The Global Rate Rise and the Battle for Warner Bros. Discovery. 12/8/25

0:00Live in the NASDAQ market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on top tonight. Another twist in the battle for Warner Brothers. Paramount Skydance making a hostile bid for the media company. Can it beat out Netflix? And what will it mean for the streaming space? And the great rate rally yields from the U.S. to Germany to Japan are on the rise. But that signals about the Fed's next move. And are markets too optimistic about a rate cut? Plus, a big win for NVIDIA. The news that had structured therapeutic shares nearly doubling in size. And clean up on aisle 10.

0:30Can Staples stock, Procter & Gamble rebound for more than two-year lows? We'll debate that. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Courtney Garcia, and Guy Adami. We'll get to the global rise in rates in just a few minutes, but we start off with that new twist in the battle for Warner Brothers. Paramount Skydance coming in with a new$30 share bid to acquire the entirety of Warner Brothers Discovery. CEO David Ellison telling our own David Faber this morning that the deal is better than the offer Netflix made on Friday.

1:00Our deal is pro-consumer. It's pro-creative talent. It's pro-competition. And we believe that when you actually, to further contextualize, there are$30 in cash, or sorry,$30 a share, is basically$17.6 billion in cash more than the$23 in share that they signed up. Netflix co-CEO Ted Sarandon speaking at a conference this afternoon saying he is, quote, super confident his company will end up the winner. But shareholders don't seem too excited about the deal. Netflix stock has lost nearly 12 percent in just last week. So how do we trade this year? On Friday, we had the dynamic where we had the two bids.

1:40We didn't have a higher offer from Paramount Skydance yet. And you guys were wondering, since you're both in WBD, why isn't WBD higher? Well, why weren't my options moving? And so I'm long calls and the stock. And I added the calls, you know, sometime early last week when I sensed that this was going to be a bidding war. And obviously there is an element in terms of the shares where there's some part of this that's still going to probably hang open until we don't know where this is going to go. We don't know where the Warner Brothers board will decide. We don't know where the regulators will be.

2:14So there's there's that period where my January 16 expiry might actually run out of some steam. And ultimately, there's so much value that you can try to break down in the company. I actually think this deal, I think the Paramount offer is clearly, excuse me, the Peace Sky offer is clearly superior. I do think it's fascinating to hear like we've got, you know, Warner Brothers, you know, basically saying we've got support of the board. Paramount saying we've got support of the president. And you have a lot of different dynamics here in terms of also just what are they really valuing the core business for or the streaming business, I should say, and that of the entire company.

2:54Because it seems like there's a 20, almost six billion dollar valuation for something that the Ellison, David Ellison is saying is, you know, we're putting a dollar of value on that in terms of the share price. What do you call, Karen? Risk arbitrageur. It's a French word, not risk arbitrageur. arbitrageur. So it's 27 and, you know, it's not trading up to 30. It's not trading up to 30. Which speaks volumes, I think, in terms of how this deal is being perceived. Yes, but it's not. I think what it is, the nuance is the time to close is so long, right? So nobody knows how long it'll be. And we've got a bunch of, you know, potential antitrust for either side.

3:34I understand the Paramount argument. Paramount thinks they have the upper hand in that regard. But so you have a long time to go. That generally doesn't trade well. Arms are very short term focused. And so I think that I don't think it's over. I think that the background to the offer, which was a super interesting, paramount view of what happened and how they were sort of shunted to the side. I thought it was really interesting. The one thing I would argue is they said they didn't even let us come with our best and final. I don't know why they didn't come up with their best and final at the time where all the bids were due.

4:13I mean, in the UK, if you say best and final, like, you know, you have one shot. That's it. And so that was sort of interesting to me. I think Netflix, I think they come back with something. And I think what they can do, we now see their stock is trading below the bottom of the collar means that deal is not worth quite as much as they said. So that's a weakness in their deal. But they I mean, they're Netflix. They can put a wider collar on. They can put up more shares. They could do a lot of different things. I think we'll see them come back. And then obviously, if Paramount had said, well, we do it, we didn't even come with our best and final.

