Wall St Engine
BOFA COMMENTS ON ILLINOIS RAISING OSB TAXES: 'WE DO EXPECT DKNG TO EXPLORE VARIOUS MITIGATION STRATEGIES'
Analyst comments: "This weekend, Illinois passed their FY26 Budget with an incremental fee for online sports book (OSB) operators. Operators will be charged $0.25 for each wager up to 20M wagers and $0.50 for each additional wager over 20M. DraftKings and FanDuel are the only two operators that collect over 20M wagers annually in Illinois, and we estimate this incremental fee to increase their effective tax rate to over 50% from ~35% currently. As a reminder, IL raised taxes last year from 15% to ~35% for DKNG/FanDuel. Bottom line: Initial budget proposals in Illinois did not include any incremental taxes for OSB operators, and given the significant increase in taxes last year, this was a very unexpected last minute addition. We estimate this new fee could be a ~$70M annualized EBITDA impact to DraftKings in 2025 (~$35M for 2H25) and $80M in 2026 (~6% of 2026 EBITDA) pre-mitigation. We do expect DKNG to explore various mitigation strategies including lower promotions, passing part or all of the fee through to customers or changing merchandizing to incentivize lower effective tax rate bets. While DraftKings initially targeted 50% mitigation on the higher tax rate in Illinois, it’s our sense actual mitigation has been less as they balance growth and profitability. We think this incremental fee will encourage DKNG and FanDuel to revisit promotions and be more aggressive in their mitigation. Since this is not a flat tax rate across $GGR, $DKNG and FanDuel could try to aim to change their bet mix in Illinois to optimize for the fee, or could look to pass this fee onto customers more directly, though major changes could put them at a competitive disadvantage relative to smaller operators in the market."
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BOFA COMMENTS ON ILLINOIS RAISING OSB TAXES: 'WE DO EXPECT DKNG TO EXPLORE VARIOUS MITIGATION STRATEGIES'
Analyst comments: "This weekend, Illinois passed their FY26 Budget with an incremental fee for online sports book (OSB) operators. Operators will be charged $0.25 for each wager up to 20M wagers and $0.50 for each additional wager over 20M. DraftKings and FanDuel are the only two operators that collect over 20M wagers annually in Illinois, and we estimate this incremental fee to increase their effective tax rate to over 50% from ~35% currently. As a reminder, IL raised taxes last year from 15% to ~35% for DKNG/FanDuel. Bottom line: Initial budget proposals in Illinois did not include any incremental taxes for OSB operators, and given the significant increase in taxes last year, this was a very unexpected last minute addition. We estimate this new fee could be a ~$70M annualized EBITDA impact to DraftKings in 2025 (~$35M for 2H25) and $80M in 2026 (~6% of 2026 EBITDA) pre-mitigation. We do expect DKNG to explore various mitigation strategies including lower promotions, passing part or all of the fee through to customers or changing merchandizing to incentivize lower effective tax rate bets. While DraftKings initially targeted 50% mitigation on the higher tax rate in Illinois, it’s our sense actual mitigation has been less as they balance growth and profitability. We think this incremental fee will encourage DKNG and FanDuel to revisit promotions and be more aggressive in their mitigation. Since this is not a flat tax rate across $GGR, $DKNG and FanDuel could try to aim to change their bet mix in Illinois to optimize for the fee, or could look to pass this fee onto customers more directly, though major changes could put them at a competitive disadvantage relative to smaller operators in the market."
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Wall St Engine
GERMANY WARNS $AMZN ON MARKETPLACE PRICE CONTROLS — 🇩🇪 Germany’s antitrust office says Amazon’s pricing restrictions on third-party sellers likely breach national and EU law. Regulator argues Amazon’s opaque price caps distort fair competition on its own platform, per Bloomberg. Amazon warns changing the rules could harm the customer experience.
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GERMANY WARNS $AMZN ON MARKETPLACE PRICE CONTROLS — 🇩🇪 Germany’s antitrust office says Amazon’s pricing restrictions on third-party sellers likely breach national and EU law. Regulator argues Amazon’s opaque price caps distort fair competition on its own platform, per Bloomberg. Amazon warns changing the rules could harm the customer experience.
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Wall St Engine
Truist Securities Initiates Coverage on $XYZ with Sell Rating, PT $60; 'Block has limited OpEx flexibility to offset a worse macro, we expect the shares to underperform peers'
Analyst comments: "While we like Block as a company long-term, we believe this is a really difficult stock to own late cycle as its two business segments are sensitive to the macro (Square mainly serves SMBs/micro merchants and Cash App predominately serves less-affluent consumers). In addition, we believe Block is leaning into growth of its lending products (Cash App Borrow, merchant cash advances, Afterpay BNPL loans) in order to reaccelerate growth throughout 2025 which may lead to higher credit losses and a tough growover in 2026. Given this, and our concern that Block has limited OpEx flexibility to offset a worse macro, we expect the shares to underperform peers."
Analyst: Matthew Coad
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Truist Securities Initiates Coverage on $XYZ with Sell Rating, PT $60; 'Block has limited OpEx flexibility to offset a worse macro, we expect the shares to underperform peers'
Analyst comments: "While we like Block as a company long-term, we believe this is a really difficult stock to own late cycle as its two business segments are sensitive to the macro (Square mainly serves SMBs/micro merchants and Cash App predominately serves less-affluent consumers). In addition, we believe Block is leaning into growth of its lending products (Cash App Borrow, merchant cash advances, Afterpay BNPL loans) in order to reaccelerate growth throughout 2025 which may lead to higher credit losses and a tough growover in 2026. Given this, and our concern that Block has limited OpEx flexibility to offset a worse macro, we expect the shares to underperform peers."
Analyst: Matthew Coad
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Wall St Engine
CHIME FILES FOR IPO, TARGETS UP TO $832M:
Chime and some shareholders are looking to raise as much as $832M in an IPO, valuing the fintech at up to $11B fully diluted — less than half its 2021 peak of $25B. It reported $12.9M in Q1 net income on $518.7M revenue. Shares will trade under CHYM on Nasdaq.
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CHIME FILES FOR IPO, TARGETS UP TO $832M:
Chime and some shareholders are looking to raise as much as $832M in an IPO, valuing the fintech at up to $11B fully diluted — less than half its 2021 peak of $25B. It reported $12.9M in Q1 net income on $518.7M revenue. Shares will trade under CHYM on Nasdaq.
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Wall St Engine
$APLD signs two 15-year leases with $CRWV to deliver 250MW of AI/HPC capacity at its Ellendale, ND data center, generating ~$7B in total revenue. CoreWeave holds option for another 150MW. 1st 100MW phase expected online in Q4'25. Ellendale is engineered to scale to 1GW over time.
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$APLD signs two 15-year leases with $CRWV to deliver 250MW of AI/HPC capacity at its Ellendale, ND data center, generating ~$7B in total revenue. CoreWeave holds option for another 150MW. 1st 100MW phase expected online in Q4'25. Ellendale is engineered to scale to 1GW over time.
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Quiver Quantitative
BREAKING: We just found more STOCK Act violations.
Representative Brandon Gill just filed purchases of up to $850K of Bitcoin.
Some of the trades were made over 100 days ago. The reporting deadline is 45 days.
Gill sits on the House Committee on Oversight and Government Reform https://t.co/CI01ct2ozM
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BREAKING: We just found more STOCK Act violations.
Representative Brandon Gill just filed purchases of up to $850K of Bitcoin.
Some of the trades were made over 100 days ago. The reporting deadline is 45 days.
Gill sits on the House Committee on Oversight and Government Reform https://t.co/CI01ct2ozM
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