Fubo Jumps 57% After Disney Merger News

Good morning. It's January 6th, and today we'll cover three M&A stories related to Walt Disney and FuboTV, Paycor and Paychex, and Palomar and First Indemnity of America Insurance Company (FIA).

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What to Watch

Earnings Calendar:

• Commercial Metals [CMC]: Premarket

Economic Reports:

• Factory orders [Nov]: 10:00 a.m.

Entertainment

FuboTV Soars on Disney Merger Report

Walt Disney Co. and FuboTV are reportedly nearing an agreement to merge their live TV streaming businesses, as per a report. Under the proposed deal, Disney will integrate its Hulu + Live TV service into FuboTV, creating a new joint venture in which Disney will hold a 70% stake while FuboTV will retain the remaining 30%.

Shares of FuboTV (NYSE: FUBO) are surging by nearly 57% in premarket trading today following the news, while Disney is also seeing a modest increase. Neither company has commented on the report.

The agreement would also resolve FuboTV’s ongoing legal disputes with Disney, Fox Corp., and Warner Bros. Discovery over the Venu Sports streaming platform. FuboTV had previously filed antitrust claims against the media giants, arguing that Venu Sports would stifle competition and inflate prices. A district court issued an injunction temporarily halting Venu’s launch, siding with FuboTV.

As part of the merger, FuboTV is expected to drop its legal challenges, clearing the way for the new sports platform. Meanwhile, the U.S. Court of Appeals will hear arguments from media companies seeking to overturn the injunction.

This strategic move positions Disney to consolidate its live TV offerings while FuboTV gains a significant ally in the competitive streaming market. Further announcements are expected soon.

Human Resources

Paycor Shares Jump Upon Paychex Acquisition Rumors

Shares of Paycor HCM Inc. are soaring 21% today amid rumors that Paychex Inc. is in advanced discussions to acquire the company. The deal, which could be announced as early as this week, would merge two prominent players in the human resources software market. Both companies have yet to comment on the ongoing discussions.

Paycor, valued at $3.3 billion, specializes in cloud-based HR software for small and medium-sized businesses, serving over 30,000 customers across the U.S. Paychex, headquartered in Rochester, New York, boasts a market capitalization exceeding $50 billion and offers a broad range of HR, payroll, and employee benefits services to over 745,000 clients globally.

If completed, the acquisition would mark Paychex’s largest deal to date, significantly bolstering its market footprint.

Analysts see the move as part of a growing trend of consolidation in the HR services sector, as companies look to expand offerings and achieve cost efficiencies.

The news comes amid a broader wave of industry mergers, including Automatic Data Processing’s acquisition of WorkForce Software in October. Investors have responded positively, with Paycor’s stock reflecting strong optimism about the potential benefits of this consolidation. Further details are eagerly anticipated.

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Insurance

Palomar Enters Surety Market with FIA Acquisition

Palomar Holdings has officially completed its acquisition of First Indemnity of America Insurance Company (FIA), marking its strategic entry into the surety market. The financial terms of the deal remain undisclosed.

Founded in 1979, FIA initially focused on writing surety bonds in New Jersey before expanding its operations to states like Alabama, Florida, Georgia, and Maryland. The acquisition enables Palomar to diversify its specialty insurance portfolio, adding a high-margin and profitable line of business.

Palomar chairman and CEO Mac Armstrong expressed enthusiasm about the deal, highlighting the opportunity this acquisition provides the firm to expand into the surety market, a sector with significant growth potential.

In addition to the acquisition, Palomar recently reported a strong Q3 2024 performance, with a net income of $30.5 million, a sharp increase from $18.4 million in Q3 2023. Adjusted net income for the quarter stood at $32.4 million, reflecting continued growth.

Palomar Holdings, which includes subsidiaries like Palomar Specialty Insurance and Palomar Insurance Agency, views this move as a step toward enhancing long-term shareholder value and expanding its product offerings in the specialty insurance space.

CytoMed Therapeutics Limited [GDTC] - Last Close: $3.45

CytoMed Therapeutics Limited (GDTC) is a Singapore-based clinical-stage biopharmaceutical company focused on innovative cancer immunotherapies.

The company announced a collaboration with India’s SunAct Cancer Institute to advance the use of its proprietary allogeneic gamma delta T cells in treating solid cancers today, which is causing its shares to jump 24% in premarket trading.

Cerence Inc. [CRNC] - Last Close: $19.33

Cerence Inc. (CRNC) is a provider of AI-powered voice and in-car assistant technologies for the automotive industry.

The company recently announced an expanded collaboration with NVIDIA to advance its Cerence Automotive Large Language Model (CaLLM) family, enhancing in-vehicle AI capabilities, which is pushing its share up by 27% before the opening bell today.

GEE Group Inc. [JOB] - Last Close: $0.22

GEE Group Inc. (JOB) is a provider of professional staffing services and human resource solutions in the United States.

The company is acquiring Hornet Staffing, an Atlanta-based firm specializing in staff augmentation services for large companies in IT, professional, and customer service sectors, causing a 20% upsurge in its stock price premarket.

This strategic acquisition is expected to be accretive to earnings and enhance GEE Group's capacity to serve Fortune 1000 clients.

Technology

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Everything Else

• U.S. Steel and Nippon sue over blocked $14.9 billion merger.

• Semiconductor stocks rally after Foxconn's bumper fourth-quarter revenues signal AI boom continuation.

• Biden enforces the largest offshore drilling ban in U.S. history as his environmental legacy grows.

• The dollar tumbles while the euro and yuan climb upon speculation of a reduced Trump tariff scope.

• Xpeng and Volkswagen will co-develop an EV charging infrastructure across 420 Chinese cities.

• The Modi government proposed major incentives for smartphone component makers in India.

• Canada's prime minister faces mounting pressure as resignation rumors intensify.

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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