Archer Daniels Midland (ADM) shares plunged nearly 25% on Monday following an accounting investigation into its nutrition division by the Securities and Exchange Commission (SEC).
Fuel distributor Sunoco (SUN) will acquire NuStar Energy (NS) in a $7.3 billion deal that includes assumed debt.
Online video platform Rumble (RUM) is seeing its stock soar after news of its partnership with Barstool Sports.
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor's note: This article was written by luke carberry morgan.
video transcript
– We also have individual students today. Start with ADM stock. Shares plunged today after the company suspended its chief financial officer amid an investigation into its accounting practices and cut its earnings outlook.
So it was a tough day for someone who had thought of this name, obviously Julie, for a long time, dropping more than 20%. So it suspended its CFO, who was there to lower the company's profit outlook starting in 2022, and the investigation appears to be into the company's accounting practices. SEC asking questions.
ADM said this relates to what it calls an intersegment transaction involving its nutrition division, which likely produces ingredients for human and animal food. Companies that claim to be cooperating with the SEC.
By the way, this nutrition business we're talking about here, Bloomberg has a great article on this. It was challenging. Operating profit in 2023 was already expected to fall by about 20%.
Lowest price in about 3 years. And analysts say the research could cause the division's profit margins to fall further.
– right. that's right. So it's just bad news on top of bad news here. So the company was developing its nutrition business. And one of the sacrifices is a diminished taste for meat substitutes. This is because they manufacture alternative proteins and certain core ingredients that are included in some of the alternative meats. That's one of the reasons it didn't work.
But, you know, Wall Street doesn't like to see investigations into accounting practices. So that's really, really driving the huge drop in stock prices today.
– And just like the analysts said, they got to work. So today, a lot of companies took out their red pens and made a number of downgrades on this company name. By the way, the target price has become neutral to 67, including Goldman Sachs.
– Okay, let's talk about trading here too. Fuel distributor Sunoco announces final deal to acquire new Star Energy. This is an all-stock transaction with a total value of approximately $7.3 billion, including assumed debt.
We've been seeing a lot of oil and gas deals lately. In the case of Sunoco, this is a diversification play, right? It is a fuel distributor and owns many gas stations here.
And in this case, the company will be transporting and storing even more crude oil. So, I would like to expand the scope a little here. That's because Nustar owns pipelines and terminals for oil and other fuel-related products in the West Coast and Midwest.
Sunoco is looking to diversify its holdings again with this transaction. But we've seen a lot of shale deals recently, for example.
– surely.
– So this is a slightly different flavor. But it will be interesting to see another energy play.
– Well, there was an interesting note from Mizuho's team regarding the trade and they said they had mixed reactions. They told their customers that. Yes, this is a leap forward in the company's midstream ambitions, offering commercial synergies and conservative cost synergies.
But they told the client that 10% plus an increase after three years was not enough for a deal of this size. So they reiterated their neutral claims about the name.
Finally, check it out here. Let's take a look at Rumble's stock price. The video platform is on the rise after announcing a partnership with Barstool Sports.
The partnership will give Rumble users access to all Barstool Sports content on the platform, including live streams here. This was announced by Dave Portnoy's media company Barstool Sports. This sounds like this kind of partnership with Rumble, the Peter Thiel-backed platform we know.
So, Julie, it sounds like Rumble users now have access to Barstool content. And a press release Barstool states that viewership has increased by nearly 200% for her. Over the past three years, podcasts have been downloaded approximately 1.6 billion times.
It also appears that there will be an agreement regarding advertising between the two. Rumble went public in 2022 through a blank check merger, but it hasn't been easy to get off the ground here. This is still a significant drop from its closing high.
– Yeah. And this… I've talked about the stock universe of Trump memes before. I think Rumble is one of them. Yes, we have this news today and it is boosted.
But that also doesn't hurt the halo we've seen with other Trumps, the halo that we talked about earlier in the show that Trump hates meme stocks. Like Phunware, D is a big mess.
Because Rumble is seen as a more right-leaning alternative to YouTube. The way it describes itself is that it advocates for technology that is immune to cancel culture. You can see why there's such an uproar now that DeSantis has withdrawn from the race.
– Well, you can definitely see some cultural similarities here. You know, Rumble, anti-YouTube, anti-cancel country, anti-establishment, and in some ways aligns with Dave Portnoy's brand.
