“The fact is that China still punches below its weight as an investor overseas” — Primavera Capital founder Fred Hu, responding to the notion that China is buying up everything lately. Sounds like a callout to us.
- U.S. stocks finished higher yesterday after the ISM non-manufacturing index (translation: it measures the “services” part of the economy, i.e. the majority of it) dropped to its lowest level since 2010, further diminishing chances of a September rate hike
- Shares of Chipotle jumped after hours when it was revealed that Bill Ackman’s hedge fund, Pershing Square, disclosed a 9.9% stake in the fast casual food chain
- Following the news that GE scooped up two European 3D companies at massive premiums yesterday, the entire 3D printing space had a strong day
As If You Don’t Already Have Enough Ways To Pay
…Add another to the list. You’ll soon be able to pay with PayPal in stores via MasterCard tap-and-pay thanks to the two companies’ expanding partnership. Quick refresher: the payments duo already had an existing relationship based on co-branded credit cards, but these new plans will step things up exponentially, especially for PayPal as it fights for a spot in point-of-sale transactions. Since breaking off from eBay last year, PayPal has been making major moves: it reached a similar deal with Visa in July and has been expanding Venmo’s capabilities (yes, PayPal owns Venmo). If PayPal’s good at one thing, it’s taking our money.
Enbridge Buys Out Spectra
…And hits the dividend jackpot. In an all-stock deal valued at $28 billion, Canadian pipeline operator Enbridge is acquiring Houston-based Spectra to create an energy infrastructure empire—and in a time of falling commodity prices and high regulatory hurdles to boot. So what’s in it for Enbridge? For starters, how about a natural gas pipeline that services the gulf and east coast? How about the investors? With 96% of all cash flow in the combined company coming from contracts that are unaffected by energy prices, the newly formed giant can almost promise annual dividend growth of 10-12% through 2024. Time to milk that cash cow.
We’ve All Seen the Ads
…We’re almost going to miss them. Yesterday, ITT Tech, one of the largest for-profit operators of technical schools, ended operations at all of its over 100 campuses. The shutdown comes on the heels of the U.S. government’s decision to stop providing federal loans and grants—totaling millions of dollars. Talk about a tough way to go out. Remember, the government is looking down the barrel of a dismal budget deficit on education, and for-profit institutions are typically the first to get cut—especially when they’re mired in controversy and fraud allegations, like ITT Tech was. Unfortunately, no one knows what’s next for the 8,000 employees and 35,000 students at its campuses.
Bayer Means Business
…Beefing up its offer price to buy U.S. seed maker Monsanto. The German drug giant raised its per share price, making the new total deal value over $65 billion. That’s a big number—in fact, we’re now looking at the largest all-cash proposal on record. Goodness. Why the increase? The two agro-giants have been discussing a deal since May, but Monsanto was a bit reluctant to share all of its accounting information—and didn’t think the initial offer was strong enough. Bayer enticed the seed maker to reveal its info with a sweetened price. Now, most signs point to the deal happening shortly, although it’s certainly not official yet.
- Goldman Sachs bans employees from donating to Trump
- Brazzers hacked, nearly 800,000 porn subscribers’ details leaked
- Starbucks to begin serving Stevia
- EpiPen maker Mylan being investigated by New York’s attorney general
- Monday: Labor Day (U.S. Market Closed)
- Tuesday: Dave & Buster’s (+/-) Earnings; ISM Non-Manufacturing Index (-)
- Wednesday: Hewlett Packard Enterprise Earnings; Job Openings and Labor Turnover Survey; Beige Book
- Thursday: Barnes & Noble Earnings; Weekly Jobless Claims
- Friday: Kroger Earnings
THE MOST INTERESTING MAN IN THE WORLD
The Brew may have just discovered the Most Interesting Man in the World. Enter John Malone. Full disclosure: he doesn’t have a beard, a rich exotic accent or a throng of women at his side (as far as we know). But don’t be discouraged, Mr. Malone has quite the resume. Once dubbed “Darth Vader” by former VP Al Gore for his cutthroat tactics, Malone made headlines again yesterday. The U.S. tycoon will reportedly pay £6.4 billion to take control of Formula One. Yes…he’s buying a sport. If that’s not impressive enough, here’s some more padding to Darth Vader’s lengthy resume:
- Malone is currently worth $7.1 billion, which the Connecticut-born entrepreneur amassed through the acquisition of several cable television channels, including Discovery and Eurosport. Stay thirsty, my friends.
- He’s also (casually) the largest private landowner in America with 2.2 million acres, most of which sits in Maine.
- The man is also a dedicated philanthropist, with some serious love for his alma maters. He’s dedicated $74 million to Yale University, $24 million of which was used for the school’s Engineering Center. Johns Hopkins and Colorado State received their fair share as well, a fat $30 million and $42.5 million, respectively.
Exit John Malone.
INTERVIEW QUESTION OF THE DAY
A man owns 2/3 of a computer service business and sells 3/4 of his share for $75,000. What is the value of the business? (Answer)
BUSINESS TERM OF THE DAY
Darvas Box Theory – Darvas box theory is a trading strategy that was developed in 1956 by former ballroom dancer Nicolas Darvas. Darvas’ trading technique involves buying into stocks that are trading at new highs. A Darvas box is created when the price of a stock rises above the previous high but falls back to a price not far from that high.
FOOD FOR THOUGHT
Check your snaps yet? Analysts at eMarketer expect Snapchat’s revenue to increase from $366 million in 2016 to nearly $1 billion in 2017. Now there’s a snap story.
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