NVIDIA Dips After China Launches Antitrust Investigation

Good morning. It's December 9th, and in today’s edition, we’ll look at how an activist investor is pressuring Macy’s to cut costs, NVIDIA is facing an antitrust investigation in China, and a space research firm’s stock that is surging nearly 90% in the last 5 days.

Previous Close 📈

Stocks ended Friday mixed as the Dow Jones Industrial Average slipped 123.19 points, while the S&P 500 rose 0.25% and the Nasdaq Composite surged 0.81%.

Futures

U.S. stock futures are edging lower this morning as markets await key inflation data set for release later this week. Dow futures are down 16 points (-0.04%), while S&P 500 and Nasdaq-100 futures are declining by 0.1% each.

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What to Watch

Oracle (ORCL), MongoDB (MDB), C3.ai (AI), and Planet Labs (PL) will report their quarterly earnings today after the market closes.

Also keep an eye on the Wholesale Inventories data for October that will be released at 10:00 a.m. ET.

Semiconductors

NVIDIA Faces Chinese Antitrust Investigation, Shares Dip in Premarket

China's State Administration for Market Regulation (SAMR) is launching an antitrust investigation into NVIDIA Corporation, targeting potential anti-competitive behavior following its acquisition of Mellanox Technologies.

The inquiry, announced today, raises concerns about NVIDIA's compliance with China's Anti-Monopoly Law and a key 2020 regulatory directive.

The specific allegations remain undisclosed, but the investigation will examine whether NVIDIA's post-acquisition practices have restricted competition in the semiconductor industry. This scrutiny comes as NVIDIA continues to face a separate antitrust probe by the U.S. Department of Justice, which is investigating the company's dominance in the AI chip market.

The announcement has already affected NVIDIA’s stock, which has dropped nearly 2% in premarket trading, reflecting investor apprehension.

China, a major player in the global semiconductor supply chain, is a crucial market for NVIDIA. The outcome of this investigation may have far-reaching consequences for the company, particularly as it navigates growing competition and regulatory hurdles. NVIDIA has yet to issue a statement on the matter as the investigation unfolds.

Chemicals

Dow Chemicals Shares Climb 5% After Announcing Major Asset Sale

Dow is selling a 40% stake in select U.S. Gulf Coast infrastructure assets to Macquarie Asset Management for $2.4 billion, marking a strategic shift towards its core chemicals business.

The deal, disclosed on Monday, includes an option for Macquarie to increase its stake to 49% within six months of closing, potentially raising the cash proceeds to $3 billion.

The transaction aligns with Dow's ongoing efforts to optimize its global asset portfolio by evaluating non-core holdings, such as power and steam production and pipeline assets. This move is part of a broader initiative to streamline operations and strengthen its focus on chemical production.

As part of the agreement, a new partnership, Diamond Infrastructure Solutions, will serve as an infrastructure provider for Dow and other industrial clients at five key sites in Texas and Louisiana. The deal is expected to close in the first half of 2025.

Shares of Dow are up 5% in premarket trading following the announcement. This comes amid ongoing challenges for the company, including weak demand recovery and regulatory headwinds. Last month, Dow was replaced by Sherwin-Williams in the Dow Jones Industrial Average, reflecting the pressures on its market position.

Retail

Macy's Faces Pressure From Barington to Cut Costs, Unlock Property Value

Activist investor Barington Capital has taken a stake in Macy’s and is pressuring the iconic department store chain to reduce spending and explore strategic real estate options, according to a Wall Street Journal report today.

The investor group, reportedly working with property owner Thor Equities, is advocating for Macy's to separate a real estate unit and evaluate options for its Bloomingdale’s and Bluemercury brands.

Barington believes Macy's stock is undervalued, citing its real estate holdings, which it estimates to be worth between $5 billion and $9 billion. The firm is also urging Macy’s to lower its capital expenditure to 1.5%-2% of total sales and initiate a stock buyback program of up to $3 billion over three years.

Shares of Macy’s are up 2.4% in premarket trading on this news. This comes as the retailer is set to release delayed third-quarter earnings, postponed due to an internal accounting issue where an employee reportedly hid up to $154 million in expenses over several years.

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Satellogic Inc. [SATL] - Last Close: $3.92

Satellogic's stock is rising sharply (+25%) in premarket trade today following its selection for a NASA Earth observation contract worth up to $476 million, shared among multiple awardees.

This prestigious win underscores Satellogic's advanced capabilities in providing high-resolution multispectral imagery, which will support NASA's efforts to tackle climate change, monitor environmental trends, and improve global applications for societal benefit.

The contract, which runs through 2028, positions Satellogic as a key player in the space imaging market and offers substantial revenue potential over the coming years.

Interpublic Group of Companies [IPG] - Last Close: $29.26

Interpublic Group's (IPG) stock is up nearly 12% in premarket trade following reports that Omnicom Group (OMC) is in advanced talks to acquire the company in an all-stock deal.

This potential merger would create the world's largest advertising company, surpassing current leader WPP.

The transaction is rumored to value Interpublic at $13 billion to $14 billion, reflecting significant investor confidence in the combined entity's market dominance.

The merger would integrate two of the industry's top players, allowing them to pool resources, enhance client offerings, and gain a competitive edge in the global advertising landscape.

Seres Therapeutics, Inc. [MCRB] - Last Close: $0.82

Seres Therapeutics' stock is surging nearly 25% in premarket trade due to the FDA granting Breakthrough Therapy Designation to its lead investigational program, SER-155.

This innovative therapy is designed to significantly reduce bloodstream infections in patients undergoing stem cell transplants (allo-HSCT). Phase 1b clinical trials showed a 77% reduction in infection risk compared to a placebo, along with decreased antibiotic use and fewer complications.

The designation underscores SER-155’s potential to address a critical unmet need for patients facing life-threatening infections.

Breakthrough Therapy status also accelerates regulatory support, which could speed up the path to approval.

Additionally, Seres is exploring expansion opportunities for SER-155 to other high-risk populations, such as cancer and transplant patients, potentially creating a blockbuster product.

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Everything Else

• CVC Capital bid €1.18B for German software firm CompuGroup.

• Arthur J. Gallagher expands middle-market reach with its $13.45B AssuredPartners acquisition.

• Kioxia priced $5.2 billion IPO as the Japanese market sees a surge in large listings.

• BYD's aggressive expansion boosts market share and positions it among top global automakers.

• Beijing pledged extraordinary fiscal and monetary measures as Trump threatens tariffs.

• BP and Jera merge offshore wind assets to form London-based JERA Nex bp.

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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