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Public.com presents the rundown, your daily market update in 10 minutes. My name is Zaidad Mani, and Today is Monday, May 4th. In today's episode, we'll tell you why Spirit Airlines shut down over the weekend and what it means for travelers in the airline industry. We'll also recap highlights from the Berkshire Hathaway annual meeting, the first one without Warren Buffett on stage. Then stick around to the end of the show to find out why GameStop is trying to buy ebay. We got a great show for you today. Let's go. Stocks are coming off the fifth winning week in a row. The S and P Nasdaq both jumped about 1% last week, closing at record highs. This is now the longest winning streak for the S and P since 2024. Earning season overall has been a big reason for the market rally. This earnings season has been one of the strongest we've seen in years. According to FactSet, 84% of S&P 500 companies that have reported earnings so far have beat on earnings estimates. That is the highest beat rate since 2021. And companies aren't just barely beating, they're absolutely crushing it. On average, earnings are coming in 21% above expectations, which is way above the five year average of a 7.3% beat. So we'll see if that continues through the rest of earnings season. Now the other thing the market is keeping an eye on is, of course, the Iran war and oil prices. Over the weekend, President Trump launched what he's calling Project Freedom, which is an operation to escort stranded cargo ships through the Strait of Hormuz. So we'll see how that plays out. I mean, right now, oil prices are still elevated. Brent crude is trading at around $111 a barrel, while WTI is at $105 a barrel. So there seems to be this tug of war right now in the markets. For now, though, it seems like investors are more focused on these strong earnings. The question, though, is how much longer markets can keep going up and if oil stays elevated. So we'll see what happens. We should get more clarity this week. You know, we have 120 companies reporting earnings this week along with the April jobs report. So it's another big week in the market. So make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop. Let's run through some headlines, starting with spirit Airlines. After 34 years, Spirit Airlines has shut down. The airline officially stopped operations on Saturday after failing to reach a last minute bailout deal with the Trump administration and its debt holders. So all flights have been canceled, the company has dissolved, and Spirit Airlines is no more. I know that Spirit Airlines became a meme for their terrible service, but, you know, their business model of super cheap airfare and charging extra for everything worked for a long time. You could make the case that Spirit made air travel more affordable for millions of people. In fact, it came in clutch for me when I was in college, and it also forced bigger airlines to compete on price. But over the last few years, the business model started breaking down. There was just more competition from the bigger airlines and also more travelers started prioritizing comfort and were willing to pay a bit more for it. Spirit Airlines had to file for bankruptcy back in November of 2024, and they filed again in August of last year. And it looks like the final nail in the coffin was jet fuel prices. And with the war in Iran driving up fuel costs, Spirit just ran out of cash. Their CEO said the sudden rise in fuel prices left them with no alternatives or but to wind down the company. Now, look, Spirit had about a 3.9% share of the US market as of February, which is down from over 5% last year. So they were already shrinking fast. I wonder what's going to happen to the airline industry now with Spirit gone, that market share is up for grabs. The biggest winners here might be Frontier Airlines and JetBlue, who both actually tried to buy Spirit a few years ago. Frontier tried to merge with spirit back in 2022, but then JetBlue swooped in with a higher bid. Unfortunately, that merger was blocked by the DOJ on antitrust ground in 2024. And look, that might have been a blessing in disguise because Both Frontier and JetBlue can go after Spirits market share without having to spend the $3.9 billion they were planning to spend back in 2022 for the merger. Now, JetBlue is already moving fast. They're offering $99 rescue fares and rolling out plans to expand as Spirit's largest hub, which is the Fort Lauderdale Hollywood International Airport in Florida. And then Frontier is offering up to 50% off fares. And even other airlines like American and United are also stepping in to offer rescue fares for travelers who already paid for Spirit and are now left without a flight. Investors seem to think that Frontier could be the biggest winner because their shares are up around 8% this morning. But yeah, I wonder how this all plays out and what it means for airfare as well, because I imagine some markets are going to see higher prices down the line and then not to mention 17,000 direct and indirect employees are losing their jobs as a result of the Spirit shutdown. Now, some airlines are inviting Spirit workers to apply for open roles, so hopefully everyone lands on their feet. But, you know, I think I'm going to miss Spirit Airlines. I haven't flown them in a while, to be honest, but every time I did fly them, I never really had any problems. Let's shift gears and talk about the Berkshire