December 01, 2024 | Read Online

December 1st - The Week Ahead

The Upcoming Remote Vs. Return To Office Battle

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Welcome back! We're almost at year end guys…just gotta keep pushing just a little bit more.

I'll be direct, there wasn't too much that happened over the past few days, so this edition will be very headlines focused.

The Week Ahead Of Us 🔍

Here's a look at earnings this week.

Tuesday: Salesforce, Marvell Technology
Wednesday: Synopsys, Campbell's, Chewy, Dollar Tree
Thursday: Kroger, Lululemon, Veeva Systems, Samsara, Ulta Beauty, Dollar General, Docusign

Here's a look at economic data this week.

Monday: Manufacturing PMI (est. 48.8)
Tuesday: Job Openings (est. 7.49MM)
Wednesday: ADP Non-Farm Employment Change (est. 166K), Services PMI (est. 57), Non-Manufacturing PMI (est. 55.5)
Thursday: Initial Jobless Claims (est. 215K)
Friday: Average Hourly Earnings (est. 0.3% MoM), Non-Farm Payrolls (202K), Unemployment Rate (est. 4.2%)

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Earnings Corner 📜

Given the Holidays, there weren't any notable earnings, so we'll get right into the headlines below.

Today's Headlines 🍿

Black Friday was mostly positive for retailers. While US e-commerce sales hit a record $10.8B (+14.6% YoY), in-store sales climbed 0.7%, down from last year's growth. Overall, however, retail sales rose 3.4%, beating last year's performance, and reflecting a resilient, though increasingly budget-conscious consumer. With a shorter window between Thanksgiving and Christmas digital and brick-and-mortar retailers are hoping to whet consumers' price-sensitive appetites with steeper discounts
Moana 2 is surfing towards a stellar box office performance, driving a record Thanksgiving Weekend box office performance. Over the past five days, the Disney part-deux brought in $300mm globally, surpassing previous record held by "The Super Mario Bros. Movie" and becoming the biggest Thanksgiving weekend opening of all time (also beating Frozen 2's Black Friday record by nearly 100%)
CFAs are slacking: Fewer people are pursuing the certification as the asset management industry increasingly questions its practical relevance. The number of candidates taking the exams has plummeted this year, with only 116k sitting for the tests in the first eight months of 2024, down from a peak of 270k in 2019, largely due to a slowdown in Chinese registrations and pandemic-induced testing limitations
Elon vs. OpenAI: Elon Musk is asking a federal court to stop OpenAI from converting to a fully, for-profit business. The injunction is also focused on allegations that OpenAI asked investors to not invest in rival companies, such as xAI. As a reminder, Elon was a co-founder of OpenAI and now runs xAI, which after the latest financing round is worth $50B
Starbucks saw record "Red Cup Day" sales. Once a year, the company offers customers a free (red) reusable cup with their purchase of a specialty holiday beverage. After a disappointing showing in 2023, on November 14th the coffee conglomerate saw a 42.4% spike daily visits vs. typical Thursday averages and more visits during the week than during the Pumpkin Spice Latte rollout
A KPMG Survey on Return To Office showed 8 in 10 CEOs believe a full return to the office will take place in the next 3 years. This contrasts heavily to the 8 in 10 workers surveyed who view flexible work arrangements as crucial. It seems clear that there's going to be some sort of tipping point in return to office vs. remote/hybrid battle. As of now, in-person turnover is ~30%, while remote and hybrid employee turnover is ~15%
Trump touts tariffs again. The President-elect warned BRICS nations (Brazil, Russia, India, China, and South Africa) that he will demand commitments from them not to create a new currency as an alternative to the US dollar. Trump reiterated his threat on Truth Social impose a 100% tariff if these nations do not comply with his demands to stop leaning into de-dollarization
Rivian is going to have the $6.6B federal loan given to them scrutinized by DOGE co-Head Vivek Ramaswamy. Obviously, the other co-head of DOGE is Elon, and Tesla is a competitor to Rivian. The loan is so Rivian can build a vehicle manufacturing plant in Northeast Georgia and create 7,500 jobs
Undersea Cables are getting cut in the Baltic Sea, potentially due to sabotage related to the ongoing war in Ukraine. Authorities investigating the incidents are focusing suspicions on a Chinese vessel, although no entity has been officially held accountable yet. These cables carry a significant portion of global internet traffic and are critical to global communication
Ski Resort Consolidation: There was an interesting thread on X highlighting how consolidation in the Ski Resort industry has led to pricing at the Vail, Park City, Snowbird, Squaw, and Alta spiking exponentially over the past 10-20 years.

