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Fanatics in talks to acquire BetParx sportsbook

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New York, NY. – December 7th. Portrait for a profile on Fanatics founder & CEO Michael Rubin at his office in downtown NYC.

The Washington Post | Getty Images

Fanatics is in discussions to acquire the BetParx sportsbook, as the sports merchandising company looks to take a bigger position in sports betting, according to people familiar with the matter.

A deal hasn’t been reached, although Fanatics signed a letter of intent to buy the sportsbook, said the people, who weren’t authorized to speak publicly on the matter. A deal price couldn’t yet be learned, and the discussions may not result in an agreement, the people added.

Representatives for Fanatics and BetParx declined to comment.

The BetParx app was launched last year by Greenwood Gaming & Entertainment, the parent company of Parx Casino in Pennsylvania, and Playtech, an online gambling software supplier. BetParx is also available in New Jersey, Pennsylvania, Maryland, Michigan and Ohio.

Fanatics has considered an initial public offering, but has been looking to complete an acquisition in the gambling space, among other possible deals, ahead of going public, the people said.

The company would be entering a crowded marketplace. Dozens of sports-betting operators have emerged in recent years, including Flutter-owned FanDuel, DraftKings, Caesars and BetMGM, which is co-owned by MGM Resorts and Entain. As the space has grown more competitive, smaller players have struggled, with some, like MaximBet, ceasing operations recently.

Fanatics has been seeking a deal in the sports betting space for some time. Last year, it had been in discussions with small gambling operator Tipico, CNBC previously reported.

The company is opening Fanatics Sportsbook at FedExField, the stadium of the NFL’s Washington Commanders. Fanatics also said it received a temporary license to operate in Massachusetts, and plans to partner with Plainridge Park Casino, which is owned by Penn National.

In October, Fanatics said it hired Andrea Ellis as chief financial officer of its betting and gaming division.

Last year, Fanatics’ billionaire executive chairman Michael Rubin sold his 10% stake in Harris Blitzer Sports Entertainment, the owner of the Philadelphia 76ers and New Jersey Devils, allowing Fanatics to enter the gambling space. NBA rules prohibit team owners from operating a gambling platform.

Fanatics raised $700 million in capital late last year, which the company planned to use toward potential mergers and acquisitions across the collectibles, betting and gaming businesses, CNBC previously reported.

The fresh round of capital brought Fanatics’ valuation to $31 billion.

Rubin’s company has been rapidly growing recently, pushing past solely being an online sports merchandise business. The company estimates its revenue for Fanatics, including its Lids segment, will be approximately $8 billion in 2023.

The company has been growing through acquisitions. Last year, it expanded its footprint in the collectibles business with a $500 million acquisition of Topps. It also bought clothing brand Mitchell & Ness in partnership with LeBron James and Kevin Durant.

–CNBC’s Jessica Golden contributed to this article.

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PayPal, Airbnb, Match Group, Caesars and more

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A sign is posted outside of the PayPal headquarters in San Jose, California.

Justin Sullivan | Getty Images

Check out the companies making headlines in extended trading.

Match Group — Shares of the dating app operator tumbled as much as 23% after the company reported revenue of $795 million for the second quarter, compared with FactSet estimates of $803.9 million. Match also issued weak guidance around adjusted operating income and revenue for the current quarter.

Solaredge Technologies – The solar-power stock tanked nearly 13% in after-hours trading following disappointing quarterly results. Solaredge reported an EPS of 95 cents, below analysts’ expectation of 88 cents per share, according to FactSet. Revenue also came in shy of estimates.

PayPal — The payments giant’s shares soared 11% after hours following stronger-than-expected second-quarter results and an increase in its forecast. PayPal also revealed it has entered into an information-sharing agreement with Elliott Management.

SoFi — Shares climbed more than 7% after the personal finance company reported a beat on the top and bottom lines. “While the political, fiscal, and economic landscapes continue to shift around us, we have maintained strong and consistent momentum in our business,” SoFi CEO Anthony Noto said in a statement.

Airbnb — Shares of Airbnb fell about 10% in extended trading after the vacation home rental company posted weaker-than-expected revenue for the second quarter. The company also reported more than 103 million booked nights and experiences, the largest quarterly number ever for the company but short of StreetAccount estimates of 106.4 million.

