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THE HEADLINES

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IT’S WHAT’S INSIDE

Define textbook insider trading: Person A sits on the Board of Directors for the publicly traded company, Acme. Person A catches wind of some business going-on that will almost assuredly affect Acme’s stock price. Person A promptly divulges this non-public information to Person B (presumably Person A’s “squash buddy”) thus allowing Person B to profit, or at the very least prevent loss of value by trading on the tip.

Congressman Chris Collins of New York was arrested on charges of insider trading stemming from an incident in 2017 when he sat on the Board of an Australian biopharmaceutical company called Innate Immunotherapeutics.

The charges indicate that Collins tipped off his son and some others that the company’s “blockbuster” drug had failed clinical trials. All-in the traders avoided $750k in losses by acting on the information before it went public.

After the news did go public shares plummeted 92% and Collins himself lost a reported $17M. And as if that wasn’t bad enough, mid-term elections are just around the corner.

Water Cooler Talking Point: “If we’re being totally honest, an insider trading conviction actually helped Martha Stewart’s career.”

 

CUT THEM SOME SLACK (AND A CHECK)

Slack, the workplace email replacement, just won’t quit. Last year Slack closed a funding round led by SoftBank that was worth over $250M, bringing its valuation to $5.1B. But you ain’t seen nothing yet

Shortly after acquiring HipChat from Atlassian, AIM’s younger, more intelligent relative is claiming around 8M daily active users, with 3M paying for the service. The growth has setup Slack for a potential $400M funding round that would value the company at $7B.

With Atlassian out of the way, Slack still has to fend off Microsoft and Alibaba in the work chat space. In a recent regulatory filing, Microsoft directly called out Slack as an Office competitor. If it wasn’t before, Slack is most certainly operating with a target on its back now.

Water Cooler Talking Point: “Being called a competitor by a company founded by Bill Gates is a lifelong dream of mine. Please share this email with your friends and help me get there.”

 

FUNDING “SECURED.”

“Shame, shame, I know your name” – the SEC to Elon Musk, probably.

The Securities and Exchange Commission is looking into whether or not Musk had actually secured funding to take Tesla private when he tweeted out “Funding secured” like he was a villain in some second-rate 1980’s heist flick who is trying too hard to trademark a catchphrase.

If his statement turns out to even be the slightest big untrue, the move could be viewed as market manipulation. Elon can also expect the “windbreakers” to inquire as to why he took to Twitter instead of going the regulatory filing route.

Water Cooler Talking Point: “A prominent leader used Twitter to lie to their followers?! That HAS to be a first …”

 

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IN OTHER NEWS

• The New York City Council passed regulations on Tuesday that will cap the expansion of ride-hailing services and impose minimum wages for drivers in the city.

 

• Shares of Disney slid on the news that the media giant had missed revenue expectations. ESPN continues to drag on the happiest place on earth. The Worldwide Leader’s television subscription base continued to dwindle in fiscal Q3 (though not as fast as it had been), ad revenue declined (see: NBA Finals sweep) and programming costs increased.

 

• Could you be any more predictable, China? Beijing will retaliate against Washington’s latest duties imposing their own set of 25% tariffs on $16B worth of US goods entering China.

 

• Don’t sleep on Casper. The predominately online, direct to consumer mattress retailer plans to open 200 brick and mortar stores to dethrone one of the most cleverly named brands of all time, Mattress Firm, once and for all.

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