Games In Business

Demand for game dev companies Silver Banana goes to... [image](=) Market Snapshot Like golf courses in Augusta, GA, financial markets were nothing but green yesterday. Modest gains were seen almost across the board, largely driven simply by lesser bearish vibes on Wall Street this week than last week. On the day, the Dow finished up 0.78% while the Nasdaq gained 0.75% and the S&P rose a nice 0.69%. But markets actually don’t make sense these days, right? This makes trustworthy information more important than ever before. [Commonstock]( is the social network for smart money investors which helps you distinguish signal from noise by showcasing the portfolios and trades of the smartest retail investors. Let’s get into it. Macro Monkey Says Teachers Hate Homework Too — In fact, teachers hate homework so much that they are flooding out of schools in droves to go work for themselves, Jeff Bezos, or Ronald McDonald. And it’s not helping the learning crisis faced by America’s youth… at all. We know 2021 was the year of the quitter, but no cohort of people did a better job of quitting than U.S. teachers. Data from LinkedIn shows a 62% jump in the number of teachers who switched jobs last year, and if we go back even further, we can see that quits in educational services jumped 148% between January and November of 2021. And teachers are in demand, both in and out of the classroom. Districts across the nation struggled through an Omicron flareup that shut down schools for not having enough teachers on certain days. Meanwhile, the stress management, multitasking, communication, and listening skills wielded by teachers make them top prospects in places like IT departments, consulting, software development, and, of course, Amazon warehouses. And who can blame them? Compared to teaching, the benefits of working at a large, private employer are like that of Queen Victoria to the average 19th-century British steel mill worker. Amazon, for example, pays a minimum wage of $15/hr (starting higher in many locations) and does things like give free community college to employees. Sure, teachers get three months off in the summer, but the other nine months are spent dealing with all of our pieces of sh*t kids. Jokes aside, this is not good. Children have already been hit with the developmental hammer by being locked inside alone for months on end, drastically impacting both social and cognitive development. Losing teachers doesn’t exactly help with that. Hedge No-More-Fun-ds — Great vehicles for intelligent speculative investing and self-glorification, hedge funds have long followed a similar playbook. But, as pointed out by Matt Levine at Bloomberg, this common strategy appears to be falling out of favor. Here’s how hedge funds have traditionally worked: Some banker/trader at a big shop decides at the age of 25-35 that she is better than her company. To prove that, she takes that investment strategy that has worked for her over the years. Whether it be volatility trading, long/short strategies, arbitrage, or whatever, she leans into this strategy and hires an army of traders to implement it and a bunch more HR reps to keep the degeneracy to a minimum. Investors pour money in, and they just get better and better at the strategy until either 1) the fund blows up or 2). Now, this is changing. Multi-strategy funds are the new, cool way to go. Basically, the opposite of what was described above, a multi-strategy fund involves hiring a bunch of traders who all have their own trading strategies. So, for example, one guy does global macro while the girl sitting next to him does capital structure arbitrage. It might seem like a small change, but this trend is essentially turning the industry on its head. The switch from depth to breadth for hedge funds does a few key things. First, it brings implicit hedging because while one strategy might be failing, maybe another strategy is killing it. Second, hedge fund applicants might up their chances of getting hired by mastering their own strategy first rather than mastering ass-kissing. Third, this is just another iteration of the trend of decentralization. A new era of smart money [image](=) Discover new investment ideas on [Commonstock](=), the social network for smart money investors. Does anyone else feel like capital markets make zero sense these days? From equities and options to crypto and NFTs, markets are changing fast. It’s more important than ever to find trustworthy information. Commonstock built a platform to showcase the portfolios, real-time trades, and analysis of the smartest retail investors, helping you distinguish signal from noise. [Join](=) Commonstock’s community of engaged investors today. What's Ripe United Parcel Service ($UPS) — Big ups to UPS on a record-breaking earnings report. The company delivered its highest profit ever, driving a net income of $3.15bn for the quarter and pushing EPS to $3.59, way beyond the $3.10 expected. Forward guidance was the kicker, with management expecting 2022 operating margin to increase to 13.7% despite costs rising for, well, everything. Investors were almost as excited as when a package gets delivered early and sent shares on a 14.1% ride. UBS Group ($UBS) — Big ubs to UBS— oh sh*t, that doesn’t work here. Anyway, in addition to having similar names, UPS and UBS also had in common their stock price returns yesterday. You saw UPS above, but UBS popped on earnings as well, gaining 9.3% on their results. Net income came in lower than both last year and last quarter at $1.35bn, but well above expectations. Analysts were expecting a bottom line figure of $863mm because, well, UBS had a slight money laundering bill to pay this quarter. But that’s all in the past. What investors really cared about was the guidance management provided, specifically the firm’s plans to jack up margins going forward. Let’s see how that turns out. What's Rotten AT&T ($T) — Never forget, apes; old news can come back to bite you. That’s essentially what happened to AT&T yesterday, as the firm gave clarity around the plan to divest WarnerMedia and combine it with Discovery. Basically, AT&T is spinning off Warner to shareholders prior to the merger with Discovery. $T holders will retain 71% of the eventually combined company. But for now, all that meant to investors was that their dividend payment is getting slashed by 46%. Considering everyone who owns AT&T is above 90, and all they care about is the dividends, shares tumbled 4.2%. Microsoft ($MSFT) — So, it turns out the deal in which the world’s second-largest company buys one of the world’s largest companies in a certain industry might face some antitrust scrutiny. If you didn’t assume this, kindly exit the trading floor, because Lina Khan and the FTC are gonna need to take another look at the Microsoft-Activision deal. Likely, this was at least partially priced in, leading Microsoft to lose only 0.7% on the day. Thought Banana The Game of Business & The Business of Games — What do teenagers have in common with large, multinational, technology conglomerates? That’s right, they both love video games. If you thought NFTs were the hot market to be in, think again. Video game developers and companies alike are being bought up like toilet paper back in 2020. Zynga and Activision Blizzard have both been announced as acquisition targets in the past few months, and now, Bungie is getting snatched up too. In a $3.6bn deal announced late Monday, Sony plans to acquire Bungie, the maker of games like Halo and Destiny, and tuck those valuable titles in nice and snug with the rest of their IP portfolio. If you’re an Xbox user, don’t worry yet. Sony has stated it has no intentions of making Bungie games exclusive to PlayStation or other Sony products… for now. Microsoft said basically the exact same thing about Activision Blizzard games, but I think we’ve learned over the years not to put too much trust in Big Tech. The IP provided by these game studios, even without exclusivity, is more than valuable enough for these giant firms to take big bets on them. Incorporating these titles into subscription revenue streams is massively valuable in the eyes of Wall Street. Not to mention, foraying into the metaverse is gonna require some heavy-hitting brand names to lead the charge. What’s another beloved gaming studio that Microsoft and Sony can snatch up and milk dry for profits? Hang on, don’t tell me. I’m sure they already know who’s next. Wise Investor Says “I can calculate the motions of heavenly bodies, but not the madness of people.” — Sir Isaac Newton Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? Sign up for the WSO Daily Peel [here](. [ADVERTISE]( // [WSO ALPHA](=) // [COURSES]( // [LEGAL]( Don't want The Daily Peel? [Unsubscribe here](). Click to [Unsubscribe]( from ALL WSO content Wall Street Oasis (IB Oasis Corp.) 20705 Saint Charles St Saratoga, California 95070 United States