Check out the companies making headlines in midday trading. Etsy — The online merchandise platform saw shares rebound 3% after a steep sell-off last week. Etsy announced last Wednesday that it is cutting 11% of its workforce , or approximately 225 employees, as the company looks to restructure its business and streamline costs against a “very challenging” macro and competitive environment. Netflix — The stock added 3% after Morgan Stanley raised its price target on Netflix to $550 from $475 per share. The bank cited renewed confidence in the streaming giant’s return to content spending and “execution on growth initiatives including paid sharing and advertising.” Oil stocks — Oil companies broadly rose as crude prices jumped more than 2% on concerns of supply disruptions. Valero Energy added 3%, while Marathon Petroleum and Diamondback Energy gained more than 2%. U.S. Steel — The steelmaker jumped 26.5% after Japan’s Nippon Steel beat out rivals to buy the company for $14.9 billion in cash. The $55-per-share deal price is 142% above U.S. Steel’s price on Aug 11, the last trading day before Cleveland-Cliffs offered $35 per share for the company. SolarEdge — Shares tumbled more than 5% after Goldman Sachs downgraded the company to sell from neutral. The firm cited further downside risk to earnings and margin uncertainty. SunPower — The solar company plunged more than 33% after filing a delayed 10-Q form for the third quarter on Monday. The company disclosed liquidity concerns and “substantial doubt about the company’s ability to continue.” Goldman Sachs had already downgraded the firm to sell from neutral in a Sunday note. Adobe — Adobe shares rose about 1% as the company called off its plan to buy cloud-based design tool Figma for $20 billion due to regulatory pushback. Adobe said in a regulatory filing that it will pay Figma a $1 billion breakup fee. VF Corporation — Shares lost nearly 8% after the apparel company disclosed a cyber incident from Dec. 13 in an 8-K filing. The company said the incident would likely result in a material impact on its business. Coupang — The South Korea-based e-commerce platform fell 3.7% after it announced plans to acquire online luxury platform Farfetch. The deal will give Farfetch access to $500 million in capital and turn the company private. Shares of Farfetch fell nearly 35% before trading was halted. Liberty Media Formula One — The racing series dropped more than 1% after a Morgan Stanley downgrade to equal weight from overweight, calling the stock a ” victim of its own success .” Structure Therapeutics — The U.S. listed shares of Structure Therapeutics plunged 34% even as the clinical stage biopharmaceutical company said its obesity drug can reduce weight and blood sugar. Snap — Shares added 1.6% after Guggenheim upgraded them to buy from neutral. The firm also raised its price target to $23 from $9, suggesting 35% upside potential from Fridays’ close. Analyst Michael Morris is forecasting revenue growth to outperform in 2024 as digital ad trends strengthen. Nio — Shares jumped more than 6% after the company entered a $2.2 billion share subscription agreement with Abu Dhabi-based CYVN Holdings, expanding its ownership in Nio to 20.1%. — CNBC’s Lisa Kailai Han, Samantha Subin, Yun Li and Michelle Fox contributed reporting
Here are the biggest calls on Wall Street on Wednesday: TD Cowen names Liberty Formula One a top pick TD said the motorsports company is a top pick in 2024. “We view FWON as a capital-light royalty on the growth & monetization of a premium global sports league.” BMO reinstates Apollo Global as outperform BMO reinstated coverage of Apollo and said the private equity company is well positioned. “Amid a crowded fundraising environment, prized features in alternative asset management include credit origination capabilities, distribution channel diversification, and business model resiliency to higher interest rates.” Morgan Stanley downgrades Plug Power to underweight from equal weight Morgan Stanley said in its downgrade of the electric vehicle charging company that it sees deteriorating “hydrogen economics.” “In the U.S., we cut PLUG to UW on liquidity concerns and worsening hydrogen economics.” UBS upgrades Anheuser-Busch InBev to neutral from sell UBS said in its upgrade of the brewer that it’s getting more bullish on EBITDA growth. “We have been impressed with ABI’s share gains in recent years, however see a risk that part of these share gains are given back, particularly in Mexico, Brazil and South Africa.” Citi upgrades Signet to buy from neutral Citi said in its upgrade of Signet Jewelers that the “jewelry recession” is almost over. “This is a better business than pre-pandemic but achieving their 10% EBIT margin goal not necessary for the stock to work.” Bank of America names Qualcomm a top pick Bank of America said the company is a top AI beneficiary. “Our top pick is Qualcomm (QCOM US) under the on-device AI theme with its new smartphone application processor (AP), Snapdragon 8 Gen 3.” Morgan Stanley resumes J.M. Smucker at equal weight Morgan Stanley resumed coverage of the peanut butter and jelly maker, which recently closed on the purchase of Hostess Brands, with an equal weight rating, largely due to valuation. ” SJM’ s Q2 EPS beat and increased FY24 EPS guidance on the legacy business underscore its favorable topline drivers in FY24 and cost flexibility.” Raymond James upgrades Shake Shack to strong buy from outperform Raymond James said in its upgrade