% last year.
Cisco intends to stop Acacia from ending merger
It seems that Cisco and Acacia are not agreeing. Cisco agreed to acquire Acacia in 2019 for $ 2.6 billion, with plans to use it to strengthen its position in the optical network market. The deal came with standard conditions related to regulatory approval from various agencies around the world.
Acacia announced on January 8 that it was terminating the merger agreement because approval by the State Administration of China for Market Regulation was not received on time. Acacia noted in that press release that Cisco told the company that it can challenge the termination.
Cisco disputes Acacia’s claim that regulatory approval has not been received. The company said on Friday it was seeking confirmation from the Delaware Chancellery Court that it had met all conditions to close the deal. Cisco also said it was seeking a court order to suspend termination until the differences are resolved in court, as well as a court order forcing Acacia to close the deal.
Cisco obtained a temporary court order blocking termination on Friday. Bloomberg said a Cisco lawyer said during the hearing that Acacia believed that its valuation had increased since the deal was signed and was therefore trying to negotiate a better offer.
Cisco’s shares were up about 1.1% early Monday afternoon. Although it is unclear exactly how this drama will play out, Acacia’s case does not look particularly strong. Acacia shares rose 3.4%.