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Distributor Betting on the super bowl hit a new record we survey the ascent of prediction markets as they battle for the turf of DraftKings and Fan Duel. A year after its CEO exited after an ethics violation, Kroger looks to a competitor to fill the top job. We have the latest and choppiness is Word of the day in Monday.com's earnings. We break down why the stock is dropping like a rock. For Monday, February 9, it's been markets Daily and I'm Ann Berry. More market details to come. But first it's just another manic Monday. No, not the Prince Meets the Bangle Song. Great tune by the way. I love that one. But the market reaction to the latest big name software earnings, that's Monday.com and here's a reason, or at least some context for why this one was always going to catch my eye. I spent the super bowl with Claude in front of me on my computer while I had the super bowl on in the background as ambient noise. I know that confessing that is going to give our producer John a lot of fodder to come at me in our conversation. But I spent the hours not watching the game. I instead spent it working through courses on how to use Claude Opus 4.6. And I've got to say Anthropic's latest really did live on up to the hype. Because if your experience on X has been anything like mine lately, it's been just a flood of gushing posts on its capabilities and power, PowerPoint and Excel in particular. Not to mention Claude code and its ability to replicate read replace workflow related software just like yes Monday.com but I'm going to come back to my experience using Claude in just a moment and focus for the moment on Monday's earnings. It beat revenue expectations for the fourth quarter, only just came in at about 25 year over year growth to hit more than $340 million and adjusted earnings per share also beat forec. But here is the problem. The company pulled its previous 2027 guidance on the earnings call. The CFO said, quote, given the evolving nature of the AI landscape and the choppiness in the no touch demand environment, we believe it is our responsibility to keep our near term communication focused on what we can execute and deliver with high confidence. That was a long way of saying we just can't plan more than one year out. And the market absolutely hates that. Especially for software companies because these are supposed to enjoy sticky businesses protected by recurring subscription revenue. I mean, one analyst from Guggenheim listening to this call, even asked, literally just hang on a second. A lot of effort was put into building the fiscal year 27 target. So I just want to be sure, is it off the table altogether? The answer was yes. Now Monday.com also issued an outlook for 2026 that disappointed analysts, including forecast revenue of 1.45 to $1.46 billion, falling short of Wall Street's hopes for 2026 revenue by as much as $300 million. Now one reason is that Monday's original strength was it was discovered by potential customers organically, at least when it was really gaining traction. And to do that, Monday.com used what it calls a self serve no touch model. So for several years, Monday was benefiting from customers discovering, trying and buying the software independently, reducing its cost cost base because it didn't have to spend money on a sales team. And it also freed up the company to focus on building a product so intuitive and valuable that it drove adoption without sales intervention, something that worked especially well with smaller customers, although larger enterprise clients tended to need some more sales support. Well today Roy Mann, who's Monday's co CEO, described that no touch business as quote, yes, a bit choppy and said that there is quote choppiness in the performance marketing of the company. The markets, just to be clear, do not like hearing chop chop chop sounds in the earnings calls and what it likes even less than that is not knowing the cause of this volatility. Well, management referenced a challenging macroeconomic environment as one reason vague even if true. Margin impact from foreign exchange pressure is one tangible reason that we saw some of this. But while they didn't outright say that specific AI tools coming up to compete with them are the problem, here is my view. This is just one person's view on why that no touch business model is really at risk. So small businesses with only a few employees are the most motivated to try free or low cost AI tools. Yes, just like Anthropics Claude, that can quickly and easily be used for workflow collaboration among small teams. Think of it, we use Monday.com@work. I can completely see why Claude could be a feasible alternative for a very small group. That product product Claude is so intuitive and getting so much buzz in social and in traditional media that it seems likely to me that it is now riding a no touch wave of own at the continued expense of the likes of Monday.com whose stock by the way was down over 20 today, down 48 year to date and we're not even halfway into this month. We're going to keep on watching. Well, coming up, we explore why traditional sports gambling apps are betting on a future in the prediction markets. We also break down the latest in the GLP1 wars. But first a word from our sponsor, Charles Schwab. Trading at Schwab is powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders.
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Learn more@schwab.com trading well, yesterday was the Super Bowl. Like I said, I had sort of one eye on it rather than both eyes on it, but lots of people were fully engaged. And it's estimated that 1.8% billion was wagered legally on the game, which doesn't include the side bets and also the boxes that John claims he won last night. Now, the headlines of late have been focused on the decline in share prices of publicly traded sports betting companies like FanDuel and DraftKings, perhaps due to the ascent of competing prediction market platforms like Cal and polymarket. But as government policy evolves, it doesn't seem clear cut that one side will win and that one side will definitively lose. So we're going to get into the prediction markets. But first, John, two requests for you. Number one, just explain what you mean by the boxes that you won because I don't understand it. And number two, give us a little context on those public companies that offer sports betting.
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Sure. Boxes or called squares Sometimes regionally there's 100 boxes and you pick it at random. That is the point of this. You don't need to know anything about sports.
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Okay.
