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- 🍋 T-Swift and Private Equity
🍋 T-Swift and Private Equity
Why private equity investors are worried about Taylor Swift, plus Bank of America created fake accounts, and Microsoft got the green light to buy Activision.
Short Squeez
July 12, 2023
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“Don’t run when you lose, don’t whine when it hurts. It’s like first grade. No one likes a cry baby.” — Gordon Gekko
Good Morning! Microsoft got cleared in court to buy Activision for $69 billion. Bank of America is facing a hefty $150 million fine - regulators say the bank opened up fake accounts and charged junk fees. There's so much milk but nowhere left to process it, so farmers in the Upper Midwest are dumping the excess surplus down the drain.
Florida has unexpectedly emerged as America's top inflation hotspot. And Arctos Partners is raising a $4 billion fund specifically designed to provide capital solutions for private equity firms. This intriguing shift highlights how one of private equity's fastest-growing segments is now serving its own industry.
If you are looking for a fun, entertaining newsletter (with great formatting) on current events, then check out friends over at the DONUT.
SQUEEZ OF THE DAY
Taylor Swift and Private Equity
As if rising interest rates and new SEC rules weren’t enough, it looks like private equity investors are facing yet another problem in 2023 - Taylor Swift.
The music industry has become an intriguing investment opportunity for private equity firms - entire funds have been dedicated to acquiring legacy catalogs. Just take Blackstone-backed Hipgnosis, which bought Justin Bieber’s catalog for $200 million in December.
Taylor Swift’s first six albums were sold to Shamrock Capital Group, a private equity firm, for an estimated $300 million in 2020. But out of protest, Taylor decided to re-record all of her own songs. She brands the new recordings ‘Taylor’s Version’ and encourages her audience to listen to the new recordings so she can monetize them.
And, now private equity investors are worried - how can investments in song catalogs be safeguarded against potential devaluation when artists re-record their own songs?
And will more artists follow Taylor Swift’s strategy, or is her cult-like following a rare exception?
Takeaway: Some experts don’t think private equity investors should be too worried about re-recordings posing a substantial threat to the value of these investments. They believe the majority of consumers still harbor a strong preference for streaming the original versions of songs. They say Taylor Swift’s situation is so unique - she’s a marketing genius and such a savvy businesswoman that it’s unlikely other artists could replicate her fandom.
CAPITAL PULSE
Markets Rundown
Stocks closed higher as traders await key inflation data.
Movers & Shakers
(+) Zillow ($ZG) +11% after an upgrade by Piper Sandler.
(+) Shutterstock ($SSTK) +9% after the stock photography company expanded its deal with OpenAI.
(–) JetBlue ($JBU) -3% after a downgrade by Evercore.
Private Dealmaking
Berkshire Hathaway Energy bought Dominion Energy's stake in a Maryland LNG project for $3.3 billion
Molina Healthcare bought Bright Health's California health plans for $600 million
Septerna, a biotech startup, raised $150 million
CarbonCure, a carbon removal startup, raised $80 million
Aphea.Bio, an agriculture tech startup, raised $77 million
Raft, a logistics platform, raised $30 million
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HEADLINES
Top Reads
The U.S. cities with the most million-dollar homes (CNBC)
Why Amazon’s Prime Day is in July (CNN)
The corporate bankruptcy wave will get even uglier (BB)
American banks face more pain, huge shift (CNBC)
Airlines are struggling to keep up as Americans keep flying (YF)
Private equity firms are buying up practices and raising medical prices (WP)
Microsoft confirms more job cuts on top of 10k layoffs in January (CNBC)
Wall Street has been more bullish on companies than stocks (YF)
America’s biggest banks need more capital (WSJ)
Saudi Wealth Fund reports $11B investment loss for 2022 (BB)
BOOK OF THE DAY
The Power of Saying No
You have probably said "yes" to bosses, partners, family, friends, and even strangers, when you actually want to say "no." Maybe you wish you could say no more often, but you're not sure how or if it's even possible to do so. You're not alone!
We're taught to say yes as often as we can. After all, if you say no, aren't you likely to miss out on opportunities and sever important relationships? Isn't saying no a harmony-buster?
In The Power of Saying No, award-winning professor and researcher Vanessa Patrick delves into the new science of saying no.
She introduces the ground-breaking concept of "empowered refusal"―a proven framework for saying no that puts you in charge of your life―and reveals some surprising secrets about the power of the word no.
“This essential guide will sharpen your mind and steel your spine to live life on your own terms."
ENLIGHTENMENT
Short Squeez Picks
DAILY VISUAL
Online Price Relief
Year-over-year change in price of online goods
Source: Axios
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DAILY ACUMEN
The Fisherman and the Businessman
A businessman on vacation watched a fisherman lazily catching fish.
The businessman asked, "Why don't you fish more and earn more?"
The fisherman replied, "But what would I do with more money?"
The businessman said, "You could expand, hire others to fish for you, eventually make a fortune."
The fisherman asked, "And then what?”
The businessman said, "Then you can sit back, relax, and enjoy life."
The fisherman smiled, "Isn't that what I'm doing already?"
Consider what truly makes you happy and content.
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Memes of the Day
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