of the burger chain that it sees improving profit margins. “We are upgrading SHAK to Strong Buy from Outperform as we 1) believe the company is still in the early innings of driving improved margins and lowering development costs and 2) see idiosyncratic opportunities into 2024 to increase margins and potentially stimulate traffic, which could create upside to consensus 2024 expectations.” Raymond James upgrades AutoZone to strong buy from outperform Raymond James said the auto parts retailer has “compelling valuation and fundamentals.” “[W]e remain upbeat on the overall industry fundamentals (pricing environment remains rational) and AZO’s market share potential on a multiyear basis.” Bank of America upgrades Jack Henry to buy from neutral Bank of America said in its upgrade of the financial services company that it has an attractive pipeline of products. “We upgrade JKHY to Buy from Neutral, driven by the company’s high quality business model, solid bookings and pipeline, more palatable valuation, and prospect for margin expansion and [free cash flow] conversion to improve in F25.” Bank of America downgrades Toast to neutral from buy Bank of America said in its downgrade of the restaurant payment company that it sees too many risks. “We downgrade TOST to Neutral from Buy. Shares have lagged significantly since the 3Q print, and we see risks which could inhibit near-term re-rating higher.” Bank of America downgrades PayPal to neutral from buy Bank of America said it thinks it will take longer to fix the stock. “Shares have traded up from lows following PYPL’s modest 3Q beat and new CEO Alex Chriss’ fresh messaging around profitable growth and increased urgency around execution.” Bank of America upgrades Discover and Capital One to buy from neutral Bank of America upgraded several credit card stocks on Wednesday, believing “we are in the latter stages of the current credit cycle and expect losses to peak in 2H2024.” “We update our estimates for Capital One (COF) and Discover (DFS), upgrade to Buy from Neutral on both and raise POs to $129 and $116 (from $112 and $94) respectively.” JPMorgan upgrades Devon Energy to overweight from neutral JPMorgan said in its upgrade of the energy company that it sees an attractive risk/reward. “Upgrade Devon (DVN) to OW from N: DVN shares have lagged peers by ~20% YoY, but risk-reward is skewed favorably given low expectations plus self-help initiatives.” Redburn Atlantic Equities reiterates Walmart as buy Redburn is standing by its buy rating on the big box retail giant. “Overall, we believe Walmart remains exceptionally well-positioned for any macroeconomic scenario in 2024 and we maintain our Buy rating with a $180 price target.” Guggenheim reiterates Tesla as sell Guggenheim is standing by its sell rating following the cyber truck debut last week. “We believe TSLA will wait closer to launch to take orders (6-12 months prior) for vehicle to limit impact on selling current model lineup.” TD Cowen names Regeneron a top pick TD called the pharmaceutical company a top idea for 2024. ” Regeneron is one of the more fundamentally attractive companies in large-cap biotech.” Wedbush downgrades Shopify to neutral from outperform Wedbush downgraded the stock, mainly citing valuation. “While we continue to hold a favorable view of Shopify’s overall strategy and competitive positioning within eCommerce, shares have risen +53% since the company reported 3Q23 results on November 2nd and now trade at a significant premium relative to software peers across key valuation metrics.” Oppenheimer names Deere a top pick Oppenheimer says Deere is a “best-in-class through-cycle pick.” “And while we believe the downturn will prove less severe than the prior, evaluating swing factors it is simply too early to suggest 2025 can return to growth vs. 2024, adjusting all three models lower in 2025 to reflect a continued downtrend.” Guggenheim upgrades Sphere to buy from neutral Guggenheim said it’s seeing strong demand for the Las Vegas events and entertainment company. “Revenue in the quarter has been driven by strong demand for The Sphere Experience (SPHR’s owned content), the U2 show run, Exosphere activations, and the F1 takeover.” Mizuho reiterates Robinhood as buy Mizuho stood by its buy rating on Robinhood shares after a recent dinner with company management. “Following strong November crypto data (+75% vs. Oct. vs. just +60% for Coinbase), it was nice to hear that management is equally bullish on continuing to gain share in crypto.” Citi reiterates Johnson & Johnson as buy Citi said JNJ is “best-in-class” after a series of investor meetings. “What we walked away with was not just numbers and goals, but a sense that in its new formation the company and management are focused on striking a path forward and delivering best-in-class products and financial delivery.” HSBC downgrades Asana to reduce from hold HSBC said in its downgrade of the software company that it sees too many headwinds for Asana. “Margin expansion drives narrower 3Q FY24 loss; however, macroeconomic challenges continue.” KeyBanc initiates Vital Energy as overweight Key said in its initiation of the former Laredo Petroleum that it’s “in transition.” “On the heels of bold and reasonably structured (in our view) transactions, Vital is boot-strapping its way back to relevance with investors, and now has deeper and higher-quality inventory (~725 locations) it can leverage to lower cash opex/F & D costs and improve margins going forward.”
