Good Morning!
Welcome to Tuesday the 31st. Happy Halloween! 🎃
👉 X valuation drops
👉 Pinterest beats quarterly results
👉 U.S. Treasury slows borrowing in Q4
Let’s plunge into some ghoulish opportunities! 🧛
X: Unraveling Musk’s Impact on Shocking Valuation
X, previously known as Twitter, now has a value significantly below the amount Elon Musk purchased it for a year ago. Stock units given to employees currently value the company at $19 billion, translating to $45 per share. Musk acquired Twitter last year. After Musk rebranded it as X and modified some content guidelines, the platform saw a decline of over half its ad revenue. Musk aims to transition X from ad-based revenue to paid subscriptions. However, to date, the company has only managed to get under 1% of its users to subscribe to its monthly premium offering, which equates to an estimated annual income of less than $120 million, according to Bloomberg.
Source: CNN
Under Musk's leadership, the company has faced financial challenges. When he took over, Twitter had a valuation of $44 billion, derived from a combination of debt and equity. The acquisition burdened the company with $13 billion in debt. Additionally, X is estimated by Bloomberg to have yearly interest obligations of about $1.2 billion on its debt.
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PINTEREST: Surging Ahead in Earnings
Pinterest announced better-than-expected earnings on Monday afternoon, beating profit and revenue estimates. Revenue was $684.6 million, which was an 11% increase from this time last year. One of the biggest wins was global monthly active users, which jumped to 482 million. This was an 8% increase from a year ago and beat Wall Street estimates. Pinterest reported a net profit of $6.73 million, or one cent per share, compared to a loss of $65.2 million, or 10 cents per share, in the same period the previous year.
Source: The Information
The company's quarterly expenses increased by almost 2%, reaching $768.2 million, up from $753.9 million the year before. Pinterest also projected that its non-GAAP operating expenses for the fourth quarter of 2023, excluding revenue costs, will see a reduction of between 9% and 13% compared to the previous year.
Pinterest Earnings:
Revenue: $763.2 million vs. $743.5 million expected
EPS: 28 cents vs. 20 cents expected
TREASURY: A Week of Turmoil and Tension
In an announcement that drew significant attention, the U.S. Department of the Treasury shared its plans to borrow $776 billion in the last quarter of 2023. This is a reduction from the record $1.01 trillion they borrowed between July and September, the highest for that specific quarter.
Interestingly, the actual borrowing figure is slightly lower than market predictions. JPMorgan Chase strategists, for instance, had forecasted a borrowing amount close to $800 billion.
Source: Getty, Forbes
This borrowing update is especially relevant given the current volatility in the global bond market. It's worth recalling that when the Treasury highlighted its escalated borrowing requirements in July, it triggered a substantial shift in the bond market, with yields soaring to their most elevated levels since the onset of the 2007 financial crisis. This suggests a potential moderation in the U.S. government’s borrowing relative to the preceding quarter.
Headlines You Need To Know: 🎙
Tesla shares drop 5% on battery warning
Pfizer swings to quarterly loss
Apple announces new M3 chips and cuts the price
Zombie firms are filing for bankruptcy
Wall Street predicts a record $114 billion in debt refunding
The three young activists who helped UAW win
Beer giant AB Inbev beats forecasts
Workers keep getting big raises. That’s a problem for the Fed
China factory activity shrinks
Stem Cell Sector Set to Reach New Heights
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*This is PAID advertising content and the disclaimer at the bottom of this email MUST be read carefully.
Quenching Thirst with Liquid Death
This man turned boring water into a hardcore brand and a $700 million dollar company. Get ready for what I'm about to tell you because you’re going to be shocked. Water is one of the most boring brands, and all water bottles have the same bland and uninspiring marketing. This is when Mike Cessario wondered if he could change this. His ultimate goal was to make water cool. He became obsessed with the branding and labeling of liquid death. He came up with the catchy slogan called “Murder Your Thirst.” They started marketing the brand on social media with unique ads like “Don’t be scared. It’s just water.” And even during the Super Bowl. Cessario envisioned the brand for people who wanted to drink water instead of Alcohol at a party or rock concert but still have a cool drink in their hand. Liquid Death went from doing $2.7 million in revenue in 2019 to over $150 million in 2022.
Source: CNBC
On top of that, Liquid Death is backed by Live Nation Entertainment and Science Ventures and celebrity backers, including comedian Whitney Cummings and members of the music group Swedish House Mafia. Collectively, investors have pumped about $195 million into Liquid Death, valuing the brand at $700 million. Liquid Death plans to IPO in 2024, and it will be one of the most popular initial public offerings of the year.
Chart of the Day
Federal Interest Rate Payments
The U.S. Federal interest rate payments have exploded in recent years. At this rate, interest costs are on pace to become one of the largest Federal budget items.
Source: Bureau of Economic Analysis
The Financial Ally You’ve Been Waiting For
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Hank’s intelligent automation orchestrates the collection, storage, and payment of bills, so that payers reduce interest expense, and build equity faster. Managing bills sucks but Hank is the financial ally looking out for your cash flow.
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*This is PAID advertising content and the disclaimer at the bottom of this email MUST be read carefully.
GRIT Meme of the Day 😂
Tag GRIT Capital on social media for a chance to be featured in our meme or Tweet of the day in our GRIT daily newsletter! 👇
Source: @gavinuf7
GRIT Content Creator Spotlight: Joyee Yang! 🤩
Our creator highlight of the week is the talented Joyee Yang! Finance can be challenging to learn if you're starting, and Joyee makes learning finance and investing easy with her short, snappy TikTok and Instagram videos. Whether a beginner or an expert investor, you can appreciate Joyee's simple, approachable, teachable videos!
@joyeeyang0 What are your thoughts on stock lending? Hope this helps you understand how stock lending works! 🥰💸✨ #investingforbeginners #money #millen... See more
Check out Joyee's latest viral video highlighting and teaching the value of dividend investing! Click HERE to join Joyee's Discord!
*This section is in brand partnership with Joyee Yang
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