4:48We know they have more there. So I think it's going to play out kind of slowly, though. Yeah, I don't know if$30 is January. I don't know. It's the ceiling here, but it's a short term ceiling. So then you say, what's the risk reward? So two and a half dollars for the upside. So it's at 10 percent ish downside. I mean, this started about 18 bucks. I don't think it's going back to 18. But could you see it in the low 20s again? Yeah. I mean, if some of the rhetoric around this heats up in terms of people backing away, yeah, it could happen. I think Netflix is the play, though. And you look at Netflix now, traded two times normal volume.

5:17You're getting it at a valuation you probably haven't seen in a while. I think a lot of the concern about growth is sort of dismissed or now in the stock. And I think that whole concern about them buying WBD and maybe having to pay up, I think that's more than in the stock now. So I think Netflix, given the fact that we traded down to the prior all-time high in February and seemingly are holding, is interesting to me. You agree, Court? Yeah, well, I think what it's going to come down to is what are the cable channels really worth? And I think that's what people are trying to figure out here, because if they are worth more than$2.25 a share, then it makes more sense for Netflix.

5:50But as Paramount is arguing, it's not worth that, in which their deal is actually better. And they have better regulatory approval process, so they say. But I think it's also pretty interesting here because when you take a look at it, HBO subscribers have a really large overlap with Netflix. So there actually could be some cost dis synergies there. That is it actually worth Netflix to get this deal? And I think that's what people are questioning right now. So I think a lot of people are actually favoring Paramount, though. I think we're going to have to see how it plays out. As a Netflix watcher.

6:21Yeah, I'm a watcher. I'm a watcher on Netflix. And I think this is, I agree with Guy. I mean, I think the opportunity here is ultimately for Netflix. But this will drag on. And I think Netflix is kind of committed here. But unfortunately, what this has entire process has opened up this concept of Netflix as an asset light business, as a business that seemingly was not necessarily tethered to some of the same dynamics as the rest of the media space, but was a pure streaming play that seemed to also have this content machine that was kind of working. Although as we pulled back kind of the layers here, all we seem to hear over the last week or two weeks is that their licensing of even Warner Brothers type stuff has been a big part of the success at Netflix.

7:00So I think that Netflix will probably trade around here or could trade a little bit lower. And I think it will overhang the stock. I don't think you're going to miss your opportunity. But if this deal, which it won't and can't we explain why, but this deal suddenly went to Paramount tomorrow. Netflix is a buy tomorrow. Yeah, absolutely. In terms of Netflix, though, the more it acquires legacy assets, doesn't that bring down the valuation automatically? So it's a very good question. You have to wonder, though, might the valuation go down not automatically, but over time anyway? Because of slower growth?

7:34Slower growth and maybe more competition. I think we were talking about this on Friday. Is this a defensive? Is it offensive? I think it's somewhat of both. I don't think they're done, but let's let's just say Netflix is, you know what? We're not getting into a bidding war. This was it. That was our best shot. We're done. It's not what Saranda said, though. Right. Right. But let's say they did. The stock, I do think, would pop from here. And then I think there would be some concern. Well, now they got this other competitor who's, you know, pretty big. Not like they are, but could be a real competitive threat.

8:09I don't know. This is classic. This is a great risk. are just, well, you're, you know, if you're for your. What's fascinating about all of this is that, you know, seemingly you could have bought Warner Brothers for one third this amount. Yeah. Or two thirds, excuse me, two thirds less this amount based upon at least the stock market price six months ago. So where was everybody when we were looking around kind of at these assets? And I mean the rest of the media space. And at times we've had these conversations here that there's no question that there is a sum of the parts and that when private equity gets involved in the media space, they're going to find the intrinsic value in these assets.

8:47And guess what? They were cheap. That's why Disney is cheap here. One thing about studio assets, though, I feel like there is an element of ego there, unlike, you know, a pipeline asset or something like that. I feel like studio assets, just to own a studio, right, there's something there. It's somewhat like a sports team, just to, you know, people pay up. For more in Paramount's hostile bid for WBD, Moffitt Nathanson's Robert Fishman joins us now. Robert, great to have you with us. Which bid is superior in your view if you're a WBD shareholder? You guys just went through a lot of the different dynamics that investors are now having to weigh after the hostile bid today.

