Disney’s boardroom warfare & Microsoft-backed cybersecurity IPO

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Tickergeek market update:

Today’s big headlines:

• Disney’s boardroom warfare

• The dangerous game of IPO investing

• From Smartphones to EVs, Xiaomi wants it all

• Microsoft-backed cybersecurity IPO

Disney’s boardroom warfare⚔️

What’s happening? In the enchanted kingdom of Walt Disney (DIS), a fierce battle is brewing. The current board, armed with their Mickey Mouse ears and magic wands, are locking horns with activist investors, including the formidable Nelson Peltz, over the coveted throne of board seats. The plot thickens as more than half of all shares have already cast their votes prior to the company’s upcoming annual meeting on Wednesday.

A knight in shining armour for the company has emerged in the form of T.Rowe (TROW) who own a 0.64% stake in the business. T.Rowe has decided to back the current Disney board, rather than siding with the activist investors of Trian Fund Management and Blackwells Capital. Their loyalty lies with the house of the mouse itself. In this epic saga, Disney has also secured the backing of the company’s second-largest shareholder, Blackrock. With allies like these, who needs Avengers?

So, what’s the endgame for these activist investors? Trian Fund Management and Blackwells Capital are both jousting for board seats of their own, seeking the power to steer the ship and alter the course of the business. Activist investors typically have one goal in mind: to drive share price returns through any means necessary to turn the business around. Nelson Peltz, in his quest for power, aims to acquire two seats, one for himself and one for former Disney CFO Jay Rasulo.

Share price performance: Despite this boardroom Game of Thrones, shares of Disney (DIS) are up 34% year-to-date, a performance that would make even Scrooge McDuck proud. However, they are still down close to 40% from the all-time highs set back in March of 2021.

sources: (reuters), (variety)

The dangerous game of IPO investing☠️

Hold onto your hats, folks! The IPO market of 2024 is heating up faster than a SpaceX rocket launch. With Donald Trump’s Truth Social (DJT) and the internet’s favourite hangout, Reddit (RDDT), both more than doubling in valuation on their debut trading day, it seems we’re about to witness a stampede of companies rushing to go public, eager to ride this wave of pent-up demand.

The rumour mill is churning, and it’s widely anticipated that we’ll be seeing IPOs from some of the tech world’s most elusive unicorns, causing a frenzy that would make a Wall Street trader blush. This star-studded lineup includes the likes of Klarna, Chime, Databricks, Shein, Stripe, Discord, PayU India, and even Kim Kardashian’s Skims. Yes, you read that right, folks - even reality TV royalty is getting in on the action!

But let’s not forget, investing in a business just as it goes public can be as risky as a blind date. Over the past few years, we’ve seen some significant companies take the plunge, with varying degrees of success.

The list continues and reads like a who’s who of the tech world, including Rivian (RIVN), Doordash (DASH), UiPath (PATH), Roblox (RBLX), and Coupang (CPNG). However, much like Icarus, these companies flew too close to the sun, with all of them currently trading significantly below their initial valuations at their respective IPOs. It seems the market can be as unforgiving as a Simon Cowell critique!

sources: (instagram - intelligent investor)

From Smartphones to EVs, Xiaomi wants it all🚗

What’s happening? In the bustling tech metropolis of China, Xiaomi (1810.HK), the technology titan, saw its stock price rocket by 16% on Tuesday. The catalyst? A wave of interest in their newly unveiled sporty electric vehicle, launched just last week. The vehicle, christened the “SU7” or “Speed Ultra 7”, has been turning heads faster than a spinning teacup at Disneyland. Drawing design inspiration from Porsche, it’s hit the market with a price tag that undercuts the Tesla Model 3, coming in under $30,000.

Share price performance: Since the grand unveiling of their debut car last Thursday, Xiaomi’s share price has been on a rollercoaster ride, touching its previous peak set back in January 2022. This surge has left the soon-to-be automaker with a valuation of $55 billion, outpacing US auto giants General Motors (GM), and Ford (F). It’s like David and Goliath, if David had a fleet of electric cars.

The villain of this fairytale? The Chinese auto market, while the largest in the world, is not without its dragons. Significant pricing constraints and an ongoing price war could hamper profit margins. Add to that the slowing demand due to the Chinese economic slowdown, and you’ve got a plot twist. But fear not, analysts note that Xiaomi, with its deep pockets and expertise in smart dashboards from their smartphone ventures, might just have the magic beans to overcome these challenges.

Everyone wants one: It seems everyone wants a ride in the SU7. Xiaomi has advised eager buyers that the wait times for this hot rod could be around seven months. With the company announcing 88,898 pre-orders within the first 24 hours, indicating robust demand for the vehicle.

Now, all the stock needs is a sprinkle of the “AI” buzzword, and it could continue its upward trajectory, reaching for the stars.

sources: (reuters), (financial times)

Microsoft-backed cybersecurity IPO🛡️

What’s happening? In the realm of cloud security, a new player is stepping into the limelight. Rubrik, a provider of backup services on Microsoft’s cloud platform Azure, has thrown its hat into the ring of the public market. Under the ticker symbol “RBRK”, it’s aiming to raise a cool $500 million to $700 million in funding.

One of their shining stars is a product known as Ruby. This gem offers AI data defense and recovery, harnessing the power of the Microsoft Azure OpenAI Service in tandem with Rubrik’s proprietary software. This alliance, forged in the fires of innovation, has all the ingredients for a blockbuster success on the public markets.

Now, let’s talk numbers. In their SEC filing, Rubrik pulled back the curtain on their financials. They revealed a total annual subscription revenue of a whopping $784 million, amassed from a loyal customer base of 6,100. Their annual revenue growth is a robust 47%, a figure that would make any Wall Street wolf howl with delight. However, every story has its twist. Despite these impressive numbers, the business is yet to turn a profit, reporting a net loss of $277.7 million in 2023. But as they say in showbiz, the show must go on!

sources: (The register), (cnbc)

Additional market-moving events🌎

• Q2 stock pullback intensifies: Sticky inflation data at the end of last week, plus strong economic data on Monday sent treasury yields higher after traders reduced the odds of the Fed cutting rates in June.

• The truth came out: Trump’s net worth dropped $1B as Trump Media stock sinks on news of the company’s $58 million loss emerged.

• EV sales are taking a beating: Tesla first-quarter deliveries were a ‘disaster’ and may mark turning point, Wedbush’s Dan Ives says. Meanwhile, the Chinese automaker BYD has surrendered the largest EV maker title back to Tesla after the latest quarter’s sales slump.

• UBS share buyback: The Swiss bank UBS (UBS) has announced a $2B share buyback program, lasting two years, signaling confidence as it nears the completion of its merger with former Swiss competitor Credit Suisse, which is expected in Q2.

Notable earnings this week💵

• Blackberry (BB) will report Wednesday after hours. Analysts estimate a loss per share of $0.03 (-50% YoY).

• Levi’s Jeans/Levi Strauss Co (LEVI) will report Wednesday after hours. Analysts estimate $1.53B in revenue (-9.54% YoY) and $0.20 in earnings per share (-41.18% YoY).

Our selections performance👾

On Monday the 11th of March, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500.

Here’s how the two stocks have performed since then:

• Evolution AB: 1,330.60 SEK (📉-1.60%)

• Hims & Hers Health: $15.62 (📈+3.80%)

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