Markets
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Tom Jones

Netflix has granted Warner Bros. a 7-day waiver to resume deal talks with Paramount to hear out its best and final offer

Warner Bros. Discovery will resume talks with Paramount Skydance to hear out its best and final offer after Netflix granted a limited weeklong waiver, according to a statement released Tuesday morning.

The Warner Bros. Discovery board, per the statement, continues to unanimously back the merger with Netflix, while the streamer will retain its rights to match or exceed any forthcoming offer from Paramount. This fresh negotiation period ends on February 23.

Shares of Warner Bros. Discovery rose on the news, up 2.6% as of 7:46 a.m. ET. Netflix shares also gained about 1% following the press release — suggesting that investors think the streaming giant might be overpaying at the originally agreed-upon price, and that losing out to Paramount could be a blessing in disguise.

Warner Bros. Discovery also confirmed that a Paramount representative told the company it would be willing to pay $31 per share “pending engagement” — that would be up about 3% from the current $30-per-share offer and also doesn’t constitute PSKY’s “best and final” proposal, per the representative.

The headline offer price had, up until now, proved a sticking point for both sides of the Paramount/Warner deal, while a clause covering the $2.8 billion breakup fee with Netflix in PSKY’s most recent offer could also prove enticing.

WBD shareholders will vote on the proposed Netflix merger on March 20. Interestingly, though the WBD board continues to “unanimously recommend” taking the Netflix deal, some prediction markets have now swung to place Paramount as the favorite in the acquisition battle.

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(Event contracts are offered by Robinhood Derivatives, LLC. Data is sourced from KalshiEX LLC.)

Warner Bros. Discovery Agrees to Engage With Paramount in Sales Talks, but for Now Still Backs Netflix Deal as It Sets March 20 Shareholder Vote

Warner Bros. Discovery Agrees to Engage With Paramount in Sales Talks, but for Now Still Backs Netflix Deal as It Sets March 20 Shareholder Vote

Shares of Warner Bros. Discovery rose on the news, up 2.6% as of 7:46 a.m. ET. Netflix shares also gained about 1% following the press release — suggesting that investors think the streaming giant might be overpaying at the originally agreed-upon price, and that losing out to Paramount could be a blessing in disguise.

Warner Bros. Discovery also confirmed that a Paramount representative told the company it would be willing to pay $31 per share “pending engagement” — that would be up about 3% from the current $30-per-share offer and also doesn’t constitute PSKY’s “best and final” proposal, per the representative.

The headline offer price had, up until now, proved a sticking point for both sides of the Paramount/Warner deal, while a clause covering the $2.8 billion breakup fee with Netflix in PSKY’s most recent offer could also prove enticing.

WBD shareholders will vote on the proposed Netflix merger on March 20. Interestingly, though the WBD board continues to “unanimously recommend” taking the Netflix deal, some prediction markets have now swung to place Paramount as the favorite in the acquisition battle.

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(Event contracts are offered by Robinhood Derivatives, LLC. Data is sourced from KalshiEX LLC.)

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Tasha Matsumoto
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Stocks eke out gains on hopes for a path forward for reopening the Strait of Hormuz

Stocks rebounded on news that Iran is drafting a protocol with Oman to “monitor transit” through the crucial Strait of Hormuz.

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Matt Phillips

AI server cluster maker Penguin Solutions takes flight

Small-cap AI server cluster maker Penguin Solutions surged Thursday after posting better-than-expected Q2 revenue and profit numbers Wednesday after the close, along with an increase in full-year sales and profit guidance.

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and cooling systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed “Liberation Day” in April. Then it turned tail and doubled through early October amid a surge of call options activity, which tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today, too — relatively speaking — with roughly 2,625 traded as of 1:15 p.m. ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, FactSet data shows.

Penguin Solutions Stock Takes Off On AI Bolstered Outlook

Penguin Solutions Stock Takes Off On AI Bolstered Outlook

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and cooling systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed “Liberation Day” in April. Then it turned tail and doubled through early October amid a surge of call options activity, which tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today, too — relatively speaking — with roughly 2,625 traded as of 1:15 p.m. ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, FactSet data shows.

markets
Luke Kawa

Momentum returns to optics stocks as the release valve for AI optimism

Potentially imminent end to the war? Buy optics stocks.

Maybe not? Buy optics stocks anyway.

Effectively all the juice left in the AI trade is coming from optics (and memory) stocks. And the latter group is taking a bit of a breather today while the former continues to surge.

Shares of Ciena Corp., Lumentum, and Coherent are building on recent big gains and among the biggest gainers in the S&P 500 near midday, while Applied Optoelectronics is also surging on Thursday.

These companies all provide solutions that help information move around in data centers, and thus are key beneficiaries of the aggressive capex plans of hyperscalers. Nvidia has invested $2 billion apiece in Coherent and Lumentum in deals that also include purchase commitments.

markets
Matt Phillips

Space stocks rip during a topsy-turvy day for the equity market

Satellite-services-from-space stocks surged Thursday after reports that Amazon is in talks to buy Globalstar, which provides voice and connectivity services from its satellite network. It also can’t hurt that the general mood around space is ebullient, following the successful launch of Artemis II on Thursday.

Planet Labs and ViaSat also soared on the news.

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

Globalstar surges after FT reports that Amazon is in talks to buy the satellite group

Globalstar surges after FT reports that Amazon is in talks to buy the satellite group

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

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Can Sandisk do the double?
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The S&P 500 just had its worst quarter in years. Here are the biggest winners and losers.

Sandisk and energy stocks soared while software names sank amid a broad sell-off in tech stocks.

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