In mid-July, the stock for the cancer drug developer MEI Pharma skyrocketed. It wasn’t because the small company, first listed on the Nasdaq in 2003, had discovered a blockbuster cancer cure. Rather, MEI Pharma’s soaring share price coincided with the company’s decision to buy up $100 million of the cryptocurrency Litecoin for its treasury.
The pop in price, which saw shares go from $3 to a high of $7, wasn’t surprising. In announcing the Litecoin purchase, MEI Pharma became just the latest firm to exploit a popular stock price hack: When a public company adds crypto to its balance sheet, traders have responded by buying up shares and boosting the firm’s value well beyond the cost of the purchase.
What was unexpected, however, was that MEI Pharma’s stock price almost doubled in the days before the announcement became public—despite there being no material updates filed with the Securities and Exchange Commission, no press releases, and barely any chatter on social media.
MEI Pharma is not the only firm that has recently experienced an unusual pop in its stock right before announcing a crypto-buying strategy. Fortune discovered a similar pattern at other small public companies, which suggests that insiders are front-running some of these announcements, according to finance professors, investors, and corporate CEOs.
“It does look suspicious to me,” said Xu Jiang, a professor at Duke University who has studied insider trading in public markets. “This usually happens for a lot of insider trading scenarios that I anecdotally know about.” He added that he couldn’t say whether insider trading definitively occurred without a thorough investigation.
A spokesperson for MEI Pharma declined to comment.
Spokespeople for four other companies whose stock showed unusual price movements just prior to crypto purchases—Kindly MD, Empery Digital, Fundamental Global, and 180 Life Sciences Corp—did not respond to a request for comment. Spokespeople for VivoPower and Sonnet BioTherapeutics, two other crypto treasury companies with similar price movements, declined to comment.
Crypto treasury boom
Treasury companies are one of crypto’s newest manias, and billionaire Michael Saylor is the trend’s pioneer.
In 2020, the founder and chairman of Strategy, formerly called MicroStrategy, announced that his data analytics software company would add Bitcoin to its balance sheet. Traders saw the company’s stock as a proxy for the world’s largest cryptocurrency, and bought up its shares as the price for the world’s largest cryptocurrency increased.
For Strategy, the tactic proved so successful that it went on to accumulate almost $70 billion worth of the cryptocurrency and reached a market capitalization of around $100 billion, despite reporting only a paltry $115 million in revenue in the second quarter of this year. (By comparison, Starbucks, which has a similar market capitalization, reported $7.8 billion in revenue in the same period.)
Others have sought to replicate Strategy’s success. Early copycats included a budget hotel company in Japan, which began adding Bitcoin in 2024 and a handful of other companies. This year, the trend has taken off in earnest. Since January, 184 public companies have announced crypto purchases collectively worth almost $132 billion, according to data from Architect Partners, a crypto M&A advisory and financing firm.
“We’ve kind of hit this point of saturation,” said Louis Camhi, founder of RLH Capital, an investment management and advisory firm that’s helped out on recent crypto treasury deals. Now, he said, investors are waiting to see if their crypto treasury bets will turn a profit.
‘Information leakage’
Some of these reaping the benefit of crypto-related price pops are not retail investors, however, but people with connections to the company or outsiders who gained access to private details, who appear to have turned a profit by front–running the news.
SharpLink, a marketing company for sportsbooks and casinos, saw its share price languish below $3 during April and early May. But on May 27, when it announced plans to add $425 million in Ethereum to its balance sheet, its shares rocketed to a high of nearly $36.
But, during the three trading days prior to the announcement, the stock for SharpLink more than doubled from $3 to $6, despite no SEC filings or press releases from the company. “There’s something leaking out there, because they approached so many investors, so it’s just really hard to control,” said the CEO for a separate crypto treasury company who was pitched on the deal. The executive declined to be named when talking about a competitor.
A spokesperson for SharpLink, which announced the completion of its first Ethereum purchase on June 13, told Fortune the company has “established policies and procedures in an effort to prevent” trading on insider information but declined to provide more details.
Then there is Mill City Ventures, a small, non-bank lender in Minnesota, which also showed signs of what financiers call “information leakage,” or when non-public information spreads beyond those within a company who are authorized to hear about a material event.
In the two trading days before Mill City Ventures announced it had raised $450 million to become a treasury company for the cryptocurrency Sui, it saw its stock more than triple to end the week at almost $6—without the company announcing any material changes to its business.
“There was definitely activity in the stock prior to the announcement,” said Stephen Mackintosh, an executive at Mill City and a general partner at the hedge fund Karatage, which led the fundraise. He later added: “We are highly confident that the price movements had no effect on the pricing of the deal.”
