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Luke Kawa6/6/25

Ho-hum May jobs report sends stocks higher

US nonfarm payrolls rose by 139,000 in May, solidly above estimates for 126,000, while the unemployment rate held steady at 4.2% as anticipated.

SPDR S&P 500 ETF and Invesco QQQ Trust extended premarket gains to session highs in the wake of the data, with iShares Russell 2000 ETF pushing more than 1% to the upside.

Heading into this report, there had been some nascent signs of concern about the US labor market — in particular the climb in continuing jobless claims. The headline figures from this jobs report should allay any worries, even as the details of the data were unspectacular to soft. Notably, revisions were brutal, showing that 95,000 fewer jobs were added in March and April than previously thought.

In any event, the pricing of Federal Reserve easing through year-end has dipped from above 50 basis points to below that threshold following this release, suggesting the theme of economic resilience is carrying the day across stock and bond markets.

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Disney gains after posting better than expected sales and earnings

Disney, the Stitch merch company that also operates a streaming service and several global theme parks, reported its fiscal first-quarter earnings on Monday. Its shares were up 2% in premarket trading.

The company reported adjusted earnings of $1.63 per share in its first quarter, down 7% from last year but above Wall Street’s estimate of $1.57 per share. Its total revenue of $25.98 billion was ahead of the $25.7 billion consensus, driven by a 7% rise in overall entertainment segment revenue.

Management reaffirmed its full year guidance for double digit adjusted EPS growth, and said the company is on track for its $7 billion stock buyback.

Disney posted an 11% hike in streaming revenue, while operating income for the division surged 72% from last year to $450 million, ahead of Wall Street estimates. The entertainment juggernaut forecast $500 million in Q2 streaming profit. Disney+’s ad-free tier price hike last year was its fourth in four years.

Disney’s board is reportedly closing in on promoting the head of its theme park division, Josh D’Amaro, to CEO — with a vote coming this week. On Friday, the Wall Street Journal reported that Bob Iger has told associates he will step down before the end of 2026.

In December, Disney became the first major content licensing partner with OpenAI, granting more than 200 of its licensed characters to the tech giant’s generative AI tools. Last month, the company said it would introduce TikTok-esque vertical video to Disney+ this year — a move seen across the streaming industry as competition for attention grows beyond traditional content forms.

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GameStop rallies as Ryan Cohen’s M&A media blitz spurs buying

GameStop is trading higher again on Monday, up 2% in the premarket, as CEO Ryan Cohen continues his media blitz to tease potential M&A.

Late Friday afternoon, CNBC reported that Cohen wants to buy a company much bigger than itself, and that if his play works, it has the “potential to make [GameStop] worth several hundreds of billions of dollars.”

That came on the heels of Cohen telling the Wall Street Journal that he was on the hunt for a “big” acquisition that would either “be genius, or totally totally foolish.” Shares rose nearly 5% on Friday.

The CEO is slated to appear on Fox Business for a TV interview at 2 p.m. ET on Monday. Michael Burry — of “The Big Short” fame, who recently revealed that he’s long GameStop — said he’d be publishing a list of suggested targets that the company could potentially acquire ahead of this appearance.

This press push marks a big shift for the executive, whose media appearances have been scarce during his time running the retailer. But Cohen needs both GameStop’s market value and EBITDA to rise significantly if he’s going to make any money from running the company. He recently agreed to a package that would tie his pay completely to those metrics, and only see him start to receive stock options in the event that GameStop’s market capitalization exceeds $20 billion while also booking $2 billion in cumulative EBITDA from Q1 2026 onward.

On a closing basis, GameStop has exceeded this $20 billion threshold only during its 2021 meme stock mania. And, due to heavy losses from 2019 through early 2022, it’s taken GameStop a full decade to generate its latest $2 billion in cumulative EBITDA.

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Strategy’s bitcoin purchases briefly underwater as cryptocurrency tests April 2025 lows

Bitcoin’s tumble has brought about the return of an inauspicious milestone for Michael Saylor’s leveraged bitcoin-buying vehicle Strategy.

At the cryptocurrency’s lows on Monday, the value of the bitcoin held by Strategy was less than its cost basis for the first time in more than two years.

Strategy’s 8-K filing on January 26 showed the company held 712,647 bitcoin purchased at an average price of $76,037.

The cryptoasset fell as low as $74,540 overnight, just shy of its 2025 low of $74,425, before rebounding to trade higher in early action on Monday.

In December, Strategy unveiled a US dollar reserve of $1.44 billion so that it could cover its interest and dividend payments, helping the firm avoid the prospect of selling bitcoin to meet those obligations.

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Oracle plans to raise up to $50 billion in debt and equity this year to fund its AI ambitions

On Sunday evening, Oracle told investors just how much money it’s going to need to raise from them to fund its data center expansion efforts.

Management said it plans to raise $45 billion to $50 billion this calendar year, split roughly equally between debt and equity in a bid to maintain its investment grade rating.

The lion’s share of the equity raise ($20 billion) will come from an at-the-money offering that enables the firm to opportunistically issue shares. This year’s debt issuance will come in one fell swoop, per the company, and happen early in the year.

Carl Quintanilla Vital Knowledge ORCL — Source: Bluesky

On the bright side, at least this is an answer. During the conference call that followed Q2 results in December, Oracle said that capex for the fiscal year would be $15 billion higher than previously anticipated. When asked how much money the company would need to raise, CEO Clay Magouyrk said “it’s hard to answer that question exactly,” before saying he thought it would be “less, if not substantially less” than $100 billion in order to complete its multi-year AI buildout.

“Oracle is raising money in order to build additional capacity to meet the contracted demand from our largest Oracle Cloud Infrastructure customers, including AMD, Meta, NVIDIA, OpenAI, TikTok, xAI and others,” per the press release.

Put it in alphabetical order all you want, we all know who your biggest customer is!

Oracle’s (over)reliance on OpenAI as a source of future revenues has prompted markets to view the firm as less creditworthy.

Nvidia’s not investing $100 billion in OpenAI because the chip designer doesn’t want to pay the OpenAI valuation tax

The upshot of the WSJ report on Nvidia’s relationship with OpenAI is that the former wants you to know they won’t be dependent on the latter.

Nvidia developer conference GTC

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