WSO Platinum Banana: Deal of the Year

Under the category marked "Deal of the Year," the 2023 Platinum Banana award goes to Dave Portnoy and the reacquisition of Barstool Sports! [The Daily Peel... ]( December 20, 2023 | Peel #610 In this issue of the Peel: - According to the Department of Housing and Urban Development (HUD), most new residential housing metrics indicate a thawing housing market heading in the right direction. - Affirm and UBS Group AG had a ripe day, seeing their share price rise throughout the day. On the other hand, FuelCell Energy and FedEx saw their share price decline. - Under the category marked "Deal of the Year," the 2023 Platinum Banana award goes to Dave Portnoy and the reacquisition of Barstool Sports! Market Snapshot Happy Wednesday, apes. As long as you weren’t the absolute brick that slammed their car into Big Dawg Joey B’s motorcade, I hope you’re having a good week so far. We know that guy is definitely not. That is unless he was overallocated to U.S. equities yesterday. Markets kept the good vibes going this Holiday season, largely spiking higher to close the day. Small caps led the way, with the Russell 2k gaining 1.94% while the S&P’s 0.59% brought up the rear. Clearly, there was some insider trading or some sh*t going on in the WSO Alpha portfolio, however as those apes managed to move in lockstep with the S&P, gaining 0.59% at the same time. Yields stayed relatively flat for the session, however, despite some fairly positive housing data (more below). If anything, they mostly closed lower, but it sure wasn’t by much. The 10-year is still well below 4%, right around the 3.91% line, while the 2-year spent the day hovering around 4.45%. Let’s get into it. Calling all Sophomores. Your time is NOW (skip the waitlist) [image]( What a shocker, recruiting season kicked off early, yet again! RBC, Houlihan, Rothschild, DB and BMO among others already opened up SUMMER 2025 APPLICATIONS. That means if you are targeting IB or other high finance roles, you should ALREADY BE APPLYING or be ready to apply VERY soon. Use [WSO Academy]() to get ahead with personalized 1:1 coaching with actual IB pros, over 100 hours of expert-led finance courses, and a unique internship experience to help you land more interviews. Build a strong foundation with our extensive network and interview preparation so you can land more offers. If you wait until junior year (or even 1 month), your odds drop dramatically…so don’t wait and apply now to gain a critical edge this recruiting season. Since timing is so critical and we need every day we can get over winter break, if you are a 2026 grad, please use the link below to skip the waitlist and apply directly. [Skip Waitlist. Click here to Apply to WSO Academy today.]() (if you are not a 2026 grad and you apply directly, you will be automatically removed from the process) Banana Bits - Total housing starts [rose 14.8%](=) in November, a huge jump and a reason to get slightly less depressed about buying a home. - The [Red Sea](=) has taken on a role similar to my locker in high school… everyone is trying to avoid it. - Would you really be surprised to learn that [BMW drivers](=) are the most likely to rack up a DUI? My first guess might’ve been those behind the wheel of lifted trucks, but the Beamer gang wouldn’t have been far off. Macro Monkey Say Building is BACK Dealflow, volcano eruptions, and white-collar crime: No, this isn’t a list of things that I’m sure keep you (and me) up at night, but just a casual list of some of our favorite trends that are so BACK in 2023. Add to that list—building homes. Homelessness is an enormous and tragic problem in the United States, and while it might not be directly related to the Fed’s bombing campaign of rate hikes they’ve unloaded, my personal future homelessness problem would have been (and, sadly, still might be). But as usual, we can once again thank sweet, generous, giant American corporations for coming to our rescue. They just always have our best interests at heart, huh? Of course. And yesterday, that manifested (damnit, I hate that word) in this past month’s data on housing starts and preliminary building permits, released yesterday by the Department of Housing and Urban Development (a.k.a. HUD). Yes, that is the department they always make fun of in Veep, and based on absolutely nothing, we’re gonna go ahead and say they deserve it anyway… making fun of the government is just too damn fun. But yesterday, the fun came right from their data releases. "... making fun of the government is just too damn fun. But yesterday, the fun came right from their data