Business: Aspen Technology provides industrial software that focuses on helping customers in asset-intensive industries worldwide. Its software is used in performance engineering, modeling and design, supply chain management, predictive and prescriptive maintenance, digital grid management and industrial data management. The company serves a range of asset-intensive industries, including oil and gas exploration and production; oil and gas processing and distribution; as well as oil and gas refining and marketing.

Stock Market Value: $16.8B ($265.25 per share)

Ownership: ~9.0%

Average Cost: n/a

Activist Commentary: Elliott is a very successful and astute activist investor. The firm’s team includes analysts from leading tech private equity firms, engineers, operating partners – former technology CEOs and COOs. When evaluating an investment, the firm also hires specialty and general management consultants, expert cost analysts and industry specialists. Elliott often watches companies for many years before investing and have an extensive stable of impressive board candidates. The firm has historically focused on strategic activism in the technology sector and has been very successful with that strategy. However, over the past several years its activism group has grown, and Elliott has been doing a lot more governance-oriented activism and creating value from a board level at a much larger breadth of companies.

On Feb. 7, Elliott announced that it’s taken a $1.5 billion position in Aspen Technology. The firm expressed its disagreement with Aspen’s decision to support a $265 per share tender offer by Emerson Electric, noting that it substantially undervalues the company.

Aspen Technology (AZPN) is a global provider of process optimization software solutions designed to manage and optimize plant and process design, operational performance, and supply chain planning. On Nov. 5, 2024, Emerson Electric (EMR), which currently owns approximately 57.4% of Aspen’s outstanding shares, issued a tender offer to acquire all outstanding shares of Aspen not already owned by Emerson at $265 per share. To evaluate this offer, Aspen’s board formed a special committee of three independent and disinterested directors. Ultimately, on Jan. 27, 2025, it was announced that the committee voted unanimously to recommend the transaction for approval. On Feb. 7, Elliott announced that it opposes the tender offer as the firm does not believe it fairly values the company.

Emerson acquired a 55% position in Aspen in 2022 and until May 2024 had a standstill agreement preventing it from acquiring additional stock (it got to 57% through share repurchases by the company). As an insider for 2.5 years, Emerson knows Aspen well and could have made this offer at any time since May. As a controlling shareholder, Emerson has an informational advantage over the public and pursuing a buyout now suggests that it’s strategically timing its move. Notably, it comes after a good quarter where the integration of Emerson’s contributed assets from its 2022 majority investment is starting to take hold, an improvement of margins seems to be on the horizon, particularly with the recent suspension of Aspen’s Russia business, and the seating of the Trump administration (Emerson actually announced its bid on Election Day) bringing with it a more lenient regulatory environment for oil- and chemical-related products.

When Emerson publicly announced its tender offer, Aspen stock was trading at approximately $240 per share, making this a 10% takeover premium that does not come close to accounting for the significant synergies Emerson could get from this transaction. While there are operational and sales synergies of at least $100 per share, what is most valuable to Emerson is access to Aspen’s software and code, which Emerson can only get by acquiring the entire company. There is a clear precedent for this. In January 2023, Schneider Electric closed out its acquisition of Aveva, buying out the remaining 40% of the company – which happens to be Aspen’s smaller peer player. It offered a 41% premium to Aveva’s undisturbed share price before Schneider’s interest was disclosed in August 2022. This is more of a standard premium for these types of transactions and is consistent with the $100 per share of synergies Emerson would get here. This suggests a substantially higher fair price than $265 per share. When looking at all the synergies and integration advantages Emerson has in this transaction, a more reasonable takeout price looks to be north of $350 per share.

As a majority shareholder, Emerson has a lot of control in this situation. Absent an activist investor, this deal likely gets done at $265. Not only does the price seem glaringly low, but the process suggests a sweetheart deal. For example, Aspen’s “independent special committee” that approved this deal was comprised of three directors, two of whom were Emerson’s designated directors on the board. So, Emerson effectively controlled the special committee that was tasked with reviewing the tender offer. Fortunately, in Delaware, where the company is incorporated, a tender offer requires at least 50% of disinterested outstanding shareholders to approve the transaction. This means 21.4% of the remaining shareholders (other than Emerson) need to vote for the deal for it to pass. Elliott has 9%, and if every other shareholder votes (an improbable likelihood), Elliott would just need another 12.4% to block the transaction. If 5% of shareholders do not vote, Elliott would only need an additional 7.4% of votes. Kayne Anderson is the next largest shareholder with 6.5%, so its vote will be important. It should be noted that it is not clear if Elliott’s position is in common stock or swaps (a common practice for the firm) as its actions here would not require the firm to file a 13D. However, in this situation it is not that relevant. If the company were required to get the vote of 50% of disinterested shareholders, Elliott would need to have its position in common stock to vote. However, since in this case the requirement is a tender of 50% of disinterested shares, even if Elliott owns swaps (and assuming the counterparty does not take equity risk), the shares underlying the swaps will not be tendered.

