← The Rundown
The Rundown
Larry Ellison Backs Paramount’s Bid for WBD, Nvidia to Ship H200 Chips to China by February
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Public.com presents the rundown your daily market update in under 10 minutes. My name is Zadod Mani and Today is Monday, December 22nd. In today's episode, we'll get you ready for this holiday week and why a Santa Claus rally would be the fitting way to end 2025. We'll also update you on the latest development in Paramount's hostile bid for wbd. And we'll tell you about Nvidia's plans to resell AI chips in China. Then stick around to the end of the show to find out why I was impress with how much money the new Avatar movie made at the box office. We got a great show for you today. Let's go. The stock market is coming off a winning week thanks to a nice rally on Friday. The S&P 500 was up 0.9% on Friday, which was just enough to push the index into the green for the week, up 0.1%. The Nasdaq did even better. It added 1.4% on Friday and finished the week up 0.4%. Q4 has been a pretty choppy one for the market, but despite all the volatility, both the S P and NASDAQ are within 1% of all time highs. And we could be sitting at all time highs by the end of the year if we get a Santa Claus rally. The Santa Claus rally refers to the final five days of trading in December plus the first two trading days of January, and historically the S P 500 has averaged a gain of 1.3% during that stretch, going all the way back to the 1950s. Now unfortunately Santa didn't show up last year, so we'll see what happens this year. But if we finish the year at all time highs, it would be a fitting end to an Absolutely wild 2025. So we're going to be keeping an eye on that. Now remember, we do have a short week coming up. The stock market will be closing early on Wednesday for Christmas Eve and closed all day on Thursday for Christmas. So we won't have a show on Thursday. And overall volumes should be pretty light. I mean most people are checked out for the holidays. But if you really need your market fix this week, we got you covered here. So. So make sure you guys are subscribed to the podcast to stay in the loop. Really hoping there's some news to talk about. Otherwise we'll have to get creative with it. Let's run through some headlines starting with Paramount. We got another development in the Paramount Warner Brothers hostile takeover saga. Last week the Warner Brothers Discovery Board rejected Paramount's hostile bid for the company, instead telling its shareholders to go with the Netflix offer. And, and one reason for that was because they weren't sure that Paramount actually had the money to move forward with the takeover. Now remember, Paramount is majority owned by David Ellison, the son of Larry Ellison, founder of Oracle. Fifth richest guy in the world, worth like $250 billion depending on the day. But one of the problems with Paramount's original bid was that Larry Ellison wasn't legally on the hook for the money, which meant that Paramount could back out of the deal at any time. Well, Paramount just updated its bids that Larry Ellison is Now personally guaranteeing $40 billion in equity financing damages if the deal falls apart. The best way I can explain this is like the old Paramount bid was like a 22 year old kid with rich parents trying to rent a luxury apartment and he's telling the leasing office that my daddy's rich so I'm good for the rent. Well, the leasing office comes back and says, no, we need your dad to co sign the lease so he's legally on the hook for the rent in case you don't pay. And that's essentially what this revised Paramount bid does. Larry Allison is now on the hook for the money or the breakup fee if Paramount backs out of the bid. So we'll see if this personal guarantee from Larry Ellison will get the Warner Brothers Discovery Board to change their mind and go forward with the paramount bid of $30 a share over the Netflix bid. The market seems to think so. Warner Brothers stock is up 4% this morning in pre market trading. Some kids had their parents help out and co sign their first apartment lease or their first car loan. David Ellison is having his daddy co sign a $100 billion takeover of a media company. So yeah, you know what, it's pretty much the same thing. Let's shift gears and talk about Nvidia. Nvidia is planning to restart shipments of their H200AI chips to China as early as mid February. Now Chinese regulators are still debating on whether to allow the imports of the H200 chips because the Chinese government wants to build out their own domestic manufacturing of high end AI chips. But as of right now, no Chinese chip makers have anything close to what Nvidia has. And that's why Chinese tech companies like Alibaba and Bytedance want to get their hands on Nvidia's chips. The H200 chip