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Elliott Effect Lifts SAP, as Softbank Bets on Wirecard At Investing.com

© Reuters.

By Geoffrey Smith

Investing.com – The Elliott Effect just hit SAP (DE:).

The B2B software provider is at the top of the early trading on Wednesday, after Paul Singer's Elliott Management reported it has accumulated a $ 1.3 trillion stake in the company via stock and derivatives.

Normally, that could have seen Germany's most valuable company for a potentially abusive battle with one of Wall Street's most aggressive activist investors. However, SAP appears to have pre-empted a head-on clash by announcing new targets for profit margins and stock repurchases. They're designed to assure investors who have been unsettled by recent high-profile departures and by uncertain progress in their core software business to a cloud-based subscription model.

The new targets more than made up for a quarterly loss caused by restructuring charges and other items related to SAP's expensive-looking $ 8 billion acquisition of Qualtrics last year. Underlying earnings rose at more than expected, while operating margins from its cloud-based business also improved.

The shares rose as much as 7% to a new Early trading in early trading and up 6.6% as of 04:30 AM ET (0830 GMT)

SAP was one of two reasons Germany was alone in the green early Wednesday, on a day when profit taking kicked in across Asian and European markets after Wall Street hit new record highs on Tuesday. The benchmark was down 0.46 points, or 0.1

% at 390.90

The other reason for the Dax's outperformance was payments processor Wirecard (DE :), which rose over 7% after Japan's venture capital giant Softbank announced a $ 1 billion investment. This is a huge vote of confidence in a company that has been plagued by allegations of false accounting – allegations that it has repeatedly denied.

Credit Suisse (SIX 🙂 rose 2.6% after reporting and 8% increase in net profit in the quarter, while chipmaker STMicroelectronics (PA 🙂 rose 3.1% after beating expectations. Pharma giant Novartis (SIX 🙂 also rose 2.7% as it raised its full-year guidance for core operating profit after a strong first quarter. U.K fast-fashion group boohoo.com (LON 🙂 also rose 3.8% after announcing a sharp rise in full-year sales and improved profit margins.

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