- Bombing Iran May Blow Up Trump’s Middle East Plans
- US Threatens to Cut Off Swiss Bank Mbaer from Financial System Over Alleged Iran, Russia, Venezuela Ties
- OPEC+ Looks Willing to Defy Oil Bears’ Warnings Again
- Taiwan and TSMC Make the World Safer by the Day
- Japan’s Takaichi Takes a Page Out of Trump’s Central Bank Playbook
- Trade Remains ‘Challenging’ for Eurozone Amid Volatile Policy, Says ECB’s Lagarde
- Under Siege from Politics, Central Bankers Fight Back – At a Cost
- New Credit Blowup in London Has Wall Street Chasing Billions
- The Buyers Behind Gold’s $5,000 Breakthrough
- Kalshi and Polymarket Are Economic Oracles
- Trump Says Prices Are Falling. Here’s Why That Would Be Bad
- Trump’s Retirement Proposal Already Failed — Under Obama
- The Redistricting War Spells Doom for Congress’ Last Moderates
- Even States With No Income Tax Are Flirting With Taxing the Rich
- Mortgage Rates Fall Below 6% for the First Time Since 2022
- Netflix Backs Out of Bid for Warner Bros., Paving Way for an Ellison Takeover
- Paramount Wins Bidding War for Warner Discovery After Netflix Drops Out
- Tech, TV, Movies and News: Ellisons on Brink of Colossal Empire
- What I Learned In Business School Wasn’t Reflected In the Real World
- Raves, Debt and Deaths: How a Wall Streeter Came to Own New York’s Biggest Club
- Brink’s to Acquire NCR Atleos in $4 Billion Deal in Combo of ATM Players
- Nebraska’s Most Feared Man: The Auditor Who Busts State Workers for Running Errands
- No Such Thing As ‘Free Bus Fares’ In Any City
- A World Where All Is Free? That’s Elon Musk’s Theory of ‘Sustainable Abundance.’
- The Web of Companies Owned by Elon Musk
- Bad Bets: Massive EV Subsidies Not Paying Off
- Nvidia’s Huang Confronts an Investor Audience Demanding the Next Big Thing
- Anthropic Rejects Latest Pentagon Offer, Escalating AI Feud
- Tech Has Never Caused a Job Apocalypse. Don’t Bet on It Now.
- How Jack Dorsey Explained Cutting Almost Half of Block’s Staff
- The Rise and Fall of a 3-D Printing Empire
- The $3,000 Minipig Powering Europe’s Drug Pipeline
- Bloomingdale’s Is Defying the Demise of Department Stores
AI purge: Jack Dorsey's Block (XYZ) soars 20% after slashing its headcount by nearly half due to intelligent technology.
Going global? The returns of South Korea’s KOSPI are getting crazy, triggering warnings of an imminent market crash.
Defense talk: Anthropic has rejected the Pentagon's demand for unrestricted model access, saying threats won't sway it. Odds of a ban?
Discipline vs. expansion
That was a good way to make a few billion dollars. Netflix (NFLX) has scored a $2.8B breakup fee after walking away from a deal to acquire Warner Bros. (WBD), with Paramount Skydance (PSKY) serving up an offer the former studio didn't want to outbid. The advance from Paramount (PSKY) is valued at $111B vs. the $82.7B that Netflix (NFLX) made to reach the initial deal—translating into a staggering $28.3B spread between both their proposals.
The reaction: The loser is winning on Wall Street, with shares of Netflix (NFLX) surging 7% premarket, though the winner is logging even larger gains. Paramount Skydance (PSKY), which has agreed to cover the breakup fee, is up 9% in early trade as investors digest what the impact will be for both companies. Note that even after factoring in the big gains from this morning, shares of NFLX are still down 12% since it first agreed to the deal with Warner Bros. (WBD), while Paramount Skydance (PSKY) is 18% lower. Their stocks are also down by more than a third since talks got serious in October and November, meaning they both have significant ground to recover.
"We've always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive," Netflix (NFLX) said in a statement. "This transaction was always a 'nice to have' at the right price, not a 'must have' at any price." Netflix (NFLX) shareholders have also been wary about the theatrical Hollywood deal, worrying that it could compromise the company's current internet business model, as well as the massive new debt load it would incur to finance the merger to the tune of more than $50B.
In comparison: David Ellison's Paramount Skydance (PSKY) sees things very differently. The studio is hungry to expand after Skydance Media and Paramount Global closed their merger last summer despite losses that continue to pile up. It sees Warner Bros. (WBD) as the key to its turnaround strategy, staying on top of the industry with a gigantic content library and franchises, and creating a must-have subscription service for consumers. In terms of debt concerns, Larry Ellison, one of the world's richest people, has personally backstopped much of the deal, giving him an outsized media influence with new stakes in CBS, Paramount, CNN, HBO, and TikTok (through Oracle's (ORCL) cloud provider relationship). (1 comment)
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What else is happening...
DraftKings (DKNG) is coming to Arkansas as its reach hits 30 U.S. states.
ATM services firm Brinks (BCO) to buy NCR Atleos (NATL) for $6.6B.
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Meta (META) inks another AI chip deal, this time with Google (GOOGL).
Jeff Bezos' AI Lab in funding talks for multibillion-dollar investment vehicle.
Walmart (WMT) agrees to $100M FTC settlement over Spark driver pay.
CoreWeave (CRWV) falls after reporting mixed Q4 financial results.
ASML says next-gen chipmaking tool ready for high-volume production.
Citigroup (C) targets Bitcoin integration into core banking this year.
Venezuela oil sales under U.S. deal seen reaching $2B by February-end.
Today's Markets
In Asia, Japan +0.2%. Hong Kong +1%. China +0.4%. India -1.2%.
In Europe, at midday, London +0.4%. Paris -0.1%. Frankfurt +0.2%.
Futures at 6:30, Dow -0.6%. S&P -0.4%. Nasdaq -0.4%. Crude +2% to $66.53. Gold flat at $5,192.60. Bitcoin -2.9% to $66,253.
Ten-year Treasury Yield -1 bp to 3.99%.
On The Calendar
Companies reporting today include Arbor Realty Trust (ABR) and AES (AES).