⚗️ Big Pharma is Ripping Higher

MARKET UPDATE

Good Morning Investor! Shares of Chinese tech titan Alibaba (BABA) traded down over 7% following the news that it’s planning a $5B convertible bond sale to fund share repurchases and growth, following a similar move made by its competitor JD (JD). Meanwhile, shares of media company Buzzfeed (BZFD) have surged 20% in reaction to former republican candidate Vivek Ramaswamy announcing the initiation of an activist stake in media company.

TODAY’S BIG HEADLINES

• Biopharmaceuticals are Ripping Higher

• The Breakup of Live Nation-Ticketmaster

• Elf Beauty is Gobbling Up the Beauty Market

BIOPHARMACEUTICALS

Biopharmaceuticals are Ripping Higher⚗️

Catch Me if You Can: Hold onto your hats, folks, because biopharmaceutical juggernaut Moderna (MRNA) is sprinting like Usain Bolt in the stock market relay. Since their quarterly earnings report earlier this month, Moderna's stock has catapulted 51%, making it the top dog in the S&P 500. But wait, there's more to this meteoric rise than just stellar earnings.

Fowl Play: The Bird Flu Solution: Talk about ruffling feathers! Moderna's hot streak is fueled by the avian flu epidemic, which has been making waves not just in the US cattle population but now among human travelers in Australia and Michigan. With the global case count reaching a nail-biting eight, the US government is deep in discussions with both Moderna and Pfizer (PFE) over a potential avian flu vaccine program. This potential feather in their cap has sent shares of Moderna, Pfizer, and their wingmen—BioNTech (BNTX), AstraZeneca (AZN), and GSK plc (GSK)—soaring. In the past month, these stocks have taken flight with gains of 13%, 10%, and 8% respectively.

Vaccine Derby: Meanwhile, over in the vaccine race paddock, German company BioNTech is strapping on its running shoes with a Phase 2 trial vaccine that “targets the same evolutionary group as the avian influenza virus”. This could mean a fast-track to market, giving BioNTech a head start in the high-stakes vaccine derby.

Mixing Up Success: Moderna isn’t just riding the bird flu wave, it's mixing up a potent cocktail of successes. On top of the avian flu potential, it's shaking up the oncology world with promising results from its cancer vaccine, developed in partnership with Merck (MRK). But wait, there's more! Moderna is also rolling out a new respiratory syncytial virus (RSV) vaccine for the 60+ crowd, poised for FDA approval. This shot sets the stage for a heavyweight showdown with Pfizer and GSK in the respiratory vaccine arena.

LAWSUITS & REGULATIONS

The Breakup of Live Nation-Ticketmaster💔

Breakup Blues: Live Nation (LYV), the parent company of ticketing titan Ticketmaster, is in hot water. The U.S. Department of Justice has decided to crash the concert, filing a lawsuit to break up the company over antitrust allegations. This legal encore stems from a 2022 probe, and Live Nation's stock felt the dissonance, dropping over 6% in a single day.

Monopoly Meltdown: The lawsuit reads like a greatest hits album of antitrust accusations, claiming Live Nation has a stranglehold on the ticketing industry. The government alleges that the company is using its monopoly to orchestrate a symphony of anti-competitive conduct, harming fans, artists, smaller promoters, and venue operators alike. Apparently, Live Nation is playing the market like a fiddle, and not in a good way.

Defense Mode, Activate: Unsurprisingly, Live Nation isn't taking this lying down. They’ve labeled the claims as "absurd," suggesting that if fingers need to be pointed, they should be directed at soaring production costs, skyrocketing artist popularity, and relentless 24/7 online ticket scalping. The 2010 merger of Live Nation and Ticketmaster created an industry juggernaut, now commanding an 80% market share. It seems that dominance has made them a prime target for legal fireworks.

The Nitty-Gritty: The lawsuit paints a detailed picture of Live Nation’s alleged self-reinforcing business model.

• It claims that the company captures fees and revenue from concert fans and sponsorships, which it then uses to lock artists into exclusive promotion deals, granting them access to premier entertainment venues across the country.

This dominance is further cemented by tying new concert venues into long-term exclusionary contracts, effectively creating a loop that keeps competitors out and Live Nation on top.

CONSUMER DISCRETIONARIES

Elf Beauty is Gobbling Up the Beauty Market💄

Beauty Bargain Blitz: In a world where beauty brands like Ulta Beauty (ULTA) and Estee Lauder (EL) are feeling the heat from a challenging macroeconomic backdrop, the newbie on the block, E.l.f. Beauty (ELF), is strutting its stuff with some jaw-dropping earnings. April might have been a rough month with the whole beauty sector slowing down, but E.l.f. just put on a masterclass in comebacks, with its stock rocketing 18% higher. Talk about a glow-up!

Peeling Back the Layers: E.l.f. isn’t just playing dress-up; it’s showing some serious business acumen. The company's sales are booming across all categories—from cosmetics to skincare—and through every channel, including national retailers and digital platforms. Here’s the scoop:

• Revenue Explosion: E.l.f. reported a jaw-dropping $321.1 million in revenue, marking a 71% increase from last year’s numbers and leaving the $292.6 million expected in the dust.

• Earnings Surprise: Earnings per share came in at a pretty $0.53, up 26% year-over-year and smashing the consensus estimate of $0.33. Who needs fairy godmothers when you've got numbers like these?

Crystal Ball Crack-Up: However, before we get too carried away, let's talk about management’s guidance for the upcoming fiscal year. It's like getting a fortune cookie that says “Meh.” They're predicting earnings per share in the range of $3.20-$3.25, which is a bit of a downer compared to the expected $3.56. Sales guidance also didn’t quite hit the mark, with a forecast of $1.23 billion-$1.25 billion. But hey, a growth rate above 20% year-over-year isn’t exactly shabby. Plus, the CFO hinted that they're just being cautious, reminding everyone that last year's guidance started at 22%-24% and ended at a whopping 77%.

Wall Street Whispers: Post-earnings, E.l.f.’s stock has soared 18%, bringing its year-to-date gain to a dazzling 31% and a staggering 116% over the past twelve months. It seems E.l.f. Beauty is the well-oiled machine that just can’t be stopped, making it the belle of the Wall Street ball.

MORE NEWS

Additional market-moving events🌎

Alexa is Back: Amazon’s Alexa is being revamped to utilize AI, and this time there will be a monthly subscription. (CNBC)

Slap on the Wrist: Citi bank has been fined by UK authorities over a $79 million “fat finger” mistake, or failings in its trading operations. (Reuters)

Pickleball is Taking Over: The number of pickleball courts in major cities has skyrocketed 650% over the past seven years. (CNBC)

More Chips!: South Korea has announced a new $19 billion chip-funding package to help with the expansion of its local chip production. (Fortune)

DeepL skyrockets in valuation: DeepL, a new AI translation tool and competitor to Google Translate, raised $300M in a funding round led by Index Ventures, doubling its valuation to $2 billion. (CNBC)

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