9:28I would say clearly if you subscribe to the view that global networks have less value, then the Paramount bid on the face of it today is superior. The question that Netflix and investors really need to address right now is what is the true upside potential of owning this asset in terms of all of the better monetization that Netflix is talking about that they can get out of these assets versus where Paramount Skydance is ultimately looking to take these assets. So So to some degree, from the Netflix standpoint and Netflix investors, you have to understand where the companies want to go with this and how much they're willing to dive in to that bidding war that you guys just went through.

10:16So to get at Tim's question in terms of the valuation of WBD, is it that WBD should have never traded as low as it did? And that what we're talking about now in terms of the offers being made, that is really a reflection, a better reflection of the true value of WBD assets? I mean, where are we on the valuation of this property and why Netflix needs to chase after this? Yeah, so we fortunately upgraded Warner Brothers Discovery at the beginning of the year because of this underlying thesis that we had, that the assets and the content and the quality of the content and assets and the premium nature of both really were undervalued.

10:58valued. And all it does take to what we've just kind of lived through is that one first bid to really unlock the value. So clearly investors before this were not giving the company full credit or really much credit for the strategy that they were going on. But as soon as you saw there was this interest in terms of this bid that Peace Guy brought to the table unsolicited, That's how the value completely got unlocked here. So we're now at the point where there is this essentially bidding war that's about to take place. And how that plays out remains to be seen. But as you mentioned before, Peace Guy David Ellison has announced that this is not his last and final offer.

11:46So we have to see if Netflix and how the different shareholders respond to today's events. So, Robert, Tim brought it up. Can Netflix be a winner here if they lose the bidding war? Forget about bidding war. If they just take themselves out of the bidding war, does the stock become a winner? We think the stock would definitely rebound, as you mentioned. And so, again, we've been positive on Netflix since this year as well because of the clear path that they have in terms of monetizing their existing engagement and the potential of growing that engagement through different ways. But ultimately, I think what this raises is concern for the Netflix investor base.

12:30Is this a signal of more defensive nature, given the bid, and whether or not how aggressive they want to be here? But ultimately, we think that the path as a standalone company is a meaningful growth opportunity ahead, and at these levels, you know, not properly reflected. So, Robert, then it brings it back to, again, this intrinsic value dynamic that I'm talking about. It seems like one plus one equals three in this environment where these two assets, strategically, this makes more sense by adding them in. But I want to get back to the rest of the sector that may or may not be trading on this news.

13:06And again, assets that may or may not be fully appreciated either by the market or by other players who now have to move after this deal gets done to one of these two people. Are the assets in the industry that much more valuable? And there are other assets out there that at least could be combined and bolted on. So it comes down to who ultimately perseveres here. If Peace Sky does not end up with these assets, clearly, we believe that they do need additional scale in terms of accelerating their own streaming strategy and getting to the global reach that they're looking for. So, you know, we've talked about before, would they be interested in looking at the NBC Universal assets?

13:52That's an open question. But I do think, you know, we've heard today from Comcast and from others, everyone wants to go at it on their own if they don't persevere. But ultimately, we think that consolidation will continue within the industry in order to help fight that DTC's overall streaming fight against some of the larger digital players. Robert, great to get your thoughts. Thank you, Robert Fishman, Moffitt Nathanson. In terms of managing the trade, Karen, you mentioned that it's not going to make that. It's not going to go higher by that difference between 30 and where it is now for a long time.

14:29Unless they come up with a bid like 34. So in terms of managing the trade, you're in it still because you believe that there will be a higher bid. I think there will be excitement around it for a little while, but it's not the most compelling. As we've described to me, it's not the most compelling. The upside doesn't seem that much. No, it doesn't seem that great. So, you know, I'm lukewarm on this. Well, I'm hanging in. And I thought about trading out of the options today. And I still could do that because I think there's a little bit more of a vol push to the upside here. But as we get back to it, I think ultimately the trade's Netflix.