Advanced Micro Devices — AMD’s shares fell nearly 5% despite reporting strong quarterly earnings and revenue, after the chipmaker issued a weaker-than-anticipated third-quarter forecast. The chipmaker said it expected $6.7 billion in revenue during the current quarter, plus or minus $200 million. Analysts expected $6.83 billion.

Caesars Entertainment — The casino company lost about 2% after it reported a quarterly loss of 57 cents per share, which was 74 cents lower than analysts had expected. It also reported a Caesars Digital loss of $69 million, compared with $2 million for the comparable prior-year period.

Robinhood — Robinhood slid about 2% after reporting it will cut its headcount by some 23%, after previously laying off 9% in April, and posting a decline in monthly active users and assets under custody for the second quarter. The investing app operator released its results a day ahead of schedule.

Starbucks — The coffee chain saw shares edge higher by more than 2% after it reported better-than-expected quarterly results, despite lockdowns in China weighing on its performance. Within the U.S., however, net sales rose 9% to $8.15 billion and same-store sales grew 3%.

— CNBC’s Sarah Min and Yun Li contributed reporting.

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Business

Kohl’s, Micron, Apple and more

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Check out the companies making headlines before the bell:

Kohl’s (KSS) – Kohl’s tumbled 17.9% in premarket trading after the retailer confirmed an earlier CNBC report that it ended talks to be bought by Vitamin Shoppe parent Franchise Group (FRG). Kohl’s said the deteriorating retail and financial environment presented significant obstacles to concluding a deal. It also cut its current-quarter outlook amid more cautious consumer spending.

Micron Technology (MU) – Micron slid 4.6% in the premarket despite reporting a better-than-expected quarterly profit. The chip maker’s shares came under pressure due to a lower-than-expected sales outlook, stemming from weakening overall demand.

Apple (AAPL) – J.P. Morgan Securities analyst Samik Chatterjee reiterated an “overweight” rating on Apple, saying he is not as worried about Apple’s prospects as others. The firm has a December price target of $200 per share, $46 higher than its Thursday close.

China-based electric vehicle makers – Li Auto (LI) delivered 13,024 vehicles in June, a 69% year-over-year increase for the China-based electric vehicle maker. Rival Xpeng (XPEV) delivered 15,295 vehicles in June, a 133% jump from a year earlier. Nio (NIO) delivered 12,961 vehicles in June, up 60% from a year ago. Li Auto added 1.7% in premarket action, Xpeng rose 2.1%, and Nio gained 1.8%.

Meta Platforms (META) – The Facebook parent is slashing hiring plans and bracing for an economic downturn. In an employee question-and-answer session heard by Reuters, CEO Mark Zuckerberg said it might be “one of the worst downturns we’ve seen in recent history”.

Caesars Entertainment (CZR), MGM Resorts (MGM) – The resort operators reached tentative contract agreements with Atlantic City casino workers, avoiding what might have been a costly strike during the busy July 4th holiday weekend.

FedEx (FDX) – FedEx lost 2.1% in the premarket after Berenberg downgraded the stock to “hold” from “buy”, pointing to near-term earnings risks which could halt a recent rally in the stock.

Coupang (CPNG) – The South Korean e-commerce company saw its stock rise 1.7% in the premarket after Credit Suisse upgraded it to “outperform” from “neutral”. The firm feels Coupang’s bottom-line turnaround prospects are underappreciated by investors.

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Casino stocks take a hit as inflation rocks economy

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Shares of casino companies have plummeted even as inflation has soared at rates not seen in four decades and fears of a recession rattle consumers and investors alike.

Caesars Entertainment stock has plummeted 50% so far this quarter. Bally’s has dropped 40% over the same time period, and Penn National Gaming and MGM Resorts shares have declined 35%. To compare, the S&P 500, which recently entered a bear market, is down nearly 19% this quarter.

Yet, the nation’s commercial casinos just had their best April ever, according to the American Gaming Association. The industry posted $4.99 billion in revenue, up 12.4% year over year. It’s the second-highest grossing month ever, following March of this year.

