🎲 Sportsbetting is on fire!

Good morning Investor. Nothing in this world can take the place of good old persistence. Talent won't. Nothing's more common than unsuccessful men with talent. Genius won't. Unrecognized genius is practically a cliche. Education won't. Why the world is full of educated fools. Persistence and determination alone are all powerful.

— Ray Kroc, “The Founder” Film

MARKET UPDATE

TODAY’S BIG HEADLINES

• Sportsbetting on women, a new gold mine

• Samsung’s profits increase tenfold

• Disney taking notes from Netflix

• Google splashing the cash on Hubspot

GAMBLING INDUSTRY

Sportsbetting on women, a new gold mine🎲

High Stakes and High Heels: Sportsbook giants DraftKings (DKNG) and FanDuel (FLUT) have rolled out the red carpet to announce that the LSU-Iowa March Madness rematch, featuring the formidable Hawkeyes, has smashed records to become the most wagered women’s game in the history of American sportsbooks. FanDuel even went on to state that this represented a 28% increase in handle over their previous record-holder, making it the Super-Bowl of women’s betting events.

Ladies Night Outshines the Gents: In a twist that would make Vegas blush, this event managed to draw more bets and handle than any other event on the Monday night sports roster, including the NHL game and all but one MLB and NBA game in the prior week. Here’s a fun fact to chew on: only 26% of bettors are women at present, suggesting a vast, untapped goldmine for further expansion.

Putting It All On Red: Hold onto your wallets, folks, because a staggering $2.7 billion is expected to be wagered on the basketball tournaments. Analysts are currently placing their bets on DraftKings to post positive cash flows in 2024 for the first time on an annualised basis. The stock is up 35% year-to-date, making it the Usain Bolt of publicly-traded betting companies.

sources: (ESPN), (ABC)

SEMICONDUCTORS

Samsung’s profits increase tenfold🚀

Another Chip Winner: The tech titan from South Korea, the mastermind behind the Galaxy smartphone series, dropped a bombshell in its preliminary earnings guidance last Friday. The company is forecasting a whopping ₩71 trillion ($52.5 billion) in revenue, marking an 11% YoY increase. But hold onto your hats, folks, because the operating profit is expected to hit ₩6.6 trillion ($4.88 billion), a staggering 931% YoY increase. Yes, you read that right, a tenfold increase in just a year! It’s like they’ve found a golden goose laying semiconductor eggs!

The Turnaround Story: Samsung’s (LON: BC94) profits took a nosedive in Q1 2023, coinciding with the start of the semiconductor market’s downcycle. It was like watching a high-budget Michael Bay disaster movie. But plot twist! The company seems to be witnessing a resurgence in sales across its product spectrum, from consumer electronics to chips. Reporting profits from DRAM for the first time in a year is like a phoenix rising from the ashes, signaling the dawn of a recovery.

Rally the Troops, It’s Earnings Time: Samsung is set to release their earnings report at the end of the month. The likely culprits for the surge in profits? A spike in demand for both NAND and DRAM products, and the launch of the new S24 Galaxy Smartphone products. It’s like they’ve suddenly inherited Midas’ touch! Since hitting rock bottom in September 2022, Samsung’s shares have skyrocketed by 70%. It’s not just a rally, it’s a moonshot!

sources: (ZDNET), (Yahoo)

STREAMING SERVICES

Disney taking notes from Netflix📺

Streaming Shenanigans: Remember when Netflix (NFLX) decided to play the strict parent and crack down on password sharing among friends and family? Remember the uproar, the threats of boycotts, the social media outrage? Well, it turns out, the move was a masterstroke, leading to the fastest customer acquisition growth the company has seen in years. It was like watching a magician pull a rabbit out of a hat. The company implemented a rule that if a user shared their account with another user, they would be hit with an extra $7.99 a month charge. It was like a Netflix tax, and thanks to their ad-supported tier of their subscription, it worked wonders.

