🍋 Ultra Fast Lawsuits

Ultra-fast fashion retailer, Shein is in hot waters for copyright infringement. Air New Zealand is planning lie-flat beds for economy class. "Minions: The Rise of Gru" had a blockbuster opening weekend. Deal activity is expected to slow down this year and 500 of the world’s richest have also lost $1.4 trillion, steepest decline in 6 months.

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Short Squeez
July 04, 2022

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"Good positioning lets you control your circumstances. Poor positioning lets your circumstances control you.” — Shane Parrish

Good Morning and Happy 4th of July! Thanks for reading on your day off! If you were flying for the long weekend and hated the cramped seats, then check out Air New Zealand's lie-flat "pods" for economy class, set to debut in 2024. (Really changing the meaning of Air Pods, eh?) "Minions: The Rise of Gru" gru to a flyin' opening weekend, with $108+ million in ticket sales.

Lower numbers are expected for banks this year as weak markets and choppy macroeconomic conditions slow down M&A & IPO activity. Also feeling the effects are 500 of the world's richest losing $1.4 trillion in the first half of the year, which is the steepest decline in 6 months for the uber-rich.

If you are looking to reconcile all your investments in one place, check out the Delta Investment Tracker, which lets you manage and track your portfolio so you don't need 10 different spreadsheets anymore.

1. Story of the Day: Ultra-fast Lawsuits

Fast fashion's shining star, Shein, is in hot water for potential copyright infringement from the industry's major fashion houses and boutique designers. It makes sense that the popular kids of the industry are picking on the new guy, as Shein has gotten a tight grasp on the Gen-Z demographic in just a few years.

Shein is valued at over $100 billion, with an impressive roster of investors including Sequoia Capital China and General Atlantic. Thanks to low prices and partnerships with influencers, the company is able to speed through the fast fashion model, creating up to 6,000 new items a day.

Lawsuits are also quickly coming in ultra-fast too, with Shein or Zoetop Business Co, its Hong Kong-based parent company, being named in at least 50 US federal lawsuits in the past three years. According to public records, they are being sued for trademark or copyright infringement in these suits.

The plaintiffs include a unit of Ralph Lauren Corp, Oakley, and some smaller designers that work out of their homes. When looking at social media posts/complaints of some of these independent fashion mini moguls, it's hard to see how Shein can deny some of the blatant plagiarism.

Short Squeez Takeaway: Shein has settled with plaintiffs in many cases, but often responds to complaints by passing the blame to third-party suppliers. A Shein spokesman said, "It is not our intent to infringe on anyone's valid intellectual property and it is not our business model to do so." If you're going to knock off a big company, I guess give it your best shot and prepare for a long, expensive, legal battle. Ripping off the little guys though? Come on, Shein...

2. Markets Rundown

Green on the screen heading into the long weekend for equities despite the weakest first 6 months in the markets in over 50 years. Crypto got a little holiday bump as well.

Movers & Shakers

  • (+) Coupang ($CPNG) +16% after Credit Suisse upgraded the company to "outperform" from "neutral."

  • (–) Kohl's ($KSS) -20% after the company confirmed that talks to sell to Franchise Group have ceased.

  • (–) Intel ($INTC) -3% falling with other semiconductor stocks, and because it delayed plans to construct chip factories in Ohio.

Private Dealmaking

  • Evolved By Nature, that has bio-engineered its own silk product, raised a $120 million Series C round

  • Avant, that is cultivating meat from fish cells for food and skin care products, raised a $10.8 million round

  • Faeth Therapeutics, is developing therapies to control nutrients in order to enhance the efficacy of cancer treatments, raised a $47 million Series A

  • Moon Surgical, a three-year-old Paris startup that is developing a robotic surgery system, raised a $31.3 million 

  • Mottu, aims to rent motorcycles to independent, raised a $30 million Series B

  • Sensible Care, that provides telepsychiatry and teletherapy services, raised a $13 million Series A

3. Top Reads

  • Americans have had it with inflation (WSJ)

  • Your investments won't do as well as you think (Axios)

  • Warren Buffett has advice for the Barbarians at Japan’s gate (BB)

  • Success does not necessarily make you miserable (WSJ)

  • Joshua Tree, once quiet and quirky is California’s hottest real-estate market (WSJ)

  • What happened when the rich stopped intermarrying (Axios)

  • Bezos slams Biden over call for lowering of gas prices (BB)

  • LA considers banning new gas stations (Protocol)

  • The economic trend that could hurt Democrats most in the midterms (Axios)

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4. Book of the Day: The Intelligence Trap: Why Smart People Make Dumb Mistakes

Smart people are not only just as prone to making mistakes as everyone else, they may be even more susceptible to them. This is the "intelligence trap," the subject of David Robson’s fascinating and provocative book.

The Intelligence Trap explores cutting-edge ideas in our understanding of intelligence and expertise, including "strategic ignorance," "meta-forgetfulness," and "functional stupidity."

Robson reveals the surprising ways that even the brightest minds and most talented organizations can go wrong—from some of Thomas Edison’s worst ideas to failures at NASA, Nokia, and the FBI. And he offers practical advice to avoid mistakes based on the timeless lessons of Benjamin Franklin, Richard Feynman, and Daniel Kahneman.

“Intelligent and educated people are less likely to learn from their mistakes, for instance, or take advice from others. And when they do err, they are better able to build elaborate arguments to justify their reasoning, meaning that they become more and more dogmatic in their views. Worst still, they appear to have a bigger "bias blind spot," meaning they are less able to recognize the holes in their logic.”

5. Short Squeez Picks

6. Daily Visual: Worst First-half Performances for S&P 500

Source: Axios

7. Daily Acumen: Lessons

Health over wealth

Invest in your education

Have an emergency fund

Build multiple income streams

Practice delayed gratification

Invest in quality

Don’t compare with others

Go at your own pace

It’s okay to feel lost

Work consistently, not hard

Know when to give up

Relationships take work

Time is limited

Take calculated risks

8. Crypto Corner by Bonkalytics.com

For more crypto-focused content, sign-up here.

9. Memes of the Day

 

 

 

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