On earnings calls in April and May, casino executives collectively denied seeing any slowdown in customer spending, in spite of soaring gas, housing and food costs, except in the very lowest demographic of customer.

In a note published this week, Jefferies gaming analyst David Katz wrote that meetings with management teams in Las Vegas provided “evidence of the dichotomy between the current operating strength and the markets’ expectation of a recession.”

Danny Owens of Sacramento, Calif. plays a slot machine in downtown Las Vegas, Nevada, June 4, 2020.

Steve Marcus | Reuters

Katz wrote that MGM, Caesars, Wynn Resorts, Boyd Gaming, Golden Entertainment, and Red Rock Resorts, which owns Stations casinos, say business levels continue to be “very strong” in the second and third quarter, with demand pricing and volume levels above 2019 and strong bookings into 2023, as conference business and international travel rebound in Las Vegas.

But Derek Stevens, owner of three downtown Las Vegas properties, including Circa, is telling a different story. In April, he told CNBC he was beginning to see the impact from inflation based on the amount of cash being withdrawn from casino ATMs.

There has been no letup since then, he told CNBC this week.

“It’s just really accelerated,” Stevens said. “Every weekend has been worse than the prior weekend.”

He described it as a downward spiral: Bars have suffered the biggest percentage decline, and gaming has seen the biggest impact as slots and table games have experienced a slowdown.

And yet, Stevens said, demand for travel is still there: Reservations at his Las Vegas hotels are holding steady, without any room discounts. Hotel guests are limiting their spending elsewhere, he added, noting that customers are spending less on restaurants and extra amenities at the pool and other discretionary items.

“If you’re on the West Coast, you might have felt it a little bit quicker because gas prices,” Stevens said, referring to California’s super-high fuel costs. “You can immediately see it in discretionary consumer spending.”

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Business

Lowe’s, Virgin Galactic and more

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A Lowe’s hardware store in Philadelphia.

Mark Makela | Reuters

Here are the stocks making the biggest moves midday:

Lowe’s – Shares of the home improvement retailer added 3.5% after the company reported quarterly results that beat top- and bottom-line estimates. Lowe’s also issued upbeat full-year guidance, citing continued demand for tools and building materials.

Tupperware Brands – The stock fell 4.9% after the kitchen storage maker reported an earnings miss, citing challenging operating conditions. The company reported an adjusted profit of 38 cents per share, falling short of analysts’ estimates by 14 cents. Revenue was above Street forecasts.

Palo Alto Networks – The cybersecurity software company’s shares rose more than 3% after beating earnings estimates by 9 cents with adjusted quarterly earnings of $1.74 per share. The company also topped revenue estimates. Palo Alto also gave a better-than-expected outlook.

Virgin Galactic – Shares of the space exploration company surged nearly 13% after Virgin reported a smaller-than-expected loss for the fourth quarter. Virgin also said that it expects free cash flow for the first quarter to be between negative-$75 million and negative-$85 million and that it should have a spaceship enter commercial service in the fourth quarter.

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TJX – Disappointing fourth-quarter results, particularly in international markets, sent shares of the retailer down about 1%. The company reported 78 cents in earnings per share on $13.85 billion in revenue. Analysts surveyed by Refinitiv were looking for 91 cents per share on $14.22 billion in revenue.

Caesars Entertainment – The casino company’s stock rose nearly 8% despite a weaker-than-expected earnings result for the fourth quarter. The company’s CEO said on a conference call that Caesars will spend less on advertising going forward, a key source of concern in the mobile and sports betting space.

Cadence Design Systems – The software stock jumped more than 6% after Cadence reported stronger-than-expected earnings and revenue for the fourth quarter compared to estimates from FactSet’s StreetAccount. The company’s forward guidance for the first quarter and full year also topped estimates.

Tenneco – Shares of the auto supply manufacturer jumped more than 90% after Tenneco announced that it had accepted a takeover offer from Apollo Funds in a deal valued at $7.1 billion.

Kodiak Sciences – Shares of the biotech company tanked 79% after Kodiak announced that a drug aimed at improving vision in patients with macular degeneration failed to meet its primary endpoint in a clinical trial.

— CNBC’s Tanaya Macheel and Maggie Fitzgerald contributed to this report.

