Raphael Stevens

Exceptionally strong housing demand in the U.S. has large homebuilders in the driver’s seat and smaller builders ripe for takeover.
The surge is the result of still-growing housing demand that reignited at the start of the pandemic thanks to record low mortgage rates and sudden new migration.
Margaret Whelan, founder of Whelan Advisory and one of the biggest investment bankers in the builder space, said half of the deals she has done this year are with Japanese buyers.

Exceptionally strong housing demand in the U.S. has large homebuilders in the driver’s seat and smaller builders ripe for takeover. The buyers are both domestic and Japanese.
M&A activity in the single-family homebuilder space is having a record year in terms of dollar volume, and close to a record in the number of deals, according to Margaret Whelan, founder of Whelan Advisory and one of the biggest investment bankers in the builder space.  

“The big guys want to get bigger. They want to get into more markets, more price points, more types of product, and as they’re doing that, they’re finding the most efficient way is through acquisitions,” she said.
There have been a total of 19 homebuilder deals so far this year. Whelan says she alone has four more set to close by year end, and there could be more from others. The average number of deals across the industry over the last five years was 12 per year.
The surge is the result of still-growing housing demand that reignited at the start of the pandemic thanks to record low mortgage rates and sudden new migration. But mortgage rates also caused a historic housing shortage.
Homes were flying off the shelves in the first two years of the pandemic, when rates were low, but when interest rates rose, homeowners stopped selling so they wouldn’t have to trade a low mortgage rate for a higher one. That dynamic, sometimes called the mortgage rate lock-in effect, has exacerbated the housing shortage.

Construction of a KB Home single family housing development is shown in Menifee, California, U.S., September 4, 2024. 
Mike Blake | Reuters

The nation’s large homebuilders benefited from all of it, especially since they’ve been buying down mortgage rates to get customers in the door. Five years ago, builders accounted for 1 in 6 homes for sale. Now they make up 1 out of every 3, according to industry counts.

The biggest builders have also gone from a 30% market share five years ago to 50% today. Public builders have clear advantages over smaller private builders.
“Public builders have a lower cost of debt (less expensive to borrow) than private builders and generally don’t need to borrow to buy a large company,” wrote Danielle Nguyen, vice president of research with John Burns Research and Consulting.
And it’s not just public builders in the U.S.
Whelan said half of the deals she has done this year are with Japanese buyers.
“From their perspective, they have much lower growth at home than they have here, and they have much lower cost of capital. And because their capital is so cheap, they can afford to pay more, so an M&A process tends to be very competitive,” said Whelan.
Some of the biggest builder deals this year involved Japanese companies like Sekisui House, which purchased MDC Holdings.
“The deal of the year was Sekisui buying MDC, which made them a top five builder. I expect Sumitomo Forestry and Daiwa House to follow suit, acquiring other big builders who are not gaining market share and having difficulty competing,” said John Burns, founder of John Burns Research and Consulting.
Whelan said the Japanese are particularly adept at value engineering the homebuilding process, in part through reverse engineering building plans to remove any waste. They often “build” the home first in 3-D imaging, reducing waste by as much as 20% to 30%, and use factories where they pre-cut all of the wood that’s going into the house, such as the trusses, frames, and wall panels, she said.
“I think what we would love to see is that they would bring some of the efficiencies that they have at home in Japan that would make housing more affordable, more cost-effective. They’ve done it successfully in the U.S. auto industry,” Whelan said.
Homebuilder M&A will likely continue into next year, as deals have a long lag time. The new Trump administration could also provide a boost.
President-elect Donald Trump has promised to open up more federal land for homebuilding. He could also put pressure on state and local governments to loosen zoning regulations that have inhibited more growth.
He has also, however, promised mass deportations, which could hit the builder workforce hard. Right now the highest costs for homebuilders are land and labor. More

Planet Fitness lost a bid in bankruptcy court to acquire Blink Holdings.
U.K.-based private gym chain PureGym won its bid to acquire Blink and its assets, including 60 of its gyms in New York and New Jersey.
A Delaware bankruptcy court judge said accepting PureGym’s offer would avoid antitrust risks.

