Tesla's Upshift

Equity markets took the view of this week in stride, largely powered by those expectations as well as Tesla's early morning jump. [The Daily Peel... ]( September 12, 2023 | Peel #540 Silver banana goes to... [SRS Acquiom. ]() In this issue of the Peel: - Disney has allowed Charter to distribute Disney+ and ESPN+ to its pay-for Spectrum TV customer - Tesla and Meta had a ripe day following certain announcements while JM Smuckers and Moderna had a down day - Labor contracts of employees under the United Auto Workers Union are set for renegotiation this coming Thursday Market Snapshot Happy Tuesday, apes. Sometimes all it takes is one, and yesterday, Tesla got the people goin’ like they hadn’t been in quite a while. We’ve got a whole lotta data to look forward to this week, from inflation expectations to actual inflation and…more inflation, so get ready. Equity markets took the view of this week in stride, largely powered by those expectations as well as Tesla's early morning jump that we’ll talk about below. That seemed to make optimism the vibe of the day, with all 4 of the U.S. majors rising along with gold, oil, and basically everything except the euro (losers). Anyway, it’s tough for the euro to win and then the dollar and U.S. treasuries to gain. The 2-year and the 10-year yields both moved higher in anticipation of the week’s figures, beginning with consumer expectations yesterday. We’ll see if they can keep that energy. Let’s get into it. Paradise Means Leaving Thumb Drives Behind [image]() You’ve got enough things to worry about. A thumb drive full of deal docs and data shouldn’t be one of them. With SRS Acquiom, it doesn’t have to be. Because once your files are up and organized on the VDR, they can stay there until you decide to take them down. Since there’s no additional charge to keep the VDR open, it’s totally up to you whether and when to close it. In the meantime, all that confidential data stays as secure as ever. It gets better: transparent, flat-rate pricing for however many users and uploads you need, for as long as you opt to keep the VDR open. No pay-by-the-page nonsense or unexpected upcharges here. It’s obviously a win-win as far as VDRs go. It’s also one more way SRS Acquiom maximizes efficiency throughout the deal process— from due diligence, to payments, all the way through post-closing. That’ll keep your clients happy and you looking great at what you do. Need more convincing? [Here’s more convincing]() > Macro Monkey Says Friends Again Alright, Charter subscribers, you can put down the pitchforks and torches. ABC and ESPN are back together, alive, and well on a (cable) TV near you. Since this past Thursday morning, subscribers procuring cable TV services from Charter Communications (CHTR, +3.18%) have been forced to suffer—arguably, have been tortured—without access to Disney-owned channels like ESPN, ABC, and some other little bullsh*tty things. As of yesterday, those channels are back online, just in time for Monday night football. We hope you caught the game and, more importantly, that you had [INSERT BEST PLAYER OF GAME HERE] on your fantasy team, but even if not, there are still some big takeaways from this kerfuffle (what a word). Netflix, Amazon, HBO (not calling it “Max”), and the rest of team streaming have been slow-moving grim reapers to linear TV owners, operators, and distributors like the two reunited besties listed above. In fact, it was largely influenced by streaming itself that led to the challenges in the first place. "... Disney has essentially allowed Charter to distribute Disney+ and ESPN+ to its pay-for Spectrum TV customers." After first saying that “the video ecosystem is broken”, Charter CEO Chris Winfrey settled Monday with the (exact opposite) statement that “this deal sets the framework for what should be developed throughout the entire industry.” Whether or not he meant to sound like he just fixed the entire TV/streaming market, the deal has big implications for the market as a whole. In this deal to allow Charter to continue carrying ABC and ESPN, Disney has essentially allowed Charter to distribute Disney+ and ESPN+ to its pay-for Spectrum TV customers. For this, Charter will pay Disney a boatload more to continue carrying the above networks. More specifically, the deal outlines that: - Ad-supported Disney+ will be included with Spectrum’s “TV Select” offering - ESPN+ comes to customers who already pay for higher-end versions that include sports packages (think Redzone) - Charter Pay TV customers will also get access to Disney’s still-not-released upgrade of its ESPN streaming service "... Charter did lose access to carrying channels like Disney’s Freeform, Disney XD, and FXX." As such, Charter did lose access to carrying channels like Disney’s Freeform, Disney XD, and FXX. I don’t know what I’m gonna do without my Phineas and Ferb on XD, but maybe we’ll find a way. As with most deals like this, it’s a win-win and lose-lose for both parties, but clearly, the Ws are expected to outweigh the Ls. Disney and Charter don’t really directly compete with each other, but two immediately obvious trade-offs include: - Charter pays more but also gets to incentivize customers of its broadband internet business with Disney+ and EPSN+ - Disney gets more ad revenue from the above, but less distribution in linear networks and will make fewer subscriptions from those broadband customers, lowering the ARPU of streaming Win-win and lose-lose. Just the way we like it, right? While it’s not clear that the deal will become a textbook strategy for other industry players, the demonstration of flexibility to make sure consumers are maximally entertained with whatever they want whenever they want is clearly the industry’s priority. Keeping consumers happy is a near-impossible task, so can’t wait to see how it plays out. What's Ripe Tesla (TSLA) ↑ 10.09% ↑ - While it’s not the Mojo Dojo Casa House just yet, Tesla’s most anticipated release since the Cybertruck has investors excited nonetheless. - And we all remember how well the [Cybertruck unveiling]() went, so this time, Elon & Co. have taken just