🚂 The US-Canada Rail Catastrophe

MARKET UPDATE

Good Morning Investor! On Monday, shares of Indian electric two-wheeler manufacturer Ola Electric Mobility ($OLAELEC) jumped 10% on Monday, hitting the upper circuit limit of the Bombay Stock Exchange (BSE). Shares of the electric wonderkid are now up a whopping 107% since their IPO on August 9th.

In other news, Sweden’s Riksbank cut interest rates by 25 basis points to 3.5% — its second cut of the year. Meanwhile in the US, The Bureau of Labor Statistics will release a key job market update on Wednesday which could shake up the Federal Reserve and stocks this week. The report is expected to come with a large downward revision to jobs growth — on the order of 600,000-1 million according to Goldman Sachs. Such a large figure would represent the largest downward revision to nonfarm payrolls since 2010.

TODAY’S BIG HEADLINES

Canada’s Pending Rail Shutdown Could Be Catastrophic

The Billionaire Backlash

The PayPal x Adyen Partnership Nobody was Expecting

TRANSPORTATION & LOGISTICS

Canada’s Pending Rail Shutdown Could Be Catastrophic🚂

The Freightening: Canada’s freight railroads might be about to grind to a screeching halt after labor negotiations over the weekend hit a classic deadlock. On one side, we’ve got the Teamsters union, and on the other, Canada’s two rail giants, Canadian National Railway and Canadian Pacific Kansas City. They’ve been butting heads since last November, debating everything from wages and scheduling to rail safety. Spoiler alert: no one’s blinking.

• The union’s 3,000+ Canadian rail workers are threatening to strike on Thursday unless, by some miracle, an agreement is reached at the eleventh hour. Meanwhile, the freight companies are ready to play hardball, threatening to lock out union workers if they dare strike. Talk about a standoff on the tracks!

Looking for a Rail-Saving Hero: In a plot twist that surprises no one, industry groups are begging the government to step in, claiming that a rail stoppage could cost millions of jobs and lead to billions in economic losses. But the country’s labor minister isn’t taking the bait, politely declining to jump into the fray.

• Just to give you the full picture, Canada’s rail network moves a whopping $277 billion worth of goods each year. And let’s not forget, Canada is the US’s second-biggest trade partner after Mexico.

• Morgan Stanley crunched the numbers and came up with a jaw-dropping figure: this disruption could cost US mining titan Glencore ($GLEN) (Canada’s a big coal exporter), at least $100 million a week. Ouch! Looks like somebody might want to fast-track those negotiations, or Glencore will be feeling the heat more than their coal ever could.

REGULATIONS & LAWSUITS

The Billionaire Backlas‍h😠

Slap on the Wrist: In case you missed the drama, on Monday, the SEC gave billionaire activist investor Carl Icahn a rather expensive slap on the wrist—$2 million in fines, to be exact. Why? For keeping billions in loans tucked away under the mattress. You can bet his arch-rival, Bill Ackman, is grinning like a Cheshire cat right now.

From Wolf to Watchdog: Carl Icahn, once the ultimate corporate raider, has mellowed out a bit in recent years. Now, he likes to think of himself as more of an "activist investor," swooping in to buy stakes in companies and push for changes. But don't let the softer image fool you—his public company, Icahn Enterprises ($IEP), was at the heart of the SEC's recent investigation.

• The SEC's probe revealed that Icahn had pledged billions of IEP stock as collateral for personal loans, all while keeping investors in the dark—a big no-no. Over six years, he put up more than half of IEP’s shares—up to $5 billion—as collateral. Sure, he owns 86% of the company, but IEP is still publicly traded and must play by the disclosure rules. Carl’s little secret was one the SEC couldn’t ignore.

Hindenburg Strikes Gold…Again: And who’s the one who blew the whistle? None other than Hindenburg Research, a short-seller firm renowned for its in-depth short reports. Hindenburg accused IEP of overvaluing its holdings and operating on shaky financial ground. Since their report dropped, IEP’s stock has taken a 60% nosedive, with Hindenburg not-so-subtly calling it a “Ponzi-like structure.” Talk about a punch below the belt.

Arch Nemesis: As for our Bill Ackman comment earlier, These two financial gladiators have been locking horns since the Jurassic era (okay, maybe not that long). Their legendary feud kicked off over a deal with Hallwood Realty in 2003, where they cooked up a "shmuck insurance" scheme. The plan? If Icahn sold his shares within three years and made a 10% profit or more, he’d have to split the cash with Ackman.

• Icahn bought in at $80 per share, but when Hallwood was sold at $136.16 per share, Ackman was owed $4.5 million. Icahn, of course, refused to pay up—because who likes sharing? Eight years of legal brawling later, Icahn finally had to hand over the cash, plus 9% interest.

FINTECH & PAYMENTS

The PayPal x Adyen Partnership Nobody was Expecting💳

Brothers in Tech: In a press release that dropped yesterday, our old fintech friend PayPal ($PYPL) announced it’s turning up the heat on its partnership with Dutch payments powerhouse Adyen ($ADYEN). The news gave PayPal’s shares a cheeky little boost of over 2%—and for those of you who get a thrill from chart patterns, PayPal has finally waved goodbye to the "accumulation" phase. Could this be the start of a beautiful breakout? Only time (and a few candlesticks) will tell.

Adyen’s Need for Speed: Under this souped-up partnership, Adyen will be rolling out PayPal's shiny new "Fastlane" guest checkout service to its enterprise and marketplace customers in the US, with plans to take it global in the future. Considering that North America is currently Adyen’s fastest-growing region—racing ahead at a speedy 30% year-over-year—this could be the turbo boost PayPal’s Fastlane needs to leave the competition in the dust.

• Fastlane by PayPal is designed to make the checkout process as smooth as butter, helping shoppers zip through their purchases faster and more efficiently. This, in turn, is expected to rev up conversion rates for businesses using Adyen's platform.

• The real magic? Fastlane lets customers save their payment and shipping details during their first purchase, so future checkouts are as quick and effortless as a swipe right. Teaming up here is a win-win for both companies—even if PayPal’s Braintree is technically an Adyen rival.

Strength in Numbers: This partnership isn’t their first rodeo. Adyen has already been offering PayPal’s payment options, including Venmo and Buy Now, Pay Later solutions, to its global customers. This latest move just takes their bromance to the next level.

MORE NEWS

Additional market-moving events🌎

GM Layoffs: General Motors ($GM) is laying off over 1,000 salaried employees globally, including 600 at its tech campus near Detroit, as part of a move to streamline its software and services division. (CNBC)

SEC Fines Icahn: Billionaire investor Carl Icahn and his firm Icahn Enterprises ($IEP) have settled with U.S. regulators over securities charges, with Icahn paying $1.5M in penalties and his company $500K. (CNN)

Video Game Record: "Black Myth: Wukong," a video game backed by Tencent ($TCEHY), hit a record 1.4M players on its launch day, becoming the most-played game on Steam and points towards a recovery in gaming. (Reuters)

Elon in the Cabinet: Trump wants to hire Elon Musk — and possibly cut Tesla's key tax credit. Musk would be put in either an advisory role or cabinet job. (Axios)

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Our selections performance👾

On Monday the 11th of March, we released our “superperformers” stock pick which we believe will provide significant outperformance compared to the S&P 500. Then on the 14th of June we released our next stock selection. Lastly, on August 6th, we initiated a position in Celsius holdings.

Here’s how the stocks have performed since:

• Hims & Hers Health: $16.53 (📈+14.24%)

• PayPal: $71.89 (📈+18.55%)

• Celsius: $40.35 (📈+0.07%)

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