"Reduce that expense ratio, Buzz, and your space stock could really take off"
Hey Snackers,
Appropriate timing for the 1st ever space IPO.
The S&P 500 rose to a fresh record high on word US trade talks with China got their mojo back. More on that Virgin Galactic IPO below.
Take me to your leader... Virgin Galactic's founder is Richard Branson — he hit billionaire and British "Sir" status by founding Virgin Records music, Virgin Atlantic airline, and Virgin Hotels. But Richard called this IPO "the most satisfying" of all. Virgin Galactic's ticker is "SPCE," now traded on the NYSE after Monday's IPO.
This business is astronomically unprofitable... Since its 2004 launch, VG exists because Sir Branson has invested almost $1B to own 51% of the shares today. Here's its corporate timeline:
Virgin Galactic is incomparable... Investors love "comps" that help them assess the value of one company by referencing another (it's easier to evaluate Lyft when you know how much Uber is worth). But Virgin's comps don't exist in the public markets.
But did they get down on one knee?... Luxe-glomerate Louis Vuitton Moët Hennessy (aka LVMH) just offered $14.5B to buy up jewelry icon Tiffany. LVMH is run by the world's richest non-American (Bernard Arnault) and it owns 75 brands, from fancy champagne to fancy handbags. But here's the potential couple:
Breakfast at Tiffany's $215 semi-affordable earrings display... Tiff's board hasn't decided to accept/reject the offer. But if it goes through, the acquisition will up LVMH's jewelry game from just 8% of its sales today. Meanwhile, 92% of Tiffany's revenues are straight-up jewelry (and over a quarter of that is engagement-related).
This acquisition come down to T.L.C... Timing. Location. Customer. (Forget "the 4 C's"):
Thanksgiving's coming up... Vegan kids are hatching "swap the turkey with meatless meat" plans to trick carnivorous dads. Beyond Meat gave shareholders something to celebrate heading into the holiday quarter:
So why did shares drop 10%?... Not totally clear. Our guess: the end of Beyond's "lockup period." Today's the 6-month anniversary of Beyond's IPO, which means early pre-IPO investors are finally eligible to sell their stock (lockups apply to most newly-listed companies). So nervous investors may have sold to avoid dealing with a potential increase in Tuesday's new "lockup" sellers.
The growth is in restaurants — not groceries... Beyond surged over 200% after its IPO, but has fallen from that high. Food-glomerates like Kellogg and Nestlé have dropped some plant-based competition — and they've shown up in grocery stores. But restaurants (like McDonald's, Taco Bell, and Dunkin') power 45% of Beyond's revenues — and those already quintupled (5x) this year.
Disclosure: Authors of this Snacks own shares of Beyond Meat, Tesla, and call options in Spotify.
Correction: In yesterday's newsletter, we incorrectly said Netflix doesn't have a company that's offering it free as a "promo puppy." It's actually been offered free to certain T-Mobile customers since 2017.
ID: 996379