New Apple Watches don’t make it to the holidays

Hey Superheroes,

It’s the last week before the holidays and it looks like the markets are set to end the week in green. 

Lots of big news coming from blue chip companies this week. 

Here’s this week’s top stories.

Apple to stop latest Apple Watch sales in the U.S. from December 25

The largest company in the world may have celebrated a new all-time high last week, but it looks like its pre-holiday celebration may have to be cut short.

Thanks to a ruling back in October by the U.S. International Trade Commission (ITC) that Apple has infringed on patents owned by another publicly-listed company, Masimo, certain affected Apple products will see their last day in U.S. stores on December 24.

⌚ Nitty-gritty deets

The problem lies with the Apple Watch’s blood oxygen sensor, which has been found to infringe on Masimo’s pulse oximeter patent. 

The sensor, which is used to read blood oxygen levels, was first released in the Apple Watch Series 6 in 2020. The Apple Watch is commonly marketed as a life-saving device thanks in part to this feature.

While Apple is still set to sell older Apple Watch models, the two flagship models released this year – Series 9 and Ultra 2 – will no longer be available for sale through Apple’s official channels from December 25.  

While Apple plans to appeal the ITC’s decision, the quickest way for the affected Apple Watches to be cleared would be for the Biden Administration to veto the ban. However, the deadline for that to happen is Christmas Day.

One analyst estimates Apple to lose out on between US$300m to US$400m worth of revenue from the ban.

🧠 The lesser-known Masimo

Compared to Apple’s market cap of over US$3 trillion, Masimo’s current valuation sits at about US$6 billion. 

Aside from the patent infringement, the medical device company also claimed that Apple poached 25 of its employees, including some C-Suite executives, beginning in 2013. Apple also apparently never tried to work out an agreement with the smaller company. 

Interestingly, Masimo created its own watch to provide continuous real-time oxygen saturation and pulse rate data to its users. That watch just received FDA clearance last month. 

Adobe abandons Figma merger deal

It’s been 15 months since Adobe first announced its intent to acquire Figma for US$20 billion in cash and stock consideration.

While both parties were strongly supportive of the merger, sometimes things just aren’t meant to be.

🙅 Regulators have been difficult

Unfortunately for both companies, the necessary regulatory approvals needed for the merger to push through would not happen. 

According to the filing published by Adobe, both sides agreed to terminate the deal after seeing “no clear path” for approvals from the European Commission and the UK Competition and Markets Authority. If you can recall, the latter also delayed Microsoft’s acquisition of Activision Blizzard… though that transaction ended up completing in October 2023.

Common with large acquisitions, regulators are concerned with the threat of these transactions on healthy competition within industries. 

Despite Adobe having to pay out a US$1b termination fee to Figma, Adobe’s shares climbed nearly 2% following the news.

🔦  Some other things we’re shining the Spotlight on:

HOLLYWOOD’S NEW POWER COUPLE?: Warner Bros Discovery and Paramount Global have begun talks of a merger, according to an unofficial source. The market value of the potential merger would be approximately US$39 billion and would allow both companies to compete better with Netflix and Disney.

NOT FINE FOR AIRBNB: Airbnb was slapped with a fine of A$15m after admitting that it misled customers with its pricing. The ACCC first initiated proceedings in 2022 after receiving over 2,000 complaints from customers who were overcharged due to Airbnb not specifying whether charges were in USD or AUD.

RIO STRIKES HOT: Following Fortescue’s record high last week, Rio Tinto shows that it’s not falling behind – hitting an intraday high of over A$135 for the first time in its long history. Some say that an increase in iron ore prices is due to an expectation of winter restocking of commodities – which could be one of the causes of the resource giant’s strong performance this week. 

That’s all for this week’s Spotlight! 

Don’t forget that U.S. markets will be closed on Monday (December 25) while Australian markets will be closed on both Monday and Tuesday (December 25 and 26).

Additionally your favourite weekly newsletter (aka Spotlight 💙) will be taking a break next week.

If you want to keep track of market updates, don’t be shy to chuck us a follow on Instagram, @superheroau!

Happy Holidays to all our Superheroes!