Plus, how artists are fighting back against AI scraping.
Roaring Kitty is back. Investor Keith Gill, who drove 2021’s meme stock bonanza through his Reddit account and Roaring Kitty YouTube channel, has his first livestream in three years scheduled for today at noon Eastern. GameStop stock has been on a tear since Gill started memeing again last month, later revealing he’d placed a nine-figure bet on the beleaguered video game retailer.
Retail trader or master manipulator? The stock platform E-Trade was reportedly considering banning Gill over concerns that he was manipulating the market. But gaining notoriety that compels others to buy or sell a specific stock isn’t against the rules. Bloomberg noted Gill’s new stream comes with a long disclaimer that begins: “You should not treat any opinion expressed on this YouTube channel as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion.”
“He’s … exploiting a gap in the rules,” a former head of the Securities and Exchange Commission’s market abuse unit told The Wall Street Journal. Gill’s activities may not be palatable to some Wall Street stalwarts, but they’re not illegal. Barring evidence of deception, lawyers and professional investors say banning Gill would be a mistake.
Is the juice worth the squeeze? GameStop’s stock surged as much as 2,000% at the height of the pandemic as Gill and other retail investors bought up shares to stick it to hedge funds that had shorted the stock. (Forgot how short selling works? Marketplace has an explainer.) Earlier this week, short sellers were down well over a billion, but experts aren’t expecting a short squeeze like the one that happened in 2021. Back then, some traders got burned because they sold illegal “naked” shorts without buying the stock first. Some traders are still betting against GameStop but generally with smaller positions and more restraint.
The fundamentals haven’t changed. Stock prices are ultimately set by what people are willing to pay for them, and GameStop’s business has the same problems it had a month ago. Investing in meme stocks remains very risky.
This image, generated by artificial intelligence, was shared nearly 50 million times last week to protest deadly Israeli airstrikes on the Palestinian city of Rafah. Two AI-art creators are claiming credit for the image, but that’s a small scuffle in a larger fight over AI and art on the world’s biggest social networks. Meta is changing the way it trains its own AI image generators overseas.
European Meta users received a notification that starting June 26, their posts could be scraped to train the company’s AI models. Those users can thank the European Union’s strict data privacy laws for that disclosure. Meta users in Europe are able to opt out of having their posts used for AI training, but the company doesn’t make it easy. Tensions between creatives and AI companies have been high for a while now. Artists across creative industries are speaking out against AI models that scrape and reuse their work, often without permission or compensation. Around 85% of visual artists earn less than $25,000 a year, according to one study, cobbling together income from direct sales, commissions, freelance work or other jobs.
Over the next year, Meta plans a big expansion of its AI infrastructure, part of the $40 billion the company has earmarked for capital expenditures. As Big Tech races to build out AI at any cost, artists are concerned that text-to-image platforms could make it even harder to scrape together a living. Some artists are fleeing to alternative platforms, like Cara, to escape AI interference. In February, Marketplace spoke with the creator of two data-poisoning tools, Glaze and Nightshade, that alter images and throw out extra data to confuse and overwhelm generative AI.
After months of speculation and backroom negotiations, entertainment empire in decline Paramount Global has reportedly reached a deal to merge with Skydance Media.Paramount is more than a historic Hollywood studio. In recent decades, the conglomerate absorbed a bunch of TV networks, including CBS and MTV, then launched and relaunched several streaming services to stay competitive.
The billionaire Redstone family has long controlled Paramount through its theater chain, National Amusements, an ownership structure that could still scuttle the Skydance merger and get other bidders back in the mix. Let’s do the numbers.
Of the 655 million Paramount Global shares outstanding, as of March 31, nearly 41 million are Class A common stock, which comes with voting rights. National Amusements President Shari Redstone, the controlling shareholder of Paramount, owns approximately 77.4% of that voting stock, so any deal to buy Paramount needs Redstone’s buy-in.
If approved, the $8 billion merger deal would be a two-step process. Skydance, the production company behind “Top Gun: Maverick” and other hits, would need to buy Redstone’s controlling interest before CEO David Ellison and his private equity partners can combine the two companies. Skydance is putting up additional cash toward Paramount’s significant debt.
As The Wall Street Journal put it, “What’s good for the Redstone family might not be as good for every other investor.” Some of Paramount’s nonvoting shareholders oppose the deal, saying it would dilute their shares.
That’s why Skydance is also offering $4.5 billion to buy out half of the nonvoting shares at $15 apiece, a 25% premium over Thursday’s closing price.
Skydance and Paramount had been negotiating during an “exclusivity period” in which Paramount could not entertain other offers, like the $26 billion proposal submitted jointly by Sony Pictures Entertainment and asset management firm Apollo Global Management. Buyers typically like exclusivity windows because they signal that companies are serious about selling, but they can also put an unwelcome spotlight on negotiations. The exclusivity window expired last month.
That’s the number of subscribers to streaming service Paramount+, up 3.7 million in the first quarter of 2024. But the company is still reporting huge losses from streaming, and its TV revenue has shrunk as more people cut the cord. Naturally, the company’s market value has suffered, declining $18 billion since 2019.
Beyond Redstone’s personal reasons for selling, finding a buyer also signals that Paramount has a future worth investing in.
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Newly expanded state voucher programs mean taxpayers all around the country are unwittingly paying religious private schools billions each year. Producer Courtney Bergsieker recommends a Washington Post article that does the numbers. Here’s a gift link.
Even when “the house” is an app on your phone. Editor Tony Wagner recommends this episode of the Bloomberg podcast “Odd Lots,” in which a sports betting expert explains how pro gamblers scrape together returns by identifying gaps in oddsmaking. Sportsbook apps catch on quickly, however, and they issue de facto bans on users who win even a little too much.
A juror for a case tied to one of the country’s largest pandemic aid fraud cases received an anonymous bag of $120,000 in cash, with the promise of more if she voted to acquit. Host Kimberly Adams is reading an Associated Press story about the brave juror, who was dismissed after coming forward about the bribe attempt.
