We admit we're always delighted when a new fast-food chain enters the arena, and still remember the jolly reception Jollibee got when it opened its Times Square location in 2022. The "chickenjoy," as the chain calls it, was palpable. Now the company is expanding beyond US stores and into the US stock market with a plan to spin off its international business and list on a US exchange sometime next year, and we're bullish on the appetite for its Filipino chicken and other offerings. The S&P 500 closed lower on Wednesday after notching a new intraday record high. The Nasdaq 100 managed to eke out a small gain, while the Russell 2000 fell. Investors reviewed mixed employment data, in which the December ADP employment report showed private payrolls rising but the November JOLTS showed jobs openings falling. Friday's December jobs report could offer more insight into the Fed's path to easing in 2026. |
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| - Cohen would receive options that enable him to purchase 171.5 million shares of GameStop at $20.66 apiece — but only if the market valuation of the company exceeds certain thresholds and GameStop generates enough cumulative earnings.
- Essentially, Cohen can't benefit personally from another meme stock surge unless that's combined with a continued increase in profitability.
- The package is divided into nine tranches, each with a different market cap and cumulative EBITDA hurdle. The first tranche vests if GameStop clears a $20 billion market cap while the company generates $2 billion in EBITDA under his leadership.
- On a closing basis, GameStop has exceeded this $20 billion threshold only during its 2021 meme stock mania. Because of 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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Cohen's key moves as leader of the retailer have been to lean into collectibles, which have seen massive growth, while pursuing an aggressive cost-cutting campaign to improve its financial position. And doing the bitcoin treasury thing. |
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At a $100 billion market cap with the current share count, GME's stock would trade at about $223. That would imply Cohen's stock options to purchase 171.5 million shares at $20.66 would be worth an eye-watering $34.7 billion. But that, unfortunately, is too simple. Because each tranche vests in turn, and because GameStop is offering over a third of its current shares outstanding, we have to take the dilution into account, which would impact all shareholders, Cohen included. With a bit of napkin math, this would mean Cohen's 171.5 million stock options would be worth closer to $24 billion, provided, of course, that Cohen leads GME to a $100 billion market cap, so slightly bigger than Starbucks is right now. |
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| It's official: the sixth time was not the charm for Paramount, as the Warner Bros. Discovery board on Wednesday unanimously, and officially, voted to reject the company's Larry Ellison-backed offer. |
- Paramount's latest hostile takeover attempt didn't boost its $30-per-share offer, but did include a $40.4 billion personal guarantee from Larry Ellison, the father of Paramount's CEO, David Ellison. That update directly addressed the WBD board's concern that Paramount's deal being backed by a revocable trust meant it could pull out of the agreement at any time.
- Still, the update wasn't enough to persuade WBD to recommend the deal over Netflix's bid.
- Warner Bros.' board also noted that the company would owe Netflix a $2.8 billion termination fee if it pivoted to Paramount's deal, along with a $1.5 billion fee for not completing its debt exchange.
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Netflix issued a statement in support of the WBD board vote, writing: "Netflix and Warner Bros. will bring together highly complementary strengths and a shared passion for storytelling. By joining forces, we will offer audiences even more of the series and films they love — at home and in theaters — expand opportunities for creators, and help foster a dynamic, competitive, and thriving entertainment industry." |
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Event contracts show increased optimism in Netflix's likelihood to end up buying WBD, with its odds at 61%* as of market close, up from 57% as of 7 a.m. ET yesterday. Event contracts had Netflix's odds hovering around 40% in the days following Paramount's renewed bid. |
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A new quantum computing company will soon be arriving in public markets. Infleqtion filed its S-4, paving the way for it to go public via a SPAC merger with Churchill Capital Corp X this quarter. Sherwood News Markets Editor Luke Kawa talked with CEO Matthew Kinsella and got the details on its product line, how it's already integrating AI, and the real-world problems quantum computing solves. |
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- 🏈 College Football: It's the Fiesta Bowl tonight, but more importantly, the College Football Playoff Semifinal between Miami and Ole Miss. Miami is hot off an upset victory where it defeated No. 2 Ohio State in the Cotton Bowl, while Ole Miss is also coming off a surprise win after beating No. 3 Georgia in the Sugar Bowl. Despite their original seeding, Miami is a solid favorite, with markets pricing in a 61% chance of victory.
- 🎬 Warner Bros.: On that news that Paramount has been rebuffed for a sixth time, it's worth considering the possibility of a third contender for the future parent company of Warner Bros. Discovery: nobody. Yes, while Paramount's chances are still just north of 25% and Netflix's edge is consistently around 60%, give or take, markets are pricing in about a one-sixth chance that neither deal is tenable and Warner Bros. stays solo.
- 💸 Ethereum: The line to exit as a validator for ethereum is now empty, while the entrance queue for staking now stands at a waiting period of 25 days, a sign that holders have expectations of higher prices ahead. Prediction markets are pricing in a 69% chance that ethereum will have a positive return this year.
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*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC. |
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