US blacklists more than 50 entities to restrict China’s growing AI capabilities. (00:21) GameStop (GME) rallies after saying it can use its billions in cash to buy Bitcoin. (01:53) Grab seeks up to $2B loan for possible GoTo takeover - report. (03:08)Episode transcripts seekingalpha.com/wsb.Show links: Biggest stock movers Wednesday: GME, HUMA, and moreTrump may reportedly impose copper tariffs ahead of schedule, futures hit record highCanada halts Tesla rebate payments, moves to block future incentivesStock market selloffs may have ‘washed out’ some buyers: IBKRSign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Chapter 1: What are the new additions to the U.S. blacklist and why?
Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. Good morning. Today is Wednesday, March 26th. I'm Julie Morgan. The U.S. expands its blacklist. GameStop surges and GrabBuy is a go-to takeover. The Bureau of Industry and Security from the U.S. Department of Commerce has added 80 entities to its blacklist.
Chapter 2: How does the U.S. blacklist expansion affect China's tech capabilities?
This includes over 50 from China and others from the UAE, South Africa, Iran, Taiwan, and other countries. The expanded blacklist aims to restrict China's ability to develop or buy high-performance computing chips or quantum technologies for military applications and to curb its hypersonic weapons program.
Chapter 3: Which Chinese entities are involved in advanced AI and military activities?
The newly blacklisted entities include 11 from China and one from Taiwan, engaged in advanced AI, supercomputers, and high-performance AI chips for China-based end users and closely linked to China's military-industrial complex. Another 13 entities from China were added for links to unsafeguarded nuclear activities and 27 more from the country for acquiring or attempting to acquire U.S.
origin items to support China's military modernization. In addition, seven entities from China were blacklisted for acquiring or attempting to acquire U.S. origin items to advance Beijing's quantum technology capabilities. And two were added for selling products already blacklisted, including Huawei and its affiliated entity, HiSilicon.
Chapter 4: What are the implications of the U.S. blacklist on American companies?
American companies are barred from supplying to the blacklisted entities without government permits. This marks the first expansion to the entity list under the Trump administration. GameStop traded higher in post-market trading on Tuesday after disclosing its Q4 earnings report and announcing that it can start investing in Bitcoin.
Chapter 5: Why did GameStop's stock rally following its earnings report?
Revenue fell 28.5% year-over-year for the quarter that ended on February 1st to $1.28 billion. The grapevine Texas-based company said selling, general, and administrative expenses were 22% of sales compared to 20% of sales a year ago. GameStop recorded net income of $131.3 million in Q3 versus a net income of $63.1 a year ago.
Chapter 6: What financial performance did GameStop report for Q4?
EPS was $0.30 for the quarter versus an $0.08 consensus and $0.22 a year ago. On the balance sheet, GameStop ended the quarter with $4.76 billion in cash and merchandise inventory was reported at $480.2 million versus $632.5 million a year ago. GameStop had long-term debt of $6.6 million at the end of the quarter.
Notably, GameStop announced that its board has unanimously approved an update to its investment policy to add Bitcoin as a Treasury Reserve asset. GME is up 11% in pre-market action. Singapore-headquartered Grab is seeking a loan of up to $2 billion to support its potential takeover of Indonesia's go-to.
Bloomberg News reported that the so-called bridge loan could have a tenor of about 12 months and that Grab's talks with banks were in the early stages. The U.S.-listed ride-hailing and food delivery firm is also considering a bond or equity takeout after securing the bridge loan.
Grab, which is backed by Uber Technologies, has held on-and-off talks with GoTo, but a merger never materialized, partly because of antitrust concerns likely to arise from combining two of the biggest Southeast Asian tech companies. Now for a look at what's trending on Seeking Alpha. President Trump may reportedly impose copper tariffs ahead of schedule. Futures hit a record high.
Canada halts Tesla rebate payments and moves to block future incentives. And IBKR says the stock market sell-offs may have washed out some buyers. On our Catalyst Watch for the Day, shareholders with intracellular therapies will vote on the acquisition offer from Johnson & Johnson. Shareholders with Accolade will vote on the acquisition offer from Transparent.
And Dutch Bros will hold its Investor Day event. The company plans to highlight its growth strategy. Shares of Dutch Bros have seen strong rallies in the past after presentations by management. Now for a look at futures, ahead of the opening bell, Dow, S&P and Nasdaq futures are in the red. Crude oil is in the green, up 0.4% at $69 a barrel. Bitcoin is up 0.8% at $87,000.
In the world markets, the FTSE 100 is flat and the DAX is down 0.3%. On today's economic calendar, at 10 a.m., the Fed's Neel Kashkari will host a Fed Listens event conversation on labor market conditions, inflation, and how the Fed communicates and transmits monetary policy before the Detroit Lakes Regional Chamber of Commerce Economic Summit.
And at 1.10 p.m., the Fed's Alberto Musalem will speak and participate in a moderated conversation on the U.S. economy and monetary policy before a Paducah area Chamber of Commerce luncheon. That's it for today's Wall Street Breakfast. Thanks for listening.
To take full advantage of Seeking Alpha, join the highest quality community of real investors discussing stocks and ETFs at seekingalpha.com slash subscriptions. I'm your host, Julie Morgan. Go out and make it a great day.
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