Biden Nixes Nippon-US Steel Deal

Author

Adam Garcia
January 03, 2025

Good morning. It's January 3rd, and today we'll take a look at the latest updates on US Steel, Plenty Unlimited, and GM.

Technology

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What to Watch

  • ISM manufacturing [Dec]: 10:00 a.m.

  • Auto sales [Dec]: 6:00 p.m.

There are no major earnings reports scheduled for today.

Steel

Biden Rejects $14 Billion US Steel Sale

President Joe Biden has blocked the $14.1 billion sale of United States Steel Corp. to Japan’s Nippon Steel, ending months of speculation and controversy surrounding the deal.

The White House formally announced the decision today, citing national security concerns and prioritizing domestic ownership of the iconic steelmaker. US Steel shares are down by nearly 8% in premarket trading.

Initially announced in December 2023, the deal faced intense opposition from the United Steelworkers union and political scrutiny during the presidential election campaign.

Despite Nippon Steel’s assurances on employment, investment, and leadership, the Committee on Foreign Investment in the United States deadlocked on its review, leaving the final decision to Biden.

Nippon Steel has indicated it may pursue legal action against the block, while US Steel could face challenges restarting the sale process or finding a suitable buyer. Cleveland-Cliffs, a previous bidder, may reconsider its interest, though it has since shifted focus to other acquisitions.

US Steel CEO David Burritt argued that the merger would strengthen competition against China’s steel dominance but warned that failing to complete the deal could result in plant closures and headquarters relocation. The block is seen as a significant win for the United Steelworkers union, which staunchly opposed the takeover.

Farming

Indoor Farming Pioneer Plenty Unlimited Faces Major Valuation Cut As Industry Struggles

Plenty Unlimited Inc., a vertical farming startup backed by prominent investors like Jeff Bezos and SoftBank Group, is negotiating a funding round that could drastically reduce its valuation by more than 90%, sources revealed today.

Previously valued at $1.9 billion, the company may see its existing shares valued at under $15 million as part of the $125 million recapitalization effort.

The funding, led by New York-based One Madison Group, is expected to include contributions from SoftBank and Walmart. However, the deal remains uncertain, and talks could still collapse.

Amid these developments, Plenty has appointed Daniel Malech as interim CEO following the departure of Arama Kukutai. The company is also narrowing its focus to strawberry production, a move aimed at improving profitability.

This pivot comes as the indoor farming sector faces mounting challenges. Competitors like Bowery Farming, AeroFarms, and AppHarvest have either shuttered operations or filed for bankruptcy in recent months.

Founded a decade ago, Plenty was once seen as a leader in sustainable farming, offering solutions that required less land and water. However, the company’s struggles highlight broader difficulties in the indoor agriculture industry, which has yet to deliver on its high expectations.

Automobiles

GM Leads as Tesla and Stellantis Struggle in 2024 Sales

U.S. new car sales in 2024 reached their highest level since 2019, topping 15.8 million vehicles, as per analyst estimates. Strong consumer resilience, boosted inventories, and increased discounts fueled the market's recovery from pandemic lows.

General Motors (GM) defended its position as the sales leader, with approximately 2.7 million units sold, as per a report from Cox Automotive.

However, not all automakers benefited from the surge. Stellantis, the parent company of Jeep, Ram, and Dodge, faced declining sales amid fallout from a failed pricing strategy, while Tesla grappled with slowing sales and intensified competition, particularly in China.

Electric vehicle sales in the U.S. are projected to reach 1.3 million units in 2024, accounting for 8% of total new car sales. Buyers rushed to purchase EVs in the fourth quarter, aiming to capitalize on tax credits before potential policy changes under President-elect Donald Trump.

Looking ahead, analysts anticipate a 3% growth in new vehicle sales in 2025, driven by improved inventory levels and increased availability of affordable models. The average incentive per vehicle rose 30.7% year-over-year, reaching $3,442 in December, further easing sticker shock for buyers.

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Movers and Shakers

N2OFF, Inc. [NITO] - Last Close: $1.07

N2OFF, Inc. (NITO) is a clean tech company specializing in sustainable energy solutions and agri-tech innovation.

The company announced yesterday that its joint venture with Solterra Renewable Energy Ltd. obtained approval for a 111 MWp solar PV project in Melz, Germany, which is causing its stock to rise sharply in premarket today

My Take: NITO rose more than 300% yesterday and is continuing on its upward trajectory today. But this is a tiny stock from a <$5M market cap firm which has been struggling to make any profits to date. So hedge your bets if you wish to invest here.

Nu Skin Enterprises, Inc. [NUS] - Last Close: $6.56

Nu Skin Enterprises, Inc. (NUS) is a beauty and wellness company specializing in personal care products and nutritional supplements.

The firm has announced today that its Rhyz unit sold its Mavely marketing technology platform to Later, a portfolio company of Summit Partners, for $250 million in cash and a minority equity stake in the combined Later/Mavely business, causing the stock to rise 17% in premarket trade.

My Take: NUS has struggled with profitability in recent quarters. This divestment allows it to focus on its core business areas and improve its profit margins. Keep your eye on this stock as it might be a good bet for the future.

Ondas Holdings Inc. [ONDS] - Last Close: $2.63

Ondas Holdings Inc. (ONDS) is a leading provider of private industrial wireless networks and commercial drone solutions.

The company recently issued $18.9 million in 3% Series B-2 Senior Convertible Notes, bringing total net proceeds to $30 million since December 3rd, aimed at supporting the growth of Ondas' drone business.

Given the rapid rise of the drone market, this news has excited investors, causing the firm’s stock to rise 21% in premarket trade today.

My Take: Ondas has grown 360% in the last six months. However, the firm isn’t profitable and has very little revenue to its name. It might be best to put this on your wait and watch list for now.

AI

Elon Musk’s ventures have consistently reshaped industries, from online payments with PayPal to space exploration with SpaceX and automotive AI with Tesla.

Now, his next project is being called his most ambitious yet—a groundbreaking AI initiative projected to tap into a $9 trillion market.

This “silent partner” is already positioned to benefit massively from Musk’s success.

As the project gains momentum, early investors in this under-the-radar stock could see incredible returns.

Everything Else

  • China boosted Tesla's performance with 8.8% sales growth as global competition intensifies.

  • Short-seller Hindenburg’s report on Carvana alleges insider trading and corporate misconduct.

  • Thailand’s Prime Minister revealed massive wealth, including properties in London and Japan.

  • Fugitive Thai tycoon accused of defrauding investors as authorities coordinate with Interpol.

  • Aerolineas Argentinas trims staff and passenger perks as the government mulls privatization.

  • iPhone 16 models see rare price cuts in China amid slowing sales.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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