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Lowe’s, Tenneco, Tupperware and others

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Check out the companies making headlines before the bell:

Lowe’s (LOW) – Lowe’s shares added 1.6% in the premarket after the home improvement retailer beat top and bottom-line estimates for the fourth quarter. Lowe’s earned $1.78 per share, 7 cents above estimates, and issued upbeat full-year guidance as demand for tools and building materials remained elevated.

Tenneco (TEN) – The automotive components maker agreed to be acquired by affiliates of Apollo Global Management (APO) for $20 per share in cash, compared with Tenneco’s Tuesday close of $9.98 per share. The deal is expected to close during the second half of this year. Tenneco soared 91.7% in premarket action.

Tupperware (TUP) – The maker of home storage products saw its shares slump 3% in the premarket following its quarterly earnings report. Tupperware’s revenue was above Street forecasts, but its adjusted profit of 38 cents per share missed estimates by 14 cents amid what the company called “challenging operating conditions.” Tupperware noted it saw both top and bottom-line growth in 2021 despite those challenges.

Palo Alto Networks (PANW) – The cybersecurity software company beat estimates by 9 cents with adjusted quarterly earnings of $1.74 per share and revenue that topped Street forecasts as well. Palo Alto also gave a better-than-expected forecast, and its shares rallied 7.8% in premarket trading.

Virgin Galactic (SPCE) – The space tourism company’s stock jumped 4.1% in premarket action after it reported a narrower-than-expected quarterly loss and improvement in its cash position.

Stellantis (STLA) – The automaker beat its profit targets in the first year following the merger of Fiat Chrysler and Peugeot parent PSA Group. It also said it was realizing projected benefits from that combination sooner than originally expected. Its stock surged 6.3% in the premarket.

GlaxoSmithKline (GSK), Sanofi (SNY) – GlaxoSmithKline rose 1.7% in the premarket and Sanofi was up 1.5% following news that the two companies would submit their Covid-19 vaccine to global drug regulators for approval.

Caesars Entertainment (CZR) – The casino operator’s stock jumped 4.5% in premarket trading after the company reported a 63% jump in revenue compared with a year ago, and a narrower loss.

Mosaic (MOS) – The fertilizer producer’s shares slid 5.6% in premarket action after the company’s quarterly earnings and revenue fell below analyst forecasts. Mosaic said it expects upward pricing momentum to continue.

Quest Diagnostics (DGX) – The medical lab operator’s stock was down 2.1% in the premarket after UBS downgraded it to “neutral” from “buy.” UBS cited risk to meeting management’s earnings target for fiscal 2023, given the company’s level of investment in growth.

Kodiak Sciences (KOD) – The drugmaker said a mid-to-late stage trial of its experimental eye drug failed to show it was not inferior to Regeneron’s (REGN) Eylea macular degeneration treatment. Kodiak tumbled 69.2% in premarket trading while Regeneron jumped 4.5%.

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Business

Moderna, Lululemon, GameStop and more

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Moderna’s sign is seen outside of their headquarters in Cambridge, MA on March 11, 2021.

Boston Globe | Getty Images

Check out the companies making headlines in midday trading.

Moderna — Shares of the drug maker rose more than 7% after announcing it’s developing a two-in-one vaccine booster shot that protects against both Covid-19 and the seasonal flu. The new vaccine, which the company is calling mRNA-1073, combines Moderna’s current Covid vaccine with a flu shot that’s also under development, according to a press release.

Lululemon — The athleisure brand jumped 12% and hit an all-time high after reporting strong second-quarter earnings and said it’s on track to hit a 2023 revenue target ahead of schedule. The company has outperformed other retailers during the pandemic and is poised to continue to even as people return to offices.

GameStop — Shares of the video game retailer fell 2.7% even after the company posted a narrower loss in the second quarter compared with a year prior and rising sales. The retailer was light on providing an outlook for the upcoming quarters and details on its e-commerce transformation, which disappointed Wall Street analysts. The meme stock favored by Reddit traders is still up over 900% this year.

Boston Beer — Shares of the alcoholic beverage lost over 4% after it pulled its earnings guidance late Wednesday amid a slowdown in sales of its hard seltzer brand Truly. That development came just a few weeks after the company blamed weaker-than-expected second-quarter earnings on poor Truly sales, leading it to cut its full-year forecast.

