Musk v. Putin in the ring

[The Daily Setup] ADVERTISEMENT March 15, 2022 Good morning traders, Welcome back to The Daily Setup. Markets started off the day with a lot of promise but, just like you to your parents, ended up disappointing us in the end. Here’s what’s on the docket today: - Volt goes private - An update on Russia (spoiler: there’s a lot to unpack) - We might be in for a fourth round of ‘vid shots Let’s get after it today. Nick How'd the markets look? Market Outlook [Market Outlook] Volt, Russia, and Covid updates Biggest Mover Volt Gets a Jolt [Activision Blizzard, Inc. ]( Volt Information Services (VOLT) had a better Monday than you, hitting the stratosphere on news of being taken private by ACS Solutions affiliate Vega Consulting Inc. Vega, a provider of IT services and solutions, will acquire all outstanding shares of Volt for [$6/share in an all cash transaction](, which sent the global staffice services company’s stock up [96%]( on the day. - The purchase price represents a 99% premium over VOLT’s closing price of [$3.02]( on Friday March 11th. Vega not paying a 100% premium is like Betty White not being able to make it to her 100th birthday: it’s sad if you think about it. - Vega announced that they will commence a [tender offer]( no later than March 25th and expect the [deal to close in the second quarter of 2022](. - The deal includes a [“go-shop” period]( which will allow Volt to go out and seek a superior deal if one is out there. It would be a real kick in the cajones to Vega if some other firm steps up and pays a 100% premium for Volt. With Volt being taken private, its shares will cease to exist once the merger goes through. The acquisition price of $6/share combined with Monday’s closing price of $5.88, leaves virtually no room for any substantial advantage to trading the stock from here on out. No point in experiencing FOMO on this one if you weren’t a current shareholder as this announcement was not telegraphed. If I were a current shareholder, I’d count my lucky stars and go take the family to Sizzler to celebrate. From Russia With… Not Much Really [Cycling Downhill]( Did anyone have [Elon fighting Putin]( on their 2022 bingo cards? The saga of Putin’s invasion of Ukraine continues ever onwards this week amidst news that the Russian economy has gotten so toxic that even [Deutsche Bank decided to bail](. Not only that, but as Western sanctions have begun to take hold there’s the very real possibility that Russia is on track to default on its various financial obligations. There was some good news though: the price of oil was down on Monday… due to a [new Covid outbreak in China](. Is it possible that 2022 already has 2020 and 2021 beat for one of the worst years ever? - On Monday the US crude benchmark West Texas Intermediate Crude Futures [(WTI) lost -8.75%, while Brent Crude dropped -8%](. The cause isn’t just the new Chinese lockdowns but also the promise of Ukraine and Russia entering a series of negotiations which could abate the tides of war. - After Goldman Sachs and JPMorgan Chase left the Russian economy last week, it was a pretty bad look for any bank choosing to stay in the country. Deutsche Bank eventually got the hint and announced Friday evening their intention to withdraw. That must have really hurt for them considering they had [just opened a shiny new office]( in Moscow. - Here’s the big Kahuna though: Western sanctions are really coming to roost in the Russian economy and they are likely headed towards default. The newest round of G7 sanctions have targeted the foreign exchange reserves of Russia’s central bank, making it difficult to pay back their debts via their stockpile of USD and Euros. They have a [$117M payment of some U.S. dollar-denominated eurobond coupons]( on Wednesday which they plan to pay in Chinese Yuan. It’s still too early to really know how things will shake out across the market as all these situations develop but it's likely that blanket-volatility will persist for now. Oil was down on Monday but it had already regained some of its position by the end of day. There is the promise of diplomacy between Ukraine and Russia but that’s far from a guarantee that the war is coming to a close, and let’s not forget that Covid is still very much on the menu of global catastrophe. Fortunately (at least for non-Russians) global banks have about $120B of exposure to Russia so if they do end up defaulting, the overall effect on the global economy wouldn’t be too astronomical. Oh and if Putin decides to hold the world’s markets hostage by other means, at least we have the people’s champion, [Elon Musk]( to shut him down. More like the Down Jones Industrial [More like Goldman Sucks] In what is quickly approaching the amount of sequels of the Fast & Furious series, it looks like another covid vaccine booster is in the cards for those that have been around since the first film shot. [Pfizer CEO Albert Bourla went on Face the Nation and said](, “The protection that you are getting from the third, it is good enough, actually quite good for hospitalizations and deaths”…“It’s not that good against infections, but doesn’t last very long.” A second booster shot has already been approved for immunocompromised people and is expected to be ready for the general public in the fall of this year. Bourla went on to state the following: - Pfizer is currently working on a shot that will [protect against all covid variants]( and is submitting data regarding the fourth covid shot to the FDA at this time. - Both Pfizer and Moderna are also working on a shot to combat the highly contagious Omicron variant. - [The goal is to create]( "something that can protect for at least a year," Bourla told CBS on Sunday. "And if we are able to achieve that, then I think it is very easy to follow and remember so that we can go back to really the way (we) used to live," he said. - I