The Ultimate Meme Stock

🤣 The ultimate meme stock has entered the chat. Reddit has gone public March 22, 2024 | Peel #673 In this issue of the Peel: - 🏡 Home sales increased by 9.5% last month... so is housing back? - 🤣 The ultimate meme stock has entered the chat. Reddit has gone public! - 🤯 Apple is being sued by the DoJ, alleging antitrust violations. Market Snapshot 📸 Banana Bits 🍌 - Our Tesla report is out! - Leave it to the Swiss to make the first financial leap, becoming the inaugural central bank [to cut rates while the BoE]( followed the Fed - C&I loans are finally creeping back [to pre-C-19 levels]() - Lululemon crashes more than 10% after hours on [tough Q4 earnings]() - Nike beat on earnings, but its stock is [crashing after hours, too]( Skip the Coffee, We Brew Success! Who needs caffeine when you have ambition? At WSO Academy, we're brewing a different kind of success. Forget coffee runs – here, you'll run towards your finance career goals with top-notch training, expert mentorship, and an exclusive network. We blend the essential ingredients of knowledge, experience, and opportunity to craft the perfect recipe for your success. Join us, and let's brew a future in finance that's as bold and robust as your favorite coffee. With WSO Academy, success is always on the menu. [Click here to join the WSO Academy Waitlist. Limited slots only.](=) Macro Monkey Says 🐒 Hope For The Hom(i)es Dealflow? Back. BTC and ETH? Back. March Madness? SO damn back. A lot is back in 2024. And now, the once-frozen housing market could finally be coming back as well. Time to get some homes for the homies. The U.S. just got some of the first positive news on the housing market since the invention of air conditioning. And, of course, this comes just days after I officially became a homeowner by buying a tent and setting up shop on my parent’s front lawn. Let’s get into it. The Numbers For the first time in over 2 years, existing home sales across the U.S. rose for two months in a row. [Source](=) Will Smith hadn’t even slapped Chris Rock in the face and then yelled about his cheating wife on national TV the last time this happened. Nonetheless, home sales increased by 9.5% to a seasonally adjusted rate of 4.38mn in February. Yesterday was the spring equinox, and the housing market is starting to thaw, too. Economists’ guesstimates forecast existing home sales to drop 1.3% for the month. But this stark increase comes just before the industry’s peak season of spring and early summer. Most of the February gains came from expensive homes, with those in the >$1mn range surging 37% compared with February 2023. Overall, 2023 saw the fewest home sales in the United States since the early 1990s. [Source]( And we all know what the culprit was. Remember, for a while there, Fed Chair JPow wanted you to be homeless, poor, and ugly, but now that mortgage rates are normalizing and have fallen since last fall, you’ll only have to worry about the ugly part. It’s not necessarily that mortgage rates are crashing—they’re not—but that U.S. homebuyers have essentially just gotten used to elevated rates. We went from average 30-year fixed rates below 3% in mid-2021 to nearly 8% by late 2023. Luckily, 8% appears to have been a strong line of resistance. Given the Fed’s more dovish posturing of late, rate expectations have dropped as well, which can help take current rates lower. [Source](=) The Takeaway? While those 3-4% mortgage rates were a dream, and those of you who locked in an ultra-low rate probably value it more than your second-born child, rates that low are way outside the historical norm. Prior to the post-GFC era, rates very rarely fell below the 4% line and were generally in the 4.5-6.5% range. So, when we say “rates are normalizing” we mean back to this historic standard, not necessarily to the ZIRP era when we should’ve skipped homework to go tour properties. At the same time, new construction of residential real estate has moved higher as well, starting to alleviate the pain of drastic shortages felt since the GFC. [Source]() Increased supply should translate to lower home prices, but obviously, these are new homes, so the data won’t appear in the above growth of “existing” home sales. However, while increased supply pulls prices lower, falling rates will pull prices in the opposite direction. So, if homebuilders keep up their strong construction numbers while the Fed chops rates, it will be interesting to see which has more magnitude and thus determines the dynamic in home prices throughout the year. Ultimately, that’s the major question for wannabe homebuyers in 2024. The battle between supply increases and rate declines begins now! Or, you could follow my advice and just get a nice tent for [like $79](. Plus, I got a sweet mortgage on mine (not to brag). What's Ripe 🤩 Reddit (RDDT) 📈48.4% - The ultimate meme stock has entered the chat. Reddit, the engine powering the mania of early 2021, officially just went public. - Founded in 2005, Reddit has still never once turned a profit. But that didn’t stop shares from ripping 70% to its intraday peak of $57.80. - Over $750mn was raised in total, with the company receiving $519mn. Now, the firm’s market cap sits at roughly $8.1bn, down from $10bn in 2021. - Ultimately, the stock finished its debut up nearly 50% from