One final note – this is not just a “bumpitrage” situation for Elliott. While the firm would sell to Emerson at a fair price, it owns the stock because it likes Aspen and thinks it is a good investment as a standalone company owned 57% by Emerson. If Emerson does not increase its bid, that does not mean Elliott will tender at the $265 price or any other price it finds insufficient. The firm would likely be happy to own the stock and benefit from the same operational and macro tailwinds that Emerson sees. Moreover, the company just had a strong earnings call, but the stock did not rise past the $265 on the news as the offer price is establishing somewhat of an artificial ceiling. So, this is a situation where if Emerson ups its offer, the stock will go up. If the offer goes away, the artificial ceiling does too, and the stock price could also go up in that situation.

Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.

The Securities and Exchange Commission issued long sought after guidance Thursday evening saying it does not deem most meme coins securities under U.S. federal law.

Meme coins “typically have limited or no use or functionality” and are “more akin to collectibles,” according to the agency’s Division of Corporation Finance.

“It is the Division’s view that transactions in the types of meme coins described in this statement do not involve the offer and sale of securities under the federal securities laws,” the statement says. “Persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission. … Accordingly, neither meme coin purchasers nor holders are protected by the federal securities laws.”

It also said “a meme coin does not constitute any of the common financial instruments specifically enumerated in the definition of ‘security’ because, among other things, it does not generate a yield or convey rights to future income, profits, or assets of a business. In other words, a meme coin is not itself a security.”

The clarification comes after the latest rapid rise of such cryptocurrencies following the election of President Donald Trump, as well as their crash in recent weeks. It’s also another notch in the belt of the new administration, which has promised to create clearer and perhaps more favorable regulatory conditions for the crypto industry, and to do so swiftly.

“The SEC’s recent statement on meme coins is the clarity that the digital asset space has been demanding for years,” said Ishmael Green, a crypto attorney and partner at the law firm Diaz Reus. “This will drive continued investment in the U.S. crypto space, as the vast majority of meme coins launched in the last 12 months with multibillion dollar market caps have been released on Solana, an American blockchain.”

“[It] also comports with the current administration’s promise to the crypto community to end needless and frivolous enforcement actions which stifle innovation and investment,” he added.

Dogecoin, the original meme coin and sixth largest cryptocurrency by market cap, rose 3%. The token tied to Solana, which has become the go-to host for meme coins – including the Official Trump meme coin – rose 2%.

Shares of both Coinbase and Robinhood rose about 1% in after hours trading.

The clarity could pave the way for both exchange operators to list more meme coins without the risk of regulatory enforcement.

In January, at the height of the Trump-fueled meme mania, Coinbase CEO Brian Armstrong said that “given there are [about 1 million] tokens a week being created now, and growing … evaluating each one by one is no longer feasible,” in a post on X. “And regulators need to understand that applying for approval for each one is totally infeasible at this point,” he said.

Meme coins, of which there are thousands, sit at the furthest end of the risk spectrum. They’re three to four times more actively traded than bitcoin and ether, adjusting for market cap, which makes them lucrative offerings for newcomers to the market who feel they may have missed the boat on bitcoin. Historically, they’ve been a gauge of retail interest and risk appetite in crypto, though most market participants warn strongly against them.

Despite their purely speculative nature and lack of intrinsic value, they’re widely viewed as a significant sector of the crypto market and an important part of internet culture that reflects the origins, culture and permissionless nature of the crypto community.

There’s a new ETF in town. SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) will trade Thursday at the NYSE.  

This fund intends to invest at least 80% of its net assets in investment grade debt securities, including a combination of public credit and private credit.  What’s surprising is that there is a significant component of  private equity in the ETF wrapper.  Because private credit is illiquid, it has been a problem getting this in an ETF wrapper, since ETFs need liquidity. 

They are trying to solve this problem by having Apollo provide credit assets and they will purchase those investments back if need be. 

ETFs have owned illiquid investments in the past (there are bank loan ETFs that have illiquid investments) so this is not the first time this issue has been addressed. But Wall Street is eager to provide access to private equity and credit to the masses, and ETFs are the obvious wrapper.

Normally, ETFs are only allowed to own illiquid investments up to 15% of the fund, but the SEC says that in this case private credit can range between 10% and 35%, but can be above or below that.

This filing has been controversial. One early concern was that if Apollo is the only firm providing the liquidity, it naturally raises questions about what type of pricing State Street will get. However, State Street apparently can source from other firms if it can get better prices.

Another issue: Apollo is required to buy back the loans, but only up to a daily limit, and it’s not clear what happens after that. It’s not clear if the market makers would accept private credit instruments for redemption.

Bottom line: This is a groundbreaking but very complicated ETF.  It will be closely monitored for liquidity.

Note:  Anna Paglia, Executive Vice President, Chief Business Officer for State Street Global Advisors, will be on ETF Edge Monday to explain how this ETF works.

An expensive stock market did not prevent traders from getting more bullish as investors increasingly bet that the bull run could keep chugging along, according to Charles Schwab’s new quarterly client survey.

The bulls continue to outnumber the bears among traders 51% to 34%, according to Schwab’s survey, which polled 1,040 active traders last month. Young traders under the age of 40 especially showed a spike in optimism, with bullishness jumping to 59%. That compares to 47% in the fourth quarter. The positive sentiment came even as two-thirds of the traders believe the market is overvalued, the survey said.