Mill City Ventures has since rebranded to SUI Group Holdings.
Insider trading
Public markets have clear rules when it comes to announcing news of “material non-public information” that are likely to affect a firm’s stock price.
Insiders who receive news of a material event must typically agree to be “wall-crossed,” a term that refers to “crossing the wall” from being an outsider without stock-moving information to an insider with sensitive information. Usually companies have a database of individuals that have been wall-crossed in case regulators reach out to investigate insider trading.
In the case of crypto treasury companies, the deals may be months in the making, but just days before the announcement, brokers commence what’s called a roadshow, or widespread outreach to investors to encourage them to put money into a deal.
For example, during a three-day period right before SharpLink announced its crypto treasury pivot, company executives pitched investors on ponying up capital, according to Mackintosh. Notably, it was during those three days when the price of the company’s stock popped. And, during the two-day period when dealmakers pitched investors on the $450 million fundraise for Mill City Ventures, the stock for the small non-bank lender also popped.
Insider trading laws in the U.S. don’t only preclude executives at a company from trading on news that may affect a stock’s price. The laws also apply to others who receive information from these executives, said Elisha Kobre, a partner at the law firm Sheppard Mullin and former federal prosecutor in the Southern District of New York. This includes investors briefed during roadshows.
In the case of the crypto treasury firms, it’s unclear who’s profiting off of the front-running. While some executives at these companies have filed notices of stock grants or purchases just before the crypto pivots, the vast majority haven’t sold their holdings, according to SEC filings. What’s more likely is that insiders beyond just company directors or executives are getting tipped off.
Still, the suspicious price movement is in line with what researchers have long catalogued in public markets. One study in 2014 found that companies’ stocks rose on average 7% in the 41 days before a merger announcement. And, while some of that price movement likely stems from traders who are correctly reading the tea leaves, researchers have found it’s also likely that the price moves stem from those trading on inside information.
“There is academic evidence that is widely cited that shows that most illegal insider trading happens before M&As,” Peter Cziraki, a finance professor at Texas A&M University who studies insider trading, told Fortune. He pointed to a 1992 study that found that 80% of illegal insider trading cases litigated by the SEC are associated with takeover attempts.
“Like every time you do a major M&A deal, this shit happens,” said a finance executive involved in a crypto treasury company, who declined to be named while talking about private business dealings. “And you always hear about how the SEC is asking people who knew what and when.”
Fighting front-running
In recent weeks, companies embracing crypto treasury strategies have taken additional measures to prevent “information leakage.”
“It’s a bad look for everyone here,” said Camhi, the founder of RLH Capital, in reference to those who appear to be front-running crypto treasury announcements. “So it’s really to everyone’s advantage to squash this issue.”
Mackintosh, the hedge fund investor at Karatage, and his team were aware of alleged leakage with SharpLink, which is why they decided to contact investors over just two trading days, not three, he said. “We were mindful that markets are very exuberant at the moment, and we tried to run it in the best and the safest way possible,” he added.
Others have gone even further. These include CEA Industries, a small public company focused on the Canadian vaping market.
In late July, CEA Industries announced that it had raised $500 million to become a treasury company for BNB, the cryptocurrency closely associated with the crypto exchange Binance. Instead of divulging the ticker of CEA Industries as they conducted the roadshow, dealmakers gave it to investors on Friday evening after markets closed on July 25, said David Namdar, CEO of CEA Industries, which has since changed its name to BNB Network Company. The company wanted “to minimize the risk of leaks or volatility” before it announced its crypto pivot on Monday, he said.
And just one week later, Verb Technology, a small public firm that develops a livestreaming platform called MARKET.live, adopted a similar strategy. In early August, the company announced that it had raised $558 million to hold TON, a cryptocurrency closely associated with the messaging app Telegram. Dealmakers also didn’t divulge Verb’s ticker until after markets closed on Friday evening, said an investor in the company, who declined to be named while talking about private business dealings.
A spokesperson for the company declined to comment.
Like with CEA Industries, the announcement for Verb came out just before markets opened on Monday, giving would-be frontrunners only the ability to buy up the stock in pre-market trading.
Still, in the four hours before the announcement went live, the stock jumped almost 60%.
The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.
With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.
“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.
The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.
CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.
Reversing recent guardrails
MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.
The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.
The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.
MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.
The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.
“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.
The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”
Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.
“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.
Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.
Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market.
The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.
That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.
“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”
By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump.
Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.
The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.
The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment.
US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.
“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”
European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.
The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.
Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.
Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.
Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation.
“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.
Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.
The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.
Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking.
Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.
Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.
AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.
The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.
The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives.
More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.
Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said.
The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.
“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”
To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.
The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.”
OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.
Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.”
Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.
Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.
Politics8 years ago