The Rundown - Reddit Strikes AI Deal with OpenAI, GTA 6 Release Updated to Fall 2025

Episode Date: May 17, 2024

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Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Friday, May 17th. In today's episode, Tesla's board of directors is trying to pay Elon $46 billion, but will shareholders agree? Also, we have new details on the release of Grand Theft Auto 6, and then we tell you the latest on GameStop and why the stock is down big today. Then stick around to the end of the show to hear about McDonald's bringing back a classic this summer to help boost their business. Right, let's go. Well, guys, after hitting record highs on Wednesday, stocks finished lower on Thursday. All three major indices were in the red.

And the day started off pretty nice. In fact, the Dow Jones Industrial Average crossed 40,000 for the first time ever. But that only lasted a few minutes, and by the afternoon, stocks were lower across the board. But again, nobody cares about the Dow, so whatever. By the way, this whole thing about nobody caring about the Dow is starting to get more fans. I saw a Bloomberg article yesterday that called the Dow Jones a meaningless index. So we are adding more people to the movement. Overall, pretty solid week for the stock market,

unless you bought into meme stocks on Tuesday. All three major industries are on track to have a winning week. We haven't talked a lot about crypto on the show lately. Bitcoin hasn't been moving around too much. Well, I did want to bring up some comments that a Fed official made yesterday. Fed official Neil Keshkari, who is the president of the Federal Reserve Bank of Minneapolis, was giving a talk yesterday, and he made some interesting comments about Bitcoin. Neil Kishkari compared Bitcoin to Beanie Babies and meme stocks,

saying that Bitcoin is just a tool for speculation. I mean, he wasn't really holding back. He also said that Bitcoin was not a hedge against inflation. So let's just say he's not a big fan of Bitcoin. But his comments had no impact on Bitcoin's price, though. In fact, Bitcoin rallied a bit yesterday, closing above $66,000 for the first time all month. Neil Kishkari also talked about interest rates,

saying the Fed will have to keep interest rates unchanged a while longer until they are confident about the path of inflation. He was pretty much repeating whatever Jerome Powell has been saying for months now. So no really major news there. Let's run through some headlines. Starting with Tesla. Tesla's board of directors is in the process of trying to convince shareholders to revote in favor of paying Elon Musk a massive $46 billion compensation package.

But it's looking like a challenging task right now. Tesla's chair Robin Denholm, who's been the chair since 2018, compared winning the vote to climbing Mount Everest because not only does the board need to convince shareholders to vote yes, but they also need to get 50, percent to participate in the vote. Now, this campaign to get Elon his bag came after a judge voided his previously approved compensation package in January, calling it, quote, an unfathomable sum that was unfair to shareholders after it was approved by shareholders back in 2018. So now

Tesla will need to persuade not only retail investors who now own about 30% of shares, but also major institutional investors that originally voted against the pay package like Vanguard, its largest outside owner. The vote is on June 13th at its annual shareholder meeting. This feels like an episode of succession. I hope they have cameras running. We have some news regarding Grand Theft Auto 6. It looks like the game will be released during the fall of 2025. And this news is sending the shares of gaming publisher Take-Two Interactive lower.

Now, even though Take-Two reported better than expected earnings, the updated schedule for the release of GTA 6 is causing the company to lower its full-year forecast. Because the Grand Theft Auto franchise is massive. Like GTA 5, which was released back in 2013, 10 plus years ago, has sold more than 200 million copies. It's the second best-selling game ever behind Minecraft, which has sold over 300 million copies. I just hope I get my hands on GTA6,

but before all my hair turns gray. I guess we've got to wait until fall of 2025. Let's talk about some stocks making moves today. Starting with Reddit, the stock is up big this morning after reports that they signed a deal with OpenAI. Reddit will license their data to OpenAI so the data can be used to train OpenAI's models.

Now, we don't have the financial deal. details of this Open AI deal yet, but Reddit did sign a similar deal with Google a few weeks ago reportedly worth $60 million a year. So this is becoming a nice revenue stream for Reddit because these AI companies are constantly looking for new data to train their models. And Reddit generates a ton of new user-generated content every day. So they have the goods to provide these AI companies. My only concern is that AI models being trained on content from Reddit could be interesting to say the least. I mean, for anyone that's been any time on Reddit, know is exactly what I mean. But investors were loving it.

Reddit stock is up more than 10% in the pre-market. On the flip side, GameStop, having another rough day. GameStop shares are falling after they reported that they expect their first quarter sales to decline. The company says they expect sales to come in between $872 and $892 million, which is a big drop from the $1.2 billion in revenue they made in the same quarter from last year. So the business not growing. On top of the lower revenue, GameStop also says they plan to sell $45 million shares to raise money, isn't great for existing shareholders because their ownership of the company gets diluted.

And that's why GameStop shares are down more than 20% in the pre-market today and down more than 60% from its peak earlier this week of $64 a share. The meme stock hype really did fizzle out pretty quick this time, huh? Let's wrap the show with a fun fact. Today's fun fact is about McDonald's. They're bringing back the $5 value meal starting on June 25th, according to CNBC. But unfortunately, this promo is only going to live. last for about a month. And the value meal will include a make-chicken or McDouble, four-piece chicken

nuggets, fries, and a drink. See, McDonald's business has been struggling recently. Their most recent quarterly earnings were a mixed bag, and one reason for that was higher prices, which is causing people to cut back. So we'll see if this value meal will get more people to go to McDonald's this summer. Now, while the $5 value meal sounds great, McDonald's is starting to phase out self-serving drink stations and free refills. Guess we can't have everything, right? McDonald's stock is down more than 7% this year, while the S&P has been up more than 11%. Speaking of McDonald's, go check out the other show from public.com, the leading indicator podcast, because on their latest episode, they interviewed the CEO of Sweet Green. They asked

them about the pricing edge that Sweet Green has versus fast food chains like McDonald's. They also discuss if protein is Sweet Green's missing ingredient to profitability. They also talk about AI and automation. It's a great conversation. Definitely worth listening to. We'll put the link in the show notes for you to check out. Well, all right, guys, that's the rundown for today. That's the rundown for this week. It was surprisingly an action-pack week with the meme stock rally to start off the week. We had all the AI news from Open AI and Google. We had inflation reports. I mean, there was a lot packed into this week. Plus, stocks made record highs. So, fantastic week. If you enjoyed the show, please consider giving us a five-star rating on Apple and Spotify.

And also vote in today's Spotify poll. We put out a poll every day. The engagement really does help the show. Next week should be a good one too. We have Nvidia earnings coming up next week. Invidia stock is creeping back to all-time highs. So something to keep an eye on. I'm also going to be in the UK next week, London and Sky. Scotland. I'm taking all my podcasting gear with me, so we're still going to have new episodes every day next week. I mean, did you really think I was going to miss in video earnings? Come on. All right. Thank you guys so much for listening. Shout out to Connor and Mike for all the work behind the scenes. We'll see you guys back here on Monday.

This is the rundown, your real-time resource for news events and trends in the markets. All views presented in this show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell or hold that security. Run-down guests are not financial advisors and are not affiliated with public holdings or subsidiaries. You should make your own financial and investment decisions or consult, respective professionals. Learn more at public.com disclosures. In partnership with Zayidamani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.