Black Swan Street Weekly Stock Market Summary (May. 13-May. 17 2024)

Welcome to Black Swan Street!

Just as Roaring Kitty is back, so are we with another packed edition of Black Swan Street!

This week was full of LBOs, bankruptcy, economic data, and more:

• Squarespace To Go Private📉

• The Swan’s Selections🦢

• In Other News🗞️

• Next Week In The Stock Market🔮

• The Swan’s Story Of The Week🦢

Read time: 8 minutes

Squarespace To Go Private 🕵️

We are in the midst of Q2, and private equity action is starting to pick up its pace.

Permira, a London-based PE firm, agreed to acquire website builder Squarespace Inc. for a $6.6 billion all-cash deal, making it the second-largest private equity deal of the year.

The firm has agreed to pay $44 per share, a premium of more than 15% of the closing price. Including debt and all the little fees that are common with PE deals, the purchase is worth a staggering $6.9 billion.

This deal concludes the website maker’s brief stint in the public markets, where they went public at $50 per share in 2021. Compared to its private valuation of $10 billion during that time period, the stock has since fallen by around 24%.

The stock rose 13% to $43.26 on Monday after the news broke last Friday, spiking the company’s market value to $6 billion.

This transaction comes at a time when billions of dollars are being funneled into private equity, especially in the technology sector, after a major lull in activity in 2023.

Squarespace’s leveraged buyout is the second-largest of the year, behind Silver Lake’s $13 billion purchase of entertainment conglomerate Endeavor Group Holdings Inc. in April.

Looks like more private equity deals are expected and yet to come as we close out Q2 in June.

The Swan’s Selections🦢

🤝Elon Musk’s New Buddy: They say it’s always good to make friends in high places. Tesla CEO Elon Musk has been seen courting and cozying up to Argentine president Javier Milei. Find out why Elon Musk’s big Tesla dreams may hinge on his friendship with new president Javier Milei.

📈US Stocks Rally After CPI: It’s a good week when all three major indexes close at record highs. What is the cause? Consumer Price Index rose by 0.3% over the last month and 3.4% over the prior year in April. This is a much-needed deceleration from March and a sign that core inflation is cooling down.

🎥The Most Expensive Film Ever: Brad Pitt’s new F1 Movie has increased its budget to more than $300 million, making it the most expensive film in history. Alongside production delays and putting actors into real race cars, the film still has no theatrical distribution or release date.

🖥️OpenAI Launches New AI Model: The GPT-4o has an updated user interface that is faster and has improved text, video, and audio capabilities. This model will eventually be available and free for all users. OpenAI looks to expand its chatbot to all people by taking this massive step forward.

🦞Bye-Bye Red Lobster: Red Lobster is expected to file for bankruptcy as early as next week as the dining chain seeks to pare down its debt. This comes after the chain has already closed 48 locations through various states. The company’s ‘Ultimate Endless Shrimp’ promotion led to $11M in losses in Q3.

📉Corporate Defaults Doubled: Global corporate debt defaults doubled in April from the month prior, now at their highest monthly tally since October 2020. The markets saw 18 defaults globally, led by 10 U.S. defaults worth over $7.1 billion. These include the bankruptcies of IT provider ConvergeOne Holdings and fashion retailer Express Inc.

In Other News🗞

• US consumer sentiment at six-month low as inflation expectations rise - RT

• Global equity funds see biggest inflows since March - RT

• Electricity supply is failing to satisfy US tech growth - WSJ

• Hedge fund legend Jim Simons died at 86 - CNBC

• OpenAI launched its latest GPT-4o AI model - CNBC

• GameStop short sellers lost ~$1B after monster memestock rally - CNBC

• Japan GDP declined 2.0% YoY in Q1 - RT

• Global corporate defaults doubled in April - RT

• Temu cools on US after shelling out billions - WSJ

• Investors are 'most bullish' since November 2021 - RT

• Vanguard named ex-BlackRock exec Salim Ramji as new CEO - WSJ

• U.S. sharply raises tariffs on Chinese EVs and semiconductor imports - FT

• Mega funds pile into real estate debt as banks retreat - RT

• OpenAI co-founder Ilya Sutskever will depart - CNBC

• Caitlyn Clark is already the GOAT of TV ratings - WSJ

• CFTC wants to ban derivatives tied to sports and elections - WSJ

• Chinese VCs warn IPO freeze will hit innovation - RT

• Shares of EV maker ‘Zeekr’ rose in trading debut after $441M IPO - BBG

• Corporate greed not to blame for price pressures, Fed study shows - YF

• Apollo Global is in advanced talks with Intel to invest over $11B to build a new chip plant in Ireland - WSJ 

• Kraft Heinz is exploring a sale of its ‘Oscar Mayer’ meats business that could fetch $3B-$5B - WSJ

Next Week in the Stock Market🔮

Earnings Calendar Next Week:

Economic Calendar Next Week:

The Swan’s Story Of The Week🦢

GameStop shares soar again after ‘Roaring Kitty’ returns to social media.

Guess who is back…

Legendary value investor Keith Gill, also known as “Roaring Kitty,” has made his return to social media. The trader and former financial advisor led the miraculous 2021 GameStop Stock frenzy, where small-time investors, following Gill’s lead, made fortunes by betting against institutional short sellers. 

All he did this time was share some memes on X, but boy, it made an impact.

GameStop spiked in share price on Monday to over $30.46 at close from just $17.46 per share during Friday’s close. While the stock was not driven nearly as high as it did in 2021, the stock rose by more than 70 percent, causing multiple pauses due to the intense volatility of the stock. Institutional short sellers lost over $1B after the monster meme stock rally.

Only time will tell as to what Roaring Kitty is up to. However, the legend posted an image of a gamer suddenly sitting upright from a slouched position. 

That can only mean one thing….

He is back in business. 

The Wrap-Up🔄

🎊🎉 That’s it for this of Black Swan Street 🎉🎊

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Black Swan Street Review of the Week🖤

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