🤝 Google’s Next Acquisition

MARKET UPDATE

Good Morning Investor! Shares of Trump Media ($DJT) have soared 28% after the failed assassination attempt on the former president over the weekend. Meanwhile, ammunition & gun manufacturers Ammo Inc ($POWW) and Smith & Wesson ($SWBI) saw their shares surge 15% and 11% respectively. Apparently, nothing says "invest in me" quite like a good old-fashioned security scare. On the other side of the pond, British fashion house Burberry ($BRBY) saw its shares drop 16% after the company cut its profit forecasts and replaced its CEO, proving that even in the world of high fashion, sometimes you need to change your outfit.

TODAY’S BIG HEADLINES

Google is Considering Acquiring Cybersecurity Firm Wiz for $23 billion

Uniqlo is Dominating the World of Fast-Fashion

Greece Adopts Six-Day Work Week, While the UK Four-Day Week Gathers Support

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MERGERS & ACQUISITIONS

Google is Considering Acquiring Cybersecurity Firm Wiz for $23 billion🤝

Google's Billion-Dollar Shopping Spree: After turning its nose up at CRM giant Hubspot ($HUBS), Google ($GOOG) has since set its sights on another potential acquisition. The tech behemoth is reportedly eyeing a mammoth $23 billion purchase of cloud cybersecurity startup Wiz. It seems Google's spare change has been burning a hole in their pocket.

• Given the eye-watering price tag, this deal would not only be close to twice what Google shelled out for Motorola Mobility in 2012 (remember that impulse buy?), but it would also be the largest acquisition in the company's history. Talk about going big or going home!

Pawns, Knights, and Cybersecurity: Wiz is a cloud cybersecurity firm offering siloed security tools and scanners for the enterprise space. This potential purchase feels about as subtle as a neon sign, seemingly targeted at an increasingly vulnerable-looking Microsoft that's been playing whack-a-mole with high-profile security breaches lately.

Google's Cybersecurity Odyssey: If successful, this acquisition could help solidify Google's reputation as a secure cloud platform. It's the latest move in what appears to be Google's mission since 2022, when it splurged half a billion dollars on another cloud security startup. They followed that up with a $5.4 billion acquisition of Mandiant, the company that discovered the SolarWinds hack later that year. At this rate, Google might just end up with more security than Fort Knox!

• Despite the deal looking more likely than a cat chasing a laser pointer, there's still the nail-biting concern that it will spark antitrust concerns. Regulators might just decide to play party-pooper and block the deal.

CONSUMER DISCRETIONARIES

Uniqlo is Dominating the World of Fast-Fashion💪

Uniqlo's Fashion Takeover: The Japanese fast-fashion juggernaut Uniqlo ($TYO: 9983) has officially strutted its way to the title of the world's third-largest global apparel manufacturer, hot on the heels of Zara and H&M's parent companies. It's like they're playing a real-life game of fashion Monopoly, and Uniqlo just landed on Boardwalk! Interestingly, the US market has been Uniqlo's fashion faux pas. Since its 2005 debut, the company has only managed to sprout 74 stores nationwide - a number that looks as small as a size zero next to H&M's whopping 500 stores.

• But fear not, fashion fans! Now that Uniqlo has finally cracked the code of American tastes (hint: it's not just stars and stripes), they're giving it another go. Their ambitious target? 200 US stores by 2027. Last week, Uniqlo's parent company, Fast Retailing ($FRCOY), reported a 19.4% increase in Uniqlo's international business. Looks like their strategy is finally paying off.

When the Dragon Sneezes, Uniqlo Catches a Cold: Much like many of their competitors, Uniqlo is finding the Chinese market tougher to crack than a fortune cookie. Despite China accounting for 27% of Fast Retailing's operating profit and hosting more Uniqlo stores than anywhere outside Japan, things aren't looking as rosy as a pink cardigan. In its latest quarter, sales and earnings in China took a nosedive faster than a model on a slippery runway. The culprits? Weak consumer spending (apparently, the Chinese aren't in a "treat yo'self" mood), unseasonal weather, and the rise of cheaper alternatives

• Uniqlo's sister brand GU is waiting in the wings, poised to become the next big thing. With plans to open 1,000 stores abroad by 2026, GU is like the plucky understudy ready to steal the show. While it currently makes up just 11% of Fast Retailing's revenue, Bloomberg analysts say GU "could become a second growth engine."

MACROECONOMICS

Greece Adopts Six-Day Work Week, While the UK Four-Day Week Gathers Support👏

A Sign of the Times: Times are changing faster than a chameleon in a disco, but nothing signifies this quite like the rollercoaster ride of European work weeks. Greece, the birthplace of democracy and feta cheese, has attempted to incubate another change to modern society, this time with far less support from the public.

• Last week, Greece's government put new labor laws into effect that mean workers can be asked to work a six-day workweek. It's like they're trying to bring back the "good old days" of Ancient Greece, minus the togas and philosophical debates.

• Meanwhile, just a hop, skip, and a jump across the pond in the UK, the campaign for a four-day workweek is gaining momentum faster than a British queue for tea. They're looking to the new left-wing Labour government with some optimism that it can get more trials underway.

A Tale of Two Economies: Over the past decade, the Greek economy has lagged behind the rest of Europe like a tortoise in a hare convention. However, the tables seem to be turning. The UK's economy has been limping out of a pandemic-induced recession, while Greece's economy has been running hotter than a gyros grill at lunchtime.

• Greece has been suffering from "brain drain", where educated and skilled Greek workers have been fleeing the country. They're in search of both a better lifestyle and higher paying jobs elsewhere in the EU - apparently, sunshine and great food aren't enough anymore.

• So how do you drive productivity growth with a declining workforce and an aging population? Greece's solution is to simply work more.

The British Experiment: In the UK, however, we're seeing an opposite stance. Trials of the four-day, 32-hour workweek in the UK have been largely successful: 54 out of 61 companies that tried it kept the policy 18 months after the trial began.

MORE NEWS

Additional market-moving events🌎

New Volkswagen Upgrades: QuantumScape ($QS) has struck a new deal with Volkswagen, enabling the automaker to make 1 million cars annually using its solid-state technology. (Reuters)

FTC Targets Oil Merger: The Federal Trade Commission is seeking more information on ConocoPhillips’ ($COP) $17 billion acquisition of Marathon Oil ($MRO), signaling closer antitrust scrutiny in energy sector consolidation. (WSJ)

NYC Food Felivery Fees Surge: New Yorkers are paying 58% more in delivery fees since a minimum-wage law for couriers took effect in late 2023. Delivery workers' earnings rose, but contractor numbers fell by 9%. (YF)

Smartphone Shipments: Global smartphone shipments rose 6.5% in Q2, led by Samsung (SSNLF), with an 18.9% market share, and Apple (AAPL), with 15.8% of the market. (Reuters)

OUR PICKS

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. Then on the 12th of June we released our next stock selection.

Here’s how the three stocks have performed since:

• Evolution AB: 1,164.50 SEK (📉-11.30%)

• Hims & Hers Health: $23.04 (📈+59.23%)

• PayPal: $60.88 (📉-4.01%)

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