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Matt Phillips2h

Analysts weigh in on DraftKings’ tumble: One sees a “back up the truck” opportunity to buy the dip

Wall Street analysts are reacting to the sharp slide of online gambling stocks DraftKings and Flutter Entertainment Tuesday, after prediction markets company Kalshi introduced a product mimicking the parlay bets on the betting apps, intensifying concerns about the competitive pressures prediction markets pose.

Citi analysts snipped their Q3 estimates and price target for DraftKings — while maintaining a “buy” rating — after Tuesday’s tumble. They wrote:

“We are lowering our 3Q25 estimates and now forecast 2025 to come in toward the lower end of the firm’s guide. Along with results, we believe investors will be focusing on initial trends since the start of the NFL season, the evolving prediction market landscape, the firm’s recent NBCU partnership, and recent product enhancements.”

BMO Capital, however, kept its “overweight” rating on the stock, which it calls a “top pick,” seeing Tuesday’s nearly 12% drop as a chance to buy the dip:

“While bears will point to product enhancements (parlays) and trade volume momentum by prediction markets, we believe legal [online sports betting] vendors continue to control the lion’s share of betting volume in the legal betting markets. We view today’s sell-off, in particular, as a ‘back up the truck’ opportunity.”

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Plug Power soars on bullish options activity as it delivers first electrolyzer for green hydrogen project

Hydrogen fuel cell company Plug Power is enjoying massive gains and a lot of love in the options market Wednesday after the company announced that it delivered the first electrolyzer to a refinery in Portugal.

“This project, Plug’s largest worldwide, will produce up to 15,000 tons of renewable hydrogen per year, replacing 20% of the grey hydrogen currently used at the Sines Refinery,” per the company’s press release. “This switch will reduce the Refinery’s greenhouse gas emissions by approximately 110,000 tons per year (Scope 1 and 2, CO2e).”

As of 11:03 a.m. ET, over 146,000 call options in Plug have changed hands, already running hotter than the 20-day average of 132,328 for the full session. Activity is more than tilted to the bull side — it’s completely lopsided. Over 11 call options have traded for every one put.

Plug call options that expire in mid-January with a strike price of $2 and contracts with strike prices of $3 and $2.5 that expire this Friday are seeing especially elevated trading activity.

AppLovin gets new Street-high price target from BofA, as it’s “likely to become a required channel” for DTC e-commerce companies

AppLovin CEO Adam Foroughi said the real “fun” starts today, as the company opens its self-service ad portal on a referral basis to onboard new advertisers.

Reddit sinks on heavy volumes, social media chatter of reduced referral traffic from ChatGPT

ChatGPT thinks OpenAI’s recent model tweak is a plausible explanation.

Reddit listing day

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Lithium Americas spikes on plans for the Department of Energy to take 5% stake in exchange for early access to financing and deferred debt service

Shares of Lithium Americas are up more than 30% as of 7:35 a.m. ET after the miner announced a nonbinding agreement for the US government to receive an equity position in the company, in exchange for providing accelerated funding of a loan and offering more favorable repayment terms.

The DOE would get a 5% equity stake in the company via warrants in exchange for advancing $435 million of its previously announced loan (now worth a total of $2.23 billion) to Lithium Americas this quarter, as well as deferring interest payments on $182 million of those funds for five years.

“There can be no assurances that definitive documentation memorializing the First Draw Terms will be completed on the terms currently contemplated or at all,” the Vancouver-based company cautioned in its press release.

The first draw of Lithium Americas’ loan from the DOE is slated to be used to advance its joint venture with General Motors, a mine being developed in northern Nevada. GM is also amending the terms of this joint venture to facilitate the sale of production it does not expect to purchase. The DOE will also receive a 5% nonvoting, nontransferable economic stake in this particular project, also via warrants.

This planned pact comes on the heels of separate deals earlier this year that saw the government receive an equity stake in MP Materials and Intel, which has helped spur massive gains in those stocks.

“This proposed stake is another example of the Trump Administration taking equity stakes with American companies to promote industries seen as critical to national security with the majority of lithium reserves coming from foreign adversaries, especially China with the Thacker Pass Facility Buildout seen as crucial to national security,” Wedbush Securities analyst Dan Ives wrote. “This is important as the Trump Administration is now looking far and wide (globally) for stakes in strategic companies, not just US names.”

As we’ve written, why follow the Fed when you can just follow the feds?

markets

Nia Warfield19h

Nike pops on Q1 earnings beat and surprise revenue jump

Nike was trading as much as 3.7% higher early on Wednesday after the company topped first-quarter estimates after the bell on Tuesday.

Adjusted earnings per share came in at $0.49, nearly double the $0.27 expected by Wall Street. Revenue rose to $11.7 billion, also handily beating analyst forecasts of $11 billion, suggesting that the company’s turnaround plan is beginning to bear fruit in both footwear and apparel, which beat consensus estimates by 6% and 13%, respectively. Wholesale revenues rose 7% to $6.8 billion.

On Friday, the sneaker giant rolled out its first collaboration with Kim Kardashian’s Skims, betting that the brand’s popularity and star power will help expand its female customer base.

Ahead of earnings, Nike shares were down over 5% year to date.

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