🍋 Cash Flow Is Great Again

Together With

Good Morning! Walmart-owned Sam's Club is raising its membership fees for the first time in nine years, affecting budget-conscious bulk buyers. SNAP shares jumped, which seems good, except it was a result of an announcement to cut 20% of staff in a major restructuring. BBBY can't stay out of the news and is closing 150 stores and laying off 20% of its staff. College dining halls are also feeling the pain of inflation (10.9% annual increase in food prices) and are getting creative by offering smaller portions and plant-focused options. MicroStrategy's outspoken founder and Bitcoin's #1 fan, Michael Saylor, is being sued by DC for allegedly failing to pay over $25 million in income taxes since 2005.

Selzy, a no-code email marketing service is offering a lifetime deal to its platform for just $49! 

1. Story of the Day: Cash Flow Is Great Again

Data centers (that house the "cloud") may not be as cool as the sexy SaaS stuff you hear on the regular but they're definitely attractive private equity investments with their predictable cash flows.

In the infrastructure boom, lots of infrastructure funds have raised capital and now there is pressure to deploy the dry powder. Don't worry, PE funds are getting after it. 2022 is already a record year for PE investments in data centers.

As of August 25, PitchBook reported $41.5 billion worth of deals (not including DataBank deal below) which is ahead of last year's $27.7 billion and 2013's $36.8 billion number. 

• Malaysian telco Time Dotcom has short-listed bidders for a data center unit valued around $600 million, while another group agreed to pay $1.5 billion for 35% of DataBank

• Another high profile deal that's still developing is an auction process for London-based Global Switch, which is expected to go for over $10 billion

• So far the largest deal of the year was a roughly $15 billion take-private of CyrusOne by KKR and Global Infrastructure Partners

Not everyone is a fan: Jim Chanos is raising a fund to short US data center groups. He believes the cloud kings Amazon, Google, and Microsoft, will dominate the space by building their own facilities and leasing out some space to customers cheaply.

Short Squeez Takeaway: Looks like predictable cash flows are back in fashion, after years of investors focusing on growth, growth, and more growth. The demand for internet keeps growing at an exponential pace and data centers are here to stay. Someone tell Jim Chanos that internet supply is not a zero-sum game. Maybe Big Tech and data center groups can continue to co-exist as they have for the last decade?

2. Markets Rundown

Stocks pared early gains and finished the day in the red, continuing the recent sell off. Crypto was up as Bitcoin moved back above the $20k level.

Movers & Shakers

• (+) Rocket Lab USA ($RKLB) +8% after Cowen upgraded the company to outperform from market perform.

• (+) Snap ($SNAP) +9% after announcing its restructuring plan.

• (–) Express ($EXPR) -21% after missing earnings.

Private Dealmaking

• EarlySalary, a digital lending startup, raised $110 million

• Glints, a talent development and recruitment platform, raised $50 million

• Bitlevex, a crypto options trading platform, raised $50 million

• Proof, an NFT collective, raised $50 million

• StarTree, an open source data analytics platform, raised $47 million

• Vive Crop Protection, a crop protection products platform, raised $26 million

3. Top Reads

• Yield curve inversions are reliable, troubling economic signals (CNBC)

• Serena Williams is into the 3rd round of US Open! (YF)

• Bed Bath & Beyond tries to restructure - again (Axios)

• Fintech firm Klarna’s losses triple after aggressive U.S. expansion (CNBC)

• Economist predicts ‘whopper’ of recession in 2023 - but not because of interest rates (MW)

• Stanford pulled into dropout Musk's legal fight with Twitter (BB)

• Another tiny US listing with ties to China spikes 13,000% (BB)

• US shares fall on threat of interest rate rises (BBC)

• U.S. public widely supports unions - but why don’t workers? (CNBC)

A Message from Selzy

If you’re looking for the easiest way to start selling with emails, try Selzy – an email marketing service that suits any business goal.

