Markets
markets
Max Knoblauch

Paramount once again enhances its Warner Bros. bid without boosting its per-share offer

Paramount continues to do everything except the one thing that would vault its Warner Bros. Discovery bid into a winning position.

On Tuesday, the company beefed up its bid for WBD by adding an incremental payout if its deal closing were to be too slow, as well as offering to cover breakup expenses if WBD’s tie-up with Netflix were to end.

But again, Paramount stopped short of raising its $30-per-share value.

Getting into the nitty gritty, Paramount said it will pay a shareholders a “ticking fee” of $0.25 per share for every quarter the deal hasn’t closed after the end of 2026. (For comparison, Netflix and WBD expect their deal to close 12 to 18 months from when their merger deal was struck, which was December 5 of last year.)

Paramount also pledged to fund the $2.8 billion termination fee to Netflix, which has been a sticking point for the WBD board. Paramount said it would also eliminate a possible $1.5 billion refinancing cost of debt.

The company’s last attempt to boost its offer included a $40.4 billion personal guarantee from billionaire Larry Ellison, the father of Paramount CEO David Ellison.

Event contracts show a slight boost in Paramount’s odds to end up in control of Warner Bros. following the announcement, though Netflix is still firmly the favorite.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

PARAMOUNT ENHANCES ITS SUPERIOR $30 PER SHARE ALL-CASH OFFER FOR WARNER BROS. DISCOVERY AND PROVIDES UPDATE ON REGULATORY PROGRESS | Paramount

But again, Paramount stopped short of raising its $30-per-share value.

Getting into the nitty gritty, Paramount said it will pay a shareholders a “ticking fee” of $0.25 per share for every quarter the deal hasn’t closed after the end of 2026. (For comparison, Netflix and WBD expect their deal to close 12 to 18 months from when their merger deal was struck, which was December 5 of last year.)

Paramount also pledged to fund the $2.8 billion termination fee to Netflix, which has been a sticking point for the WBD board. Paramount said it would also eliminate a possible $1.5 billion refinancing cost of debt.

The company’s last attempt to boost its offer included a $40.4 billion personal guarantee from billionaire Larry Ellison, the father of Paramount CEO David Ellison.

Event contracts show a slight boost in Paramount’s odds to end up in control of Warner Bros. following the announcement, though Netflix is still firmly the favorite.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

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markets
Max Knoblauch

United beats Q1 earnings and revenue estimates, lowers full-year profit guidance amid surging jet fuel prices

United Airlines reported its first-quarter earnings results after the bell on Tuesday. The carrier’s shares ticked down in after-hours trading.

For Q1, United reported:

  • Adjusted earnings of $1.19 per share, compared to the Wall Street estimate of $1.08 per share compiled by FactSet.

  • $14.6 billion in revenue, compared to the $14.39 billion consensus estimate.

In the first quarter, United’s fuel expense grew 12.6% from the same period last year to $3.04 billion.

For the second quarter, United expects adjusted earnings per share of between $1 and $2, shy of Wall Street expectations of $2.08. For the full year ahead, United said it expects earnings between $7 and $11 per share, compared to its prior guidance of between $12 and $14 per share.

“Guidance assumes United’s revenue recovers 40% to 50% of the fuel price increases in the second quarter, 70% to 80% of the fuel price increases in the third quarter and 85% to 100% of the fuel price increases in the fourth quarter 2026,” read the company’s investor update.

Earlier this month, United was among the first major US airlines to hike its bag fees amid higher fuel costs. Its shares have fallen more than 15% from a February high days before the war in Iran began.

United has also made waves this month following reports that CEO Scott Kirby had floated the idea of a merger with American Airlines to President Trump. A merger between two of the big four airlines would create a true US behemoth, controlling more than a third of the American market. American Air last week said it wasn’t interested in merging with United and hadn’t held talks on the idea. On Tuesday, Trump told CNBC that he doesn’t like the idea either.

Tasha Matsumoto
9h
Stocks slip as peace prospects dim

Stocks swung from positive to negative as Vice President Vance’s trip to Pakistan for Iran peace talks was canceled.

Grizzly bear growling USA.
markets
Luke Kawa

Hedge funds are following retail traders into the Magnificent 7

Hedge funds are following retail traders into the stocks the masses never stopped buying.

“As we kick off earnings for megacap tech stocks, this stood out: [hedge funds] have started buying Mag7 stocks again this month though positioning remains well below the peak levels seen in early 2016,” wrote Goldman Sachs’ Cullen Morgan.

Goldman PB Mag 7
Source: Goldman Sachs

In early April, JPMorgan strategist Arun Jain noted that retail investors had basically been selling everything but the Magnificent 7 stocks as part of a more cautious stance due to the Iran war.

(Apple has been a long-standing exception to this trend, presumably because retail traders aren’t fond of its hands-off approach to AI.)

JPM Retail flows

Last August, Jain discussed how retail activity tended to “crowd in” institutional buyers in meme stocks, while Goldman’s John Marshall advised clients to piggyback on stocks beloved by retail traders. Speculative, retail-geared assets proceeded to go on a tremendous run that soured in October.

But there are some early indications that a similar bout of speculative fervor is bubbling up once more.

markets
Luke Kawa

POET Technologies surges above $10 for first time in 4 years amid explosion in call volumes

POET Technologies is up nearly 40% this week as options market activity goes haywire in a faint echo of what got the stock on retail traders’ radars in October.

As of 11:12 a.m. ET, more than 10 calls have changed hands for every put traded. This bullish impulse has propelled the stock above the $10 threshold for the first time since March 2022.

Shares of the optical communications firm briefly dipped last week after Wolfpack Research said it was short the company because its investors would be exposed to an “IRS tax nightmare.”

The company responded that day saying it was taking measures for US shareholders that “should mitigate certain potential adverse US federal income tax consequences to it that could otherwise result from the Company’s status as a passive foreign investment company.”

Luke Kawa
14h
The parabolic surge in Avis reached new heights, with shares halted for volatility

More motivated buyers than motivated sellers.

Travelers at Sacramento International Airport (SMF)

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