Breakfast News: U.S. Steel Takeover Unlikely
January 3, 2025
| Thursday's Markets |
|---|
| S&P 500 5,869 (-0.22%) |
| Nasdaq 19,281 (-0.16%) |
| Dow 42,392 (-0.36%) |
| Bitcoin $97,022 (+2.31%) |
Source: Image created by JesterAI.
1. Biden Set to Refuse Nippon Steel Deal
President Biden has decided to block the proposed $14.9 billion U.S. Steel (X +0.00%) takeover by Nippon Steel, according to unnamed officials. Confirmation either way is expected within the coming days.
- Referred to the top: Biden had previously expressed concern the company should remain American owned and operated, with the decision referred to him after the regulators failed to come to a consensus view.
- Back to the drawing board: Investors had already become somewhat skeptical about the deal, given the stock price closed Thursday just below $33, a long way off the $55 offer price. Should the deal be blocked, it raises more questions for U.S. Steel about whether or not to restart the sale process domestically.
2. Quantum Buzz Gains Momentum
Rigetti Computing (RGTI +0.59%) jumped 31% on the first trading day of the year as interest in quantum-related stocks picked up from where it left off in late 2024.
- Rigetti stock up 386% in just one month: Quantum computing focuses on using sophisticated mechanics to solve complex problems beyond the capabilities of normal computers. Interest in this area has soared after longtime Rule Breakers rec Alphabet (GOOG 0.58%) revealed its new Willow computing chip in early December. Investors are now targeting the likes of Rigetti, which builds quantum computers.
- "We are going to all get a little more familiar with the terms that surround this discipline": In a recent episode of Motley Fool Money, Asit Sharma's reckless prediction was for quantum computing investing to go mainstream in 2025: "I think you'll see people start to take some nibbles at some stocks that admittedly already look like they're in a bubble."
3. Carvana Attacked by Short Seller
Short seller Hindenburg Research caught investor attention following the release of a report making accusations about Carvana (CVNA +2.57%).
- "A father-son accounting grift for the ages": The title of the report packs a punch, with the details showing why Hindenburg believes the business performance is a mirage. It believes shady car underwriting practices between family members is a major reason for concern.
- Down over 6% ahead of the market opening: Investors will be awaiting some form of statement from Carvana addressing the claims, as historically Hindenburg reports have the potential to cause large reputational damage.
4. Tesla Posts Mixed Delivery Numbers
Despite posting a record number of car sales in the final quarter, Tesla (TSLA 0.96%) saw annual vehicle deliveries fall for the first time in more than a decade.
- Stock down 6% on the news: Q4 deliveries of 495,570 fell short of analyst estimates of 510,400. The bulk of deliveries for 2024 was for entry-level models, such as the Model 3 and Y.
- Broader implications: Investors might have some concern this signals some growth slowdown in the electric vehicle market. Despite the 18% drop in the last five trading days, the Hidden Gems recommendation is still up 59% over the past year.
5. Foolish Fun
What business that has previously been spun off into a separately traded company do you have most conviction in for the long term, and why? Debate with friends and family, or become a member to hear what your fellow Fools are saying!
