What You Need To Know This Week — April 13th, 2019
WHAT YOU NEED TO KNOW THIS WEEK
A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.
DISNEY ANNOUNCES NEW DISNEY+ STREAMING SERVICE
In a direct shot at competitor Netflix, Disney announced that it’s set to release its new streaming service, called Disney+. The ad-free subscription streaming service will include a wide variety of content from Disney animation, Pixar, Star Wars, Marvel and National Geographic. The service will launch in November and cost US$6.99 per month, nearly half the cost of a Netflix subscription. The company expects to have between 60 million and 90 million subscribers to Disney+ by 2024. By mid-day Friday, Disney stock was up +10.4% while Netflix stock was down -4.4%.
UBER FILES FOR IPO
Uber, the ride-share market leader, filed its prospectus to go public. Fast on the heels of competitor Lyft, Uber is capitalizing on the substantial investor demand for shares of popular Silicon Valley startups. The company is planning on raising $10 billion at a reported $100 billion valuation, which is down from initial rumors of a $120 billion valuation. The IPO roadshow is expected to commence April 29th with the official listing date of the shares in May.
SAUDI ARAMCO ISSUES $12 BILLION IN BONDS AMIDST $100 BILLION IN DEMAND
The Saudi oil giant Aramco had $100 billion in orders for its closely watched debut bond sale and ultimately upsized the deal from $10 billion to $12 billion. Public filings related to the bond issue revealed Aramco to be the most profitable company in the world, with $111 billion in net income last year. The company accounted for 1 in 8 barrels of oil produced globally last year.
CHEVRON TO BUY ANADARKO IN $50 BILLION ENERGY DEAL
In the biggest energy deal sine 2015, Chevron struck a deal to buy Anadarko Petroleum for $50 billion in a mix of cash and shares. The $65.00 consideration for Anadarko shares represented a premium of 39%. For Chevron, the acquisition adds acreage and production in the Permian Basin and the Gulf of Mexico while also increasing its exposure to LNG. Anadarko shares rose +32.2% while Chevron shares declined -5.1% on the news.
FOMC MINUTES SHOW FED UNLIKELY TO RAISE RATES THIS YEAR
Minutes released from the Federal Reserve’s March 19–20 meeting indicated that the majority of the Federal Open Market Committee members agreed that risks to the economic outlook warranted leaving the Fed’s target rate unchanged for the rest of 2019.
RECOMMENDED ARTICLES, PODCASTS, BOOKS AND TWEETS
Listen to legendary hedge fund manager Joel Greenblatt discuss his liquid alternative mutual funds in “2 Secrets to Beating the Market” on Wealthtrack.
Pinterest plans to go public at a valuation lower than its latest private round.
Shareholder activist hedge fund Third Point is building a stake in Sony in order to pressure the company to consider strategic alternatives for its movie studio.
RBC and TD have been threatened with class-action lawsuits over alleged “closet-indexing” in their $7.4 billion Canadian Equity Funds.
The International Monetary Fund cut its outlook for global growth from 3.5% to 3.3%.
The European Central Bank states that it will hold its benchmark rate at 0% “at least through the end of 2019”.
Private equity firms are getting increasingly aggressive with terms on their loans used to back leveraged buyouts, with a record 89% of loans issued last year being covenant-lite, up from 6% in 2010.
The Brexit “can” got kicked down the road once again, with the official exit day being extended from April 12th to October 31st.
