ADM, Sunoco-NuStar Energy deal, Rumble: Trending Tickers

Archer-Daniels-Midland (ADM) shares plunged by nearly 25% on Monday amid a Securities & Exchange Commission (SEC) probe into its Nutrition segment's accounting.

Fuel distributor Sunoco (SUN) is on track to acquire NuStar Energy (NS) in a $7.3 billion deal, including any assumed debt.

Online video platform Rumble (RUM) sees its stock surge on news of entering into a partnership with Barstool Sports.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

- You also get some individual takers today. We're going to start with ADM shares. They plunged today after the company slashed its earnings outlook suspended its chief financial officer this coming amid investigation into the company's accounting practices.

So this was a rough day if you were long this name, obviously, Julie, down more than 20%. So suspending the CFO, he had been there since 2022 to cut their earnings outlook and what is now this investigation it sounds like into their accounting practices. The SEC asking questions.

ADM saying this is about what they refer to as inter-segment transactions involving its nutrition unit, which I guess, makes ingredients for human and animal foods. Companies saying it's cooperating with the SEC.

Bloomberg has a good write up on this, by the way, knowing that with this nutrition business that we're talking about here. It's been challenging. Operating income was already forecast to drop about 20% in 2023.

Lowest in about three years. And analysts now saying with this investigation, we could see even lower margin for the business segment here.

- Right. Exactly. So it's just sort of bad news on top of bad news here. The company had been expanding that nutrition business, right? And it was one of the things that's been a victim of is the falling taste for alternative meats because it makes sort of core ingredients that go into some of those alternative proteins and alternative meats. So that's one of the reasons it hasn't been doing well.

But, you know, Wall Street doesn't like it when you see an investigation into accounting practices. So that really, really triggering just a huge, huge decline in the shares today.

- And analysts to your point, they got to work. I mean, a lot of firms took out their red pens today number of downgrades on this name. Including, by the way, looks like Goldman Sachs, they went to neutral price target goes to 67.

- All right, let's also talk about a deal here. Fuel distributor, Sunoco, announcing a definitive agreement to acquire new star energy. It's an all equity transaction valued at about $7.3 billion, including assumed debt.

We have seen a lot of oil and gas deals recently. In the case of Sunoco, this is a diversification play, right? It's a distributor of fuel i.e. it owns a lot of gas stations here.

And, in this case, it is going to now be doing more crude oil transportation and storage for the company. So sort of trying to branch out a little bit here. Because Nustar owns pipelines and terminals for oil, as well as for other fuel related products in the Midwest on the West Coast.

So Sunoco trying to, again, diversify its holdings by making this transaction. But we've seen a lot of, for example, shale deals as of late.

- For sure.

- And so this is a little bit of a different flavor. But just interesting to see another energy play.

- Yeah, an interesting note to buy on the deal from the team at Mizuho said they had a mixed reaction. That's what they told their clients. Yes, it's a leap in the company's midstream ambitions, offers commercial synergies, conservative cost synergies.

However, for a deal this size, they told their clients, 10% plus accretion three years out strikes us as wanting. So they reiterated a neutral call on that name.

Finally, one to check out here. Let's take a look at shares of Rumble. They are skyrocketing as the video platform announcing a partnership with Barstool Sports.

The partnership would provide rumble users with access to all Barstool Sports content on the platform, including live stream here. So this is Dave Portnoy's media company Barstool Sports announcing. It sounds like this kind of partnership with Rumble, which is the platform backed by we know Peter Thiel.

So it sounds like, Julie, like it means rumble users now have access to Barstool content. And the press release Barstool noted it's grown its audience by close to 200%. Over the past three years, it's reached about 1.6 billion podcast downloads.

And there's also apparently going to be this advertising arrangement between the two. Rumble remember went public through blank check merger in 2022 has not been easy sledding here though for that. It is still down hard from its all time closing high.

- Yeah. And this is-- we talked about the Trump meme stock universe earlier. Rumble, I would say is in that as well. So, yes, it has this news today that's giving it a boost.

But it also doesn't hurt the halo that we have seen for the other Trump-- Trump averse meme stocks that we talked about earlier in the show. D whack up, as well as Phunware.

Rumble, because it's seen as a more right leaning alternative to a YouTube. What it says the way it describes itself is it claims technologies that are immune to cancel culture. So you could see why it also gets that kind of bump with DeSantis bowing out of the race.

- Yeah, you've got to see the cultural similarities here. You know, Rumble, anti YouTube, anti cancel country, anti-establishment, and kind of aligns with Dave Portnoy's brand.