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Hear that? That's me in Tokyo learning to make sushi from a master. How did I get here? I invested wisely. Now the only thing I worry about is using too much wasabi. Get where you're going with spy, the world's most traded etf. Getting there starts here with State Street Investment Management.
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Before investing, consider the fund's investment objectives, risks, charges and expenses. Visit state street.comim for prospectus containing this and other information. Read it carefully. SPY subject to risks similar to those of stocks. All ETFs are subject to risk, including possible loss of principal Alps Distributors Inc. Distributor. Berkshire Hathaway making its first major acquisition under its new CEO. We unpack the $6.8 billion deal and Warren Buffett's reaction. Anthropic, once seen as the AI underdog, is now making moves to go public. We take a look at what it could mean for the summer IPO lineup. Plus, it's college graduation season and Hilton hot Looking to cash in on alumni school spirit? We have the latest on new brand Launch for Monday, June 1st. It's Brew Markets Daily and I'm Ann Berry. More market details to come. But first, Hilton heading back to school. Literally. That's as the hospitality giant today unveiled a new hotel brand called called Undergraduate by Hilton, designed specifically for college towns across America. Well, the move builds on the success of Graduate by Hilton, which is the line of 35 collegiate themed hotels the company bought in 2024 for $210 million. And it's actually a pretty interesting concept. It's one that I've experienced in trips to Silicon Valley where I sometimes stayed at the Graduate property in Palo Alto. And that hotel is decked out in densely patterned wallpaper and nostalgic pillows embroidered with cheery text in Varsity Let while the new Undergraduate by Hilton lifestyle brand is similarly designed to capture the spirit of university communities. That's for alumni recapturing their youth, parents visiting students and importantly, fans traveling in for game days. The locations are going to be off campus, but with library styled public spaces that are designed to encourage, well, hanging out. And they're aimed at smaller college towns that may not support larger full service hotel concepts, meaning these would be available at a more accessible price point for visitors and notably present a new offering on which Hilton loyalty program members can redeem points. Well, all of this is part of Hilton's strategy to deepen its connections to collegiate communities. The company is already the Big Ten Conference's official hotel partner. But here's why the story caught my eye, because I read about it this morning when the press release came out, the CEO is interviewed on cnbc and I couldn't help having a sense of deja vu. The and that's because just two weeks ago I interviewed Jamie Salter, co founder and executive chair of Authentic Brands Group, which owns Sports Illustrated. And here's where it comes together. Back in 2023, Travel and Leisure Company, the $4.3 billion market cap timeshare company bought the rights to bring the Sports Illustrated brand to college towns, explicitly looking to capitalize on both growing demand in these markets and in sports tourism. And just this most recent April 2nd, Sports Illustrated Resorts announced its expansion to Louisiana to the college town Baton Rouge, somewhat ironically, converting, yes, Hilton Hotel in order to gain that foothold. Well, Hilton hasn't yet announced exact opening dates or the first locations for this new undergraduate by Hilton brand, but the company did say today that the brand has it envisions long term expansion potential 4 to 500 hotels with the first property anticipated to open next year in 2027. Investors pleased with the news. The nearly $74 billion market cap company Hilton, by the way, operating more than 9,200 properties worldwide, seeing its stock up over 1 1/2% today. We're coming up in a moment a spin through the headlines that have been moving the markets, including a takeover bid for MGM Resorts and AI Sentiment up with hot news out of Anthropic. But first, this episode is brought to you by Liquid. John, how many times have you wanted to move your money around the market but had to wait for markets to reopen?
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Oof. And you're setting alarm clocks well in advance?
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Doesn't have to be difficult. Check them out at Liquid Trade Brewmarkets and sign up with referral code BrewMarkets for a $25 deposit match. Terms apply.
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Well, we'll get into the details of Berkshire Hathaway's latest merger move in just a moment. But for now, let's take a quick spin through some other big market news today.
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That's right. Starting with the Las Vegas Strip, Barry Diller's People Incorporated is preparing to offer to Buy MGM Resorts in a deal that values the casino giant at more than $18 billion. MGM is the company behind major Las Vegas properties like the Bellagio and Aria. And as part of the proposal, MGM shareholders would get a $48 per share, a 24% premium over its typical stock price. Over the past six weeks, People Inc.
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Started investing in MGM as far as long ago as 2020. So Diller already owns through People Inc. About 26% of the business and serves on MGM's board of directors. And in a statement, Diller said, quote, we began investing in MGM nearly because we believed it represented a rare kind of business. While with real world assets, the AI cannot easily replicate or disintermediate. It's a pretty robust quote there from Barry Diller. And finally, the IPO summit just keeps heating up. Anthropic, the AI company behind Claude, has confidentially filed IPO paperwork with the securities and Exchange Commission. Anthropic has experienced explosive growth this year, just last week closing on a funding round at a $965 billion valuation.
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Though, the recent SpaceX IPO filing gave us a window into a big source of anthropic spend. The AI giant paying Elon Musk's company $1.25 billion per month for computing capacity. So many big names positioning for iPodOS. With today's filing, Anthropic is poised to potentially beat OpenAI to the public market. And I thought this was interesting. In an interview with CNBC today, OpenAI CEO Sant Altman played down the idea that his firm is in a race with Anthropic to go public, saying, quote, we'll do it when we think it makes sense.
