What You Need To Know This Week — April 20th, 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.
PINTEREST AND ZOOM SHINE IN THEIR STOCK MARKET DEBUTS
The market welcomed tech companies Pinterest and Zoom Video Communications in their initial public offerings. Shares of Pinterest rose +28% and Zoom rocketed +72% after their first day of trading. The surge in share prices came after both companies raised the IPO price ranges off the back of strong investor interest during marketing of the deals. Zoom’s first day gain in its share price represented the greatest “IPO pop” so far this year.
CHINESE ECONOMIC GROWTH BOUNCES BACK IN Q1
The world’s second largest economy grew faster than expected in the first quarter, notching 6.4% annualized GDP growth, which was 0.1% higher than economists’ expectations. The better than expected economic growth numbers come after a rocky fourth quarter displayed mounting concerns of a global economic slowdown. Growth in the first three months of the year was driven by higher consumer spending and strong manufacturing growth.
CANOPY GROWTH TO BUY ACREAGE IN $3.4 BILLION CANNABIS ACQUISITION
Canopy reached a deal to acquire New York-based Acreage Holdings, a multi-state operator of dispensaries, cultivation sites and processing facilities throughout the U.S. The deal has a unique structure such that it can only occur after the federal legalization of Cannabis in the United States. Watch for this novel agreement to be replicated by other Canadian cannabis companies looking to establish a presence in the U.S. in anticipation of legalization.
QUALCOMM SHARES RISE +40% ON THE WEEK AS IT SETTLES ITS PATENT DISPUTE WITH APPLE
Qualcomm shares rocketed higher after it announced that it settled its acrimonious patent litigation with tech heavyweight Apple. The settlement includes Apple making a substantial payment to Qualcomm as well as a chip supply agreement, in which Apple would continue to use Qualcomm chips for its iPhones. Qualcomm indicated it expects incremental earnings power of $2.00 per share.
HAPPY EASTER!
“Easter is meant to be a symbol of hope, renewal, and new life.”
RECOMMENDED ARTICLES, PODCASTS, BOOKS AND TWEETS
Listen to SumZero founder Divya Narendra why “Valuation Is Probably The Most Critical Component Of SumZero’s Thesis”
Alta Mesa Resouces, taken public through a former Special Purpose Acquisition Company, is teetering on the brink of financial ruin and its stock is down -98%.
Contrarian investors at the Ben Graham Centre at Western University’s annual value investing conference recommend shorting glamour stocks such as Lyft and going long cheap international stocks such as Stolt-Nielsen and Leejam Sports.
Quant funds are coming for private equity. “It’s been a dramatic enhancer of returns in every industry, and private equity will be no different.”
President Trump attacks the Fed again, claiming the Dow Jones Industrial Average would be “5000 to 10,000” points higher, with GDP growth “well over 4% instead of 3%”, if the Fed had not engaged in quantitative tightening.
T-Mobile and Sprint shares fall after it is reported that the Department of Justice, the anti-trust regulator overseeing the regulatory approval of the planned merger, says T-Mobile’s acquisition of Sprint is unlikely to be approved as structured.
Canada’s stock market index, the S&P/TSX Composite, hit all-time highs on Thursday, bouncing back from a late 2018 correction that brought the index down -17%.
Quantitative investment firm DE Shaw is raising fees on their hedge fund to 3 & 30 amidst substantial investor demand for systematic hedge fund strategies.
-The Accelerate Team