15:06Meantime, shares of NVIDIA and AMD jumping after hours of president, confirming that he has told China's president Xi Jinping that NVIDIA will be allowed to sell its H200 chips to China. The approach will apply to other companies as well. Let's bring Eamon Javers for the very latest on this story. Amen. Melissa, the news here is we now have a statement from NVIDIA reacting to the president's announcement on social media a short time ago. Here's what NVIDIA has to say about it. They say, we applaud President Trump's decision to allow America's chip industry to compete to support high paying jobs and manufacturing in America.

15:38Offering H200 to approved commercial customers vetted by the Department of Commerce strikes a thoughtful balance that is great for America. Now, NVIDIA not mentioning in that statement, Melissa, the news out of the president's statement, which was that the United States government is going to take 10 percent, 25 percent of this transaction. Take a look at the president's social media post from a short time ago. And what you see is he says, I've informed President Xi of China that the United States will allow NVIDIA to ship its H200 products to approve customers in China and other countries. The president goes on to say that that's going to happen under conditions that allow for continued strong national security.

16:16President Xi responded positively. Twenty five percent will be paid to the United States of America. The president also goes on to say in that lengthy post that other this approach will apply to other companies as well. So I've just sent a text to a White House official to try to understand the White House's legal basis for asserting what is effectively a tax on NVIDIA, that they're going to have to pay 25 percent of the revenue from this transaction to the U.S. government and try to understand a little bit about how that will work and how it will be applied to some of these other companies. But this is a striking deal for NVIDIA and a striking change, I guess you could say, in the way the United States approaches U.S.

17:00companies that are doing business overseas. If they need any kind of approval or license, we've seen the U.S. take equity stakes, and now we're seeing the U.S. take a revenue piece. So selling the H-200 before was a national security problem, but now it's not. And the U.S. government gets 25 percent of sales. Exactly. And now the president said here in the statement that it's to certain customers in China, that there are going to be national security protections vetted by the Department of Commerce, and that other higher level chips will not be part of this deal, notably the Blackwell. But yeah, that's the deal.

17:36You pay 25 percent, you get your transaction. Eamon, thank you. Eamon Jabers from the White House. Of course, it is worth noting that the H200 chip is about 18 months or so behind the most advanced chip. So there is a question as to whether or not Chinese customers will actually want this chip in a robust fashion because some of the competitors domestically may offer a chip that is more advanced. But still, this is a very interesting dynamic given there is no China in any of NVIDIA's forecasts. And it opens a door for, I mean, this is a door opening for future sales of other chips, I think, which is, I think, why you're seeing the pop.

18:09I don't know how you get a 25 % chop on it. I don't know how that structures out. But, you know, I mean, the world we live in, I guess anything is possible. We'll see if this rally in NVIDIA lasts. Obviously, I think a lot of people have been hoping for this for a while. It's a great question how they have this 25%. I don't know if I'm joking or not, but I think they should just continue to sell through Saudi Arabia. and then transgenicists. Which ultimately some of which end up in China anyway or Singapore or whatever the route is. I don't know exactly. It saves us 25%. Yeah, it does save them 25%.

18:41I mean, they did have originally that 15 % agreement, which ended up never going anywhere because they stopped selling. Right. Right. This is unusual, but okay, it's an unusual time. Yeah, and I think, I mean, this is really going to open up an entire market for them, which we just haven't been pricing in. this point. You know, there's starting to be a lot of questions of other companies here domestically who are using TPUs, they're using in-house chips. So will this offset that? Probably. I mean, the demand in China and the outlook there, we'll see how much they can sell. They know it's only to certain companies, so I don't know, like, how big that market is.

19:17But I think it's opening the door to that, and that's what people are optimistic about. I think this is better news for AMD. I think this is better news, and I'm long AMD, but I'm long Nvidia, too. I just think, you know, The MI400 now suddenly can compete with a chip that's 18 months old on this, called this reverse tariff. I think it's interesting. It's one day. It's a couple hours. It's an announcement. We've kind of gotten the sense that this was happening. I mean, I feel like we've heard both parts of this. If the two parts are, yes, you go to China on this chip, and yes, there will be some kind of a slice.

