Welcome back to Weekend Reading.
Some market darlings have shown signs of breaking apart over the last few days, from the news of the Gates’ divorce, to Coinbase’s stock price, to Sydney’s formerly COVID-free lifestyle.
Whether or not this represents a longer-term trend is up for debate, but it is worth noting that despite a better-than-expected U.S. reporting season, the market barely reacted – it’s traditionally a not great sign when the market stops rising on good news.
Let’s look back on the week.
Shares in Coinbase Global (COIN:NASDAQ) fell to a record low this week, falling to their current level of $256.76 USD (only just above the listing price of $250). This puts COIN down 22% from the close on its first day of trading.
COIN’s slide took the Renaissance IPO ETF along with it, which until recently saw a boon from investing into recent listings like Virgin Galactic, Opendoor and other SPAC listings.
This is occurring with the backdrop of joke coin “Dogecoin” currently having a larger market cap than Moderna…
Source: Jesse Imer
Till Billions Do Us Part
This is probably the most tabloid story that will enter this note at any time, but billionaire philanthropists Bill and Melinda Gates have announced their plan to divorce this week.
Their combined net worth of $146 billion USD includes holdings in technology, businesses, real estate, farmland and other assets relating to their charitable endeavours – normally you need to be a poorly run hedge fund to have this kind of potential ripple effect throughout so many markets.
The pair will remain co-chairs of the Bill & Melinda Gates Foundation (a $50 billion USD enterprise) and continue to work together on strategy and direction of the charitable efforts.
This will be the second ultra-high-net-worth divorce after the separation of Jeff Bezos and MacKenzie Scott two years ago – based on this trend, hopefully Elon and Grimes have a strong prenuptial agreement.
Diamonds Are a Brand’s Worst Friend
Jewellery maker (and purveyors of frankly extortionate bracelet bangles) Pandora, has announced this week that they will no longer feature mined diamonds in any of their jewellery going forward – based on on-going ethical concerns around naturally formed diamonds.
Instead the company, which currently produces and sells more jewellery than any other company in the world, will use lab-created diamonds, in an effort to appeal to millennials and a greater emphasis on sustainability and ethical production.
Last year diamond sales fell 15% due to lockdowns and the production of rough diamonds fell by over 20%.
Peletonnes of Issues
Peleton has recalled over 130,000 pieces of equipment after one of their treadmills was associated with nearly 100 reported injuries and the death of a child. The company will offer full refunds for the products (costing $5,450 AUD) and pull the range of treadmills known as “Tread+” from the market.
Not a great look considering they refused to pull the treadmills from the market a month ago when safety concerns were raised previously. And the fall in share price reflects this, down almost 13% in the last 3 days.
Infineon Technologies, a German semiconductor producer, has said that around 2.5 million cars won’t be able to completed during production in H1 2020 due to supply chain shortages in the chipmaking industry, leaving the cars chip-less.
Intel’s CEO has made similar remarks, noting that the shortage of semiconductors across the globe will likely not resolve itself for the next few years – with the main issue being the foundries themselves.
Ford has also come out and said it will temporarily stop production at its German plants for the next month due to a lack of semiconductors stalling their ability to finish the cars.
Jessica Alba’s personal-care brand ‘Honest co.’ has soared 44% on its opening day of trading, taking the actresses’ holding in the company to an estimated value of USD $130 million.
Initially trading at $16 USD/share, the equity rose to a high of $23 on Wednesday night, giving it a market cap just above $2 billion USD – all without using a SPAC or merger structure, perhaps there is hope for the ‘old world’ after all.
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Have a safe and enjoyable weekend.
– Max and the Mason Stevens team.
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