In an aerial view, customers leave a Planet Fitness gym in Richmond, California, on May 9, 2024.
Justin Sullivan | Getty Images

Planet Fitness lost its bid in bankruptcy court to acquire budget fitness chain Blink Holdings, according to court filings viewed by CNBC.
Planet Fitness placed its competing eleventh hour bids early this month during a 48-hour challenge window. The two higher bids came after it lost out in a bankruptcy auction to U.K.-based, privately held fitness chain PureGym.

Late Tuesday, Delaware’s bankruptcy court formally accepted PureGym’s $121 million offer, which initially won at auction in late October.
J. Kate Stickles, bankruptcy judge in the U.S. Bankruptcy Court of Delaware, said in Tuesday’s hearing that PureGym’s offer would avoid antitrust risks. The company only operates three locations in the U.S., which it first entered in 2021.
PureGym’s offer, assuming Blink’s liabilities, also comes with 60 of Blink’s fitness centers still operating in New York and New Jersey.
“PureGym is committed to ensuring continuity of service for Blink’s members in New York and New Jersey by maintaining the high-quality fitness experience that Blink members have come to expect,” said PureGym CEO Humphrey Cobbold when the company initially made the bid in September.
“The American fitness market is the largest and most dynamic in the world. We are incredibly excited by the scale of opportunity and the chance to tailor and apply our proven model there,” he said.

A Blink Fitness gym is seen on Flatbush Avenue in the Flatbush neighborhood of the Brooklyn borough in New York City on Aug. 12, 2024.
Michael M. Santiago | Getty Images

Planet Fitness’ initial bid was rejected in part because of antitrust concerns, as the roughly $6.8 billion company already owns more than 2,000 club in the U.S., sources familiar with the matter told CNBC.
Planet Fitness’ offer would have further delayed closing the deal, they added. By accepting PureGym’s offer now and avoiding antitrust issues, Stickles said it would allow Blink to continue to operate rather than dissolve as a deal was negotiated in court.
Planet Fitness did not respond to CNBC’s request for comment.

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Liberty Media is spinning off most assets besides Formula One auto racing into a separate publicly traded company, called Liberty Live.
CEO Greg Maffei is stepping down at year-end.
The company also announced cable company Charter Communications would acquire Liberty Broadband in an all-stock transaction.

Liberty Media announced Wednesday that it’s spinning off most assets besides Formula One auto racing into a separate publicly traded company, called Liberty Live, and that CEO Greg Maffei is stepping down at year-end.
Chairman John Malone will become interim CEO of Liberty Media. Liberty Media’s investor day is set to take place on Thursday in Manhattan.

While the 83-year-old Malone will once again take the reigns as CEO, the moves simplify his empire and continue a wind down for Liberty, said Chris Marangi, Co-CIO of Value at Gabelli Funds.
“Malone has accelerated the surfacing and simplification of value,” said Marangi in an interview. “Liberty has come a long way in the 20-plus years that it’s been a standalone entity. It’s created enormous shareholder value. We’re in the final act.”
After the split, Liberty Media will hold Formula One, which Liberty acquired in 2016 and later spun out as a tracking stock, and MotoGP, upon the closing of that transaction. Liberty Live will hold roughly 69.9 million shares of Live Nation Entertainment, sports experiences provider Quint and certain other assets, according to a release.
The company also announced cable giant Charter Communications would acquire Liberty Broadband in an all-stock transaction. In September, Liberty Broadband went public with its aspirations to merge with Charter, in a move to simplify Malone’s portfolio. Liberty Broadband owns 26% of Charter shares.
The Liberty Media and Liberty Live split is expected to be completed in the second half of 2025, and the sale of Liberty Broadband to Charter is projected to be completed in mid-2027.

