️ Game over


  • U.K. politics: Boris Johnson is expected to be named the next U.K. prime minister on Tuesday. While leadership changes in Britain were more exciting 400 years ago, remember that with Johnson in charge the probability of a "no deal" Brexit goes way up.
  • U.S. markets: Earnings this week. Lots of 'em.

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China Hates Being an Empty Nester

China wants to show its tech companies that listing at home is way more fun than living at home. Today, 25 firms will start trading on the STAR Market, a new Chinese stock venue aimed at fueling the best of homegrown tech with homegrown capital.

The first batch of companies, which range from electronics manufacturers to makers of railway controls, raised a combined $5.4 billion. But with raging investor demand, the trading could be too fast, too furious.

  • The IPOs were 1,695 times oversubscribed among retail investors. (Retail investors refer to individual investors.)
  • One company, semiconductor equipment maker AMEC, priced its shares at 171 times earnings. Investors must consider AMEC the van Gogh of semiconductor equipment, because similar stocks on other Chinese venues trade at an average of 33 times earnings, according to Bloomberg.

Where have we seen this before?

STAR Market, known as a "board," is modeled after the U.S.' Nasdaq, but its objective is to keep domestic companies from ever setting foot in Times Square. Chinese leadership has seen too many of its tech all-stars, from Alibaba to Tencent, leave mainland China to raise capital on Wall Street and in Hong Kong.

So China's trying to be the cool dad, making what Reuters calls perhaps its "boldest attempt at capital market reforms yet."

  • The new tech board will allow for more volatility, capping daily price swings at 20% and eliminating any limits during a company's first five days of trading. Other boards in China are more strict.
  • STAR Market will also welcome unprofitable companies if they check other boxes. The main board requires companies to post two years of profits before joining, something your average tech company IPOing in NYC could never be bothered to do.

Bottom line: China's committed to producing organic, locally sourced tech companies. To do that, it's trying to upgrade its stock market infrastructure to compete with the U.S.


Endgame Ends the Game

Disney said the April blockbuster Avengers: Endgame became the highest-grossing film of all time on Sunday, passing Avatar with a $2.79 billion global haul. (The figures are not adjusted for inflation, excellent question.)

Time to update the leaderboard at Box Office Mojo:
Now now, Avatar, there's no need to feel blue. Following its acquisition of Fox entertainment assets, Disney now owns the Avatar franchise. And it's planning to release four sequels from 2021 to 2027

Elsewhere in Disney's magic kingdom:

  • At Comic-Con Saturday night, Marvel revealed many new projects it's been working on. Some feature a more diverse cast of characters, including LGBTQ and Asian superheroes.
  • The Lion King reboot grossed a meaty $185 million this weekend in North America. It's the biggest ever domestic launch for a PG-rated film.

+ Pop quiz: What's the highest-grossing film with a G rating? (Answer at bottom.) If you get it wrong, you must use "son of a squeegee!" to replace any PG-13 words you were thinking about saying today.


2019 Retail Vibes, in One Quote

"We've been the busiest we've ever been in our history."

Business is booming…if you're a liquidator. That's Scott Carpenter, head of retail liquidation at Great American Group telling the FT about the wave of closures and bankruptcies stinging the industry.

CBRE data showed that in recent months, retailers were vacating U.S. shopping malls at the fastest pace since at least 2010. And retailers have already announced over 7,400 store closures so far this year, 28% more than last year's total store closures, per Coresight.

Zoom out: The shift to e-commerce, as we all saw with last week's Amazon Prime Day extravaganza, has walloped physical retail. But the WSJ points out that astronomical rents are also to blame. Dragged down by expensive real estate, the luxury clothing company Barneys NY is considering filing for bankruptcy. Rent on its Madison Ave. store reportedly jumped earlier this year to $27.9 million from $16.2 million.

+ Want more retail news? Check out Retail Brew, our newsletter giving you (much more positive) retail vibes twice a week.


Five Things We Learned About the Apple Industry

Source material: A wonderful article in The California Sunday Magazine previewing the groundbreaking launch of a new apple variety, the Cosmic Crisp, this fall.

  1. For 50 years, Red Delicious was the most-grown apple in the U.S. That came to an end last harvest season, when Gala took over the throne. Some in the industry consider Red Delicious "obsolete."
  2. The first crossbreed that led to the Cosmic Crisp apple was made in 1997. It's hitting shelves this year, so we count 22 years of testing before launch.
  3. It could be worth it. According to insiders, bringing the Cosmic Crisp to grocery stores may be "the largest launch of a single produce item in American history."
  4. So how do you market an apple? The Cosmic Crisp is partnering with a theater production of Johnny Appleseed and a group of social media influencers.
  5. The Cosmic Crisp's biological identity, under patent as WA 38, is owned by Washington State University. Cosmic Crisp growers must pay royalties on every tree they buy and every box they sell.


The Week Ahead

Anyone else going to a wedding this weekend? Send us the most cringeworthy wedding hashtag you've seen.

Monday: Earnings (TD Ameritrade, Whirlpool)

Tuesday: Earnings (Chipotle, United Technologies, Lockheed Martin, Coca-Cola, Snap, Visa, Hasbro); new U.K. prime minister announced; WTO General Council meetings begin; existing home sales

Wednesday: Earnings (Boeing, Deutsche Bank, Facebook, AT&T, Tesla, PayPal, Ford, UPS, Caterpillar); new home sales; Robert Mueller hearing on Capitol Hill; figure out a way to celebrate International Self-Care Day and National Tequila Day at the same time

Thursday: Earnings (Alphabet, Amazon, AB InBev, Intel, Comcast, Starbucks, Southwest Airlines, Astrazeneca); international trade; National Intern Day; European Central Bank Governing Council meeting

Friday: Earnings (Twitter, AbbVie, McDonald's); Pan American Games begin; early GDP data; Once Upon a Time in Hollywood released (Tarantino, Margot Robbie, Brad Pitt, Leo...)


  • Bridgewater's flagship fund, Pure Alpha, lost 4.9% in the first six months of the year, per the FT. That's a historically bad first half for Ray Dalio's hedge fund.
  • CBS went dark for more than 6.5 million AT&T customers in at least 14 markets Saturday morning. Two words: contract disputes.
  • Tensions in the Strait of Hormuz are raising insurance rates for shipping companies navigating this vital transportation corridor.
  • Chinese foreign direct investment in the U.S. fell 88% from 2016 to 2018, per data from Rhodium Group.


Turn It Up
Greater Than, Less Than is taking this week off in the Bahamas. We present to you its understudy, Straightforward But Interesting Trivia Question.

What's been the most-played song of the 21st century on U.K. radio?

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Breakroom Answers

Turn It Up
"Chasing Cars" by Snow Patrol

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December 2022 Investment Banking

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