one word from Ken’s house above with this new idea: Dojo. - An investment bank claiming that $500bn in market cap could get added to your firm from just one move might seem insane, but that’s exactly what happened here. Morgan Stanley says Tesla’s Dojo supercomputer along with its in-house silicon in the form of chips for its cars could allow Tesla to become “as much a tech company as it is a car company.” - Yes, that’s what Elon fanboys on Twitter have been saying since ‘Nam, but to have an actual investment bank with (allegedly) smart people saying it was more than enough to get the stock—and the whole market—excited for the day. Meta Platforms (META) ↑ 3.25% ↑ - Getting back to a tech company that is just that… a tech company. Meta shares got a pop on the day with more AI-related (potential) nonsense. - Maybe it’s not nonsense, but it’s hard not to hate Meta…most of the time. But yesterday, the firm announced plans to go head-to-head with the likes of Google, Microsoft, and OpenAI in an announcement beefing up its plans for its very own LLM. - Meta already announced the Llama 2 AI model, but this new one—which isn’t yet named—has been upgraded to include plenty more H100 chips from Nvidia along with a buildout on Meta’s own internal cloud systems as opposed to Microsoft’s Azure as previously planned. - This thing still won’t be released until early 2024 as (presumably) Meta’s primary goal of spreading global depression still takes precedence, but it’ll sure be interesting when the company behind Instagram and election interference gets its hands on some serious AI. What's Rotten JM Smuckers (SJM) ↓ 7.01% ↓ - Despite a huge announcement coming today, it certainly wasn’t peanut-butter-jelly time for the maker of Uncrustables on Monday. - JM Smuckers, the maker of countless brands of peanut butter, fruit snacks, ice cream toppings, coffee, and a bunch of other sh*t you forgot you have in the pantry announced it was buying something you actually love to put in your pantry. - In a blockbuster acquisition for snack-eaters, JM will combine with Hostess, the maker of Twinkies, Ding-Dongs, Zingers, and other ridiculously named yet delicious confectionaries, to form a kitchen cabinet behemoth. - At a purchase price of $5.6bn, shareholders here weren’t too happy, apparently rotating funds over to Hostess, who saw shares surge 19.14% today towards that hefty premium of an acquisition price. There’s still some room for arbitrage, just a heads up, so feel free to check it out if you’re feeling lucky. (Not financial advice!) Moderna (MRNA) ↓ 1.71% ↓ - Most of the time, we’re used to Moderna falling because of something awesome—like a receding pandemic. Yeah… not this time. - This time, Moderna saw shares drive thanks to being forced, as traders seem to see it, to team up with yet another German drug developer to work on its highly-anticipated cancer vaccine. - Don’t worry, they’re still trying to save the world, but apparently, they need some help. Or maybe a whole lot of help, $120mn worth, as that is what the firm is shelling out to Immatics to come in as their sidekick. Thought Banana UAWoah Boasting 400,000 current members and nearly 600,000 retirees, the United Auto Workers union might—just might—be going to war with their employers. For weeks now, this union has been jabbing back and forth with industry owners including Ford, GM, and Stellantis (who makes Jeep, Fiat, Ram, Maserati, and more) over 4-year labor contracts set to expire at the same time as your first assignment: 11:59 pm this Thursday (you're welcome for the reminder). "For weeks now, this union has been jabbing back and forth with industry owners including Ford, GM, and Stellantis... " From the start, the UAW has had one goal in mind: 40% pay raises. And late yesterday, the group showed their first sign of willingness to negotiate on that demand. For some background, union leaders have been advocating throughout the negotiation process for members to go on strike at all three of the above firms in an attempt to force the employers to meet their terms. According to UAW President Shawn Fain, that 40% figure comes from the average salary increases automaking execs have received over the last 4 years. In response, those automakers fired back with somewhere between a 9% and 14.5% raise, at times tacking on up to an additional $16k in inflation-protected bonus payments. In response, Fain has taken the very mature and professional steps of literally throwing proposals with less than a 40% jump in the trash while on live streams to demonstrate his disgust. "... Fain has taken the very mature and professional steps of literally throwing proposals with less than a 40% jump in the trash..." As of writing, a deal is still a long way off, but the UAW has shown a willingness to come down to the ~35% range for their sought-after raises. After watching American Airlines pilots secure the 40% bag and UPS drivers move into the 1%, it makes sense for the UAW to be aggressive. Plus, with labor markets still as f*cked as they are, unions gotta take advantage of labor having the upper hand over capital whenever they can. Either way, the fight’s on. The big question: Will UAW members strike at the end of this week? If so (and if not), what kind of impact would this have on the car market and economy? Banana Brain Teaser Yesterday — What has rivers but no water, cities but no buildings, forests but no trees, deserts but no sand, and mountains but no rocks? Answer It's a map. Today — If you flip 5 coins and they all come up heads, what is the probability that the 6th coin will be heads? Shoot us your guesses at vyomesh@wallstreetoasis.com. Wise Investor Says “Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.” — Seth Klarman How would you rate today’s Peel? [All the bananas](=) [Decent](=) [Rotten AF]( Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? [Be smart like your friend](. [ADVERTISE](=) // [WSO ALPHA](=) // [COURSES]() // [LEGAL]() Don't want The Daily Peel? [Unsubscribe here](=). Click to [Unsubscribe]( from ALL WSO content IB Oasis Corp. 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