releases." [image] [Source]( As we can see in the above chart, every metric relevant to new residential housing saw at least a slight uptick in November when compared to the same period last year. Most notable of these was the jump in month-over-month housing starts, jumping 14.8% compared to October, which saw only a 0.2% jump compared to September. Within that metric, single-family housing starts boomed 18% in November. This jump translates to 1.143 million new units, the highest level since April 2022. On the permitting side, the news didn’t share the same magnitude, but it certainly was moving in the right direction, too. Single-family building permits jumped 0.7% for the month, giving us an indication of how housing starts should look in the future. This brought total permits to the highest level since May 2022, and like with housing starts above, we can almost entirely attribute this to a decline in mortgage rates. "... like we always say—the direction is often more important than the level." The big takeaway here is that housing supply is on its way BACK to levels that actually come close to somewhat aligning with the necessary levels to support U.S. housing demand. Don’t get me wrong, it’s still not even close, but like we always say—the direction is often more important than the level. Now, unlike some theoretical, esoteric bullsh*t like the rate of inflation or GDP growth, housing supply is something you actually go out and tangibly assess as opposed to just getting “approximations,” also known as “guesses.” So here, the level is actually what matters, but the fact that future supply looks to be increasing is promising to anyone who is not currently a homeowner but wants to be in the future. In this economy, good housing news is the hottest cure for depression since going outside. Economists expect continued demand and mild thawing in the housing market to buoy the U.S. economy and play a role in averting a recession in 2024, and boy, do we hope this is one of those economic predictions that “experts” actually get right. As usual, we’ll see. What's Ripe Affirm (AFRM) $50.46 (↑ 15.47% ↑) - Hats off to Affirm for not only surviving 2023 but also thriving. Most people (probably including me) would’ve had this at the top of their “2023 Bankruptcies” bingo card, but the stock is up more than 5x YTD, gaining 454.5% as of close. - And they couldn’t have done it without begging for partnerships with some of the world’s largest corporations. Speaking of which, Walmart was actually the prime reason shares gained on Tuesday as this duo announced an expansion of their partnership centered on Affirm’s buy-now-pay-later abilities. - The option to pay monthly installments on your $12.36 purchase at Walmart is getting expanded to self-checkout lines at 4,500 additional Walmart stores. That’s about 97% of their 4,622 U.S. stores, so I guess the other 3% can just f*ck off (for now, at least). UBS Group AG (UBS) $30.71 (↑ 5.15% ↑) - Believing in yourself is cool, but when others believe in you, that’s the type of thing that got Alexander his nickname “the Great.” - And while UBS might not be great right now, at least activists think they will be, even going so far as to cause the media to label the firm as potentially the “next Morgan Stanley.” - Shares in the Swiss banking giant surged on Monday as activist investor Cevian Capital announced it had taken a $1.3bn stake in UBS. It’s a bold call, claiming that the newly-married firm could nearly double in value from Monday’s close with a price target of $58.10. - Allegedly, the integration of Credit Suisse is going pretty damn sweet. The deal is so up in the air. However, Google won’t even give the stock a damn market cap when you look it up, so maybe take this with a few dozen (or thousand) grains of salt. What's Rotten FuelCell Energy (FCEL) $1.46 (↓ 4.58% ↓) - Losing 43% of anything isn’t great for a company, but when it’s revenue, I’m surprised shares only fell less than 5%. - Then again, this piece of sh*t is already down over 90% from its peak—how much assault can one stock take?? FuelCell missed revenue estimates but still managed to beat on the bottom line, so after all, it (somehow) could’ve actually been worse. - The clean energy producers reported revenue of $22.5mn, raking in a big fat $0.07/sh loss on those sales, while analysts had been expecting sales closer to $25mn and a wider loss at $0.08/sh. This year, “clean energy” has been little more than a euphemism for “horrific losses.” FedEx (FDX) $280.00 (↓ 0.68% ↓) - Yeah… don’t let that daily return fool you. It (almost) definitely opened lower