[The beef 675]
[I'm an image]
âTeslaâs been robbed!â - Jeff
Hey there carnivores,
The markets closed out Monday on a hot streak, with a late rally into the closing bell.
Today weâre discussing The Dow changing things up.
Keep raging,
Jeff & Jason
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[I'm an image]
Growing pains
You don't have to go home but you can't stay here...
The thirty company Dow Jone Industrial Average will add (and remove) three companies.
[Getting evicted]( are Exxon, Pfizer, and Raytheon Technologies, which will be replaced by Salesforce.com, Amgen, and Honeywell.
âItâs not you, itâs me.â - the DJIA
So, why the changes?
The index has only shuffled its deck sixty times in its 124-year history.
This move was prompted by Appleâs decision to move forward with a [four to one stock split](, which reduces the weight of the technology sector. You see, the Dow is price-weighted, whereas the S&P 500 is based on market capitalization. So Tim Apple getting creative went and f*cked everything up.
After Apple's decision, the Dowâs tech exposure [dropped from 27.6%]( to 20.3%. To counteract this, Salesforce was added, which brought techâs piece of the pie to 23.1%.
The bottom line...
The Dow has changed companies that comprise the index only once every two years on average. But stock splits within the index are even rarer, as Appleâs is only the eighteenth company to make its case to retail investors since 1999.
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[I'm an image]
âï¸Bouncing back. Luminar Technologies, a driverless car company backed by Peter Thiel, is going public via a [$3.4B merger]( with publicly traded Gores Metropoulos.
Gores is a SPAC, a blank check company that will be paying for the deal with $400M in cash. An additional $170M will be provided by Thiel, Volvo, and GoPro founder Nick Woodman.
Gores Metropoulos stans (read: investors) loved the deal, as the companyâs shares jumped 10% on the news, the largest single-day gain since March of 2019.
âï¸Hi, can you hear me? Zoom got a taste of its own medicine on Monday, as the company leading the charge in video conferencing in the era of WFH suffered a massive outage.
The company reported an issue just before 9 AM. This comes just as colleges and schools across the country returned to the weekday grind, while remote workers continued to do what they do best.
[By 10:23](, Zoom had followed up to say the issue had been identified and that âWe're so sorry about the inconvenience.â Zoom, you donât have to apologize. Think of all the people you helped âget that hour back.â Youâre doing the Lordâs work. On the news, Zoom shares fell by 2% in the early afternoon.
But you better be on time for your 9 AM today. Zoomâs back, baby.
âï¸Striking while the ironâs hot. Unity, one of the largest competitors to Fortniteâs Epic Games, filed to [go public]( on Monday. Unityâs timing couldnât be better. Epic is currently fighting Apple in court over its ability to feature Fortnite in the App Store, after Tim Cook and the Bad Boys of Cupertino alleged that Fortnite violated its App Store rules.
Unity isnât quite the household name that Epic is, at least not on the surface. But Unityâs technology is used to power over half of the top 1k games in the App Store and Googleâs Play Store. Can Google not come up with a less creepy name for that? Itâs 2020 for Godâs sake.
Unity also helps companies monetize content through advertising. Who exactly? Customers include BMW, EA, Microsoft, Niantic, Sony, Tencent and Zynga. When youâve got Farmville and Pokemon Go on your roster, you know youâre doing something right.
âï¸Got any drugs? Blackstone is looking for a cure-all. On Monday, the company announced that it would be buying the consumer health-care business of Japanâs Takeda Pharmaceuticals [for $2.29B](. Takeda is out on consumer health, as itâs been trying to divest $10B worth of assets to focus on prescription drug-making. And seeing the recent COVID treatment news, can you blame them? The divestment comes as Takeda attempts to pay down debts it incurred buying Shire PLC last year. That deal cost Takeda $58B.
Blackstone said that it plans to help grow the consumer side of things, including the sale of energy tablets and other over the counter substances, before taking that business public in Tokyo. So those gas station meth pills really DO work?
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