“The split-off of Liberty Live Group into a separate public entity will simplify Liberty Media’s capital structure, should reduce the discount to net asset value of our Liberty Live stock and enhance trading liquidity at both entities,” Maffei said in a release.
“Following today’s announcements at Liberty Media and Liberty Broadband, all the Liberty acquisitions completed during my tenure are now in structures where shareholders can have more direct ownership in their upside,” Maffei said in a separate release. “While it’s never easy to leave an organization as dynamic as Liberty, I am confident that this is the right time.”
Maffei has been part of Liberty since 2005 and has various positions on boards of the company’s assets, including Charter.
Malone is a pioneer of the cable industry, long known as the “cable cowboy,” and has kept his hand in various media assets over the years. He’s been an independent director of Warner Bros. Discovery — initially through Discovery, before the company merged with Warner Bros., under his advisement.
He’s chairman of the board of Liberty Media, Liberty Broadband and Liberty Global. While Malone has remained an active investor and talking head in the industry, it’s notable that he is taking over as interim CEO of Liberty Media.
A stealthy dealmaker, Malone is known for shrewd financial transactions and spinning out his companies into tracking stocks. Malone infamously ran and built the cable empire TCI in the 1970s. He sold TCI to AT&T in 1999 for roughly $50 billion. More

Rocket Lab announced its first customer for its coming Neutron vehicle.
The space infrastructure company reported third-quarter revenue increased to $104.8 million, up 55% from $67.6 million for the same period a year ago.
The stock has been flying up the past three months, nearly tripling over that period.

A view of Rocket Lab’s HASTE suborbital launch vehicle.
Rocket Lab

Rocket Lab shares jumped in post-market trading after the company reported third-quarter results and announced its first customer for its coming Neutron vehicle.
The space infrastructure company reported third-quarter revenue increased to $104.8 million, up 55% from $67.6 million for the same period a year ago, and above Wall Street’s expectation of $102 million, according to analysts surveyed by LSEG.

Its net loss also increased year over year, to $51.9 million from $40.6 million, but its loss of 10 cents per share came in slightly below analyst expectations of a loss of 11 cents a share.
Rocket Lab forecast fourth-quarter revenue between $125 million and $135 million, which at the midpoint would see the company bring in about $430 million this year.
Additionally, the company announced its first launch deal for its Neutron rocket.
A “confidential commercial satellite constellation operator” signed for two missions in mid-2026, which Rocket Lab said were at a price “consistent with our target” for the vehicle. Previously, the company said it was targeting a price point of about $50 million per Neutron launch.
Shares of Rocket Lab jumped as much as 25% in after-hours trading, up from its close at $14.66 a share. The stock has been flying up the past three months, nearly tripling over that period.

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The bulk of Rocket Lab’s Q3 revenue growth came from its Space Systems unit, which builds spacecraft and sells satellite parts. The business brought in $83.9 million of the quarter’s revenue, up from $46.3 million a year ago, while its Launch unit brought in $21 million, roughly in line wit- $21.3 million a year prior.
But the company’s small Electron vehicle, which sells for about $8.5 million per mission, has become the world’s third-most-frequently launched orbital rocket. It’s launched a company record 12 missions so far this year. And Rocket Lab added $55 million worth of new launch contracts to Electron’s backlog in Q3.
Development of Neutron — as well as the Archimedes engines that power it — remains a key watch item for investors, with heavy research and development spending driving most of Rocket Lab’s quarterly losses.
Neutron is seen as crucial for Rocket Lab to tap larger markets, including a broader swath of U.S. national security launches. The company continues to expect Neutron to debut in mid-2025 and has outlined a variety of milestones in the rocket’s path to launch — including assembly and testing of flight hardware, firing “multiple” Archimedes engines and continuing on work underway on the launchpad infrastructure in Virginia. More

Rivian Automotive and Volkswagen Group said the size of their joint venture has increased to up to $5.8 billion.
The automakers also said the first VW models to use Rivian’s software and electrical architecture are set to arrive as early as 2027.