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SpaceX's own blockbuster listing, of course, could come as soon as week. Something we're going to be watching very, very closely. Let's take a quick break, and when we come back, we dive into Berkshire Hathaway's $6.8 billion bet on housing. Well over the weekend, news broke that Berkshire Hathaway had just made its first major acquisition. Under new CEO Greg Abel, the company has agreed to buy home builder Taylor Morrison for $6.8 billion in cash. Well, when it comes to the size of the deal, the truth is we've actually seen some much bigger M and A deals announced so far in 2026, but they're still our eye and that of the market, because even under new leadership, a purchase by Berkshire Hathaway makes headline news. Investors watching closely to see what this deal means about where the new CEO is guiding Berkshire Hathaway to even as Warren Buffett at age 95 remains the company's chairman. He did by the way, make some public comments on this deal and we'll come back to those in just a moment. Well, that $6.8 billion acquisition price represent a 24% premium to the home builders closing share price of Friday at a point when the ST was near its 52 week low. The purchase price of 72 bucks 50 matches Taylor Morrison's 52 week high last reached last September. Well, we'll get into what this might signal for Berkshire Hathaway. But first John, give us some background on Taylor Morrison.
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That's right, Taylor Morrison Home Corporation Ticker TMHC on the New York Stock Exchange. It is the sixth largest home builder in the United States, quite large, headquartered in Scottsdale, Arizona, operating in 350 communities across 12 states really with a heavy presence in the Sun Belt. And they sell array of homes, a focus on entry level then move up. That's sort of the second tier after entry level and resort lifestyle, specifically those 55 plus active adult communities. And, and this past weekend I spent some time not in a Taylor community, but in one of those 55 plus communities. Have you been to one? They're, they're very interesting.
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I haven't and, but don't try and skirt through the obvious question here. It's just why were you at one?
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Well, I'm not 55 yet.
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No, I know. That's why I am.
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I was visiting some in laws.
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Oh yeah.
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And these places are seemingly very popular depending on where you are in the country. Yeah, retire. That's why they say the Sun Belt. You know, there's lots of good weather and golf and all sorts of activities.
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Well, you see these all over Florida and I actually spend quite a lot of time in Scottsdale and you do see these sort of gates to the communities there. And when I talk to people whose parents for example have decided to retire in one of them, they love it. You know, they say it's got all of the amenities that they could hope for. There's usually a gym, there's a sense of community, there's usually game playing. You know, there's book clubs, there's yoga gatherings happening. So you know, I'm, and you and I have talked about this and I'm a big believer in experiential and that people have a desire for human connection. So this makes a ton of sense to me that people enjoy living in
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and I think it's worth noting because there's all this talk about like what is the housing market? The teen leaves and the numbers are up. And this is a little bit separate from that conversation broadly.
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It's pretty niche, this one. And actually, and to your point, so much of the conversation has been around how millennials and young people can't get their foot on the property ladder. This is the kind of community that's catering for those who've perhaps already made some money from their real estate over their lifetimes. Well, Taylor Morrison also has a rental arm called Yardley, and the company overall offers in house mortgage title escrow and homeowners insurance services. So it really is sort of full service as an offering to this particular buyer universe. But when you take a look at Taylor Morrison and why would Berkshire do this other than absolute value? Because don't forget, Berkshire Hathaway is known for just saying look in a standalone, fundamental basis. That's how they consider allocating their capital. It does look as though that this is complementary to other businesses already owned by Berkshire Hathaway because the conglomerate owns Clayton Homes. And CEO Abel said that quote, over time we expect to unify our site built home building operations into a combined platform. Now, if they go ahead and do that at Berkshire, So again, that's putting Clayton Homes together with Taylor Moore. The combination would be the fourth largest builder as measured by home closings.
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And a city analyst said today that, quote, consolidation is logical in a challenging housing market where scale is key in managing land, labor and building material costs. But other analysts pointed out today, Ann, that the word unify that you repeated there in Abel's quote is associated with this deal runs a little bit contrary to Berkshire's traditional playbook of letting acquisitions run independently for now. Terrell Morrison CEO Cheryl Palmer, who's been with the company for 13 years, will stay on in that role after the deal closes.
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So Berkshire also owns other companies that have sort of adjacencies with this particular asset. There's Acme Brick, which manufactures brick. Great name, by the way, Acme Brick for something cartoon. Cartoonish. But I was going to say that John's Manville, which makes insulation, and of course, one of my favorites, Benjamin Moore. I can't help myself. I'm such a nerd. When I go into the hardware store, when I go to Ace, I love going to the Benjamin Moore rack and seeing all those sort of color coded that you're looking at me like I'm completely insane.
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Oh, no. With great names.
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Great names.
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Silver Mist.
