🦢Black Swan Street Weekly Stock Market Summary (Dec. 18th - Dec. 22nd 2023)

Welcome to Black Swan Street!

Adobe scraps $20 billion acquisition, Trevor Milton finally going to prison, Red Sea supply chain crisis, Congress passes $886 billion defense policy bill, mortgage rates slide to lowest levels since June, Trump disqualified from 2024 ballot in Colorado.

This week was a doozy, so let’s get into it:

• Adobe Scraps $20 Billion Acquisition🗑️

• The Jig Is Up Mr. Milton🚔

• Red Sea Supply Chain Crisis💰

• Headline Roundup🗞

• Next Week In The Stock Market🔮

Read time: 7 minutes

Adobe Scraps $20 Billion Acquisition🗑

Back in September 2022, Adobe announced its initial plans to acquire Figma in its biggest collaboration yet - well it’s almost 2024, and time to scrap that plan.

Following mounting pressure from UK and EU regulators, Adobe and Figma announced that the companies are mutually terminating the merger agreement.

Regulators cited Adobe’s near-monopoly in the design software market as they continuously pushed back on the deal.

Adobe general counsel, Dana Rao, said that the company couldn’t prove to European regulators that the acquisition wouldn’t harm competition in the future.

As a result of the merger termination, Adobe will be required to pay Figma $1 billion in cash as a reverse termination fee.

The Jig Is Up Mr. Milton🚔

If you were involved in the stock market back in the Covid-19 days, then you definitely recognize this face.

For those who don’t, it’s Trevor Milton.

Trevor Milton was the founder and CEO of Nikola Motors. Nikola Motors was the newest, hottest, cutting-edge startup in the electric vehicle space. People were even comparing Trevor Milton to Elon Musk.

… Until it was exposed the ‘promotional videos’ that were released of the ‘fully functional’ Nikola One truck, were really just videos of the truck rolling downhill - that’s right, not actually functional in the slightest.

Well, it can’t be that bad right? Wrong.

Here is a chart of Nikola (NKLA) shares from pre-SPAQ up until now:

From peaking at $79/share on June 9th 2020, to now trading at less than $1/share in December of 2023.

This represents a -98.94% decrease in share price… not the best ROI.

This week, it was announced Trevor Milton will be headed to prison. Milton has been sentenced to four years in prison, seizure of property, a $1 million fine, and three years of supervised release after serving the sentence.

Red Sea Supply Chain Crisis💰

After a series of ship attacks by Iran-backed ‘Houthi’ rebels in the Red Sea, it is estimated that global shipping capacity could be affected by up to 20%.

The latest update: 158 vessels are currently being re-routed away from the Red Sea. These 158 vessels carry 2.1 million cargo containers, which is estimated to have a value of nearly $105 billion.

Ikea is one of the first companies that has already warned of delays on some products due to Red Sea diversions.

Read more here.

Headline Roundup🗞

• GM’s ‘Cruise’ unit is laying off 24% of workforce - WSJ

• Congress passes $886 billion defense policy bill - CNBC

• Since Oct.23rd, Robinhood has received ~$1.1 billion in account transfers, after offering a 1% match on transferred brokerage accounts - WSJ

• Nordic investment firm ‘EQT’ is leading bidding as PE firms comete for a stake in the media rights business of the ‘Bundesliga’, Germany’s main football league - BBG

• Docusign, a $12 billion software company that handles electronic signatures, is considering a sale - BBG

• Japan’s ‘Nippon Steel’ will acquire ‘United States Steel’ for $14.1 billion to create the world’s second-largest steel company - BBG

• Wells Fargo employees vote in favor of unionization - CNBC

• Trump disqualified from 2024 ballot in Colorado, court says - BBG

• Biden administration explores raising tariffs on Chinese EVs - WSJ

• U.S. 30-year mortgage rate slides to 6.83%, lowest level since June - BBG

• Toyota recalling 1.12 million vehicles over potential air bag issue - RT

• Argentina makes biggest-ever sale (2.96 trillion) of peso notes - BBG

• Warner Bros Discovery ($28B) held preliminary talks to merge with Paramount Global ($10B), potentially combining two of the biggest media companies in the world - BBG

Next Week in the Stock Market🔮

Earnings Calendar Next Week:

No notable earnings next week.

Economic Calendar Next Week:

The Swan’s Picks🦢

☕️Coffee and Yogurt? Greek yogurt maker ‘Chobani’ acquires coffee company ‘La Colombe’ in a $900M deal. Chobani founder and CEO Hamdi Ulukaya calls the deal a “dream come true” - it will be interesting to see how Chobani handles the difficulties of competing in a unknown market.

😬Blackstone Cringe: Private equity firm ‘Blackstone’ drops the cringiest video our team has ever seen. Nothing else needs to be said. Just watch it here.

💵Washington Faces Default Risk: The Washington area has passed San Francisco for the highest share of office buildings with bank loans at risk of default. Loans of concern on office space in Washington climbed to 72%,topping San Francisco’s 71%.

❌Trump’s Former Lawyer Files for Chapter 11 Bankruptcy Protection: Rudy Giuliani, the former personal lawyer for Donald Trump, lists debts that amount to more than $100 million. And now he filing for Chapter 11 bankruptcy protection.

The Wrap-Up🔄

Thanks for tuning in this week!

Next week will likely be a lighter week because…

This upcoming Monday is - CHRISTMAS!!!

If your family celebrates Christmas, we hope you have a blessed holiday with your loved ones:)

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