Market Snapshot

What's Ripe?

State Auto Financial Corp. ($STFC) – You may not be familiar with State Auto Financial Group, but, as with any insurance company, I’m sure they’ve done their fair share of screwing people over. Liberty Mutual announced it would acquire the regional insurance firm for $52/share or ~$2.3bn, leading shares to ride the jet stream up 190% towards that level. Now, I love overpaying for things as much as the next guy, but $52/share for a company that closed at $17.26 last week...that’s pushing it. 

Tesla ($TSLA) – With a run-up of 4.4% on Monday, Tesla stock is speeding up once again. Tesla bulls can thank German Chancellor Angela Merkel, and the whole German lawmaker squad, for extending national EV subsidies for four more years. Meanwhile, the firm’s Technoking is getting roasted by his less-fanboy-crazed shareholders for an alleged bailout of his cousin’s firm, but more on that below.

Disney ($DIS) – There must have been a “Superbad-level” rager thrown at the Mouse House last night as shares in the massive entertainment firm gained 4.15% on Monday. This was their largest single day move in months. JP Morgan analysts gave Disney a boost, affirming their buy ratingalongside the Black Widow premier, picking up a quick $140mm.

What's Rotten?

Virgin Galactic ($SPCE) – Richard Branson’s flight didn’t crash, but his stock sure did. Shares in Virgin Galactic were down 17.3% yesterday following Bransons “historic” flight to “space” in what turned out to be the most expensive and potentially deadly PR stunt in human history. I was excited for this, but after learning Branson didn’t actually reach “outer-space”, I feel like the guy who sends a check to save the Nigerian Prince after reading an email. 

AMC Entertainment ($AMC) – I was going to say that I feel bad for any AMC bag-holders after yesterday’s 7.75% drop, but then I realized, I don’t. Unless you’re 16 years old or AMC was literally your first stock ever, my only question is - what was your gameplan? A great job was done pushing this thing to the moon, but it seems we won’t be staying long. As they say in the biz, onto the next one. 

Airbnb ($ABNB) – When did everyone jump off the post-pandemic, travel bandwagon? It seems like just last week that everyone and their mother thought they were Warren Buffet holding Delta, Hilton, or of course, Airbnb. Now what happened? Shares in Brian Chesky’s $89 billion travel website opened higher and immediately took the elevator down, finishing 2% lower. This may not be a huge drop, but traders foreshadowed more downside to come.

Macro Monkey Says

Boomer Boom: If you’ve ever had a boomer ask you to help them with a simple tech-related task, you better get used to it. The U.S. population amongst others, is getting older, quickly. As a percentage of the population, elders are spiking, and with a declining birthrate, young people are losing ground fast. This carries major implications, especially around the labor market, government spending, and consumer demands...and its not stopping anytime soon. So don’t be surprised if more and more people start asking you how to use “the Google”.

Food for Thought: Most families cause trouble by beefing with the tee ball coach, but very rarely do we see them harangued over a $2.6bn (alleged) company bailout. The Musks are a different kind of family, however. Today, de-facto family boss Elon Musk testified in Delaware against a group of Tesla shareholders. The shareholders claim that the firm’s buyout of SolarCity was a bailout of the fledgling solar energy company. Given SolarCity was founded by Elon’s relatives, there may be reason for suspicion. 

“The trick is not to learn to trust your gut feelings, but rather to discipline yourself to ignore them. Stand by your stocks as long as the fundamental story of the company hasn’t changed.” - Peter Lynch, One Up on Wall Street

Happy Investing,

The Daily Peel

Was this email forwarded to you? Sign up for the WSO Daily Peel here.

ADVERTISE // WSO ALPHA // COURSES // LEGAL