would be pushing for more vaccine shots too if my company made over $36B [from covid vaccines last year](. On a day when the major indices finished in the red, covid vaccine makers bucked the trend and finished the day higher. Shares of Pfizer ([PFE](), Moderna ([MRNA](), BioNTech ([BNTX](), and Johnson & Johnson ([JNJ]() were all up between 1.38% to 12%. Another round of shots means more money in the pockets of vaccine makers, and if the FDA does approve a fourth shot, I may continue to see these stocks outperform the broad market in the near term. ADVERTISEMENT "LET'S NOT STRETCH THIS OUT" Have you ever wanted a comfortable hug for your legs? How about jeans that stretch perfectly in all the right places? If you said YES to one or both of these, then[Mugsy Jeans]( are perfect for you. Known as the sweatpants of denim (by us), Mugsy provides the comfortability of your favorite dressed-down loungewear in a look that’s dressed to impress. That's right. No longer do you have to choose between comfort or fashion, as they deliver both benefits in one awesome pair of pants. But it's not just jeans anymore, as [Mugsy]([is an all-around comfort brand]( that’s ready to fit you perfectly from head to toe in any occasion. [GIVE YOURSELF THE GIFT OF UNBEATABLE COMFORT TODAY!]( This is an advertisement by a party that is unaffiliated with Raging Bull. Raging Bull does not in any manner recommend or endorse any stock, investment or service that is the subject of this advertisement The EU Chases Its Tail on Crypto Token Talk It’s time for every Cryptobro’s favorite discussion topic: Overbearing legislation that threatens the sanctity of cryptocurrency. [In 2020]( the EU parliament began drafting its “Markets in Crypto Assets'' (MiCA) framework in order to create a standardized set of rules regarding digital assets across its 27 member states. That could be threatening to crypto in the first place, but a recent rule proposed for MiCA sought to be really destructive by banning crypto powered by proof-of-work. On Monday however, the EU Parliament Economic and Monetary Affairs committee voted 30-23 against the provision, keeping it out of MiCA and ensuring that tokens like BTC and ETH (who rely on proof-of-work) won’t be outright banned… for now. - While the rule was ultimately rejected by the parliamentary committee, a slim majority did vote in favor of a compromise that calls upon the EU’s executive arm to come up with [an alternative]( way to totally f*ck things up for everyone. - Proof of work (or PoW) is the [energy intensive process]( of maintaining the blockchain that has drawn the ire of the public and legislature alike. It’s the system by which tokens like Bitcoin are reliant. If passed, this provision would have Bitcoin kicked to the curb. While this threat is out of the way for the time being, we’re not out of the woods just yet ([sorry T Swift](). As noted previously, a slim majority of committee members still voted in favor of an alternative provision to be presented before MiCA is brought into law and the document [still states](: cryptoassets “shall be subject to minimum environmental sustainability standards”. This means that a similar rule is still very much on the table, and for tokens like BTC (who essentially have PoW baked into their function) that could be a killing blow. There’s still a chance that cooler heads will prevail but it might be worth watching the development of MiCA if you’re worried about the growing movement to regulate cryptocurrency. Nielsen Boosts Its Ratings Deals and Rumors [Deals and Rumors] Shares in couch potato farm Nielsen Holdings shot up +30.5% Monday after a [report]( was released claiming that the ratings company was in talks to be acquired by a group of private equity firms. This could be great news for the company, whose stock has been on a decline since its high of $55 in 2016. The potential deal would close within the next couple of weeks but little is known about its exact terms, and there’s always the possibility that talks will fall apart. - What we do know is that Nielsen has a market value of [$6.2B]( and that the deal could be to the tune of $15B including the company’s debt of $5B. - One of the PE firms rumored to be included in the deal is Elliott Management, who has [owned a stake in Nielsen]( since 2018. They have been on an acquisitions tear lately, having purchased cloud-computing company CItrix systems for [$16.5B]( back in January. It’s not entirely clear what the reason for purchasing Neilsen could be. After all, they had been purchased by a different group of PE firms in 2006 before [going public again in 2011](. Take into consideration the fact that providing ratings for cable TV in the era of streaming and the question remains. It’s possible that what’s really appealing to Elliott and their compatriots is Nielsen’s access to the viewing habits of the American public, from which they could extrapolate any number of data points. Elliott’s recent purchase of Citrix could give some credence to that thought but until we know the details of the deal (if it still happens) all we can really do is speculate. Link Roundup Other News Other News Link Roundup - Wait, Money Laundering is Illegal in China? - Tencent Faces Record Fine for Money Laundering ([link]() - F*ck Cancer! - Nektar Shares Halve on Cancer Trial Failure ([link]() - I Can Affirm that AFRM is in the Toilet - Affirm Raises Guidance, Stock Still Falling ([link]() - Everything changes but nothing really changes - Apple Supplier Foxxconn Halts Production Amid China Covid Outbreak ([link]() - Nothing Good Comes From an Elon Tweet - Tesla Stock Dropping Again as Issues Mount ([link]() Meme of the day Doubtful, but here’s to hoping, [via @HeroDividend]( 62 Calef Hwy #233 Lee, New Hampshire 03861 United States Questions or concerns about our products? 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