Gautam Adani won't back down. After US prosecutors charged him in a $250mm bribery scheme, the Indian billionaire made his first public statement: "every attack" will only strengthen his conglomerate. Whether that's true is questionable. After news broke, India's market regulator launched an independent investigation and a subdivision of Adani's holdings bailed on a $600mm bond offering
Volkswagen AG workers in Germany are speaking up and stepping out. Represented by the IG Metall union, workers are set to begin warning strikes on Monday due to a deadlock in negotiations with management over cost-cutting measures for the Volkswagen brand. The union's lead negotiator warned that this could become the toughest collective bargaining battle in Volkswagen's history. The strikes will affect all Volkswagen plants in the country
Saudi Arabia's IPO market is staying hot. Online cosmetics retailer Nice One Beauty is planning to go public in Riyadh, aiming to raise up to 1.21B riyals ($322 million) at a 4B riyal valuation. Nice One is following a flurry of activity in the Middle East, where firms have raised $10+ billion from new share sales this year
Severe cold and heavy snow are pounding the Great Lakes and Midwest. With some areas receiving nearly 3 feet of snow, the weather is poised to disrupt post-Thanksgiving travel, one of the busiest travel weekends in the US. Ohio, Pennsylvania, and New York have been particularly hard hit by the intense snow and dangerously cold temperatures. Significant travel disruptions are expected to continue through Monday
Macau's (on its way) back. The city's gaming revenue surged 14.9% in November to $2.3B, surpassing analysts' median estimate of a 13% YoY increase. This growth marks a significant recovery, with revenue now at 80% of the pre-pandemic levels seen in 2019. The strong performance is notable given November is typically a slow month due to the lack of major holidays

M&A Transactions💭

Terna Energy (ATH: TENERGY), a Greece based company engaged in energy and construction, was acquired for $2.56B by Masdar Capital. EV/EBITDA was 16.17x and EV/Revenue was 9.05x. Morgan Stanley advised on the sale.

Insurance Australia Group (ASX: IAG) reached a definitive agreement to acquire The Insurance Business of Royal Automobile Club of Queensland for $558.84M. Bank of America advised on the sale.

Loungers (LON: LGRS), operator of cafe bars and restaurants, has entered into a definitive agreement to be acquired for $432.0M by Fortress Investment Group. EV/EBITDA was 6.24x and EV/Revenue was 0.89x.

HX Expeditions, operator of an expedition cruise services company, has entered into a definitive agreement to be acquired for $149.15M by Arini, Cyrus Capital Partners, and other investors.

Giant Cement Holding, manufacturer of masonry cement catering, reached a definitive agreement to be acquired for $600.0M by Heidelberg Materials (ETR: HEI).

Cleary Bros, operator of an integrated construction service and supply company, has reached a definitive agreement to be acquired for $112.42M by Maas Group Holdings (ASX: MGH).

Tasaki & Company, manufacturer and distributor of luxury jewelry, was acquired for $660.0M by FountainVest Partners and Unison Capital. Daiwa Securities Group advised on the sale.

Serneke Sverige, provider of construction services, was acquired for $101.09M by Mutares (BER: MUX). ABG Sundal Collier advised on the sale.

Brightcove (NAS: BCOV), provider of cloud-based streaming technology and services, has entered into a definitive agreement to be acquired for $233.0M by Bending Spoons.

Private Placement Transactions💭

Constrafor, developer of a construction procurement platform, raised $264.0M of Series A venture funding through a combination of debt and equity at a pre-money valuation of $64.4M. $14.0M of Series A was led by NFX. A $250.0M loan was provided by Crestline Investors and Wafra.

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Noteworthy Chart 🧭

How Nvidia's datacenter business has driven extraordinary growth relative to the rest of the Magnificent 7:

Check Out Carbon Finance Charts

Meme Cleanser 😆

Bullpen Clown @nunchukdave

Taking a quick work call in front of my extended family

2:33 PM • Nov 27, 2024

77K Likes 4.22K Retweets

56 Replies

Boring_Business @BoringBiz_

There is our investment banker. He rarely leaves his desk but he generated so much shareholder value this year. His MD even wrote him a full "thanks" in the email today, instead of the usual "thx"