A provided image of Oliver Blume, CEO of Volkswagen Group and RJ Scaringe, founder and CEO of Rivian, as the companies announce joint venture plans on June 25, 2024.
Courtesy: Business Wire

Volkswagen Group has increased its planned investment in an announced joint venture with electric vehicle maker Rivian Automotive ahead of the operations launching Wednesday.
The companies in a joint press release Tuesday said the size of the deal is now up to $5.8 billion — an increase from an initial investment of up to $5 billion — with the first VW models to use Rivian’s software and electrical architecture arriving as early as 2027.

Shares of Rivian were up by more than 6% during after-hours trading.
The increase in investment was a result of the companies pulling ahead some potential future capital from VW, as well as changes in the deal’s structure, including in equity investment, officials said Tuesday during an investor call.
VW Group CEO Oliver Blume during a press conference Tuesday said the German automaker expects to use Rivian’s technologies across a wide range of price points, international markets and brands.
The integration of Rivian’s software is expected to start with the Volkswagen brand, followed by Audi as well as VW’s forthcoming Scout brand, Blume said. He also mentioned “sports cars” could be included but did not specify which brand. VW’s brands also include Bentley, Porsche and Lamborghini, among others.
“We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future,” Rivian CEO RJ Scaringe said in a statement.

Both Scaringe and Blume said any further plans such as battery modules, joint production of vehicles or sharing other hardware components would need to be in addition to the announced joint venture deal.
The name of the joint venture, which was expected to close during the fourth quarter, is Rivian and VW Group Technology, LLC.

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Stock of Rivian Automotive and Volkswagen Group

VW has already made an initial investment of $1 billion in the form of a convertible note, the companies said. At the closing of the joint venture, VW will invest about $1.3 billion “as consideration for background IP licenses and a 50% equity stake in the joint venture.”
The remaining investment of up to $3.5 billion is expected to come by 2027 “in the form of equity, convertible notes, and debt at future dates and based on clearly defined milestones,” according to the companies.
The joint venture deal was initially announced in June and came as Rivian sought to raise additional capital as it launches its redesigned models and prepares for production of new “R2” vehicles in early 2026.
Scaringe previously said the capital from VW is expected to carry the company through the production ramp-up of its smaller R2 SUVs at its plant in Normal, Illinois, starting in 2026, as well as production of a midsize EV platform at a plant in Georgia, where Rivian paused construction earlier this year.
The joint venture will be headed by Rivian Chief Software Officer Wassym Bensaid and VW Group Chief Technical Engineer Carsten Helbing.
The companies said developers and software engineers from both companies will join the joint venture. Teams will be based initially in Palo Alto, California, and three other sites are in development in North America and Europe. More

Shares of Amgen fell as analysts chewed over bone density loss data from an early-stage trial on its experimental weight loss injection, MariTide.
While some analysts called the additional data a potential safety risk, others said the share move was an overreaction and that more data on a larger group of patients is needed.
The drug is a promising potential competitor in the weight loss drug market that is designed to be taken monthly rather than once a week like existing injections from Novo Nordisk and Eli Lilly. 

Shares of Amgen fell more than 7% Tuesday as analysts chewed over bone density loss data from an early-stage trial on its experimental weight loss injection, MariTide.
One analyst said the additional data suggests a new potential safety risk tied to the drug. But others said the share move was an overreaction, and that more data on a larger group of patients is needed.