“It’s clear that the majority of traders believe there’s some froth in the market but on balance they also feel like there’s still more room for the bulls to run,” said James Kostulias, head of trading services at Charles Schwab. “More than half of traders plan to move additional money into stocks in Q1,” Kostulias added.

While bullishness indicates positive views on the market, it can also be seen as a contrary indicator when there are signs of excess.

After a booming two-year period in which the S&P 500 climbed more than 50%, the momentum has slowed as of late with rising concerns about an economic slowdown and heightened volatility from rapid policy changes from the new administration. The equity benchmark is only up 1.3% on the year, while the tech-heavy Nasdaq Composite has dipped into negative territory for 2025.

In terms of sectors, traders are most bullish on energy, tech, finance and utilities. These sectors are typically beneficiaries under the Trump administration due to potential deregulation.

The survey also detected a significant drop in the number of traders who believe a recession will occur in the U.S. Only a third of the respondents called it “somewhat likely,” compared to 54% in the prior quarter.

The majority of traders also did not see a reacceleration in inflation, with two-thirds of them seeing price pressures holding steady.

Spend some time looking at trading volumes, and you’ll notice something interesting: A lot of investors recently are making outsized bets on the stock market.

Most of them are long bets, but some are short.

It’s easy to see this because there is a growing segment of the ETF business that caters to investors who want to make short-term outsized bets on the stock market.

These are leveraged and inverse ETFs. Leveraged ETFs amplify the daily returns of an index or stock using financial derivatives. For example, if an index rose by 1% in a day, a 2x leveraged ETF would deliver a 2% return, a 3x would deliver a 3% return.

An inverse ETF delivers the opposite daily performance. So a 2x inverse ETF would be down 2% on a day when the index rose 1%, and vice-versa.

These leveraged/inverse ETFs are not just growing in assets. They are becoming a greater part of the daily trading volume of the ETF universe, which is becoming a larger part of overall trading.

Who is using these products? It has a lot to do with the general rise in speculative behavior in the market. Trading in options, bitcoin, and other more speculative products has been rising.

“We’re continuing to see more investors lean into leveraged as a way to express short-term views on the market, and given all the volatility and daily market-moving headlines, it’s not surprising we are seeing higher volume and more assets entering the space,” Douglas Yones, CEO of Direxion, one of the largest providers of leveraged/inverse ETFs, told CNBC.

The first leveraged/inverse ETFs in the U.S. started in 2006 and allowed long or short bets on indexes like the S&P 500 or the Nasdaq 100. Leverage and inverse single-stock ETFs came into existence in 2022, and they too have grown fast.

The largest, ProSharesUltraPro QQQ (TQQQ), which provides 3x leveraged exposure to the Nasdaq 100 (QQQ), has nearly $26 billion in assets. Single-stock ETFs that leverage Nvidia and Tesla also now have substantial assets.

Largest leveraged/inverse ETFs

(assets under management)

ProSharesUltraPro QQQ (TQQQ) $25.7 billion

Direxion Daily Semiconductor Bull 3x (SOXL) $8.5 billion

ProShares Ultra QQQ (QLD) $7.9 billion

ProShares Ultra S&P 500 (SSO) $5.5 billion

Direxion Daily S&P Bull 3x (SPXL) $5.0 billion

Direxion Daily TSLA Bull 2x (TSLL) $3.5 billion

GraniteShares 2x Long NVDA (NVDL) $4.2 billion

Part of this is a bull market effect: Stocks are up meaningfully in the last few years, so overall assets are higher. However, these leveraged/inverse ETFs are not just growing assets, they are becoming a larger part of the ETF universe.

In 2016, when ETFs had about $2 trillion in assets under management (AUM), leveraged/inverse ETFs were about 2% of that AUM, according to Strategas.

Today, ETFs have about $11 trillion in assets under management, but leveraged/inverse ETFs make up about $81 billion of that, or almost 8% of total AUM.

“I do believe there is a generational effect at play, I think there is major appetite among younger traders wanting to play with leverage due to the gains it can provide,” Todd Sohn, head of ETFs at Strategas, told CNBC. “The barriers to entry are extremely low, you can buy these products on your phone.”

Yones estimated that 75% of the ownership of these products were retail traders, and 25% institutional, which included hedge funds, trade desks, large brokerage firms, and “anyone who has a book of positions that wants to be neutral the market.”

He estimated that a small but significant percentage of the retail traders (12%-15% of the total) were from outside the U.S., which aligns with previous reports about growing demand for 24-hour trading coming in part from retail traders in South Korea, Japan, and Europe.

Leverage and inverse ETFs, including leveraged and inverse single-stock ETFs, now routinely show up among the most heavily traded ETFs on a daily basis.

A simple way to look at this is by average daily dollar volume, the total amount of money traded in the ETF on a daily basis.

The top ETFs by daily dollar volume are still ETFs tied to the biggest indexes, mainly the S&P 500, Russell 2000, and Nasdaq 100.

Top ETFs by average 3-month daily dollar volume

SPDR S&P 500 (SPY) $27.7 billion

Invesco QQQ (QQQ) $15.3 billion

iShares Russell 2000 (IWM) $5.7 billion

iShares Core S&P 500 (IVV) $3.9 billion

Source: Strategas

However, the fifth-largest ETF by average daily dollar volume in the last three months is the ProSharesUltraPro QQQ, which provides three times leveraged exposure to the Nasdaq 100.

