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- FTC Halts Grocery Giants' Merger
Good Morning!
Happy Tuesday! Hope you have a great day:
👉 FTC blocks merger
👉 Lowe’s earnings are in
👉 Bitcoin surges above $57,000
Let’s get into it!
FTC: Blocks Merger
The U.S. Federal Trade Commission (FTC) announced its intention to block the merger between Kroger and Albertsons. They argued that the $24.6 billion deal would lead to increased prices for consumers and reduced wages for employees. The FTC, along with nine state attorneys generals, filed a complaint to prevent the creation of one of the nation's largest grocery chains. Kroger countered, claiming the merger would benefit consumers and workers by enabling stronger competition against larger retailers. On top of that, they promised $1.5 billion in price reductions and wage increases.
Source: Supermarket News
The deal has met resistance from labor unions and scrutiny over its potential to concentrate market power, competing against giants like Walmart as well as regional and discount grocers. The combined entity would operate around 5,000 stores nationwide, merging Kroger's and Albertsons' vast network of supermarket brands.
🎯 GRIT TAKE: This was seen as a brilliant move…upgrade to VIP to read the full GRIT Take.
FTC: Blocks Merger
The U.S. Federal Trade Commission (FTC) announced its intention to block the merger between Kroger and Albertsons. They argued that the $24.6 billion deal would lead to increased prices for consumers and reduced wages for employees. The FTC, along with nine state attorneys generals, filed a complaint to prevent the creation of one of the nation's largest grocery chains. Kroger countered, claiming the merger would benefit consumers and workers by enabling stronger competition against larger retailers. On top of that, they promised $1.5 billion in price reductions and wage increases.
Source: Supermarket News
The deal has met resistance from labor unions and scrutiny over its potential to concentrate market power, competing against giants like Walmart as well as regional and discount grocers. The combined entity would operate around 5,000 stores nationwide, merging Kroger's and Albertsons' vast network of supermarket brands.
🎯 GRIT TAKE: This was seen as a brilliant move by Kroger to officially be able to compete with Walmart in terms of size. However, as soon as the deal was announced, its timing was heavily scrutinized. It is no secret that the Biden DOJ/FTC are not fans of large mergers. One of his campaign promises was to support unions, and when the unions came out against the deal, it was obvious that they would attempt to block the merger. In our opinion, if President Biden is re-elected to a second term, then this deal will not get done. If the Republican nominee is elected, their FTC will allow the deal to happen.
LOWE’S Earnings Are In
On Tuesday, Lowe's reported higher earnings and sales than expected despite fewer people doing home improvement projects. The company had lowered its yearly sales forecast in November due to decreased spending on expensive and optional home upgrades. Lowe's expects to make $84 billion to $85 billion this year, a slight drop from last year's $86.38 billion.
Source: CNN
Lowe's made $1.02 billion in profit this quarter, up from $957 million last year. After adjusting for certain costs, their earnings were $2.28 per share. Sales dropped from last year's $22.45 billion, partly because of one less week in the quarter and no sales from their Canadian stores. Sales decreased by 6.2% compared to last year, mainly because people were less interested in DIY projects. However, sales to professionals like plumbers and electricians stayed the same. The company spent $404 million buying back its shares and paid $633 million in dividends in the fourth quarter.
BITCOIN: Surges Above $57,000
Bitcoin surpassed the $57,000 level for the first time since late 2021, driven by investor interest in new spot ETFs. The cryptocurrency has seen a 32% increase since the year's start, fueled by $6.1 billion flowing into recently launched Bitcoin ETFs. This reflects growing interest in Bitcoin ahead of a major event known as the halving.
Source: CNBC
The overall market value of digital currencies is now around $2.2 trillion, according to CoinGecko, recovering from a low of $820 billion in 2022. $162 million in shorts against Bitcoin were liquidated in two days, one of the largest such events since November 30. Bitcoin has outperformed traditional investments like stocks and gold this year.
Headlines You Need To Know: 🎙
Tom Brady’s New Neighbor
Jeff Bezos moved next door to Tom Brady and Ken Griffin to save billions of dollars. The State of Washington passed a new law that requires a 7% capital gains tax on all capital gains over $250,000. For example, if you profit $1,000,000 from a stock sale, then you would have to pay an extra $70,000 in taxes to the state of Washington on top of your normal taxes.
Source: Marca
In response to this new legislation, Jeff Bezos has officially moved from Washington to Florida after being a resident since 1994. Bezos owns around 990 million shares of Amazon stock, so this move will save him billions in taxes due to Florida being such a tax-friendly state. On top of this, Bezos has been very hands-on with running his space exploration company, Blue Origin, which is located in Florida.
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