# 666 – 🐭 Don’t mess with the mouse – The Average Joe
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    # 666 – 🐭 Don’t mess with the mouse

    victorlei

    April 4, 2024

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    Good morning. If you’re looking to make small talk with coworkers, might we suggest, “Crazy weather we’re having, eh?” Because chances are, no matter where you live, the weather’s been a mess:

    Beyond potential travel delays and property damage, the bizarre weather could even make it a bit harder to see Monday’s solar eclipse.


    MEDIA

    Disney Emerges Victorious From Expensive, Months-Long Proxy Battle With Billionaire Activist Peltz

    For Bob Iger, life could be a dream… if only he stayed in retirement. Instead, he’s returned to replace Bob Chapek, his handpicked successor, just to re-inherit a $220B Rubik’s Cube to solve. On one side is Disney’s ($DIS) declining streaming growth; on the other are activist investors calling for change.

    End of the line: In recent months, billionaire activist investor Nelson Peltz and former Marvel Entertainment chairman Ike Perlmutter campaigned for Disney board seats — claiming the company had lost its magic and needed a new direction. But on Wednesday, Disney announced that shareholders voted overwhelmingly to keep Iger and the current board, rejecting the activists’ candidates.

    • Although proxy giant ISS backed Peltz ahead of the long-awaited vote, institutional giants BlackRock ($BLK) and Vanguard sided with Iger.

    • Peltz received just 31% of the votes, with individual shareholders, who own 40% of Disney, firmly supporting Iger.

    Spreading pixie dust

    Despite recent distractions, $DIS has climbed nearly 50% since last October but remains down almost 40% from its peak. Gerber Kawasaki’s president and co-founder told Bloomberg that “people are starting to recognize” that $DIS may be cheap relative to similar companies, especially Netflix ($NFLX). Analysts are becoming bullish as Iger moves from restructuring the business to actually growing it.

    • Disney finally has a clear streaming strategy combining Disney+, ESPN+, and Hulu — but questions remain if traditional linear TV networks like ABC and FX will be sold.

    • Investors are also eyeing Disney’s $1.5B investment and partnership with Fortnite creator Epic Games, which aims to expand Disney’s reach to younger consumers.

    The true cost: Disney’s proxy battle might go down in history as one of the most expensive, with Business Insider reporting over $70M spent by the company and activists to reach voters. However, if Iger and Disney’s management fail to deliver on promises, another campaign could quickly follow — but at least for now, the media giant gets its happy ending.

    Read: Proxy Elections Could Change Corporate America — But Most Americans Don’t Even Know About Them


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    Save the Date: April 19’s Incoming Crypto Catalyst

    On April 19, a single catalyst will rock the crypto market for only the 4th time in history. Last time, it sent Bitcoin on a months-long 711% run.

    This time, analysts predict a 8,788% move for a different coin over the next 5 years… Enough to turn a $10K stake into $888,800 by 2030.

    If you’ve missed out on crypto’s gains so far, listen up. Because there’s still time… But this could be your last chance hit it big in crypto.

    Cryptocurrency genius James Altucher, who called Bitcoin when it was trading for just $113, has put together a presentation detailing this coin — its name, ticker, and how to invest – right here.

    Click here to watch it


    LARGECAP RECAP

    🤫 Private equity buyouts have never been this popular

    The market might be sitting shy of all-time highs, but many publicly traded companies are still down bad. Rather than waiting for a rebound, they’re considering trading their tickers for a quick payout. Eager private equity firms are capitalizing on these opportunities, making quality companies going private “more popular than ever,” as noted by PE Hub. Just this week:

    • Payment processor Nuvei ($NVEI) agreed to a $6.3B all-cash acquisition by Advent International, offering a 56% premium per share.

    • Entertainment giant Endeavor ($EDR) — which owns the majority of UFC, talent agency WWE, and OpenBet — is striking a deal to sell itself to Silver Lake for $13B.

    Forward-looking: S&P Global reports that take-private deals hit a 16-year high last year, with 96 firms totaling $118B exiting Wall Street. According to David Klein from Kirkland & Ellis, “A large number of those [deals] were really distressed situations,” where the company’s value was not recognized. This trend may persist even as the market flirts with record highs, as investors still favor megacaps.

