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McDonald’s makes the largest purchase in 20 years

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McDonald’s makes the largest purchase in 20 years

What’s up?

McDonald’s Corp. is buying a decision-logic technology company Dynamic Yield Ltd. The acquisition will help the world’s biggest restaurant chain better personalize its digital menus. According to the media reports, the company will spend more than $300 million on the purchase. Such acquisitions are not really in the habit of McDonald’s, so this piece of news matters.

Why is it important?

In general

New technologies that improve life, even in small ways, are always great. Dynamic Yield will allow McDonald’s restaurants to change their electronic menu boards’ display of items depending on the weather, the time of day or regional preferences. In addition, the menus will also suggest add-on items to customers. Can this be the dawning of the cyberpunk age when the ads communicate directly with you?

For investors

It’s hard to imagine progress without technology, so McDonald’s has all the reasons to make this acquisition. Providing personalized services for customers is another thing that seems like the step in the right direction. We can see that the company has a strategy and is thinking about the future.

McDonald’s has tremendous plans for this year. Its goal is to increase its market share and sales both in the United States and abroad. The company has everything necessary for such an expansion: technology, discounts, simpler operations, delivery, and menu changes.

In January McDonald’s announced that the technological overhaul of its restaurants, the so-called Experience of the Future, would be mostly finished in the US by 2020. The company also expected faster drive-thru times this year. All of this seems quite inspiring.

For traders

McDonald’s stock has gained 6% since the start of 2019. The price has been trading within a sort of triangle since November. The break above the resistance area of $190/191 is needed to open up the way to new highs. The upside target is at $200. Support is at the short-term trendline at $182.65 and the triangle’s support around $177.

The daily chart of McDonald’s Corp.
McDonald’s Corp., daily chart