Notable business headlines include French video game maker Ubisoft securing a new investment from Tencent, Theranos founder Elizabeth Holmes asking for a retrial, and United Airlines threatening to abandon JFK airport.
JULIE HYMAN: Let's get down to business. Now, we'll look at some of the other top headlines that are moving markets this morning. French video gamemaker Ubisoft securing a new investment from Tencent. But it might not be the deal investors were hoping for. The Chinese conglomerate is set to raise its stake in Ubisoft to nearly 10%, up from its current 4 and 1/2% stake.
But the news did disappoint investors who saw Ubisoft as a potential takeover target driven by scandals, new release delays, and industry momentum. Most notably, with Microsoft's buy of its rival Activision Blizzard. Under this agreement, by the way, Tencent cannot further increase its stake in their parent company for the next eight years.
Another twist in the Theranos saga. Elizabeth Holmes, founder of the infamous blood testing company, is now asking for a new trial. She claims a witness that testified against her in court came to her house and said his testimony was twisted around by prosecutors. Holmes was found guilty of wire fraud, among other charges, in a San Jose jury trial. She's set for sentencing in October. Theranos collapsed after a 2015 bombshell report from "The Wall Street Journal" that revealed blood tests were not conducted on company equipment.
And you might not find any more friendly skies over JFK, in particular, if a spat between the United Airlines and federal regulators continues. The airline saying it is seeing no increase in flight capacity at the busy New York City airport, despite runway and infrastructure expansions.
And now, United says it could suspend operations at the end of October from JFK if things are not changed. And Jared, this is really interesting here, this sort of battle, if you will, between the two, and the effect that it could have on flyers and also on United's business.
JARED BLIKRE: I think so. And wow, no more flights after October. I think this is a pretty big-- I think this is a pretty big deal here. You take the history of airline deregulation-- I'm gonna go back all the way to 1978, by the way.
JULIE HYMAN: Wow.
JARED BLIKRE: This was an act passed by Congress. I believe it was signed by Jimmy Carter. He would have been president at the time. Ronald Reagan came to office, he fired all the air traffic controllers. They were part of a federal trial-- I think they were part of a federal union. But the bottom line is that the airports, themselves, were never deregulated. They got to set their own prices. And they didn't really adjust for peak times.
And so you had the airlines which had been guaranteed routes, well, suddenly, they could compete. But then the airports, like JFK, they could charge whatever they wanted. They didn't-- they didn't price those landing routes as, in terms of time per day, very strategically. So you got tons and tons of bottlenecks. It looks like, what, 40-plus years later, we're still kind of looking at the same mess? Actually 50.
So I-- you know, par for the course here that we're having airline delays here and that its come to this that an airline removing service, potentially from one of the largest airports in the US.
JULIE HYMAN: Yeah, and this comes also as the airlines are trying to sort of still retain some capacity discipline, even as we have seen this big uptick in demand from flyers. And another part of the backdrop here is that United Airlines reported this morning that operating revenue is gonna be up about 12% for this quarter.
And it might fly slightly more than previously planned. So a little bit of an increase in capacity there. So they say, exiting a robust summer, the company continues to see a strong demand environment. So we'll see how the JFK fights plays into all of that and what ends up happening there.
JARED BLIKRE: Sounds like I'm gonna be taking the train as much as possible into the end of the year. I wonder if it goes all the way down to Texas. Have to figure that out.