Mouse House Follows Suit: Not to be outdone, Disney (DIS) has decided to jump on the bandwagon and implement a crackdown on password sharing, with the crackdown set to kick off in June. This is the first major move by CEO Bob Iger since his victory over Nelson Peltz in their boardroom showdown on Wednesday. With a twinkle in his eye, Bob stated, “we want to turn streaming into a growth business“. It’s like Disney is taking a page straight out of Netflix’s playbook.

Disney’s Game Plan: As of now, other than the date of the crackdown, we’re in the dark about how this will be implemented. But if we were betting folks, we’d wager that the company will be aiming for a similar implementation to Netflix’s, given the success they saw. It’s like Disney is saying, “Anything you can do, I can do better.” Shares of Disney are already up 30% year-to-date, could this news keep the rally going?

sources: (Forbes), (Sky News)

MEGA CAPS

Google splashing the cash on Hubspot👁️

Show Me the Money: Alphabet (GOOGL), the tech giant with more layers than an onion, is reportedly considering buying a shiny new toy, Hubspot (HUBS), for $32 billion. This news has sent Hubspot shares soaring over 6%, while Alphabet’s shares have taken a slight dip, much like a penguin gracefully entering the water.

Why Hubspot, You Ask? Well, Hubspot could be the secret sauce that spices up Google’s advertising business, which currently makes up the lion’s share of the company’s revenue and profits. Hubspot is the second-largest CRM, trailing only Salesforce (CRM), and could provide the missing puzzle piece for Google’s advertising customers. This is the magical transformation of a potential customer into a buyer, allowing Google to oversee the entire advertising and acquisition journey. Comparable to watching a caterpillar turn into a butterfly!

Google: The Pac-Man of Tech: Alphabet has a history of successful acquisitions that would make even Pac-Man jealous. However, this would be their largest gulp yet. Their past conquests include YouTube in 2006 for $1.65 billion in Google stock (a steal, in hindsight), DoubleClick in 2007 for $3.1 billion, Motorola Mobility in 2011 for $12.5 billion, Waze in 2013 for $966 million, DeepMind Technologies in 2014 for a rumored $400 million, and even FitBit in 2021 for $2.1 billion. A full list of Alphabet’s acquisitions can be found somewhere in the depths of the internet, just click here.

Antitrust Concerns: The Federal Trade Commission, acting like a strict parent, is currently very against big companies getting bigger. They recently rejected Adobe’s (ADBE) acquisition of Figma for $20 billion, the merger of Alberts & Kroger (ACI, KR), and heavily opposed Microsoft’s (MSFT) acquisition of Activision Blizzard for $69 billion. Would they really let Alphabet make this purchase without putting up a fight? As likely as a snowball’s chance in Dubai!

sources: (CNBC), (Techcrunch)

MORE NEWS

Additional market-moving events🌎

• New York, New Quake: Over the weekend, a 4.8 magnitude temor hit the east coast, with the epicentre of the quake being in Lebanon, New Jersey. the tremor was felt all along the east coast in New York and Boston. (BBC)

• House Prices dropping: In Q2 2023, the House Price Index dropped 1.7% in the euro area and 1.1% in the EU, following a 0.4% and 0.8% rise respectively in the first quarter of the same year. (EURN)

• AI regulation is here: A “first bilateral agreement” between the US & UK has been signed, where both countries will share research expertise with one another. (FIN)

• Experian buying competitors: The personal credit ratings company Experian, has agreed to acquire Australian peer in the credit ratings industry, Illion for as much as $542M (INV)

• Gucci playing Monopoly: In a move reminiscent of a game of Monopoly, Gucci owner Kering has purchased a retail block on the Italian city of Milan’s top shopping street from Blackstone for $1.4B. This is Europe’s largest property deal in over two years (WSJ)

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.

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

• Evolution AB: 1,303.00 SEK (📉-1.40%)

• Hims & Hers Health: $15.47 (📈+0.28%)

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