Getting started is as easy as 1-2-3: create your first campaign in just 15 minutes! The best part? Enjoy 24/7 support via chat, email, and phone even on the Free plan.

Grab a special offer: a lifetime deal for just $49! Get lifetime access to all the core features: automation, segmentation, unlimited emails, and 24/7 support – for a price of 10 lattes. No extra payments needed, no commissions or hidden fees. 

Try it now!

4. Book of the Day: The First Twenty Hours

Take a moment to consider how many things you want to learn to do. What's on your list? What's holding you back from getting started? Are you worried about the time and effort it takes to acquire new skills - time you don't have and effort you can't spare?

Research suggests it takes 10,000 hours to develop a new skill. In this nonstop world when will you ever find that much time and energy?

To make matters worse, the early hours of practicing something new are always the most frustrating. That's why it's difficult to learn how to speak a new language, play an instrument, hit a golf ball, or shoot great photos. It's so much easier to watch TV or surf the web...

In The First 20 Hours, Josh Kaufman offers a systematic approach to rapid skill acquisition: how to learn any new skill as quickly as possible. 

His method shows you how to deconstruct complex skills, maximize productive practice, and remove common learning barriers. By completing just 20 hours of focused, deliberate practice you'll go from knowing absolutely nothing to performing noticeably well.

This method isn't theoretical: it's field-tested. Kaufman invites readers to join him as he field tests his approach by learning to program a Web application, play the ukulele, practice yoga, re-learn to touch type, get the hang of windsurfing, and study the world's oldest and most complex board game.

“If you rely on finding time to do something, it will never be done. If you want to find time, you must make time.”

5. Short Squeez Picks

• Instagram’s top eleven recipes from August

• Kevin O’Leary on worst Shark Tank investment ever

• A new app that will help you read more

• Foreign candy puts American candy to shame

What Else To Read

If you love getting Short Squeez (which we'll assume you do), you must value getting crisp insights and actionable intel without all the BS.

The Daily Upside, founded by a team of bankers and journalists, is another great newsletter for big-brained readers. Built with investors in mind, The Daily Upside is packed with heavy-hitting analysis and stories you simply won’t find elsewhere.

It’s the perfect addition to your media diet, striking that elusive balance of gravitas and wit. There’s a reason 700,000+ readers start their days with The Daily Upside. Sign up for free here.

6. Daily Visual: Union Popularity Hits 57-Year High

Percentage of Americans who say they approve of labor unions; annually from 1936 to 2022

Source: Axios

7. Daily Acumen: Advice Gap

"Wisdom and good advice are everywhere, now more than ever.

And yet, despite the abundance that’s available, people often make errors in job searches, product launches, or even planning a party.

There might be three reasons:

The advice might not be good, or it doesn’t appear to be valid. It’s hard to tell good advice from the not-so-good, so it may pay to simply ignore it.

The advice might be good for “someone,” but it’s easy to imagine that it doesn’t apply to us. After all, the advice giver hardly knows us, we’re a special case and this is a special situation. Not to mention that good advice is often conservative and intended to maintain the status quo, which isn’t apparently helpful for someone who wants to make a ruckus.

The person who needs advice might not actually want advice. They might simply want reassurance. Reassurance that their instincts are right, that they and they alone are the ones that can make a difference. 

Of course, reassurance is futile (because it needs constant replenishment) but that doesn’t keep this from being the biggest of the three categories.

We don’t have an advice shortage. We have a gap in selection and application."

Source: Seth Godin

8. Crypto Corner

• Bitcoin just barely holding on ahead of historically weak September

• Matt Damon-fronted crypto firm accidentally sent $10 million to woman, who used it to buy a mansion

• Bitcoin’s crypto winter morphs into sleepy summer

• Scenarios for coming crypto regulation

• Crypto is coming back, Bankman-Fried says

• Cramer says avoid speculative investments like crypto while Fed stays hawkish

9. Memes of the Day

*****

*****

Want to reach an audience of 150,000+ business leaders, young professionals, and policy influencers? Advertise in Short Squeez.