Altogether, five of the top 20 ETFs by average daily dollar volume are leveraged/inverse.

Leveraged/inverse ETFs: largest avg. 3-month daily dollar volume

ProSharesUltraPro QQQ (TQQQ) $3.8 billion

Direxion Daily Semiconductors Bull 3X (SOXL)$2.1 billion

Direxion Daily TSLA Bull 2x (TSLL) $1.5 billion

ProShares UltraPro Short QQQ (SQQQ) $1.4 billion

GraniteShares 2x Long NVDA (NVDL) $1.3 billion

Source: Strategas

These products are bets on short-term momentum, but they have one additional feature that has proven difficult for investors to wrap their head around: they reset on a daily basis.

Because of compounding effects, it can be fiendishly difficult to figure out what actual returns will be on anything more than a daily basis. This means that holding a 2x leveraged product for anything more than a day may result in making substantially less than a 2x return, depending on the direction of the market.

Here’s an example: Suppose the S&P 500 was up 10% one day, then down 10% the next day.

A $100 investment would look like this:

S&P 500: hypothetical $100 investment

Day 0 $100

Day 1 (up 10%): $110

Day 2 (down 10%). $99

After two days of this, you have $99, so you are down 1%. If you had a leveraged product over those two days, it would seem like you would be down 2%, or that you would have $98.

But because of the daily reset, that’s not what happens.

S&P 500: hypothetical $100 investment in 2x leveraged

Day 0 $100

Day 1 (up 10%, leveraged up 20%): $120

Day 2 (down 10%, leveraged down 20%) $96

You actually have $96, instead of $98, and bear in mind this excludes fees.

As time goes on, these calculations get progressively more complex.

As a result, those offering these products routinely state that they are not meant for buy-and-hold investors.

These funds have very large daily turnovers, so most investors seem to understand the risk of holding these products on anything more than a daily basis.

But Sohn told CNBC that all investors in leveraged products needed to be very careful.

“At some point though, it helps to take stock of the risks involved whenever the market takes a turn south,” Sohn told CNBC.

Doug Yones, CEO of Direxion, will be on the ETF Edge portion of Halftime at 12:35 PM ET on Monday, and will also livestream on ETF Edge from 1:30 PM ET. He will be joined by Todd Rosenbluth, Head of Research at Vettafi.

Expanding two power plants in Georgia and South Carolina with big, new reactors was supposed to spark a “nuclear renaissance” in the U.S. after a generation-long absence of new construction. 

Instead, Westinghouse Electric Co.’s state-of-the-art AP1000 design resulted in long delays and steep cost overruns, culminating in its bankruptcy in 2017.  The fall of Westinghouse was a major blow for an industry that the company had helped usher in at the dawn of the nuclear age. It was Westinghouse that designed the first reactor to enter commercial service in the U.S., at Shippingport, Pennsylvania in 1957. 

Two new AP1000 reactors at Plant Vogtle near Augusta, Georgia started operating in 2023 and 2024, turning the plant into the largest energy generation site of any kind in the nation and marking the first new operational nuclear reactor design in 30 years. But the reactors came online seven years behind schedule and $18 billion over budget.

In the wake of Westinghouse’s bankruptcy, utilities in South Carolina stopped construction in 2017 on two reactors at the V.C. Summer plant near Columbia after sinking $9 billion into the project. 

But today, interest in new nuclear power is reviving as the tech sector seeks reliable, carbon-free electricity to power its artificial intelligence ambitions, especially against China. Westinghouse emerged from bankruptcy in 2018 and was acquired by Canadian uranium miner Cameco and Brookfield Asset Management in November 2023

The changed environment means South Carolina sees an opportunity to finish the two reactors left partially built at V.C. Summer eight years ago. The state’s Santee Cooper public utility in January began seeking a buyer for the site to finish reactor construction, citing data center demand as one of the reasons to move ahead.

“We are extraordinarily bullish on the case for V.C. Summer,” Dan Lipman, president of energy systems at Westinghouse, told CNBC in an interview. “We think completing that asset is vital, doable, economic, and we will do everything we can to assist Santee Cooper and the state of South Carolina with implementing a decision that results in the completion of the site.”

Tech as a nuclear catalyst

The United States has tried to revive nuclear power for a quarter century, but the two reactors in Georgia mark the only entirely new construction across that period despite bipartisan support under every president from George W. Bush to Donald Trump.

A fresh start was supposed to have begun more than a decade ago, but was choked off by a wave of closures of older reactors as nuclear struggled to compete against a boom of cheap natural gas created by the shale revolution.

“We went from an environment in the aughts of rising gas imports and rising gas prices to fracking technology unlocking quite a bit of affordable natural gas here in the U.S., and companies didn’t really value the firm clean attribute of nuclear back then,” said John Kotek of the Nuclear Energy Institute, an industry lobby group, and former assistant secretary at the Office of Nuclear Energy under President Barack Obama.