    🌍 Inflation continues to cool across the pond

    Europe is making strides to combat inflation, nearly reaching pre-pandemic levels. Eurozone prices declined for the third straight month, reaching 2.4% in March (down from 2.6% the month prior). Core inflation also dropped to 2.9% — the first time it’s fallen below 3% since the beginning of Russia’s invasion of Ukraine.

    • Reuters polled economists late last month, and 90% anticipate the European Central Bank will delay rate cuts until June. While this data could mean those cuts happen sooner, some figures raise concerns.

    • For instance, services inflation remains stubbornly high at 4.0% year-over-year (YoY) — likely due to steady wage growth in the EU over the past year.

    It’s not a competition, but… Meanwhile, in the US, inflation is moving in the opposite direction. Housing costs, which carry more weight in America’s inflation measurement, may be a contributing factor, particularly as they’ve been shaky this year. But culling inflation has cost the EU’s economic growth — with the bloc failing to grow in the final quarter of 2023, while US GDP surged 3.4% YoY.


    JOE’S MARKET PULSE

    🔗 Dave & Buster’s / Ulta

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    Markets & Economy

    Paramount ($PARA) enters exclusive talks to merge with Skydance: Not even a $26B offer from Apollo Global ($APO) could convince the media giant, which is now returning to its original suitor in David Ellison’s Skydance. They’ll have 30 days to broker a deal. [Read]

    Atlanta’s Fed President now expects just one rate cut this year: Raphael Bostic initially expected two rate cuts, but sticky inflation has him feeling “less confident” than he did in December. Plus, the US economy is just too darn resilient, causing him to double his ‘24 growth outlook to 2%. [Read]

    TSMC ($TSM) to resume operations after major quake: Taiwan saw its worst earthquake in 25 years, but the powerhouse chipmaker reported only minor damage to some of their tools (and thankfully no injuries). TSMC’s location in an earthquake hotspot continues to concern some in the chip industry. [Read]

    Business & Wealth

    Amazon ($AMZN) scraps its cashierless model in US grocery stores: The ambitious Just Walk Out tech was a turnoff for some shoppers, who didn’t love all the entry gates, ceiling-mounted cameras, and shelf sensors. Instead, Amazon stores will use more Dash Cart, which enables shoppers to scan items as they go. [Read]

    Iowa-LSU was the top-rated women’s college basketball game ever: 16.1M viewers tuned in to last year’s championship rematch — and ESPN said it was the most-watched college basketball game ever on their platforms. Iowa’s sharpshooter Caitlin Clark will square off against UConn on Friday. [Read]

    FDA approves software used to diagnose sepsis: The deadly medical complication is notoriously hard to diagnose, and early detection is critical. But now Prenosis’s new AI-powered tool monitors 22 medical signals at once to gauge a patient’s sepsis risk. [Read]

    *Thanks to our sponsors for keeping the newsletter free.


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    CHART


    DIGIT OF THE DAY

    US Job Market Heats Up, With Wage Growth Rising 10% for Job Changers

    With two job reports down and one more to go on Friday, the big picture remains: the US economy is still humming along. Firstly, Monday’s Job Openings and Labor Turnover Survey (JOLTS) report indicated a rise in hiring in February to 5.8M from 5.7M the month prior. Then, yesterday, ADP published private sector job data, showing a 184K increase in March payrolls — surpassing the median estimates of 150K.

    • Wages surged by 10% for those switching jobs, the largest jump since last July — while those who stayed saw a 5.1% pay raise. Job switchers to sectors like construction, financial services, and manufacturing saw the highest growth.

    • In ADP’s latest National Employment Report, Chief Economist Nela Richardson commented that, “Inflation has been cooling, but our data shows pay is heating up in both goods and services.”

    The moment we’ve been waiting for… might not come as quickly as we’d like. “There’s really no urgency to adjust the rate,” given the economy’s strong growth, as per SF’s Fed President Mary Daly. She expects three rate cuts this year, and also acknowledges that “it’s a close call” for fewer cuts. Although the odds of rate cuts in May are nearly zero, investors are almost evenly split on potential cuts starting in June.


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