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- Futures rise to start the week 📈
Futures rise to start the week 📈
These red-hot stocks are driving higher in the premarket.
Chris Dinello
July 08, 2024
Good Morning!
It's Chris from Elite Trade Club, here to give you this morning's premarket trading news.
Let’s get ready to trade!
Markets 📈
Large-cap indexes posted modest gains in their final performance of last week, while the Russ2K lost about half a point.
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Futures are sitting close to flat in early trading, but S&P 500 contracts are currently sitting in the green with an advance of less than 0.1%.
What to Watch Today:
Summer trading volumes are notoriously thin, and the week of the Fourth of July is also a typically popular week for vacations. We could see some volatility today as traders return to their desk and adjust their positions in light of last week’s jobs report.
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Premarket Highlights 🔎
Paramount and Skydance Agree to Merge, Ending Redstone Era 🎬
Skydance Media and Paramount Global [PARA] announced a merger late Sunday, marking a new chapter for the historic Hollywood studio. Shari Redstone, Paramount’s non-executive chair, will sell the family’s controlling stake in a complex transaction that will lead to the merger, ending the Redstone family's long-standing influence.
Transition of Power 🔄
The merger signifies the end of an era for the Redstones, whose patriarch, Sumner Redstone, built a media empire from a chain of drive-in theaters. This empire included Paramount Pictures, CBS, and cable networks like Comedy Central, Nickelodeon, and MTV. The merger will combine Paramount's iconic films with Skydance's recent hits such as "Top Gun: Maverick," "Mission: Impossible-Dead Reckoning," and "Star Trek Into Darkness."
Strategic Shifts 🌟
David Ellison, the founder of Skydance, will emerge as a significant power player in Hollywood, inheriting a media company facing the challenges of a rapidly evolving entertainment industry. The company has experienced executive tensions, with CEO Bob Bakish ousted in April following disputes with Shari Redstone over the Skydance deal. He was replaced by a trio of executives who proposed significant cost cuts and asset sales, plans that may now be reconsidered.
Potential Changes 👥
Ellison is expected to be joined by Jeff Shell, former CEO of NBCUniversal, once the merger is finalized. Shell left NBCU last year after an investigation and has since been involved with RedBird as chair of sports and media.
Financial Details 💰
After an initial collapse of negotiations on June 11, talks resumed and became more constructive. Skydance increased the Redstone family’s payout for National Amusements to $1.75 billion and enhanced legal protections against shareholder lawsuits. Ellison and his backers, including RedBird Capital Partners, pledged a $1.5 billion injection into Paramount and offered to buy 50% of its nonvoting shares for $15 each. Class A voting stockholders would receive $23 per share.
Prospects & Contingencies 📅
The agreement gives Paramount 45 days to seek a better offer, leaving room for potential further developments in this already complex deal process. The merger represents a significant shift in Hollywood’s landscape, with the potential to reshape the future of both companies involved.
Featured Earnings 💰️
Greenbrier Companies [GBX] ... AM
Economy 🏗
Consumer credit [May] ... 3:00p
Running Hot 🔥
Gainers
Shapeways [SHPW] >> +69.7%
Kineta [KA] >> +26.9%
Ideaya Bio [IDYA] >> +18.2%
Decliners
Hillevax [HLVX] >> (87.7%)
Fortress Bio [FBIOP] >> (54.2%)
Docebo [DCBO] >> (35.8%)
Morphic Holdings [MORF] - Last Close: $31.84
Morphic has agreed to be acquired by pharma giant Eli Lilly [LLY] in an all-cash deal valued at about $3.2 billion.
The offer pays shareholders $57 per share, representing a 79% premium to MORF’s closing bid last Friday.
Both companies’ boards have approved the transaction, and they expect the deal to close in Q3.
MORF is up 75.6% on just under 4 million shares traded.
My Take: MORF hit a home run on this deal, and, with a 15.51% short percentage as of Jun. 14th, this big rally undoubtedly busted a lot of short positions.
Inspire Veterinary [IVP] - Last Close: $1.49
This tiny stock continues to exhibit volatility after registering for a direct offering of 9.125 million shares of its common stock last week.
Inspire filed its initial S-1 prospectus on July 1st, and it filed a notice effectiveness a couple of days later on July 3rd.
Shares gained 7.9% on Friday in reaction to the news, but the rally is kicking into overdrive in today’s premarket.
IVP is up 107.3% on roughly 13 million shares traded.
My Take: IVP had a 13.2% short percentage as of Jun. 14th, and today’s rally may have gotten some extra support from squeezing those positions.
CERo Therapeutics [CERO] - Last Close: $0.2541
CERo Therapeutics is getting a boost in today’s premarket after announcing an upcoming presentation of clinical data for CER-1326.
The company said it will present data that supports use of the drug in certain leukemia patients at the upcoming Global Cell & Gene Therapy Summit 2024.
CERo will make its poster presentation today, and the company says it will focus its clinical efforts on acute myeloid leukemia after it received clearance for its investigational new drug application with the FDA.
CERO is up 52.7% on upwards of 15 million shares traded.
My Take: CERO is getting a big boost from this news, but the stock has really struggled lately. Only time will tell if this news is enough to a pivot into a long-term positive trend.
Zapp Electric Vehicles [ZAPP] - Last Close: $4.07
Zapp EV is soaring again as last week’s short squeeze continues through into the start of a new trading week.
ZAPP gained 49.6% on Friday in response to an apparent short squeeze, and, although it closed off its intraday highs, its extending the rally today.
ZAPP is up 64.1% on over 9 million shares traded.
My Take: As I said on Friday, the bulls appear to be taking control of ZAPP. We could see more volatility today, so time your entry and exit points strategically or you risk getting caught holding the bag.
That's it for today! Thanks for reading, and good luck out there!
Best Regards,
— Chris D.
Elite Trade Club
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