Full Episode
What are the opportunities outside the world of AI? You're listening to Motley Fool Money. Welcome, Fools. I'm your host, Tim Byers, and with me are longtime Fools, Carl Thiel, and first-time Monday podcast, Anthony Chavone. Ant, how you feeling? Fellas, we doing well? Fully caffeinated, I hope?
Fully caffeinated, Tim. Feeling good.
Excellent. This is good. Today, we're talking about non-AI stocks. Seriously, we are being serious about this. Non-AI stocks. Did you even know that there was such a thing as non-AI stocks? We'll be digging into reports from four stocks, really three stocks that we don't often talk about and give a buy, sell, or hold rating on each as we do. Let's get into it, starting with Carl. This
Close to $10 billion deal. I'm rounding up, but it's not quite $10 billion, but a $10 billion deal between Sedara, that is ticker CDTX, and Merck, the pharmaceutical giant, MRK. What's going on here? This is a strategic purchase, I assume here. It's a lot of money. So what are we getting here?
This is a good old-fashioned product-slash-platform deal in the sector. What Sedara does is, most directly, what Merck is buying right now is an influenza drug that shouldn't be subject to year-to-year variation. It's a different way of going after influenza. You can see why that would be a relatively big deal. There's a lot of flu shots given out every year.
Seems timely, yeah.
Yeah. I think it's interesting on a number of levels. One is just that usually, M&A in the pharma sector is just dominated by oncology, and it still is. But we've seen a lot more start going to these broader health issues around obesity and around, in this case, infectious disease, so influenza. The other reason I think it's super interesting is just that it came at a huge premium. I'll say.
Yeah, $9.2 billion all-cash deal, 109% premium to where Sedar was trading before that. I just think that that gets at continuing some mispricing in the sector. You expect an M&A deal to come at some premium, but that's a pretty big one.
One of the things I saw here, Karl, again, $221.50 in cash, that is more than double the prior closing price, huge premium here. I want to ask whether or not that is a premium that Merck feels it must pay.
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