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Good morning.
Would you like Baconator Fries with that short squeeze? The Nasdaq halted trading in fast-food chain Wendy’s stock for the second day in a row on Thursday, as retail traders tried to make it the latest meme stock. By piling into a stock, traders can inflate its price and force short sellers who bet against it to buy back shares to cover their positions, which can drive prices up even more.
The flurry of Wendy’s activity is, of course, not driven by fundamentals, instead stemming from a viral post on the subreddit r/WallStreetBets that implored the rabid army of day traders to “save Wendy’s.” Shares of the company tumbled nearly 50% in the past 12 months heading into the week, while short interest jumped from about 10% of its public float to about 30% over the same period. Whichever end of the trade you’re on, stay frosty out there.
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And then there were two.
A pair of high-profile promotions at JPMorgan Chase on Thursday appeared to narrow the long-running Jamie Dimon succession race to just two candidates: Doug Petno and Troy Rohrbaugh, now co-presidents and CEOs of the bank’s commercial and investment division and consumer division, respectively. The shake-up seems to have knocked at least one other frontrunner out of contention. One thing we know is there isn’t room for two kings to sit on one Iron Throne, and that’s assuming, you know, Dimon actually decides to give up the job he’s held for 20 years running.
Chase Your Dreams
In fact, even when Dimon does relinquish the CEO gig, the small council chamber inside the Red Keep might feel a little crowded: He has already promised to stick around in an advisory role as executive chairman instead of disappearing to a pristine beach somewhere. Dimon wouldn’t be the only longtime leader of an iconic American company to do so, and in the meantime, the 70-year-old is holding his cards pretty close to his chest. In 2024, America’s Banker suggested he had less than five years at the helm. In a March interview, he told Barron’s that, “board willing,” he aims to serve at least three or four more years.
Either way, Petno and Rohrbaugh, ages 61 and 56 respectively, will have some runway to make their final push for the job, with both now the sole leaders of their own considerable fiefdoms:
- Rohrbaugh is stepping over to the consumer division after spending years leading investment banking and trading. The Main Street division accounted for roughly 40% of the company’s revenue in the first quarter, and 30% of its net income, though it may be the unit most susceptible to disruption in the fintech and AI age.
- Petno, whose background is in oil and gas investment banking, is now the sole leader of the Wall Street side of the company. That unit continues to be JPMorgan’s major growth engine, with its $9 billion in net income in Q1 marking a 30% year-over-year increase.
At the same time, Marianne Lake, the consumer business head and former finance chief once viewed as a likely frontrunner, announced her retirement on Thursday after it became apparent she would not get the top job, sources told The Wall Street Journal.
  Stress Positions: Not that it needs saying, both men will inherit a bank far larger than the one Dimon took over two decades ago; its market cap, currently $897 billion, has climbed about 437% in that time. The bank also, unsurprisingly, recently aced the Federal Reserve’s annual stress tests, prompting the announcement of $50 billion in share buybacks.
Written by Brian Boyle
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Photo via Fisher Investments
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Darmstadt, Germany-based Merck is taking a trip to the Twin Cities to buy Minnesota-based Bio-Techne. The $11.3 billion deal would be Merck’s biggest acquisition in more than 10 years as the drugmaker expands under new CEO Kai Beckmann.
Bio-Techne spiked nearly 20% Thursday on the Nasdaq, while Merck KGaA, which hails from Germany as opposed to the US’s Merck & Co., popped about 5%. (While the companies share a name and historical roots, they’ve been separate businesses since the early 20th century and are competitors.)
The acquisition would strengthen Merck’s foothold in life sciences, especially drug discovery and gene therapy. Merck, meanwhile, could give Bio-Techne the backing it needs to compete in a consolidating sector.
David Seeks Leg Up From Goliath
The biotech sector surged during COVID-19, and Bio-Techne benefited, with its shares spiking throughout 2020 and peaking in 2021. Its focus on medical research and diagnostic tools positioned it to benefit from the pandemic. But as the world healed, capital pouring into life sciences dried up. Bio-Techne shares were sitting at less than half their 2021 record before yesterday’s boost.
Big Pharma is taking the opportunity to scoop up smaller players struggling to stay afloat in the less-liquid environment:
- Merck’s deal comes after activist investor Ananym Capital Management ramped up pressure last week on Bio-Techne to consider a sale to a pharma giant. Ananym argued it could leverage a larger peer’s resources to scale its sales faster and cheaper. Beckmann said the sale had been stewing for longer than that. Merck expects the tie-up to yield about $159 million in cost savings over three years.
- The Merck chief expects more consolidation to follow. That’s already been happening throughout the industry, with fellow biotech companies Thermo Fisher Scientific and Danaher spending billions to scoop up life sciences specialists earlier this year.
Buying Bio: Taking over Bio-Techne would expand Merck’s share of the life sciences market and its overall US footprint (it would be one of Minnesota’s largest-ever acquisitions). Bio-Techne could give Merck an edge in drug discovery with its vast catalog of proteins and antibodies used for research, as well as lab tools — a $27 billion market opportunity, according to Merck’s Life Sciences chief. Last year, Merck bought SpringWorks Therapeutics for $3.9 billion, making another inroad into a US market that Beckmann has called very attractive. But other companies aren’t sitting still in the meantime, with biotech mergers and acquisitions showing signs of building momentum this year.
Written by Jamie Wilde
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Photo via Sparrow
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Lockheed Martin, the world’s largest defense contractor, climbed 2.8% on Thursday after scoring billions in new revenue from US taxpayers over the next six years.
But while revenue is ramping up, so is pressure from Washington. In return for the promise of more predictable long-term sales, the Trump administration has pressed defense contractors to expedite production as everything-all-at-once conflicts deplete US weapons stockpiles.
Looking for a Refresh
While President Donald Trump signed an executive order in January that blasted “underperforming” defense contractors for pursuing stock buybacks and paying out large dividends despite being mired in production delays, Defense Secretary Pete Hegseth emphasized in a statement this week that the administration’s strategy is paying off. “Defense contractors are now investing their own private capital in new manufacturing plants and assembly lines, putting hundreds of thousands of Americans to work,” he said. The first contract Lockheed received this week, a six-year, $8.4 billion award announced Tuesday, does just that: The company is expected to expand its capacity to produce Precision Strike Missiles (PrSMs), allowing the Army to buy more. The second six-year contract, worth $35 billion and announced Wednesday, will see Lockheed make hundreds of Terminal High Altitude Area Defense (Thaad) Interceptor missiles.
US supplies of Thaad interceptors, which destroy incoming ballistic missiles up to 125 miles away, have been depleted by the Iran war and other conflicts, making production critical. Last month, the Center for Strategic International Studies estimated it will take three or more years to replenish stockpiles, and Trump’s meeting with the CEOs of Lockheed, Boeing and Honeywell this week made plain that hurdles lie ahead:
- The New York Times reported Thursday that the executives told Trump they want more money for production expansion, and he said the administration is trying to drum up funds.
- For a start, the White House asked Congress on Wednesday for $87.6 billion in supplemental spending, most of it Iran war-related.
Full Speed Ahead: Trump, meanwhile, said automakers Ford and General Motors are in talks with defense contractors about repurposing manufacturing capacity for weapons production. The two are also pursuing direct defense contracts with European and North American governments.
Written by Sean Craig
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- Seeking Long-Term M&A Partner: The dating app Bumble is working with Morgan Stanley on a potential sale amid a slowdown in the online dating business.
- The Good News: An IMF spokesperson said Thursday the US economy is strengthening, with the agency revising its first quarter GDP growth for the country to 2.1% from 1.6%.
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Disclaimers
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