What’s different in 2025 is the tech sector’s voracious appetite for power translating into a willingness to pay a premium for nuclear. But recent investments in nuclear have focused on restarting abandoned reactors and attempting to bring online smaller, next-generation modular reactors that many believe are the future, if they can be designed and built more cheaply.

The troubled nuclear plant at Three Mile Island near Harrisburg, Pennsylvania that almost melted down in 1979 is expected to resume operations in 2028 after owner Constellation Energy struck a power purchase agreement with Microsoft last September. Constellation wants to restart Unit 1, which shut for economic reasons in 2019, not the Unit 2 reactor that was the site of the accident.

Alphabet and Amazon invested in small nuclear reactors a month later. Meta Platforms, owner of Facebook and Instagram, asked developers in December to submit proposals for up to 4 gigawatts of new nuclear power to meet the energy needs of its data centers.

But while the recent focus in the U.S. has been on restarts and commercializing small reactors, Lipman said the extent of potential demand that has emerged from data centers over the past year has led to renewed interest in Westinghouse’s large AP1000 reactor design.

In any event, there are no operational small reactors in the U.S. today, though startups and industry stalwarts, including Westinghouse, are racing to commercialize the technology. And there only so many shuttered plants in the U.S. in good enough shape to potentially be restarted.

Gargantuan undertaking

Meanwhile, meeting the demand for power is a gargantuan undertaking. Meta’s need for new nuclear power, for example, is nearly equivalent to the entire 4.8 gigawatts of generating capacity at the Vogtle plant, enough to power more than 2 million homes and businesses. Large nuclear plants with a gigawatt or more of capacity — the size of the AP1000 — will be essential to power large industrial sites like data centers because of their economies of scale and low production costs once they’re up and running, according to a recent Department of Energy report.

Georgia Gov. Brian Kemp called for another reactor at Vogtle the same day he dedicated the plant expansion in May 2024. Southern Company CEO Chris Womack believes at least 10 gigawatts of large nuclear are needed. Southern is the parent company of Georgia Power which operates Vogtle.

“The people that are going to own and operate AP1000s traditionally are investor-owned electric utilities,” Lipman said. “When they look at the marketplace for a large reactor, AP1000 is where they turn because it’s got a license, it’s operational.”

Still, nobody in the U.S. is on the verge of signing an order for a new AP1000, he said. Westinghouse is focused on deploying reactors in Eastern and Central Europe, where nuclear projects are seen as a national security necessity to counter dependency on Russian natural gas after the invasion of Ukraine.

In addition to the two units in Georgia, Westinghouse also has four operational reactors in China.

But South Carolina’s search for someone to complete the partially built reactors at V.C. Summer will likely draw investment from Big Tech “hyperscalers” building data centers, and large manufacturers like the auto industry, Lipman said.

“That kind of asset attracts industry that relies on 24/7, 365 energy and that’s what you get with an AP1000,” Lipman said. There are ongoing discussions within the industry about whether the tech sector might act as a developer that invests capital in the upfront costs of building new plants, he said.

What went wrong in the South

Any attempt to build new AP1000s in the U.S. again will almost certainly meet with skepticism after the experiences in South Carolina and Georgia.

Lipman said the challenges that the AP1000 construction faced in the South have been resolved. Back then, Westinghouse agreed to the projects before the reactor design was complete, and supply chains weren’t fully formed due to a long period in which U.S. construction was dormant, he said.

“One big lesson learned, maybe the big lesson learned, is designs need to be complete before they hit the field, meaning they have to be shovel ready,” Lipman said. The design for the AP1000 is complete and Westinghouse has its supply chain in place, he said.

“We have winnowed over our list of suppliers,” Lipman said. “They are supporting us globally, and so it’s really easy then to have them make more equipment for deployment.”

“You’re getting economies of scale,” he said.

Ironically, given the overruns in Georgia, the original aim of AP1000 was reduce costs by creating a standardized design that requires less construction materials compared to older reactor types, Lipman said. Components of the plant are prefabricated before being assembled on site, he said.

“You basically assemble, kit-like, major portions of the plant in a modular fashion, a bit like aircraft and submarines are done,” Lipman said. “That was not fully shaken out completely at the Vogtle site.”

The Department of Energy under the Biden administration argued in a September report that future AP1000 builds should be less expensive because they won’t incur costs associated with the first-of-a-kind project in Georgia. Support from the department’s loan office, tax credits under the Inflation Reduction Act, and shorter construction timelines would substantially reduce costs, according to the report.

Trump plans for nuclear

While President Donald Trump is supportive of nuclear, it’s unclear whether the industry will receive support through DOE loans and the investment tax credit under the Inflation Reduction Act (IRA). Those tools were pillars of the Biden administration’s plan to help reduce the cost of new AP1000s.

Trump issued an executive order on his first day in office that directed federal agencies to remove obstacles to development of nuclear energy resources. The same order, however, paused all spending under the IRA. Two weeks later, Secretary of Energy Chris Wright made commercializing “affordable and abundant nuclear energy” a priority in a Feb. 5 order.

“The long talked about nuclear renaissance is finally going to happen, that is a priority for me personally and for President Trump and this administration,” Wright told CNBC in a Feb. 7 interview. Wright was previously a board member of Oklo, a nuclear startup that aims to disrupt the status quo of the industry by deploying micro reactors later this decade.

