🦢Black Swan Street Weekly Stock Market Summary (Oct. 9th - Oct. 13th 2023)

Welcome to Black Swan Street!

Welcome to Black Swan Street, the financial newsletter that makes you feel like you’re enjoying a nice cup of hot tea - all warm and fuzzy on the inside.

Crazy would be an understatement for this week, so let’s get into it:

• German Sandals vs U.S. Markets🩴

• The Largest Deal in Video Game History🎮

• Earnings Summary💰

• Headline Roundup🗞

• Next Week In The Stock Market🔮

Read time: 7 minutes

German Sandals vs U.S. Markets🩴

Everyone’s favorite (and only) German sandals went public this week through an initial public offering (or IPO).

That’s right - Birkenstock (BIRK).

The company priced its IPO at $46 per share, near the middle of its expected range of $44 to $49 - imputing an $8.64B valuation.

In fiscal year 2022, Birkenstock posted net income of ~€187M, while seeing margins of ~60%.

Birkenstock had a rough opening week on the New York Stock Exchange.

Shares of ‘BIRK’ finished the week at $36.38 per share, a 20.91% selloff from the original IPO price - cue the sad music 🎶.

Birkenstock isn’t the only IPO struggling. A few weeks ago, we saw some other ‘big-name’ IPOs.

Well, they aren’t doing so hot either…

• Arm Holding’s shares have declined -0.43% since IPO price

• Instacart’s shares have declined -14.77% since IPO price

• Klaviyo’s shares have gained +4.6% since IPO price

The Largest Deal in Video Game History🎮

After over a year and a half of waiting, countless regulatory issues, and an overall massive headache… it’s done.

The $69B deal where Microsoft acquires Activision Blizzard has finally closed.

Friday morning, the U.K.’s Competition and Markets Authority (CMA) announced the approval of the Microsoft-Activision Blizzard acquisition.

This was the final hurdle. In an email, Activision Blizzard CEO Bobby Kotick wrote, “We now have all regulatory approvals necessary to close, and we look forward to bringing joy and connection to even more players around the world”.

This marks the largest deal to date in the video game industry.

Microsoft looks to dramatically expand its Xbox video game business while adding new titles such as “Call of Duty,” “Candy Crush,” “World of Warcraft,” and “Diablo.”

Earnings Summary💰

In-Depth Earnings Dive:

Headline Roundup🗞

• Activist investor, Nelson Peltz’s Trian Fund Management, raised stake in Disney and could seek multiple board seats: Trian’s stake is now worth north of $2.5B - YF 

• Bristol Myers Squibb to acquire Mirati Therapeutics for $58 per share in cash (~$4.8B equity value) - BMSN

• Japan’s Denso, Mitsubishi Electric to invest $1B in Coherent’s silicon carbide unit. Each firm will invest $500M in exchange for a 12.5% non-controlling ownership interest in Coherent’s unit - USN

• Truist Financial in talks to sell remaining 80% of Insurance-brokerage business for $10B to Stone Point Capital, after previously acquiring 20% earlier this year - MSTR

• Palantir announces new Army A.I. contract worth up to $250M - MSTR

• Birkenstock prices IPO at $46/share - WSJ

• Exxon Mobil agrees to buy Pioneer Natural Resources for ~$60B in all-stock merger. Pioneer stockholders will receive 2.3234 shares of Exxon for every Pioneer share they own - CNBC

• Rubik’s Cuber-owner ‘Spin Master’ to buy toy maker ‘Melissa & Doug’ for $950M - RT

• Ericsson books ~$3B impairment charge related to its acquisition of Vonage and says Q3 core profit fell 39% - YF

• U.S. Producer Price Index (PPI) YoY: 2.2%, from previous 2.0%, and above 1.6% forecast

• U.S. Producer Price Index (PPI) MoM: 0.5%, from previous 0.7%, and above 0.3% forecast

• Atlassian buying private video messaging platform ‘Loom’ for $975M - TC

• Qualcomm to cut roughly 1,258 jobs in California - CNBC

• U.S. Consumer Price Index (CPI) YoY: 3.7%, from previous 3.7%, and above 3.6% forecast

• U.S. Consumer Price Index (CPI) MoM: 0.4%, from previous 0.6%, and above 0.3% forecast

• What is the Consumer Price Index (CPI)?

• Citigroup cuts 2,000 more jobs - BBG

Next Week in the Stock Market🔮

Earnings Calendar Next Week:

What the Swan is watching:

Monday: Charles Schwab

Tuesday: Bank of America, Lockheed Martin, Goldman Sachs, Johnson & Johnson, Albertsons, Ericsson, United Airlines

Wednesday: Procter & Gamble, Tesla, Netflix, Elevance Health, Discover, Morgan Stanley, Equifax, Abbott, Alcoa, State Street

Thursday: AT&T, American Airlines, Blackstone, TSMC

Friday: American Express, Comerica

Economic Calendar Next Week:

The Swan’s Picks🦢

🏒NHL tickets in hot demand: The 2023-2024 NHL season kicked off this week. And according to the latest data by StubHub, the NHL has seen a massive surge of interest this upcoming year. With overall ticket sales outpacing last season’s sales by more than double.

🍿YouTube passes Netflix as teens favorite video platform: According to a survey by Piper Sandler, teens said they spend 29.1% of their daily video consumption time on YouTube, when compared to the 28.7% of time on Netflix. This marks the first time YouTube beats out Netflix.

📱Apple continues to have Gen Z around its fingertips: Also from the Piper Sandler’s survey, 87% of teenagers surveyed said they own an iPhone, and 88% of them expect the iPhone to be their next phone. Talk about a monopoly.

👺No more sneaky fees? The Federal Trade Commission proposed a new rule to ban hidden junk fees from things such as concert tickets, hotel rooms, and other live-ticket events. These hidden fees cost consumers an estimated $80 billion every year.

❤️Israel at war with Hamas: In case you haven’t heard, there is a war breaking out near the Gaza Strip between Israel and Palestinian terrorists. Out of respect for the situation, we will not be covering it in Black Swan Street. If you want to read more about it, here is an article that talks about the heartbreaking situation.

The Wrap-Up🔄

That’s all we got this week!

Let us know what you thought⬇

Black Swan Street Review of the Week ❤️