this morning. Shares were off nearly 10% after hours, largely thanks to the company’s latest earnings report. - FedEx reported a big, fat swing and a miss on both the top and bottom lines. Earnings came in at $3.99/sh vs the $4.18/sh expected after pulling revenue of $22.2bn vs estimates for $22.4bn. - And if that doesn’t seem like that bad of a mess, just wait til you hear the reasoning. Management cited “lower demand, surcharges, and customers switching to cheaper services.” Translation: our services are too expensive for the cost, so customers are bailing. - In case you’re not a business major, you might not know this, but customers bailing for cheaper alternatives is exactly what kills companies. Anyway… good luck, shareholders! Thought Banana Platinum Banana: Deal of the Year Alright, apes—grab your tuxedos and nightgowns, prepare your acceptance speeches, and get ready because America’s most prestigious awards of the year are finally getting started. The 3rd annual Platinum Banana Awards have returned. Now, we know you’ve all probably been getting questions all year on who and/or what you think will take home the grand prizes this year. Well, with only 7 trading days left until the new year, it’s time to unveil the first of this year’s lucky, envy-inducing, and definitely-going-to-read-this winners. We have 7 Platinum Bananas to give out this year, more than ever before, as the apes of last year let us know the 4 we gave out then just wasn’t enough. "This was a tough one, to say the absolute least." As always, let us know how wrong we are and who you think deserves the highly esteemed honor of being bestowed one of these gems. The first of the 2023 Platinum Banana awards is in the category of Deal of the Year. This was a tough one, to say the absolute least. Some honorable mentions that may come to your mind could include: - First Citizens saving SVB, - J.P. Morgan buying First Republic, or - UBS and Credit Suisse’s arranged marriage But no. Those deals are boring and make me sad (and not just because I lost a bunch of money on SVB). The WINNER of the 2023 Platinum Banana award for Deal of the Year goes to… Dave Portnoy and the reacquisition of Barstool Sports! To jog your memory, recall that Portnoy first sold a stake in his sports/lifestyle media empire back in 2020. By February 2023, PENN Entertainment had amassed full control of Barstool for a total cost of $551mn. Then, only 6 months later, following a wild turn of events, dealmaker Dave Portnoy proved why he belongs in the Wall Street Hall of Fame by buying back his media empire for exactly… $1. "... dealmaker Dave Portnoy proved why he belongs in the Wall Street Hall of Fame ..." Basically, Portnoy shorted a 100% stake in his own company. He sold the company, then 6 months later, went back into the market and repurchased Barstool at a near-zero price, delivering a ~550mn% (basically infinite %) return on the trade. This trade defines making out like a bandit—and it was almost entirely due to luck. Between the time PENN initially invested in Barstool and ultimately wanted out, rates soared over 500bps, and the boomer shareholders at PENN started to actually care about Portnoy and Barstool’s personalities. Deciding that the destruction to their brand reputation compared to the potential benefit Barstool would bring their gambling business wasn’t worth it, this allowed Portnoy to swoop in and become a Wall Street legend. After the launch of Davey Day Trader Global (DDTG) in 2020, it was nice to see Portnoy back in Manhattan inking deals once again. This award will look great on Portnoy's mantle next to his two “Bee Sting Survivor” trophies, as he makes clear in his [X bio.](=) The Big Question: Has a better short sale ever occurred in the history of business (shoutout to George Soros)? Will Portnoy ever sell Barstool again? Who will win next year? Banana Brain Teaser Yesterday — What is always behind you, but you can never touch it? Answer The past Today — A student decided to become his own employer by using his car as a taxi for the summer. It costs the student $693.00 to insure his car for the 4 months of summer. He spends $452.00 per month on gas. If he lives at home and has no other expenses for the 4 months of summer and charges an average of $7.00 per fare, how many fares will he have to get to be able to pay his tuition of $3280.00? Shoot us your guesses at vyomesh@wallstreetoasis.com Wise Investor Says “The man who has done his best has done everything.” — Charles Schwab 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. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States