🍋 ESG Bubble Bursting?

Why investment bankers say that ESG pledges are unrealistic and impossible, plus Trump Media lost $58M in 2023.

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“Rather than focus on what will change, focus on what stays the same.” — Shane Parrish

Good Morning! Hopefully, you didn’t buy any $DJT stock, which plunged 21% after Truth Social disclosed a $58 million loss in 2023, and Trump’s net worth also fell over $1 billion. Tesla's awful quarter has Wall Street on edge ahead of delivery numbers. United is struggling too - asking pilots to take unpaid time off because of Boeing troubles. But good news on the horizon - optimism for both IPOs and venture capital is picking up.

Looking for exposure to the fast moving world of AI? Invest in the supercomputers powering AI with NVIDIA elite partner, NexGen Cloud. Download the strategy brief to learn more.

SQUEEZ OF THE DAY

ESG Bubble Bursting?

A few weeks ago, an ESG investment banker at UBS reportedly had an outburst at a climate event. “Banks are living and lending on planet earth, not planet NGFS,” the UBS banker told the group.

It seems like he said the quiet part out loud - the multitrillion-dollar global transition finance plan might be unrealistic.

This discussion underscores a broader dilemma within the finance industry: how to balance green regulations with the economic realities of a world still reliant on fossil fuels.

Some banks agreed to align their operations with net-zero goals. But now many of them are having second thoughts. Many banking experts say, that for banks to comply with these new rules, they’d have to dump large numbers of clients. 

Banks would virtually be banned from doing business with many commodity clients, as well as energy clients in coal-dependent countries like South Africa, Poland, and Indonesia. There is concern that, if banks were to pull out of the aforementioned countries, there could be irreversible harm to their local economies.

As the industry confronts the complexities of transitioning to a low-carbon economy, there's a growing acknowledgment that finance alone cannot drive the net-zero agenda without solid policy support and profitable incentives for green investments.

Takeaway: Banks are starting to quietly push back on ESG. It’s just tough to balance - you don’t want to look like the HSBC banker who asked an audience “who cares if Miami is underwater in 50 years?” But it just goes to show - coming up with ideas and policies is the easy part; enacting them is harder.

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The company is projecting 30-50% annualized returns and other impressive fundamentals:

  • Targeting 150% profit over 5 years 

  • Uncapped ROI 

  • Income-producing hands-off asset 

  • Early mover advantage with a deep NVIDIA partnership .

HEADLINES

Top Reads

  • Wall Street nervously eyes Tesla's Q1 delivery numbers (Axios)

  • United asks pilots to take unpaid time off, citing Boeing’s delayed aircraft (CNBC)

  • IPOs are picking up again — but don’t expect a flood just yet (Axios)

  • Trump Media shares fall after company reports 2023 net loss of $58M (CNBC)

  • VC optimism returns for 2024 (Axios)

  • Private equity vs. the coffee workers (Substack)

  • The stock market’s Magnificent 7 is now the Fab Four (WSJ)

  • Your dog will have an anti-aging drug before you do (BB)

  • Panasonic to sell autos business to Apollo Global-managed funds (Reuters)

  • Price pressures are easing gradually (YF)

  • The psychologist who turned the investing world on its head (WSJ)

CAPITAL PULSE

Markets Rundown

Stocks wavered to start the new quarter.

Movers & Shakers

  • (+) Cameco ($CCJ) +8% after Goldman Sachs initiated coverage on the uranium company with a buy.

  • (+) Micron Technology ($MU) +5% after Bank of America raised its price target for the chipmaker.

  • (–) InterDigital ($IDCC) -9% after a downgrade for the wireless company by Bank of America.

Private Dealmaking

  • Liberty Media bought Dorna Sports for around $4.5 billion

  • RHI Magnesita bought Resco Products, a refractory products maker, for $430 million

  • Cadent bought AdTheorent for $324 million

  • Robovision, a computer vision platform, raised $42 million

  • InStride Health, a pediatric treatments provider, raised $30 million

  • Avalo Therapeutics bought AlmataBio, an antibodies developer, for $22 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

2054: A Novel

It is twenty years after the catastrophic war between the United States and China that brought down the old American political order. A new party has emerged in the US, one that’s held power for over a decade. Efforts to cement its grip have resulted in mounting violent resistance. The American president has control of the media, but he is beginning to lose control of the streets.

Many fear he’ll stop at nothing to remain in the White House. Suddenly, he collapses in the middle of an address to the nation. After an initial flurry of misinformation, the administration reluctantly announces his death. A cover-up ensues, conspiracy theories abound, and the country descends into a new type of civil war.

A handful of elite actors from the worlds of computer science, intelligence, and business have a fairly good idea what happened. All signs point to a profound breakthrough in AI, of which the remote assassination of an American president is hardly the most game-changing ramification.

The trail leads to an outpost in the Amazon rainforest, the last known whereabouts of the tech visionary who predicted this breakthrough. As some of the world’s great powers, old and new, state and nonstate alike, struggle to outmaneuver one another in this new Great Game of scientific discovery, the outcome becomes entangled with the fate of American democracy.

Combining a deep understanding of AI, biotech, and the possibility of a coming Singularity, along with their signature geopolitical sophistication, Elliot Ackerman and Admiral James Stavridis have once again written a visionary work. 2054 is a novel that reads like a thriller even as it demands that we consider the trajectory of our society and its potentially calamitous destination.

“From the acclaimed authors of the runaway New York Times bestseller 2034 comes another explosive work of speculative fiction set twenty years further in the future.”

DAILY VISUAL

S&P 500 Market Cap Is Up $10.9 Trillion Since the Fed Pivot

Wealth has increased $13.5 trillion since the November FOMC meeting

Source: Apollo

DAILY ACUMEN

Advice

From a young age, we’re immersed in a myriad of roles and jobs that shape our path. Each position, whether as a deli clerk or a marketing director, brings its own set of lessons about work ethics, collaboration, and personal growth. Throughout these experiences, one learns about the importance of hard work, humility, and the value of learning itself.

A key takeaway from years of diverse work experiences is the crucial role of feedback in personal and professional development. Feedback provides insight into our performance and areas for improvement, allowing us to adapt and grow in our careers. Seeking feedback actively and embracing it, even when it's not what we want to hear, can lead to significant strides in achieving our goals.

Another vital piece of advice is to focus on effort rather than outcomes. Striving to do our best without being overly attached to the results helps maintain a healthy perspective on work and success. It's about making consistent efforts, trusting the process, and letting the results follow naturally.

Moreover, embracing adaptability and continuous learning is essential. With the rapid pace of technological advancements, like artificial intelligence, staying open and learning to leverage these tools can enhance our capabilities and keep us relevant in any field.

Understanding that elite performance, whether in sports, business, or creative endeavors, revolves around core mental skills like resilience, creativity, focus, and collaboration can be enlightening. These skills transcend industries and are the foundation of success in any arena.

ENLIGHTENMENT

Short Squeez Picks

MEME-A-PALOOZA

Memes of the Day

 

 

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