19:52Revenue sharing. A chop. Chop. I like that, too. You get a chop. Wouldn't that happen to AMD also? Why would AMD get to do it? But AMD has more to gain. AMD just has more to gain to be in this game. But what's interesting, again, we're only minutes into this, and even though we've heard, wouldn't you have thought you'd had a much bigger move in NVIDIA on this if suddenly access to China was wide open? I do. And I think we've struggled at these levels. Coming up, the read-through. On interest rates, what is global yields moving higher? And what is signaling ahead of the next Fed decision on Wednesday?

20:24That's next. Plus, Toll Brothers on the move after its latest results, what this quarter's numbers say about the state of the housing market right after this. Welcome back to Fast Money. Rates rising across the globe. Tenured Treasury yields have risen more than 20 basis points just since Thanksgiving. The German bond in JGB is also rising as investors await not only the Fed decision on Wednesday, but news from the ECB as well as Bank of Japan next week. But given the move in yields, have market expectations for rate cuts gotten ahead of themselves? We are seeing this levitation, even though everybody knows, everybody believes that there is Fed dovishness to be had in 2026.

21:00There is the assumption that we are going to get probably two, maybe more cuts. Right. And anything north of two cuts combined with 15 to 25 percent EPS growth, depending on the strategist you talk to, is a tremendous backdrop for equities in 2026, with the exception of the fact that if JGB yields are part of a handful of ingredients, but definitely an important one that pull up global interest rates. And I don't know that. I can tell you one thing as someone that invests in Japan. I've started to change my view on how negative this might be, or in other words, not as negative as I would have thought.

21:33I do think for Japanese equity investors, inflation in Japan is good news. Remember, it's taken you 30 to 40 years to get out of the deflation caused from a credit cancer that eviscerated that market for a long time. I like it for Japanese equities if the yen stays weak because we're concerned about that and yields go higher because they have to pay more to finance their debt. So we have a 10-year Japanese yield. 2 % seemingly is a magic number that people have been talking about for a while now, and each day we get a lot closer. I don't know what it means for Japanese equities. Probably right.

22:04Inflation is a good thing for their market, but I don't think it's great for our bond market. I think it's starting to manifest itself in the TLT. And throw up a chart. I mean, we are four and a quarter is the 20-day moving average in 10-year yields. I think we're going to get down to about 82 or so in the TLT, which gets us north of four and a quarter. And I don't think the equity market's going to like it. So the Fed can knock themselves out this week. They can cut 50 basis points. I think 10-year yields are still going higher. Yeah, I think it doesn't do anything. It's a different market. So I think that, yeah, you're going to have two sort of different messages coming from the markets.

22:39But in terms of the Fed, let's just say the Fed's dovish and they cut 25. And so there are still cuts in play next year. We know that there's going to be a dovish Fed chair installed, whoever it may be. We'll probably advocate for cutting rates. I mean, at that point, do you think, OK, well, there is that sort of push? Or do you think, oh, 10-year yields can do anything they want anyway? So I feel dovish makes 10-year yields higher. Yes. Yes. OK. Right. OK. No. No, so if... Yes, okay. They want to cut rates, but yields can still go higher. Absolutely. Yeah, right. Yeah. But it does allow them to, to the extent that they're funding the deficit at the front end of the curve, that does save.

23:23So that's helpful. But for the equity markets, if we get higher 10-year yields, even if the Fed is cutting rates at the short end. It's no bueno. No bueno, I think. No bueno. It's no bueno. Sorry to get around. This is a program shown around the world, so sometimes we try to be very late. I mean, Timote. Timote Samuel. You know, you can throw that in there, too. Formidable. Coming up, Toll Brothers falling in its latest earnings results. The numbers behind the move. What they mean for the housing trade next. Plus, our next guest says to expect the unexpected in the last few weeks of the year. What could bring volatility roaring back?

24:02That's right after this. Welcome back to Fast Money, an earnings alert on Toll Brother. Shares dropping after the home builder reported a mixed fourth quarter results. CBC's Diana Oleg's got the details on this. Diana. Well, Melissa, the luxury builder came in with an EPS miss and a revenue beat. The miss was partially blamed on the delayed closing of some of Toll's apartment living business announced in September. Home deliveries were stronger than expected, and home sales gross margin was also slightly bigger than expected at 27.1 percent versus estimates of 26.9. Guidance on margins was 26.25 % for Q1 and 26 % for full year.