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Boeing Hits More Turbulence

Boeing, Moderna, Berkshire

Good Morning!

Happy Monday! Let’s start off the week with a bang:

👉 Boeing’s airplanes halted

👉 Moderna’s vaccine sales plunge

👉 Berkshire Hathaway settles lawsuit

BOEING: Airplanes Landed

Boeing’s stock was down in pre-market trading on Monday. This decline followed the Federal Aviation Administration's (FAA) directive to ground a number of Boeing 737 Max 9 aircraft for immediate inspections. The FAA's decision was a response to an incident involving an Alaska Airlines flight, where a section of the plane detached at an altitude of around 16,000 feet. This grounding order comes at a challenging time for Boeing, which has been focusing on increasing the production of its Max series.

Source: Financial Times

The FAA is maintaining a vigilant eye on Boeing following the 737 Max's troubled history with fatal crashes in 2018 and 2019, issued this emergency directive over the weekend. Boeing has expressed its agreement with the FAA's decision and is actively participating in creating inspection procedures for the affected airlines.

This directive impacts about 171 aircraft and applies to U.S.-based airlines and others operating in U.S. territory. Notably, Alaska Airlines and United Airlines, which are among the largest users of the 737 Max 9 model, will feel the most significant effects of this grounding. With approximately 215 of these aircraft models in service worldwide, this latest development once again draws intense attention to Boeing and its best-selling 737 Max series.

🎯 GRIT TAKE: Boeing has had a tumultuous…upgrade to VIP to read the full GRIT Take. 

MODERNA: Vaccine Sales Tank

Moderna announced on Monday that its 2023 COVID-19 vaccine sales fell to $6.7 billion, a two-thirds reduction from 2022's $18 billion, despite fewer people opting for the updated vaccine. This decrease in sales reflects a reduced demand for Covid products as the pandemic's urgency subsided. The drop in interest for Moderna's sole commercial product contributed to a nearly 45% fall in its stock value last year. The company earned an additional $600 million in deferred revenue from its partnership with Gavi. 

Source: Reuters

Despite the overall decline, Moderna increased its U.S. Covid vaccine market share to 48% in 2023, up from 37% in 2022. Moderna expects a further decrease in vaccine sales in 2024, reiterating its overall sales forecast of around $4 billion for the year. This projection includes potential revenue from its RSV vaccine, which is awaiting FDA approval in April. The company anticipates a return to sales growth in 2025, driven by the launch of new products, including 45 in development and nine in late-stage trials. This includes a combined Covid-flu vaccine, potentially approved as early as 2025.

BERKSHIRE: Settles Lawsuit

Berkshire Hathaway settled a billion-dollar lawsuit with the Haslam family regarding the valuation of Pilot Travel Centers, affecting the buyout price of the family's stake in the truck-stop firm. The settlement terms, undisclosed, prevented a trial scheduled in Delaware Chancery Court.

Source: NY Post

The trial would have been unusual for Berkshire, with CEO successor Greg Abel expected to testify. The lawsuit alleged Berkshire used an accounting method to lower the buyout price of the family's 20% stake in Pilot Travel Centers, while Berkshire accused the Haslams of inflating the company's value for a higher buyout.

Headlines You Need To Know: 🎙

  • Goldman Sachs analyst says the world is moving into a new super-cycle

  • Blinken to meet with Saudi and UAE leaders

  • Congressional leaders reach spending deal

  • Lululemon lifts sales outlook for the year

  • Blackrock, Ark Invest files amended forms for bitcoin spot etf

  • Another Evergrande executive is detained

  • NVIDIA plans to launch a new Chinese AI chip

  • Oppenheimer’ dominates Golden Globes

This Product Has Crushed It

No Shark Tank product has ever beaten the success of this one, and it’s so simple that YOU are going to kick yourself for not thinking of it. Back in 2012, inventor Aaron Krause stepped onto the ‘Shark Tank’ stage with a simple smiley-faced sponge named the Scrub Daddy. This sponge changes texture based on water temperature—soft in warm water for gentle scrubbing and hard in cold water for tough stains. Genius, right?

Source: Medium

Well, a majority of the sharks did not think so, and they were out on the product. However, Lori Greiner saw the potential and snagged the deal at $200,000 for 20% equity. And boy, did it pay off! Fast forward, and Scrub Daddy does over $100 million in sales per year, making the brand worth well over a quarter of a billion dollars. Lori invested in a product that she believed in and understood. This is very similar to the investing advice that Warren Buffett gives, which is to invest in stocks that you know and understand.

Chart of the Day

📊 Percentage of U.S. Households Owning Stocks

Source: WSJ

GRIT Meme of the Day 😂

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Source: @wallstmemes

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