Wright emphasized commercializing small reactors and said private capital would drive the construction of new plants. Before the November election, Trump was skeptical of building large reactors, citing the cancelled project in South Carolina.

“They get too big and too complex and too expensive,” he told Joe Rogan in an October interview.

Lipman said the first Trump administration was pro-nuclear, and he expects the president will support the industry in his second term.

“If there’s going to be gigawatt scale deployment in the U.S., decision making needs to accelerate,” Lipman said. “The business model, the investment climate, any legislative changes that might be in the offing at the state level or the federal, now is the time to address those pertinent issues.”

— CNBC’s Gabriel Cortes contributed to this report.

The mystery over Warren Buffett’s surprisingly defensive stance deepened over the weekend.

The 94-year-old CEO of Berkshire Hathaway sold more stocks in the latest quarter and grew a record cash pile even larger to $334 billion, but failed to explain in his highly anticipated annual letter why the investor known for his astute equity purchases over time was seemingly battening down the hatches.

Instead Buffett said that this posture in no way represented a move away from his love for stocks.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote in the 2024 annual letter released Saturday. “That preference won’t change.”

Berkshire’s monstrous ownership of cash has raised questions among shareholders and observers especially as interest rates are expected to fall from their multi-year highs. The Berkshire CEO and chairman in recent years has expressed frustration about an expensive market and few buying opportunities. Some investors and analysts have grown impatient with the lack of action and have sought an explanation why.

Despite his repeated selling of stock, Buffett said Berkshire will continue to prefer equities to cash.

“Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities – mostly American equities although many of these will have international operations of significance,” Buffett wrote. “Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.”

Shareholders will have to wait a little longer it seems as the Omaha-based conglomerate net sold equities for a ninth consecutive quarter in the final period of last year, according to the company’s annual report, which was also released on Saturday.

All told, Berkshire sold more than $134 billion worth of stocks in 2024. This is mainly due to the shrinking of Berkshire’s two largest equity holdings — Apple and Bank of America.

Meanwhile, it appears Buffett is not finding his own stock attractive either. Berkshire continued its buyback halt, repurchasing no shares in the fourth quarter or in the first quarter through Feb. 10.

This is despite a massive increase in operating earnings reported by the conglomerate on Saturday.

Buffett’s sitting on his hands amid a raging bull market that’s seen the S&P 500 gain more than 20% for two years in a row and move into the green again so far this year. Some cracks have begun to develop in the past week, however, with some concerns growing about a slowing economy, volatility from rapid policy changes from new President Donald Trump and overall stock valuations.

Berkshire shares were up 25% and 16% respectively the last two years and are up 5% so far this year.

Buffett did offer perhaps a small hint about stock valuations being a concern in the letter.

“We are impartial in our choice of equity vehicles, investing in either variety based upon where we can best deploy your (and my family’s) savings,” wrote Buffett. “Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities.”

In this year’s letter, Buffett did endorse designated successor Greg Abel in his ability to pick equity opportunities, even comparing him to the late Charlie Munger.

“Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities. Greg has vividly shown his ability to act at such times as did Charlie,” Buffett said.

At last year’s annual meeting, Buffett surprised many by announcing that Abel, vice-chairman of non-insurance operations, will have the final say on all Berkshire’s investing decisions, including overseeing the public stock portfolio.

Some investors and analysts have speculated Buffett’s conservative moves in the last year are not a market call, but him preparing the company for Abel by paring outsized positions and building up cash for him to deploy one day.

Buffett did signal he would be deploying capital in one area: the five Japanese trading houses he began buying nearly six years go.

“Over time, you will likely see Berkshire’s ownership of all five increase somewhat,” he wrote.

Business: Liberty Live Group is a tracking stock that represents Liberty Media Group’s ownership stake in Live Nation Entertainment. Live Nation operates as a live entertainment company worldwide. It operates through the following segments” Concerts, Ticketing, and Sponsorship & Advertising. The Concerts segment promotes live music events in its owned or operated venues, and in rented third-party venues. The Ticketing segment manages the ticketing operations, including the provision of ticketing software and services to clients and consumers with a marketplace for tickets and event information through mobile apps, other websites, retail outlets and its primary websites: livenation.com and ticketmaster.com. The Sponsorship & Advertising segment sells international, national and local sponsorships, as well as the placement of advertising and promotional programs.

Stock Market Value: ~$7B ($75.85 per share)

Ownership: 5.51%

Average Cost: $51.17

Activist Commentary: ValueAct has been a premier corporate governance investor for over 20 years. ValueAct principals are generally on the boards of half of the firm’s core portfolio positions and have had 56 public company board seats over 23 years. Additionally, the firm is a long-term, thoughtful and diligent investor known for creating value behind the scenes. ValueAct has previously commenced 105 activist campaigns and has an average return of 55.02% versus 21.76% for the Russell 2000.

ValueAct filed a 13D on Feb. 11, reporting a 5.51% position in Liberty Live Group (LLYVA).

