A Buyout. Shaken, Not Stirred
When you were young and your portfolio was an open book, you used to say live and let live. (You know you did! You know you did…)
But if this ever-changing world in which we’re livin’ makes you want to give in and trade … say live and let Amazon (Nasdaq: AMZN)! Or … don’t. That’s your prerogative as an independent investing mind, after all.
Sir, I don’t think that’s how the song goes.
It is now. Why, see, it was just under a year ago — in these here virtual pages — that we first discussed the rumors of MGM’s newest corporate suitor.
After years of wooing by the likes of Apple (Nasdaq: AAPL), the film studio that made everything from Bond to Robocop to Rocky to Stargate finally found its match.
It’s Amazon. James Amazon.
What? I knew my baloney had a first name, but not Amazon…
OK, I fibbed on that last part, but it’s official.
In its ever-waging quest to own literally everything ever, Amazon announced its $8.5 billion-dollar decision to formally snatch up MGM … oh, and all the intellectual property goodies that come with MGM.
You might be wondering to yourself things like: “What would Amazon wanna do with MGM?” and “Who in the name of antitrust let this deal go through?!”
The latter question is easy enough: The FTC’s deadline to sue Amazon over the MGM buyout just passed. By default, Amazon is taking the FTC’s silence as permission, and it ain’t wastin’ time no more.
Maybe the FTC’s busy — everyone’s just so very, very busy now, you see — or maybe the FTC simply didn’t mind the acquisition. The Feds are still (supposedly) investigating all the Big Tech names on antitrust grounds, including Amazon, so … your surprise at this deal passing matches mine.
Now on to the other question top of investors’ minds: What’s Amazon gonna do with MGM? And I can only say: What won’t Amazon try to do with MGM?
Amazon is an all-time pro at monetizing … like, anything. And content is king in the land of streaming. I mean, that’s also why Great Stuff Picks is in Disney’s (NYSE: DIS) massive mouse wheel of content to begin with. There’s just so. Much. Content.
So does Amazon not have enough good, original content in comparison?
Well, like basically every other streaming service … it depends on whom you ask. But ask yourself this: Would more content hurt? Absolutely not! (Amazon-solutely not? Nah…)
MGM’s content backlog is thiccc with three Cs, and a massive influx of films and TV shows would go far to help Prime Video draw more subscribers. You don’t have to take my word for it either — Prime’s slipping market share doesn’t lie:
Let’s be clear: Amazon’s still a major player in the streaming space today, as you can see … but it could be a bigger player. This is Amazon we’re talking about here, after all.
Besides, look at the market share growth from the likes of Disney+ and HBO Max! That’s what happens when you spend on content … or have an interface that actually works. (Sorry, not sorry, Prime.)
Now with MGM under the media umbrella, think of all the pies that Amazon has its fingers in. You’ve got streaming with Prime, plus more skin in the theatrical release game with MGM’s big-name intellectual properties.
Then there’s whatever Amazon plans to do with Epix, MGM’s pay-TV and streaming service … if anything. If you have the over/under on when Epix’s curtain call is coming, I might want in.
So what you’re saying is … go all in on Amazon stock?
What? No, nobody’s saying that here.
But if it wasn’t clear when the buyout rumor mill first started up last year, Amazon is going all-in on the streaming front, either by choice or necessity to help prop up Prime Video’s slouching market share.
You either make content or buy it outright. Them’s the rules, and I didn’t write ‘em.
It’s eatin’ time, Great Ones. And movie studios are back on the menu.
Like we told you last year when Amazon’s plans came to light:
Plus, if Amazon’s mega deal made it past the FTC’s ever-so-cautious gaze — lol — just think of what other media-hungry content platforms are dreaming up.
It’s all fun and games until the Mouse starts a-nibbling. Then it’s even more fun…
Hey! Don’t forget to check this out: Mysterious Billionaire Does WHAT?
According to a major new investigation, one of America’s most mysterious billionaires has been doing something very strange with his money…
Buying up film studios?
Umm, no… But it could hold the key to a $30 trillion stock market windfall.
You’ve almost certainly never heard this billionaire’s name before. New York Magazine reports that his business has “always operated in stealth mode, keen to protect its secret formulas.” And he once admitted that he follows “the same principles as the CIA or NSA.”
We recently discovered that today he’s staking millions of dollars on a radical breakthrough … one that could disrupt industries worth trillions of dollars.
Just hit this link right now to see the full investigation.
Homebuilder Lennar (NYSE: LEN) decided to make its own luck today, citing optimistic full-year guidance despite ongoing supply chain concerns, rising materials costs and rising mortgage rates … not to mention rising resentment among wannabe homebuyers for all of the above.