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You're assigned a number for one team and a number for the other team. And where those intersections? If that's the final score of the.
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Game, you win Oh, I wish I'd done that. That sounds really fun.
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Next year, will you win? Because you don't need to know anything.
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I don't know anything.
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I had nine and two and I walked away with a few dollars.
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All right, well, let's talk about FanDuel. Reminder run by Flutter Entertainment. Ticker is Flut. Flut, yes. Rolls off the tongue.
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Exactly. And some people forget that FanDuel is owned by Flut. Market cap of $27 billion. And in the last six months, like you alluded to, shares down 4.45percent earnings for the last quarter are expected out later this month, and analysts expect that earnings per share will be down 49% with revenue down over 6%. Then let's go over to DraftKings. Ticker DKNG market cap of $13 billion. So smaller in the last six months, though, shares down 36%. And looking ahead to their earnings estimates are that earnings will be down 29% and revenue will be down 2 and a half percent.
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I mean, it's really extraordinary, John, because I just remember these going public, and there was just so much excitement that these were finally going to be accessible to retail investors in terms of holding their stock. You know, these were phenomenally successful exits for the private capital folks who'd backed them as they'd grown up and come to disrupt the betting market. So it's interesting, now we're possibly seeing the disruptors get disrupted, right? We've got the emergence of these two companies, Kalshi and Polymarket. So let's talk about what's going on at the moment, which is there was a Supreme court decision in 2018 that allowed individual states to legalize sports betting. And that was a really pivotal moment for just sports betting, period.
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Yes, exactly. And I listened to a great podcast by Michael Lewis, author of the Big Short and Moneyball, and he's been on with you on this program, and he produced a comprehensive overlook of how These companies like FanDuel and DraftKing went state to state just to make friends and influence people and to get sports betting legalized in that state. And that was what the Supreme Court opened up. It took it federal away and state to state. When I lived in California, yeah, there were lots of ads because there particularly there are Native American tribes that have gambling rights. And so there were lots of ads, pro and con, these interlopers coming in. And currently there still is not legal sports betting in the state of California.
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And Southern mothers were slow to adopt, too. It's a bit of a patchwork to your point. Last year, Missouri became the 39th state to legalize betting, only state to do so in 2025. And alongside California, Texas still doesn't have two huge holdouts. Huge, huge holdouts. Well, enter the prediction markets, like how she and Poly Market, they've been bypassing state level gambling regulations. So exactly what you just described, John, has been restricting the growth of the sports gambling market. The prediction markets have basically circumvented this by arguing that they're not subject to the same gambling regulations, that this is a different beast. Now there is though a change in national policy. Until last year, KALSHI was using its status as a federally regulated financial exchange to offer niche financial contracts tied to pop culture events and elections. The agency that oversees this as the Commodity Futures Trading Commission or the cftc. And it had previously indicated that sports contracts were off limits precisely to try to make sure there wasn't a workaround in terms of sports betting.
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Exactly. And then last year a new administration came in and so Kalshi decided to test the waters with the Super Bowl. Last year they added just a few of these sports related predictions and the CFTC didn't step in.
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Interesting.
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And so then it signaled, well, you're off to the races. And gaming regulators in several states are in court right now trying to shut Kalsheet down. Those might eventually get to the Supreme Court, but right now it's open. And the new chair, the cftc, Michael Selig, he indicated that he's going to allow sports contracts to move forward. He's for it.
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Well, while this is being sorted out in the courts, DraftKings and FanDuel are taking the if you can't beat them, join them approach to all this. In December, they both launched their own prediction market apps which are now available in all the states, including those where the tradition, their traditional apps are not allowed. So that would be California and Texas. Exactly. Together they got just under 100,000 downloads in January alone, compared with Kalshi's 1.9 million downloads. But again, it's sort of early days for them. And on Friday DraftKings announced it had struck a partnership with another early prediction market exchange. That's crypto.com. so you're sort of seeing at this point the confluence, seen the converging sports betas, crypto trading platforms, prediction markets, all sort of piling in. And this reminded me of when we talked, remember Howard Linson who found a stock twits. He came onto the show and talked about something called the degenerate economy. Right. And, and this is what he was talking about that things converging ways that would not have been anticipated six or seven or nine months ago.
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He also said that prediction markets are going to be the future media.
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He did say that you're not going.
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To need to wait for a reporter to tell you something that maybe you can look on there and see which way the wind is blowing.
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That's a great point.
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And last week we covered the strong earnings of MGM resorts. It's not an A to a example but they own a stake in BetMGN, another sports gambling app. That app attracted record sports bets last year driving 63% jump in revenue. And BetMGM CEO Adam Greenblatt said on the call we can't see any impact that we can identify that is attributable to prediction markets. And so Anne, to put a bow on this, I saw a lot of headlines over the last couple days. It is true that the sports betting apps stocks are down. We covered that 30, 40% but that's not the end of the story that these there's room for all these companies it seems to get into the prediction markets.