its list price of $34. Reddit opened at $47/sh on its first trade, a good sign to prospective 2024 IPOs like Stripe, Shein, and Databricks. Micron (MU) 📈14.1% - Mayonnaise-colored Benz, Micron pushes miracle chips. And for shareholders, Thursday was a miracle, too, as shares ripped on strong earnings. - EPS destroyed estimates of $0.42/sh vs $0.25/sh expected. Sales of $5.82bn beat as well, growing 57% from Q4 of 2022. - Micron’s chips provide memory and storage for phones, computers, and data centers, so they’re riding the AI wave almost as much as Nvidia. What's Rotten 🤮 Accenture (ACN) 📉9.3% - Even strong earnings, beating on the bottom line, couldn’t save Accenture yesterday. Maybe they should hire some consultants… or ask AI. - Oh wait, they already do both. Accenture’s $2.77/sh EPS beat the $2.66/sh thanks to cost-cutting, but reduced guidance outweighed a decent Q4. - Sales guidance fell to just 1-3% for FY’24 despite recently launching their own AI. But now, there’s the question of AI cannibalizing consultant’s work. Darden Restaurants (DRI) 📉6.5% - Another great American institution fell apart on Thursday. It’s sad to see it, but the esteemed Olive Garden had a weak Q4. - Darden also owns brands like Longhorn Steakhouse and others but missed on Q4 estimates with same-store sales falling for the first time since C-19. - Longhorn was the only brand with increased same-store sales. Plus, this was the first quarter since acquiring Ruth’s Chris, which helped offset the results. Thought Banana 🤔 From Mic Drop To Bomb Drop Apple’s lawyers have been throwing a non-stop rager since winning their lawsuit with Epic Games just a few months ago. Now, it’s back to business. But, knowing the average lawyer, reading thousands of pages in legal-speak, and screwing over the little guy is probably even better than a party anyway. But unfortunately, Apple is the little guy in this case as their new opponent is the entire damn United States. What Happened? On Thursday, the U.S. Department of Justice and 17 state attorneys general filed suit against Apple, alleging—yes, you guessed it—antitrust violations. [Source]() At this point, antitrust cases have become almost like a badge of honor for these mega-cap tech companies. This is round four for the DoJ against big tech after filing suits against Amazon, Alphabet, and Meta over the past few years. Epic’s lawsuit against Apple centered on the 30% tax—I mean, *fee, that they charge on all in-app transactions and downloads. However, this suit extends the allegations of wrongdoing to Apple’s practice of requiring all iPhone apps to be sold through its own app store. Plus, the suit goes after the horrific green bubbles of texting a non-iPhone user, the blocking of “super-apps,” prevention of access to software like cloud-based mobile games, and more practices designed to “trap” users into their ecosystem. [Source]() So, What’s Going To Happen? Basically, the DoJ is alleging that Apple uses its control over the enormous iPhone ecosystem to limit competition and prevent users from accessing non-Apple branded services that could/would be better for consumers. Apple is the modern-day railroad, alleges the DoJ. The same practices were employed by Cornelius Vanderbilt and other railroad tycoons with each other and other industries, such as Rockefeller and Standard Oil, which Apple now uses on its iPhones (allegedly). Of all the antitrust cases brought by the FTC and DoJ in recent years, this is the one that legal experts say actually gives the government a decent chance to win. That’s because it’s eerily reminiscent of these earlier cases that led to the creation of the Sherman Act of 1890 and Clayton Act of 1914, and the DoJ seems all too aware of this in their filing. Markets certainly seem to agree that the suit has some teeth to it. Apple fell 4.1% on the announcement, suggesting the Kingpin of Cupertino may someday actually have to stop raking in 30% of every app store transaction, and more. Just weeks after dropping the mic in their Epic lawsuit (which was pretty epic), Apple may have just gotten a full-*ss bomb dropped on them and one of their highest-margin revenue streams. Hopefully, the nearly $2.6tn firm can survive. Should we start a GoFundMe? 💭 The Big Question 💭: Will the DoJ and AGs actually win against Big Tech for once? What changes can we expect if so? How will this affect shareholders in the long term? Banana Brain Teaser 💡 Previous 🗓 During a recent storm, 9 neighborhoods experienced power failures of durations 34, 29, 27, 46, 18, 25, 12, 35, and 16 minutes, respectively. For these 9 neighborhoods, what was the median duration, in minutes, of the power failures? Answer: 27 minutes Today 🕐 When traveling at a constant speed of 32 miles per hour, a certain motorboat consumes 24 gallons of fuel per hour. What is the fuel consumption of this boat at this speed measured in miles traveled per gallon of fuel? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “For the wealthiest billion people on earth, iOS is the operating system of their life.” — Scott Galloway How Would You Rate Today's Peel? 😁[All the bananas]() 😐[Meh](=) 😩[Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]() // [WSO ALPHA](=) // [ACADEMY]( // [COURSES]() // [LEGAL]( [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353