Amgen did not immediately respond to a request for comment on the data 
The drug is a promising potential competitor in the weight loss drug market. It is designed to be taken monthly, rather than once a week like existing injections from Novo Nordisk and Eli Lilly, and promotes weight loss differently.
Wall Street is waiting for crucial phase two trial results on MariTide, which are set to be released before the end of the year. 
Analysts on Tuesday cited additional publicly available data from a phase one study showing that the highest dose of MariTide – 420 milligrams – was linked to roughly 4% loss of bone mineral density over 12 weeks. A decrease in bone mineral density refers to when bones lose calcium and other minerals, making them weaker and more likely to break. 
In a research note, Cantor Fitzgerald analyst Olivia Brayer called the data a “big unknown” and suggested it could be a potential risk associated with drugs like MariTide, which work by using so-called GIPR antagonism. Amgen’s injection works by blocking a gut hormone receptor called GIP but also activates another appetite-suppressing hormone called GLP-1. 

That’s unlike Eli Lilly’s obesity drug, Zepbound, which activates GIP and GLP-1. Wegovy activates GLP-1 but does not target GIP, which may also affect how the body breaks down sugar and fat.
“On one hand, patients could naturally lose bone mineral density during weight loss treatment,” Brayer wrote. 
But Brayer said, “on the other hand, this could be a non-starter because there seems to be a dose-dependent increase” in bone mineral density loss. That means patients appear to lose more bone mineral density the higher the dose they take. 
Meanwhile, Jefferies analyst Michael Yee wrote in a note that the additional MariTide data seems to be a “non-issue.” Yee acknowledged that people on the highest dose of the drug had declines in bone density, but said “the data is all over the place.” 
For example, he pointed to data on a lower dose of the drug showing that bone density actually increased by 1% before normalizing. Yee added that bone mineral density “changes” are a known side effect of weight loss drugs in the first one to three months of use because people lose significant weight quickly. 
Amgen is also aware of the “hypothetical concern” of bone mineral density loss, Yee said, citing the firm’s discussions with management.  
“While obviously not saying there is zero effect, we are saying we don’t think there is a concern, significant [bone mineral density] drop sustained over time, or clinical risk or concern,” Jefferies said. “Overall we don’t believe there is an issue and the effect is normalized over time.”
BMO analyst Evan Seigerman wrote in a note Tuesday that “We’d be cautious about making an overarching judgment on the safety profile of MariTide with this data.” 
He added that “we’d be more comfortable judging the safety profile from a larger cohort of patients.” There may not be a clear answer until Amgen releases full phase two trial data on the drug. 
“Our view on MariTide hasn’t changed with this and if anything we see the selling as overdone,” Seigerman wrote.  More

A Spirit flight was struck by gunfire on Monday and a flight attendant was injured while trying to land at Port-au-Prince’s airport.
Spirit, American and JetBlue have suspended Haiti flights.
The U.S. State Department warned travelers about “armed violence” in the area.

Spirit Airlines airplanes at Fort Lauderdale-Hollywood International Airport (FLL) in Fort Lauderdale, Florida, US.
Eva Marie Uzcategui | Bloomberg | Getty Images

The Federal Aviation Administration on Tuesday banned U.S. civilian flights to and from Haiti for 30 days after a Spirit Airlines airplane was struck by gunfire trying to land in Port-au-Prince a day earlier.
The FAA’s ban also prohibits U.S. flights from traveling under 10,000 feet in Haiti’s airspace.

On Monday, Spirit Airlines Flight 951 from Fort Lauderdale, Florida, diverted to Santiago in the Dominican Republic at around 11:30 a.m. after it was damaged by gunfire, the airline said. Spirit said one flight attendant on board “reported minor injuries” and that no passenger injuries were reported.
American Airlines said one of its flights from Port-au-Prince to Miami was hit by gunfire on Monday and that it landed uneventfully, with no injuries reported.
“Out of an abundance of caution, a post-flight inspection was completed, indicating the exterior of the aircraft had been impacted by a bullet,” American said in a statement.
American has suspended flights to the Haitian capital through Feb. 12. JetBlue Airways has also paused service to Haiti.
The U.S. State Department on Monday said that the embassy in Port-au-Prince “is aware of gang-led efforts to block travel to and from Port-au-Prince which may include armed violence, and disruptions to roads, ports, and airports.” More