Wall Street Breakfast Podcast: DOJ Set To File Suit Against Apple

Summary:

• DOJ set to sue Apple for antitrust violations related to iPhone.
• Reddit debuts on the New York Stock Exchange with strong demand for its IPO.
• Apollo Global Management makes an offer to buy Paramount’s film and TV business.

Listen below or on the go on Apple Podcasts and Spotify

DOJ set to sue Apple for antitrust violations related to iPhone. (0:14) Reddit to debut after pricing IPO at top of range. (0:48) Apollo offers $11 billion for Paramount’s film and TV business. (1:52)

The following is an abridged transcript:

The U.S. Department of Justice plans to sue Apple (NASDAQ:AAPL) for violating antitrust laws as soon as today, according to published reports.

The suit alleges that Apple blocked rivals from accessing hardware and software features on its ever-popular iPhone.

This is the third time the DOJ has sued Apple for alleged antitrust violations.

The DOJ is already suing Alphabet’s Google (GOOG) (GOOGL) for alleged monopolization in its advertising business.

Apple rose 1.5% on Wednesday amid the market’s risk-on move, but the stock is down about the same amount premarket. Shares have underperformed this year, down more than 7%.

Reddit (RDDT) is set to debut on the New York Stock Exchange today with signs of solid demand. The company raised $748 million Wednesday night, pricing its IPO of 22 million shares at $34 apiece, the top of its range.

About 15.3 million shares are being sold by the company and about 6.7 million shares are being sold by certain stockholders. Last week, Reuters reported that the message board site’s IPO was between four and five times oversubscribed.

Reddit offered active users, including moderators and users with high karma, a chance to buy shares in its IPO using a tier system to allocate shares. The first tier including “certain users and moderators identified by us who have meaningfully contributed to Reddit community programs.” Next in line were users with at least 200,000 karma and at least 5,000 moderator actions.

Users that participate in Reddit’s IPO will not be subject to a lock-up period.

Shares will trade under the symbol “RDDT.” Morgan Stanley, Goldman Sachs, J.P. Morgan and BofA Securities are acting as lead book-running managers for the offering.

Paramount Global (PARA) (PARAA) rallied on Wednesday afternoon after the Wall Street Journal reported that Apollo Global Management (APO) made an $11 billion offer to buy the company’s film and television studio.

That’s the latest in a long-simmering story of a potential acquisition of the venerable Hollywood name. It comes alongside an existing offer from Skydance Media to buy Paramount parent National Amusements and merge with the company as a whole.

And it lands amid reluctance from controlling shareholder Shari Redstone, among others, to selling the company only in part rather than in whole.

Still, the offer substantially tops Paramount’s overall market cap of $7.7 billion.

The stock rose more than 11% on Wednesday and is up more than 1.5% in before the bell.

Other articles to look out for on Seeking Alpha

Micron soars as Q2 results and guidance blow past expectations

Astera Labs rallies post-IPO as chip enthusiasm stays strong

And Disney teams up with Google and Trade Desk on an ad platform update

On our catalyst watch for the day:

• CSP (CSPI) will start trading on a split-adjusted basis following the company’s two-for-one stock split.
• Arthur J. Gallagher & Co. (AJG) will be hosting its regularly scheduled quarterly management meeting.

It was a big day for the bulls on Wednesday as the S&P 500 (SP500) set a new closing record following what was seen as a dovish Fed dot plot and press conference from Chairman Jerome Powell.

The S&P rose a little less then +1%, finishing above 5,200. The Nasdaq (COMP.IND) gained +1.25% and the Dow (DJI) rose +1%. Treasury yields fell

Traders focuses on the FOMC keeping its dot-plot projection for 2024 at three rate cuts for the year, even though the members boosted their forecasts for real growth and core inflation, while cutting unemployment forecasts. So, even with a stronger economy they still think three cuts are appropriate. You can get more details on that in Wednesday’s Fed edition of Wall Street Lunch.

This morning, the risk-on move continues. Index futures are in the green, led by Nasdaq 100 futures (NDX:IND).

Rates continue to slide following the Swiss National Bank cut rates for the first time in nine year. It lowered its benchmark rate to 1.5% from 1.75% and slashed forecasts for inflation. The 10-year Treasury yield (US10Y) is back below 4.25%.

Among premarket movers, Broadcom (AVGO) is up following the company’s announcement of its latest artificial intelligence infrastructure offerings at an investor meeting. Executives emphasized the need for a network-centric platform based on open solutions to handle the increasing demand for generative AI clusters.

And Li Auto (LI) is under pressure after the company revised its 1Q24 delivery outlook due to lower-than-expected order intake. It now expects vehicle deliveries to be between 76,000 and 78,000, down from the previous estimate of between 100,000 and 103,000.

We wrap up with today’s economic calendar

• 8:30am Initial Jobless Claims and March Philly Fed
• 9:45am PMI Composite Flash for March
• 10:00am February Existing Home Sales and February index of Leading Indicators

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