What You Need To Know This Week — July 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.
NETFLIX STOCK DROPS -10% AS GROWTH SLOWS
Netflix stock slumped after reporting its second quarter results, which missed its own guidance by a substantial margin. The company added just 2.7 million subscribers globally, well below its guidance for 5 million additions. It also revealed that it lost 130,000 subscribers in the U.S., the first time subscriber growth was negative since 2011.
ACTIVIST HEDGE FUND PERSHING SQUARE GETS TABLES TURNED AS INVESTOR UNVEILS ACTIVIST CAMPAIGN AT THE HEDGE FUND
In the ultimate irony, activist investor Bill Ackman’s publicly-listed hedge fund, Pershing Square Holdings, landed its own activist investor as investment firm Asset Value Investors went public with its own activist campaign against the fund. The activist wants Pershing Square to pursue a more aggressive share buyback program to close the discount between the fund’s price and its net asset value.
WEWORK FOUNDER EXITS STOCK TO THE TUNE OF $700 MILLION PRIOR TO IPO
In a stunning story, the Wall Street Journal revealed that WeWork’s co-founder and CEO Adam Neumann has cashed out more than $700 million of his stock in the company ahead of its anticipated initial public offering. This revelation comes amidst previously discovered corporate governance mishaps at the company, including when Neumann acquired commercial real estate buildings in order to lease them to WeWork.
SYMANTEC SHARES FALL AS BROADCOM PULLS BID
Security software firm Symantec’s shares plummeted as much as -15% as its would-be-acquiror, Broadcom, walked away from deal talks. The Symantec board insisted on at least $28.00 per share and Broadcom reduced its offer from an initial $28.25 per share to around $26.50 after it conducted additional due diligence. The companies expected $1.5 billion in cost synergies.
Recommended Articles, Podcasts, Books and Tweets
Listen to Cathie Wood, founder of ARK Invest, discuss disruption as an investment thesis on Bloomberg’s Trillions.
J.P. Morgan markets analyst Marko Kolanovic sees a once in a decade opportunity in value stocks.
But value investing hasn’t worked for 12 years. Some investors are asking, “Could value be dead?”
Hedge fund manager Kyle Bass, who rose to prominence with a prescient bet against subprime mortgages during the credit crisis, sees US interest rates going to 0%. “Growth numbers are going to come down and real growth might go to zero. We’re probably never going to go away from zero rates”.
Fed’s Bullard sees no need for a 0.5% interest rate cut this month. “I just don’t think the situation really calls for that aggressive of a move”.
Hedge Fund manager Ray Dalio on allocating capital through paradigm shifts: “Identify the paradigm you’re in, examine if and how it is unsustainable, and visualize how the paradigm shift will transpire when that which is unsustainable stops”.
China’s economy grew 6.2% year-over-year, its slowest rate in almost 30 years.
Activist investor Carl Icahn launches proxy fight at Occidental Petroleum, seeking to win four board seats.
Market now sees a 50% chance of an interest rate cut from the European Central Bank this month.
Hedge Fund Elliott Management cut its offer on another buyout, this time on its $2 billion offer for QEP Resources.
-The Accelerate Team
