Markets Defused aims to give an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- GameStop roared higher on Gill’s $116mln bet
- Paramount rallied as reports say Skydance merger is agreed
- Boston Beer Company drops as takeover rumour lost its fizz
- Raspberry Pi is set for £540mln London float
- Pershing square sells $1bn of stock, is an IPO coming?
- ARM Holdings jumps as CEO makes bullish prediction
GameStop roars higher on Gill’s $116mln ‘bet’
GameStop Corp (NYSE:GME) shares surged 71% in Monday’s trading after Keith Gill, known on social media as Roaring Kitty, posted a screenshot on Reddit (NYSE:RDDT) that showed a $116 million position in the video-game retailer.
The post revealed that Gill holds 5 million shares with an average cost basis of $21.27 each, plus 120,000 call options worth $65.7 million, set to expire on June 21.
Gill's return to social media, after a three-year hiatus, has reignited interest in meme stocks. His previous posts significantly influenced the retail trading frenzy around GameStop in 2021.
The Reddit post followed a series of meme videos posted to X (formerly Twitter) a number of weeks ago, which prompted a resurgence of so-called ‘meme trading’ through the month of May.
Elsewhere in the market AMC Entertainment (AMC Entertainment Holdings (NYSE:AMC)), the other high profile meme-stock that rallied aggressively in recent weeks, also saw a rise in its share price, up around 13.5% trading at $4.91.
No trade details in AMC stock were posted about AMC stock, however.
Paramount rallies as reports say Skydance merger is now agreed
Paramount Global (NASDAQ:PARA) stock was up 7% in Monday’s dealing on reports a deal is now agreed to merge with Skydance.
The tems of the merger have been agreed and will likely be announced in the coming days, a CNBC report claimed.
In the meantime, the deal is awaiting ‘signoff’ from Paramount’s controlling shareholder Shari Redstone, the mainstream financial media outlet said.
According to CNBC, and a separate Wall Street Journal report, Redstone’s National Amusements vehicle stands to receive $2 billion through the transaction.
Skydance would pick up ‘nearly 50%’ of Paramount in the deal, CNBC added, with the deal pitched at a price of $15 per share – valuing Paramount at $4.5 billion.
On Monday, in New York, Paramount shares were up 82 cents or 6.9% changing hands at $12.75 each.
It is reported that Skydance and Redbird, a UAE-backed partner to Skydance, will also inject some $1.5 billion into the enlarged media conglomerate.
Hollywood media executive Jeff Zucker leads Redbird and its investors include Sheikh Mansour bin Zayed Al Nahyan, who runs the sovereign wealth investments for the Abu Dhabi royal family which owns Manchester City Football Club along with a wide range of investments worldwide.
Boston Beer Company slides as takeover rumour subsides
Boston Beer Company Inc (NYSE:SAM), owner of the Samuel Adams brand, saw its shares slide in Monday’s early deals as investors reacted to latest developments after claims on Friday that a takeover may be in the offing – today, however, the rumoured buyer denied it was making a bid.
Suntory, a Japanese company that owns American spirits brand Jim Beam, denied the claim it was in negotiations to buy Boston Beer Company via comments from a spokesperson.
On Friday, a Wall Street Journal report said that a deal to buy the American larger maker would likely be priced at a premium to market value, which at the time was around $3 billion.
Boston Beer Company shares spiked to $329 per share on Friday, marking a 25% gain for the week.
Today, however, the beer stock was in retreat and came back as low as $282.
At $287 per share shortly after the start of Monday’s trading session, the stock was down $26.17 or 8.34%.
Raspberry Pi set for £540mln London float
British homebrew PC maker Raspberry Pi is expected to sell £160 million of stock in its planned London IPO, which will value the company at £540 million.
Raspberry Pi, in a statement, announced it would price its IPO shares at 260p each, with the stock market float expected to be completed later this month.
Share trading is expected to start, provisionally, on 11 June with the full admission (unconditional trading) beginning on 14 June.
The IPO will see a mix of existing and new stock sold to public investors.
It is expected, at 260p each, that the sale of new shares would raise around £31.5 million for the company.
The remainder of IPO proceeds will go to existing shareholders who are reducing their interests through the stock market listing process.
Cornerstone investors Arm Technology Investments and Lansdowne Partners will, meanwhile, back the process to the tune of $35 million and $20 million.
Brokers Peel Hunt and Jefferies are arranging the share sale.
Capturing a successful tech IPO is being seen as a coup for London, which has struggled in recent times to attract big-name listings – instead, the UK market has seen something of an exodus of companies out of the City onto American and European exchanges, seeking higher valuations.
Bill Ackman’s Pershing square sells $1bn of stock to new investors
Pershing Square, the firm of Wall Street activist investor and short-seller Bill Ackman, has sold 10% of its equity to new investors.
The share sale, worth $1.05 billion, is seen as a potential precursor to a stock market IPO for the investment company.
“We are delighted to invite a group of world-class, long-term partners as investors in our business, which has been entirely owned by Pershing Square employees since our inception more than 20 years ago,” Pershing Square chief executive Bill Ackman said in a statement.
“This new investment will help accelerate our growth in assets under management in existing and new strategies.”
News of the share transaction follows a Wall Street Journal report last week that claimed such a deal was being worked on, as a precursor to Pershing Square going public with an IPO.
In today’s statement, the investment company also detailed a change in the group’s ownership structure which sees the ‘voting securities’ of the company being transferred to a limited liability company to be controlled by senior management including Bill Ackman, the largest shareholder.
ARM Holdings advances as bullish CEO predicts high PC demand
Arm Holdings PLC (NASDAQ:ARM) stock advanced around 5% on Monday’s dealing in the wake of bullish comments from its chief executive Rene Haas, who was a keynote speaker at an industry conference.
ARM is already a dominant player in the smartphone processor market, and, according to Haas, the company is now targeting a major push for a larger stake in the PC market.
Haas reckoned that Arm could potentially capture more than 50% of the Windows PC market over the next five years – market research cited in media reports meanwhile say Arm had just 14% of the market segment in 2023.
Up until the PC market ‘chip’ market has been dominated by Intel and AMD.
The demand for AI-enabling chips is seen as a significant potential driver of growth for Arm, media reports claim.
In New York, ARM Holdings stock was up $6.38 or 5.29% changing hands at $126.90.