📈 Most Valuable Startup in Europe

MARKET UPDATE

Good Morning Investor, and Happy 4th of July! Shares of Paramount Global ($PARA) rallied almost 7% on the news of renewed merger talks with Skydance, this time with a sweetened offer. Meanwhile, electric vehicle behemoth Tesla ($TSLA) has seen its shares continue to rally after announcing its delivery numbers on Tuesday.

TODAY’S BIG HEADLINES

Tesla Delivered & Optimism is Returning

New York’s Real Estate Has Become a Buyer’s Market

Britain’s Fintech Darling Reports Record Profits

IN PARTNERSHIP WITH BULLSEYE TRADES

MEGA CAPS

Tesla Delivered & Optimism is Returning🚀

The Electric Comeback Kid: Despite the year’s negativity, Tesla ($TSLA) is proving it's tougher than a well-tuned lithium-ion battery. Shares have surged a whopping 62% from their April bottom, defying skeptics and delighting investors. The latest burst of positivity? Tesla’s vehicle delivery figures released on Tuesday.

Delivery Drama: Yes, Tesla’s delivery numbers were down year-over-year, but not by as much as analysts predicted—a mere 5% dip. Tesla delivered around 444,000 vehicles, marking a 14.8% increase from the previous quarter but still a 4.8% decrease from last year. Despite two consecutive quarters of lower deliveries, the stock shot up 10% on Tuesday. Who knew a slight decline could be so invigorating?

• Why the Dip?: The decline in delivery numbers is largely due to slower sales and shipping delays. Despite significant price cuts and attractive leasing deals, Tesla couldn't quite match last year’s figures. But hey, with a 62% recovery in just two months, who’s complaining? Well, maybe some shareholders, since the stock is still in negative territory for the year.

The Outlier: Tesla’s recovery stands in stark contrast to its Chinese competitors. Zeekr ($ZK) and Nio ($NIO) reported record deliveries in June, with Zeekr delivering 20,106 cars and Nio 21,209. Year-to-date, Zeekr leads with 87,870 vehicles, slightly ahead of Nio's 87,426, while Xpeng ($XPEV) delivered 52,028. Additionally, BYD saw a 21% increase in Q2 electric vehicle sales.

• There are potential positive catalysts on Tesla's horizon. The company will report earnings on July 23rd and meet again on August 8th to discuss its robotaxi and self-driving vehicle plans. The biggest buzz, however, is around Tesla’s cheaper model, which Elon Musk hinted would arrive in 2025. Get ready for more electrifying updates!

REAL ESTATE

New York’s Real Estate Has Become a Buyer’s Market 🏢

The Market is Shifting: Thanks to a surplus of for-sale apartments and prices that are finally starting to creep down, a handful of appraisal firms are officially labeling New York City a “buyer’s market.” It’s like a Black Friday sale but for high-rise condos.

• The Big Apple Abundance: In Manhattan, over 8,000 apartments are up for grabs—about 1,000 more than the market’s 10-year average. This means there’s now an almost 9.8-month supply of homes, far higher than the typical 6-month supply. The only logical conclusion? Buyers are in the driver's seat now, and sellers are riding shotgun.

New York’s Market Dynamics: This increase in supply is leading to a spike in deal-making, with nearly 12% more deals closed compared to last year. As activity ramps up, prices are falling, with the average sale price dropping 3%. The reality of higher-for-longer rates is setting in, and sellers are realizing they need to meet buyers halfway—or maybe more. The burning question, however, is just how much worse things will get for sellers.

• Unfortunately, this positive development hasn’t yet reached renters. Rental vacancy rates are sitting at a stingy 1.4%, with rents up a staggering 33% compared to pre-pandemic levels, according to Bloomberg. It's like trying to find a needle in a haystack, except the haystack is on fire and charging you $3,000 a month.

The Great Disparity: From 2010 to 2023, New York City saw a 25% increase in jobs but only a 7% increase in housing supply. Despite Mayor Eric Adams’ lofty goal of building a whopping 500,000 new homes over the next decade, only a meager 16,300 new units were proposed in 2023. Looks like the mayor’s plans are as ambitious as they are optimistic—let’s hope he’s got a hard hat and a shovel ready.

FINTECH

Britain’s Fintech Darling Reports Record Profits 📈

Financial Brilliance: Britain’s fintech darling, Revolut, recently announced its intention to raise capital through a $500 million share sale at a $40 billion valuation—a significant leap from its $33 billion valuation back in 2021. Why is this noteworthy? Because while Revolut’s valuation has soared, competitors like PayPal ($PYPL), Affirm ($AFRM), Klarna, and Wise ($WISE) have seen their valuations nosedive.

• Klarna, for example, has plummeted from a peak valuation of $46 billion to a mere $7 billion. To put this in perspective, Revolut is now valued higher than Dutch payments titan Adyen ($ADYEN), which boasts a $37 billion market cap. It’s like watching your high school rival drop out while you get a full-ride scholarship.

The Figures: Revolut posted a record pretax profit of £438 million ($553.81 million) in 2023, driven by strong user growth and soaring interest-related income. This achievement cements its position as Europe’s most valuable startup. Interestingly, this is the first time in three years that the company has managed to file its financial accounts on time. Better late than never, right?

• Revolut remains a private company but has hinted at plans to go public. However, the company’s interim chief financial officer, Victor Stinga, declined to comment on any timeline for an IPO. So, for now, the public listing remains as elusive as a unicorn in the fintech forest.

Banking License Limbo: Despite being founded and headquartered in the UK, and boasting a user base of over 6 million in the country, Revolut is still waiting for a banking license approval that’s been pending for over three years. It’s like being the star player on the team but still sitting on the bench.

MORE NEWS

Additional market-moving events🌎

Sony Crypto Exchange: Sony are entering the Crypto ring, with the intention of launching their own exchange after acquiring Amber platform. (The Block)

Google Isn’t Going Net-Zero: Google's carbon emissions have risen a whopping 50% due to AI energy demands making their ambitious 2030 net-zero target unlikely. (CNBC)

Politician Trades: Nancy Pelosi has disclosed her most recent trades, having purchased options contracts for Broadcom & Nvidia, while selling both Tesla and Visa. (Investing)

Eli Lilly’s New Drug: New Alzheimer's drug: The FDA has approved Eli Lilly's (LLY) Alzheimer's drug donanemab, sold as Kisunla. (CNBC)

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: 1,115.50 SEK (📉-14.90%)

• Hims & Hers Health: $20.49 (📈+41.60%)

• PayPal: $59.64 (📉-5.98%)

Make sure that you’re subscribed so that you don’t miss our next stock picking research report!