World Wrestling Entertainment Inc. Chairman Vince McMahon is introduced during the WWE Monday Night Raw show at the Thomas & Mack Center August 24, 2009 in Las Vegas, Nevada.
Ethan Miller | Getty Images
Vince McMahon has returned to the World Wrestling Entertainment board of directors to facilitate potential sale talks ahead of the company’s media rights renewal.
Owning IP allows streaming services to exclusively offer content without the annoyance of winning licensing rights in an auction every few years. WWE also has value to offer in merchandising and theme park businesses.
WWE has hired JPMorgan to help the company advise on a potential sale, according to people familiar with the matter. JPMorgan declined to comment. A WWE spokesman couldn’t immediately be reached for comment.
If a deal occurs, it would likely occur in the next three to six months, said the people, who asked not to be named because the discussions are private. WWE plans to talk to potential buyers before it makes a decision on TV rights renewal agreements.
McMahon’s return should help a sale process go smoothly, though there could still be hiccups.
The former CEO and chair is 77 years old and the controlling shareholder of WWE. He stepped down after an investigation found that he had paid nearly $15 million to four women over 16 years to quell claims of alleged sexual misconduct and infidelity. Returning to the board will give potential buyers confidence he’s supportive of the details of any transaction.
“My return will allow WWE, as well as any transaction counterparties, to engage in these processes knowing they will have the support of the controlling shareholder,” McMahon said in a statement Thursday.
Mansoor (bottom) competes with Mustafa Ali during the World Wrestling Entertainment (WWE) Crown Jewel pay-per-view in the Saudi capital Riyadh on October 21, 2021.
Fayez Nureldine | AFP | Getty Images
Whether a buyer would be comfortable with McMahon taking a more hands-on role at the company is unknown. But WWE is McMahon’s life work. It’s possible a sale may only happen with at least some strings attached.
WWE has a market capitalization of more than $6 billion after rising nearly 17% percent on Friday, buoyed by heightened sale speculation.
There are three categories of likely buyers for WWE — the legacy media companies, the streamers and the entertainment holding companies. Here’s who might be interested.
Comcast, which owns NBCUniversal, is a potential fit as a buyer for WWE. McMahon’s company already has an exclusive streaming deal with Comcast’s streaming service, Peacock, and a cable TV deal with NBCUniversal’s USA Network. Comcast has a market capitalization of more than $160 billion and can easily afford the company — especially with a $9 billion (or more) check coming as soon as January 2024 from Disney for a 33% stake in Hulu.
Comcast can lock up WWE in perpetuity without having to pay upcoming rights renewal increases and can use the company’s IP for theme parks, movies and other spinoff series.
Returning CEO Bob Iger may want to make a splashy acquisition as he retakes the throne at Disney. WWE fits Disney in the same ways that it fits Comcast. It would bolster Disney’s streaming ambitions (perhaps ESPN+), it would support the linear network business, and it would add some heft to merchandizing and theme park businesses.
Disney CEO, Bob Iger attends the European film premiere of ‘Star Wars: The Rise of Skywalker’ at Cineworld Leicester Square on 18 December, 2019 in London, England.
Netflix has long shied away from sports and other live events, but it’s recently become open to the idea of owning a league outright or taking an ownership stake. Owning a sports league would give Netflix the ability to create video games and spinoff series without friction. Netflix found success in its Formula 1 “Drive to Survive” documentary series, giving co-CEO Reed Hastings faith that certain sports properties will resonate with Netflix’s huge global audience. But Netflix doesn’t own Formula 1, limiting its future options.
Acquiring WWE or another sports league would be a path toward offering live entertainment without renting content — similar to Zaslav’s thinking.
Emanuel bought UFC to increase the scope of the talent agency’s business to live events. WME-IMG, now just a part of Endeavor, represents many UFC athletes — as well as WWE superstars. The UFC deal has been a success for Endeavor, which paid about seven times 2016’s $600 million revenue in 2016. UFC generated more than $1 billion in revenue in 2022.