On the one hand, Lennar did deliver more homes this quarter than analysts anticipated. New orders also topped 15,747 for the first three months of the year, coming in hotter than the 14,985 orders expected.
But despite the seemingly strong demand for new houses, Lennar can’t seem to lessen Wall Street’s fears about rising costs and supply chain issues eating into the company’s coffers.
These concerns echo what Robert Dietz, a member of the National Association of Home Builders, already said out loud:
In other words, a lot of Wall Street’s worries haven’t even been priced into Lennar’s stock yet, as we’re all still watching and waiting to see how the Fed handles inflation.
I personally wouldn’t put it past the Fed to take extreme measures to tame the inflation nation. And by extreme measures … I mean sending the economy into a recession to cut costs.
Should that happen — and for the record, I’m not willing to bet my lunch money on it yet — how many people do you think will be in the market for a brand-new house? Hmm?
This line of thinking is likely why Lennar’s stock remained relatively flat on the day despite posting pretty, pretty, pretty good earnings.
Either I need to get my glasses prescription updated again … or Warby Parker (NYSE: WRBY) simply wasn’t the hot new stock investors were promised after going public last year.
The four-eyed founder of trendy eyewear said that Omicron’s overzealous spread hurt holiday sales in the last three months of 2021 — to the tune of $5 million in losses in the fourth quarter.
The abysmal specs kept coming when Warby warbled off its projections for the first quarter of 2022: A $15 million sales miss that would make most WRBY investors weep.
But wait! Co-founder and Co-CEO Dave Gilboa called Warby’s challenging stock market start a mere temporary setback, saying: “We remain as confident as ever in our long-term growth plan in a reacceleration of our growth in the coming months.”
Well, if Gilboa says it, it must be true … right?
Wrong. Part of Warby Parker’s problem is that its brick-and-mortar locations aren’t bringing in the Benjamins like corporate claimed they would.
Call me crazy … but maybe an eyewear brand whose claim to fame was its digital digs and virtual try-on offerings should’ve stuck with its original business model: offering a safe place for introverts to shop sans the human element. But that’s, like, just my opinion, man…
We might see less and less of Warby Parker as its stock weebles and wobbles … and maybe even falls down. But we’ll be seeing more of…
One tiny Silicon Valley company that’s using AI to unleash the largest untapped energy source in the world.
I’m not talking about oil, gas, wind, solar, hydro, nuclear … or anything you’ve likely heard about before. Yet this breakthrough is set to help launch an era of cheap, abundant electricity the likes of which the world has never seen.
Just when I think I might finally be a full-fledged adult … a certain stock comes along that stirs up all my childhood snark. Enter PagerDuty (NYSE: PD).
You said duty! Ha…
Now that we’ve got that out of the way, PagerDuty is up big time today after dropping its fourth-quarter earnings report that … well, wasn’t as bad as Wall Street thought it’d be.
The software-as-a-service company’s still confounding unsuspecting users with its highfalutin’ “human response data” and “software-enabled systems” talk … but clearly someone figured out how to make PagerDuty’s machine learning platform work in this daring digital age, given the $78.5 million it made last quarter.
Now that still doesn’t quite offset the sting of the company’s $29.4 million, or $0.34 per share, loss. But you try selling yourself as a high-tech cloud-computing company with a low-tech name like PagerDuty … and then tell me how that works out for you.
Happy to have even gotten a nod from Wall Street, PD investors whisked the stock higher by nearly 20%.
I swear, Great Ones, every time I turn around, someone’s eyeing Kohl’s (NYSE: KSS) as a potential takeover target.
Can you guess who’s back, back again for another romp ‘round the retail-buying rumor mill? Why, private equity firm Sycamore’s back (tell a friend!).
In case you’re clueless about Sycamore’s past dealings with The Little Department Store That Could, this firm tried to buy Kohl’s back in January for $65 per share. Kohl’s kicked the offer to the curb, however, saying that Sycamore hadn’t valued the company highly enough for Kohl’s to consider its proposition.
Well, Sycamore’s apparently back for round two. And just like last time, it’s got some stiff competition when it comes to gaining Kohl’s’ attention. Canadian department store operator Hudson Bay is also throwing its hat into the retail ring, with both companies set to submit takeover bids in the high $60s per share.
Those of you who watched KSS stock’s wild price swings this morning and wondered what the hell was going on … there’s your sign.
I’m pretty sure you’re the only one who watches Kohl’s consistently…
As the great Billy Joel would say: You may be right; I may be crazy. But as for whether Sycamore has the dollar denomination that Kohl’s has been looking for? Well, your guess is as good as mine.
Kohl’s callers and housing hooplas aside, what else is on your mind this week? We’re less than a day away from tomorrow’s Reader Feedback, so make sure your voice is heard and write to us posthaste!
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Until next time, stay Great!