Hathaway annual shareholder meeting that went down in Omaha, Nebraska over the weekend. You know, this event is like Coachella for finance nerds, but for the first time in six decades, Warren Buffett was not headlining the show. Remember, Greg Abel took over as CEO of Berkshire back in January and, and he hosted the event. Now, Warren Buffett was still there, but he wasn't on stage. He was sitting in the front row with the other board members. And from everything that I've seen and read, the vibe was very different this year. See, Greg Abel isn't a showman like Warren Buffett or Charlie Munger was. He's more of an operator. You know, he's a classic boring corporate America suit. And I mean that in a good way. So that's why people attending the events at this meeting felt more like an Investor's Day conference than a folksy Q and A that Warren Buffett and Charlie Munger were famous for. In fact, I think there was less people that attended this year. I was watching the live stream over the weekend and I saw a lot of empty seats in that stadium. Anyways, Berkshire's actual business is doing solid. Operating income was up 18% to $11.3 billion, and net income more than doubled to over $10 billion. Also, the company's cash pile hit a record 381 billion. Now, with all that cash, Greg Abel says they are constantly looking to buy companies and investors, but at the right price. What's interesting, though, is that despite Berkshire putting up solid financial numbers, the stock has underperformed the S P 500 by a lot. Since Warren Buffett announced his retirement a year ago, the S P has gone up 28%, while Berkshire stock has actually dropped 8%. So maybe it was Warren Buffett's presence that was propping up Berkshire's stock price. And now that he's gone, Greg Abel is going to have to give investors a reason to to stay invested. Let's talk about some stocks making moves today. Let's start with Atlassian. This is a software stock based out of Australia, and their stock surged 30% on Friday after they reported Their earnings. See, Atlassian makes productivity tools like Gyro, Confluence and Trello. Millions of corporate workers use these tools every day to manage their projects and workflow. And they reported a blowout. Quarter revenues came in at $1.8 billion, up 32% year over. And cloud revenue, which is their most important business, grew 29% and came in well above expectations. And the reason this is a big deal is because Atlassian had been one of the poster child for the software sell off this year. The stock was down more than 45% year to date before the earnings report as investors worried that AI could eat into traditional software businesses. But these results show that AI is not killing software. In fact, it's actually helping them. Customers who use Atlassian's AI tool called Rovo, are growing their spend at twice the rate of customers who don't use the AI tools. So AI is becoming like an upsell for Atlassian and not a threat. And you know, that's been my theory all along that I would end up helping these software companies. So I'm glad that the market is seeing that, at least with Atlassian. Maybe it's a sign that the software turnaround is right around the corner. Now on the flip side, Norwegian Cruise Line is down this morning. After the company cut its full year outlook. Norwegian actually beat expectations for Q1. Revenues grew 10% to 2.3 billion doll dollars and adjusted earnings more than doubled from a year ago. The problem is the outlook. Norwegian slashed its full year earnings forecast from $2.38 a share down to about A$50 cents a share. So that's a massive cut. And the reason for it is the Iran war and surging fuel prices. Higher fuel costs are eating into the company's margins and consumers are pulling back on travel bookings, especially to Europe. As a result, shares of Norwegian Cruise are down around 6% this morning and at the time of this recording. So the big picture takeaway seems to be that travel companies are the ones taking the biggest hit from the Iran war. Let's wrap the show with the fun fact. GameStop is trying to buy eBay. GameStop just made an unsolicited offer to buy eBay for $56 billion. Now this is a pretty bold move, especially since GameStop is only worth around $12 billion themselves. But GameStop CEO Ryan Cohen thinks that he can pull this off. GameStop is offering $125 per share in a mix of cash and stock, which is about a 20% premium to where eBay closed on Friday. GameStop has about $9 billion in cash on their balance sheet, and they also have a commitment letter from TD bank for another $20 billion in debt financing. The rest of the money, though, would come from issuing new GameStop shares. Now, Ryan Cohen's pitch is that ebay should be worth a lot more. He said he wants to turn ebay into something worth hundreds of billions of dollars and make it a legit competitor to Amazon. He wants to use GameStop's 1600 stores as a physical hub for authentication, fulfillment, and live commerce, which are the things that ebay is now leaning into. Honestly, it's not a bad strategy. Now, I don't know if the ebay board will agree to the takeover. The market seems to be a bit skeptical. Ebay stock is up around 7% this morning, but still trading below the $125 offer price. 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. All that engagement really does help us out and it helps other people find the show. Thank you guys so much 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.