Liberty Live (LLYVA) is a tracking stock that represents Liberty Media Group’s 30% ownership stake in Live Nation (LYV), a global live entertainment company. John Malone’s Liberty Media Group has historically used tracking stocks as a huge part of the company’s toolbox to allow investors to have a more focused exposure to the businesses they liked without having to jump through the legal and tax hoops of a spinoff. He used this in the past with the Atlanta Braves and Sirius XM, and he presently uses it with Live Nation and F1. ValueAct has taken a 5.51% position in Liberty Live, but it also owns a 0.44% stake in Live Nation, bringing the firm’s effective ownership of Live Nation to approximately 2%, which would make it a top shareholder. 

There are two characteristics that are core to ValueAct’s investing philosophy and that permeate many of its investments: First, the firm likes companies that it thinks are somewhat misunderstood by the market. Second, it’s a long-term investor that can tolerate short-term pain. Both of those aspects are present here. As an active shareholder of Spotify, ValueAct has seen firsthand how the music industry has transformed over the last several years. It is much easier today for a talented artist to build a global following through streaming services and the marketing power of social media, but the monetization that follows is not as easy. The payouts from streaming services are relatively meager and just get smaller as additional artists are added to the platforms. As a result, live performances and touring have become the most lucrative ways for artists to earn – and Live Nation dominates this market. The company owns all facets of this ecosystem, which allows Live Nation to manage an artist’s entire tour without any external involvement. Other than private peer Anschutz Entertainment Group, no company comes close in scale, and even Anschutz lacks the full vertical integration of Live Nation. However, while this dominance is certainly an asset, it can also be viewed as a liability by some, mainly the U.S. Department of Justice.

In May 2024, the DOJ sued to break up Live Nation and Ticketmaster, sending the stock down about 8% from $101.40 to $93.48. While this development may cause a lot of investors to run in fear, ValueAct saw it as a buying opportunity in a great company that was having a market overreaction. The firm invested in Microsoft during concerns over the PC market, in Spotify when people thought streaming was dying and in Disney during the writers’ strike, so it is no surprise that the firm saw an opportunity in Live Nation at a time of heightened uncertainty. The worst thing that the DOJ could do is force the breakup of Live Nation and Ticketmaster, a structural remedy that is rarely resorted to by the Justice Department (AT&T’s 1984 breakup being a notable exception). It is more likely that Live Nation agrees to certain changes like amending its venue booking policies and shortening the length of Ticketmaster contracts to allow for more competition to assuage the DOJ. However, even if the worst case happens and the two companies separate, Live Nation stockholders would own two great businesses with strong tailwinds and best-in-class market positioning. It would likely even be another buying opportunity for investors like ValueAct.

The final piece of hidden or misunderstood value at the company is its venue expansion. While in major U.S. cities with NBA and NHL teams, there are massive arenas for concerts, in other cities and globally there are not nearly as many readily available venues. Looking to address this gap, Live Nation is pursuing these projects, successfully developing the University of Texas at Austin’s new arena and working on similar projects around the world. As a result, the company has been dedicating a lot of capex to its venue expansion goals: Capex has increased by 48% over the past two years and total debt has tripled since 2015 and has almost doubled since 2019. Moreover, the company’s disclosure around this has been somewhat opaque adding to more market confusion and uncertainty. Building these venues is expensive in the short term but should pay off handsomely in the long term, a dynamic that ValueAct is familiar with. Consider that the firm invested in Adobe when it was converting from a product purchase to a subscription, sending short-term revenue down but creating significant long-term value. Owning these venues will give Live Nation more value to its clients and more revenue from venues (as opposed to renting venues). As these venues are built and utilized, investors will start realizing that there will be a good return on the investment.  

Assuming the thesis above is accurate, there is significant value to be had by buying the tracking stock or the common shares of Live Nation. So, why buy the tracking stock? The answer is because the tracking stock trades at a sharp discount to Live Nation, and it could provide even more value above and beyond the fundamental undervaluation of the business if this discount goes away. That would happen if the same plan were followed as with previous Liberty tracking stocks such as Sirius. Liberty Media has already announced plans to spin off Liberty Live into a separate public company later this year, which is what it did with Sirius. At that time, the Liberty Live discount should compress a little but will only go away entirely if merged into Live Nation. That is what eventually happened with Sirius. For many reasons, including the relationship between John Malone and Live Nation CEO Michael Rapino, we think the spinoff and subsequent merger will take less time. ValueAct is the kind of investor that is happy holding for five years or more as value is being created.

Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.

Investors continued to dump Palantir shares on Thursday, escalating concerns that the latest hot pick among retail traders could be fizzling out.

Shares of the mysterious technology and defense stock retreated more than 5% on Thursday, regaining some ground in afternoon trading. Still, that builds on Wednesday’s slide of around 10%, which came after shares touched an all-time high earlier in the day and marked the stock’s worst session since May.

Wednesday’s initial decline came as investors keyed in on the CEO’s new stock sale plan and comments from Defense Secretary Pete Hegseth reported by The Washington Post on plans to slash defense budgets.

Now, the continued downturn raises alarm of a popular stock among retail investors showing signs of petering out. Shares had run up amid investor excitement around artificial intelligence, making Palantir the best performer within the S&P 500 last year.

Palantir has been one of the most-bought securities among everyday investors, data shows. The company seeks out these traders, with executives such as CEO Alex Karp speaking directly to them on earnings calls and in video addresses.