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One thing I didn't look up but I'm really, really intrigued to know coming off the super bowl is just to talk about betting in a vacuum for a moment. Vegas had a pretty challenging 2025, you know, room occupancies were down and usually Vegas is seen as a pretty robust and in demand vacation destination in the United States because you can get real value for money and packages there. I am really curious, remind me to go look after the show because I really want to know how Las Vegas did in terms of getting visitors and tourists in over super over the super bowl weekend and seeing what happens there. Well, we're going to keep an eye out on all of this particularly with respect to the next earnings report because that is when we are going to hear from DraftKings and fans or what the impact of the specific weekend was on their earnings relative to expectations because that's when we're going to see how the new prediction market rollout both benefited them but also to see what the impact would have been from their competitors coming into this space too. Well, shares in DraftKings were up nearly 2% today. Shares in Flutter up 1% again the market saying if you can't beat them, join them. We support that point of view. Well, let's take a break and when we come back a year after their short lived partnership Novo Nordisk is suing telehealth company Hims and Hers we're going to break down the latest in the battle over GLP1s and the other major headlines that move the markets today. Close your eyes, exhale, feel your body relax and let go of whatever you're carrying today. Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class. I got them delivered free from 1-800-contact. Oh my gosh, they're so fast. And breathe. Oh, sorry. I almost couldn't breathe when I saw the discount they gave me on my first order. Oh, sorry. Namaste. Visit 1-800-contacts.com today to save on your first order.
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1-800-Contacts.
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It's 4pm on the east Coast. The markets are wrapping up for the day. There's the closing bell and it was a pretty funny one actually. Things sort of all over the map today, John.
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Right. But all the major indices finished up for the day with the S&P 500 up half a percent, the NASDAQ finishing up 9.10of a percent and the Dow up 0.04% which was enough to hit another all time high. Some market headlines, shares in telehealth company HIMSS and hers ticker HIMSS fell over 20% today after the Food and Drug Administration announced that the agency plans to take quote, decisive steps to crack down on the sale of compounded GLP1s which Hims sells.
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Just to add to that, the company is also facing a lawsuit which has been filed by Novo Nordisk, the massive, massive maker of a zempic which seeks to bar Hims and hers from selling compounded versions of it weight of its weight loss drugs. Remember just last year the companies actually had a partnership though it was terminated after fewer than two months went by with accusations that the telehealth company was deceptively marketing unapproved versions of Novo's weight loss drugs. I've got to tell you, if there are deep pockets to go up against, Novo is going to be lawyering up this one. It's going to be a tough one for hims.
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And it's so interesting to see what the price of these GLP1s are. Every month there's a new price target that comes in in this competition. Here's a merger moment for today. Shares in Transocean ticker rig were up 2% today after word it has agreed to acquire fellow offshore drilling services company Valeris in an all stock deal worth $5.8 billion. Transocean chief executive Keelan Amdesen said the powerful combination is well timed to Capitalize on an emerging multi year offshore drilling cycle.
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Well, the combined company will own 73 rigs and put together the deal is expected to deliver more than $200 million in savings. So just to take a quick look at this, the response Valera shareholders were happy that stock up nearly 30% today. Transocean. The fact those shares are up, clearly the market's way of saying we're actually in favor of this deal. Well, just to finish the thought here on the movers of the day, fun to take a look at this one. And that is Kroger ticker KR stock up nearly 5% today after the grocery giant named a new CEO who is formerly an executive at Walmart. So quite the pedigree on this one. That's right.
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And we've been covering the grocery wars between Amazon and Walmart. But this is a good reminder that Kroger is still the second biggest grocer in the United States by sales with Walmart being the only bigger company. Kroger has been searching for a permanent leader for nearly a year after its longtime CEO exited amidst an undisclosed ethic takes violation. Apparently Kroger was looking outside its ranks to bring in some fresh ideas for growth.
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Well, the incoming CEO Greg Foreign has pretty interesting background. He was previously the CEO of Walmart US until 2019 and then he became the chief executive officer of Air New Zealand from 2020 to 2025. So different industry. Fortune magazine today in response to this news ran a headline calling him, quote, the man who fixed Walmart's grocery. And the reason for that is Foran was credited for turning around its 4600 US stores at the time while also helping Walmart to build its digital business, introducing online ordering and pickup. And just remember, that has been one of the drivers of Walmart's ability to take on Amazon. And under his leadership, Walmart reported 20 quarters of comparable sales growth. Quite the achievement. Well, although we're finishing the show for today, we are off to brew another cup of coffee. We are in the thick of earnings season. There's a lot coming out after the bell today, literally right now and also coming up the rest of this week. So we're off to go to our homework. That's it for today's Brew Markets Daily.
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Brew Markets Daily is hosted by Anne Barry and produced by John Croteau, Taka, Della Teeth and Emily Millard. Our technical director is Uchenawagu, Jim Orzo is our audio engineer and the president of Morning Brew Inc. Is Devin Emery. If you have any feedback or a company you'd like us to COVID Leave a comment or send an email to brewmarketshoworning brew.com Wake up tomorrow with the.
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Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow, same time, same place, Facebook.