Ari Emanuel speaks onstage during the 2017 LACMA Art + Film Gala Honoring Mark Bradford and George Lucas presented by Gucci at LACMA on November 4, 2017 in Los Angeles, California.
Stefanie Keenan | Getty Images Entertainment | Getty Images
Endeavor’s enterprise value of just about $11 billion makes WWE a huge swing for the company. The company’s relatively small balance sheet would likely prevent Endeavor from winning a bidding war against media giants. But McMahon’s outsized personality may fit with the brash Emanuel and UFC President Dana White.
Selling to a third party would also allow WWE to increase rights renewals every few years. That may or may not be a positive for the long-term future of the company as the media distribution ecosystem changes.
While Endeavor owns UFC, Liberty’s Formula One Group owns Formula 1. John Malone, Liberty’s controlling shareholder, and CEO Greg Maffei, along with Formula 1 CEO Stefano Domenicali, have figured out how to globally market the car racing league, including cracking American culture after decades of obscurity.
Malone and Maffei have extensive track records at maximizing media valuations and acquiring media assets for less than $10 billion, including Formula 1, Sirius XM and Pandora. The global success of Formula 1 could provide a roadmap for a future WWE strategy.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
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Beitske Visser of Netherlands and Sirin Racing (95) leads Marta Garcia of Spain and CortDAO W Series Team (19) during the W Series Round 6 race on October 02, 2022 in Singapore.
Clive Mason | Getty Images Sport | Getty Images
Formula 1 is planning to develop a new women’s racing series.
The championship — which would be for younger drivers aged 16 to 22 — is planned to run alongside the similarly all-female W Series which has hit financial difficulties, canceling its last 3 events in 2022.
It is believed that the series would form part of the Formula 2 and Formula 3 feeder pyramid, and could come as early as 2023.
It is likely there will be between 12 and 15 drivers on the grid.
F1 would not confirm details of the series but a spokesperson said: “We are committed to ensuring the best possible opportunities for women to get into our sport and to get the skills and experience necessary to get to the top of F1.”
The news comes after Lewis Hamilton criticized F1 for not affording more help to W Series.
W Series, which aims to be a feeder for women into F1, was supposed to hold its penultimate round of the year in support of this weekend’s United States GP, however fundraising issues led to them curtailing their season early.
Jamie Chadwick, Britain’s runaway leader, was crowned champion for the third time, maintaining her 100% record in the championship.
Hamilton, speaking to the media on Thursday, said he felt F1 should have done more to help W Series.
“There is not enough representation across the board, within the industry,” stated Hamilton.
“And there’s not really a pathway for those young, amazing drivers to even get to Formula 1, and then you have some people who say we’re never going to see [another] female F1 driver ever. So that’s not a good narrative to be putting out.
“So I think we need to be doing more, and with the organization, with Formula 1 and Liberty [Media, F1 owners] doing so well it’s not a lot for them to be able to help out in that space.”
It has been 30 years since there was a woman racing in F1, and Sky Sports F1’s Danica Patrick and Jenson Button had their say on the subject during Friday’s practice build-up.
“I don’t know if it is necessarily in the form of a series as much as it is a culture and accepting and giving them a chance,” said Patrick, widely renowned as the most successful woman in the history of American open-wheel racing.
“I come from a unique position where I just came up through the ranks, I didn’t drive in a female series, there was no female-oriented element to it.
“I am a girl and I know that played into me having opportunities with sponsors but that still came up through the classic ranks so really what it takes to stick around and make it to the top is that you are given really good rides along the way and are able to show your talent.
“So it just really takes a culture of the people who own teams believing in them and giving them a chance, even if it just a test to see what they are capable of.
“I think there are definitely sponsors that jump on board because it is unique to sponsor a girl and they will get a lot of attention — but what it takes is that belief and faith that they are going to make it all the way to the top.
“I don’t think that it is necessarily a sponsor not going all the way to the top, it is a driver having all the talent to go to all the way to the top.
“There are plenty of men that don’t make it all the way so they just need to be at the right place at the right time and be given good opportunities with a good car.
“I always knew in my heart that if I was given the opportunity with a good car I could show them what I was capable of and fortunately it worked out for me and my career and that is what just has to happen.”
Button, the 2009 F1 world champion, added: “I think for me, having W Series, I was never a big fan of separating men and women in racing but I also think it is great for the young kids and the young girls having a role model like Jamie Chadwick as a driver.
“When you look at youngsters, there is a very small percentage of women that actually want to go on and race cars and I think it is because they can’t see it.”