“The activity in Palantir is dominated by retail investors,” said Gil Luria, head of technology research at D.A. Davidson. “The company embraces that and caters to those investors as much or more than any other company.”

Vanda Research found the stock has trailed just Nvidia, Tesla and the SPDR S&P 500 ETF Trust (SPY) in net inflows from retail investors, according to 2025 data that runs through early February. Palantir was also one of the most-bought stocks by individual traders over the past week, per data from JPMorgan released Wednesday.

Palantir has become a sort of cult favorite among the retail crowd in recent months. The stock shot up more than 60% in November alone as investors evaluated which companies would benefit from President Donald Trump’s return to the White House.

Layered on top of that is the fact that Peter Thiel, co-founder of PayPal with Elon Musk, has chaired Palantir’s board for more than two decades. Musk is leading the so-called Department of Government Efficiency’s efforts to cut government spending, and there is speculation he could even use Palantir’s technology to help him do it.

The company’s valuation has given some market participants reason for pause, as its 198 forward price-to-earnings multiple far exceeds the S&P 500’s at 22. But sustained devotion from retail investors can actually help justify its lofty valuation, according to D.A. Davidson’s Luria.

“Palantir is trading at an unprecedented premium to other software companies,” Luria said. “The reason is that they have this very loyal retail investor support.”

In other words, Palantir’s valuation makes it a “live-by-the-gun, die-by-the-gun” stock, Ritholtz Wealth Management CEO Josh Brown said Thursday on CNBC’s “Halftime Report.”

Two news items appeared to catalyze the initial pullback on Wednesday.

Hegseth reportedly told Pentagon officials to prepare to slash defense budgets by 8% annually over the next five years, a move that can worry investors about the state of deals between the government and contractors such as Palantir. However, Palantir executives previously said they are optimistic about members of DOGE seeing value in the company’s contributions.

Palantir also disclosed in a regulatory filing Tuesday night that Karp can sell 10 million shares of the company’s stock over the next six months. His eccentric persona has drawn comparisons to Tesla‘s Musk and is considered to be helping to drive attention and interest among retail investors.

With these declines, the stock is down more than 10% this week. Still, shares are up more than 40% in 2025 after skyrocketing around 340% in the prior year.

While mom-and-pop investors have rushed into the stock, Wall Street isn’t as on board. The average analyst polled by LSEG has a hold rating, with a price target implying shares should drop from here.

Part of this disconnect between Main Street and Wall Street stems from the fact that everyday investors don’t fully understand that “a good product doesn’t necessarily mean it’s a good company, and a good company doesn’t necessarily mean it’s a good investment,” said Christopher Schwarz, a finance professor at the University of California Irvine who studies retail trader behavior.

Schwarz pointed out that the stock is trading at around 80 times its sales, adding that no company of any size would be considered a smart investment at that rate.

“It’s just crazy expensive — and people just don’t understand that there’s no way they can make money on the stock over the long term,” Schwarz said. “The more it goes up now, the more it’s going to crash in the future.”

Shares of cruise lines tumbled Thursday after Commerce Secretary Howard Lutnick suggested the Trump administration would crack down on taxes paid by the companies.

“You ever see a cruise ship with an American flag on the back?” Lutnick said in an appearance late Wednesday on Fox News.

“None of them pay taxes … every supertanker. None pay taxes … all foreign alcohol. No taxes. This is going to end under Donald Trump,” said Lutnick.

Shares of Carnival dropped 5.9%, Royal Caribbean lost 7.6%, Norwegian Cruise Line fell 4.9% and Viking Holdings weakened by 3%.

Analysts at Stifel Financial called the selling in cruise stocks a “massive overreaction,” and recommended investors use the slump to buy the names “on weakness.”

“[T]his is probably the tenth time in the last 15 years we have seen a politician (or other D.C. bureaucrat) talk about changing the tax structure of the cruise industry,” wrote analysts led by Steven Wieczynski. “Each time it was presented, it didn’t get very far.”

“[F]om a tax standpoint the cruise industry is embedded under the cargo industry in the eyes of the Internal Revenue Service,” Stifel wrote. “That would mean the entire cargo industry would have to be turned upside down even before they got to the cruise industry, which is a sliver of the size of the cargo industry.”

The cruise industry might respond by moving their corporate headquarters outside the U.S., reducing the number of jobs kept in the U.S., the report said. “With 90%+ of their business being conducted in international waters, it would then be impossible for the U.S. (or any other entity) to target the cruise operators.”

Stifel has buy recommendations on six cruise industry stocks: Carnival, Royal Caribbean, Norwegian, Viking as well as Lindblad Expeditions Holdings and OneSpaWorld Holdings.

“Cruise lines pay substantial taxes and fees in the U.S.— to the tune of nearly $2.5 billion, which represents 65% of the total taxes cruise lines pay worldwide, even though only a very small percentage of operations occur in U.S. waters,” said the Cruise Lines International Association, in a statement. “Foreign flagged ships that visit the U.S. are treated the same for taxation purposes as U.S. flagged ships visiting foreign ports, which provides consistent reciprocal treatment across international shipping.”