is Nvidia's second most powerful chip. It's nearly six times more powerful than the H20 chip, which was specifically designed by Nvidia to comply with U.S. export restrictions for the Chinese market. China does allow the import of the H200 chips. Reuters reports that the initial shipments could total 40 to 80,000 chips pulled from Nvidia's existing inventory. But Nvidia has also told Chinese customers that it plans to add new production capacity which with orders opening in the second quarter of 2026. So Nvidia could see a noticeable jump in revenue in 2026 thanks to the Chinese market opening back up. Now keep in mind the US government would get a 25% cut of the revenue coming from China as part of Nvidia's deal they struck with President Trump. But resuming these high end AI chip exports to China is a major departure from the Biden era policy that banned advanced AI chips over concerns that the technology would supercharge China's military and close the gap in the US's AI advantage. Right now there is a interagency review in the US like the state, energy and defense have about 30 days to weigh in. But at the end of the day, President Trump gets the final say here and so far he seems to be committed to relaxing export restrictions to China. Let's talk about some stocks making moves today. Rocket Lab shares are ripping higher this morning after the company landed the biggest contract in its history. The space launch company was awarded an 816 million dollar prime contract from the US government to build 18 missile tracking and defense satellites for the US Space Force. You know, Rocket Lab is often talked about as a SpaceX competitor and similar to SpaceX, they launch rockets into space. The company has completed nearly 80 launches since 2018. On top of that, the company also builds satellites too and they do most of it in house. So investors are excited about the trajectory of this company. Stock jump 18% on Friday following this news and it's up another 4% this morning. Now on the flip side, Honeywell's shares are moving lower this morning after the company announced that it's taking a 470 million dollar one time charge in the fourth quarter tied to a settlement with Flexjet, a private aviation company that sued Honeywell back in 2023. The lawsuit centered around aircraft engine maintenance services with Flexjet accusing Honeywell of breaching its agreement and delaying repairs. Flexjet sued and now Honeywell is deciding to settle this case and paying the 400 plus million dollars. Honeywell said that this cut into their full year profit outlook as well and as a result, Honeywell stock is down around 2% this morning in pre market trading. Let's wrap the show with the fun fact. The new Avatar movie Fire and Ash made $88 million in the US box office over the weekend, which was pretty disappointing because analysts were expecting like $120 million. So the movie did underperform. But Disney isn't freaking out just yet because this is just how Avatar movies usually go. Like for example, the first Avatar movie which came out back in two 2009. It only made $77 million at the domestic box office, but the movie had staying power and went on to become the highest grossing movie of all time, making nearly $3 billion. And it was a somewhat similar story to the second Avatar called Way of Water that came out in 2022. It made $134 million at the domestic box office, but went on to make $2.3 billion, the third highest grossing movie of all time. So we could see the same thing happen for this new Avatar movie. It also helps that 2/3 of tickets sold for this movie are for premium IMAX and Dolby, which are more expensive seats. You add in the fact that this movie is doing great internationally. It's already made 257 million dollars thanks to a 60 million dollar debut in China. I think this Avatar movie could end up making $2 billion again. Honestly, I'm impressed this movie's already putting up these kind of numbers because the movie is nearly three and a half hours long. I mean, I wanted to go see the movie over the weekend, but I mean, I got two little kids, how am I supposed to get away for three hours? But I don't know, maybe I'll try to make it happen this week. If you guys have seen the new Avatar movie, let me know in the comments on what you thought about it and if it's worth the time. Well, all right guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. And if you are listening on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really does help us out and it helps other people find the show. Just a heads up, we posted a deep dive about the Medline ipo. It was the biggest IPO of of the year. Not many people know about the company. We broke it down. So go check that out if you want to learn more. Thank you guys again for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.