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Yes, exactly. Like royal blue. I love it. So anyway, that is the paint maker, so you can See how there could be, again, even if it's not unification of these businesses, because to the city analyst point, actually integrating these operationally is not what Berkshire does. But I gotta believe that they have executives at these companies talking to each other to find ways in which they can get commercial synergies outside actually being fully integrated. So, you know, potential opportunities here. The one other thing I would say is when you're making a big investment, because as someone who's this one, my career has been doing due diligence is so important to do, like trying to figure out how do I assess a company from the outside in. And when you've got smart people who work in businesses closely related to the one that you are trying to buy, you've got just a great network to go and make phone calls, ask, is this fundamentally a good market? Is this a strong player in this market? What's their reputation? So the synergy here, not just in terms of actual operations, but also in terms of making the decision to make the investment in the first place, there was a concern because we've seen Berkshire sell out of some of its tech positions. You've seen this, we've talked about it on the show in its last set of filings. And there have been corners of the market that have criticized this and said, look, is this a sign that Berkshire Hathaway still isn't getting on the tech train? Right. Is this the Berkshire Hathaway that's going to be set up for modern times? This deal is about, as you know, non techie, as you're going to find. So it'll be interesting to see what the narrative evolves into as this one continues on. Well, the other thing that everyone's been watching Berkshire Hathaway closely for, of course, is its treasure trove of cash holdings. You know, the market has continued to rise. Berkshire Hathaway has continued to clip its coupons, has a lot of holdings in dividend yielding stocks. It's been collecting cash, the amount on hand over at Berkshire Hathaway, roughly quadrupling from, from around $100 billion in 2023 to nearly $400 billion so far this year. Well, in his inaugural letter to shareholders, Greg Abel wrote, quote, many times in Berkshire's history, some observers have suggested that our substantial signals a retreat from investing. It does not. We continue to evaluate many opportunities and will remain patient and disciplined in pursuing the right ones for the benefit of our owners. And he just had his moment, right? He just showed. We hold. We're holding this cash, but when we decide we're going to deploy it. We move.
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Yeah, exactly. But also putting in perspective what amount that cash represents, the headline from Market Watch today, Berkshire Hathaway finds a use for 2% of its $397 billion cash pile. So it's just 2%, but it does show that Abel is moving and talking about movement, talking about speed. That was one of the other details of this handoff of leadership that investors were watching because famously, historically, Warren Buffett would make handshake deals. He would do them quickly and he would try to keep them simple. And seeing this deal today, Buffett praised Abel. Buffett was on cnbc, and he said, greg did this job faster than I could have done it, smoother than I could have done it. And I never talked to the CEO talking about that. Buffet never got involved in the details of this.
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Well, it's interesting you say that because one of the guests we had here on the show was Lloyd Blankfein, who is the CEO of Goldman Sachs at the time of the great financial crisis. And there's a very powerful moment in that book, John, where. And I talked to Lloyd about it on this show, and he came on where Warren Buffett literally, you know, puts. Puts together this deal to invest in Goldman. It was a huge sign of confidence in the bank whose stock was struggling at the time. And it was literally a handshake. To your point. And I remember there's this comment where Lloyd Blankfe tries to say, well, should we send you a term sheet? And the lawyers should look at. And Buffett said, no, I'm, you know, taking. Taking my grandchildren out for ice cream. And I don't have time to look at this again. We're done.
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Wow.
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I mean, it's just kind of extraordinary the way in which the culture of deal making has evolved over at Berkshire Hathaway. Well, since Warren Buffett announced he would step down as CEO a year ago, despite all of this and despite the words of praise of Warren Buffett for Greg Abel, with respect to this particular deal, the shares have said something a little bit different. The shares in Berkshire have languished year to date. The Class b shares are down 7%. And today they sort of tended down about a percent lower over the course of the trading session, showing that the market does seem to feel as though the jury's out on the strategy of Berkshire Hathaway under the new regime. Investors watching closely is, number one, the housing market play the right one. That's deal specific. Number two, is this going to be a change in the way that Berkshire manages its portfolio to consolidate, I unify its subsidiary companies rather than to leave them as freestanding entities. And the third thing, watching out, of course, what will continue to happen with the hundreds of billions in cash that Berkshire Hathaway still holds. So lots going on, lots of judging going on by the markets, lots of dimensions, but we're going to keep on watching this one. It's never a dull moment over at Berkshire hathaway. Well, it's 4:00pm on the east Coast. There it is, the closing bell. The market's wrapping up for the day and we don't have a ticker tape. We'll throw it over, as always, to our human ticker, our producer, John.
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And another day of record highs. The S&P 500 finished up a quarter of a percent. The Dow was up a tenth of a percent for the day. And The NASDAQ finished up 4. 10 of a percent.
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For final thought, come back tomorrow because we have one of our favorite guests coming back on the show to talk about the latest and what she is seeing on where money is flowing to different corners of the market. John Croteau is going to be in dialogue with Shauna Smith. That's it for today's Brew Markets Daily.
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Brew Markets Daily is hosted by Ann Berry and produced by John Crateau, Taka Villa, Tief, Aveni laroya and Emily Miller. Our technical director is Uchena Waugu and the president of Morning Brew Inc. Is Devin Emery.
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Wake up tomorrow with the Morning Brew newsletter and tune in, of course, to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow, same time, same place.