RH — Shares of the furniture retailer popped nearly 8% after beating on the top and bottom lines of its quarterly results. RH earned $8.48 per share, topping estimates of $6.48 per share, according to Refinitiv. Revenue came in at $988.8 million, above expectations of $975.4 million.

Caesars Entertainment — Caesars shares gained 3% after the company announced it will sell the non-U.S. assets of its William Hill sports betting unit to British gambling firm 888 Holdings. The deal is worth about 2.2 billion pounds, or roughly $3 billion.

NetEase — Chinese regulators summoned NetEase and other gaming companies to remind them of restrictions on game time for children. Shares of NetEase retreated 2.7%.

Analog Devices — Analog Devices shares added 2.8% after the company announced its acquisition of rival chip maker Maxim Integrated Products is expected add to adjusted earnings in 12 months after closing, six months sooner than previously expected. Analog Devices said it expects the acquisition to be neutral to adjusted earnings in fiscal 2022.

Macy’s — Shares of the retailer gained 1.5% after Cowen upgraded the stock to an outperform rating, saying the stock can jump almost 30%. The firm pointed to the retailer’s digital push, as well as product innovation and pricing management as factors that will drive upside. Shares of Macy’s have nearly doubled this year.

Ford — Shares of Ford dipped 1.4% after the automaker said it would end vehicle production in India, costing about $2 billion. The company is shutting down two large plants in the country and about 4,000 people are expected to lose their jobs.

Blade Air Mobility — Shares of Blade surged over 15% after JPMorgan said the aerial ride-sharing company could be the Uber of the skies. The firm predicts an 80% rally ahead for Blade and believes the aerial ride-sharing market could be worth tens of billions of dollars within a decade.

Leslie’s — Shares of Leslie’s rose 2.6% after Stifel initiated coverage of the pool stock with a buy rating. The firm said the stock is currently undervalued as Leslie’s is poised to “build upon its leading market share” in the pool and spa market.

— CNBC’s Pippa Stevens, Yun Li, Maggie Fitzgerald and Tanaya Macheel contributed reporting

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Business

Casino stocks rally as Macau loosens restrictions

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Casino stocks are on a hot streak this week.

Las Vegas Sands, Wynn, Caesars, Penn National Gaming and MGM Resorts have all surged in recent days, getting a big boost Tuesday after gambling destination Macao eased restrictions for visitors from mainland China.

This group has been incredibly volatile over the past 18 months, hit hard by closures and then travel disruptions and uneven traffic during the coronavirus pandemic.

So, is Lady Luck finally on the casinos’ side?

Quint Tatro, president of Joule Financial, says yes … for one stock.

“The easy play is Las Vegas Sands,” Tatro told CNBC’s “Trading Nation” on Tuesday. “It was March of just this year we were on here speaking about their abrupt shift and their sale of all their Las Vegas properties to basically double down and focus on their Asia exposure. At the time, I think it was a big question mark.”

The benefits of that strategy now make more sense to Tatro in light of China’s reopening and Macao’s rebound. Las Vegas Sands announced in the first quarter that it would sell its Vegas properties including its Venetian Resort for a total of $6.25 billion.

“It still has a difficult balance sheet, it’s not the greatest balance sheet, but they do have $2 billion now in unrestricted cash that they can put where they see the best opportunity,” said Tatro. “If this [rebound] is legit and we start to see a resurgence in the casino space, I think Las Vegas Sands is the play here.”

Las Vegas Sands has tumbled 36% from a March high. It is down 28% for the year.

JC O’Hara, chief market technician at MKM Partners, said the downturn in the China-exposed casino names has him wary. Instead, he prefers DraftKings, a gambling stock that he says looks to have stabilized after its pullback.

“It is reestablishing itself in an uptrend, breaking back above the 150-day moving average. So rather than trying to bottom pick some of these names and make calls on economic data, let’s look where the price action is positive and that’s DraftKings,” he said during the same interview.

O’Hara targets the March highs above $74 as a promising target price and sees a band of support at $50. DraftKings closed Tuesday at $56.47.

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