What we’re reading (5/30)
“Twitter Is Now Worth Just 33% Of Elon Musk’s Purchase Price, Fidelity Says” (Bloomberg). “Musk has acknowledged he overpaid for Twitter, which he bought for $44 billion, including $33.5 billion in equity. More recently, he said Twitter is worth less than half what he paid for it. It’s unclear how Fidelity arrived at its new, lower valuation or whether it receives any non-public information from the company.”
“To Work Fewer Hours, They Put AI On The Job” (Wall Street Journal). “Numerous workers, especially freelancers and small-business owners who are free of the legal hurdles in large companies, have already started using generative AI tools to save time. They say they’ve been struck by how the new technologies, including image and text generators, allow them to expand and speed up what they do, freeing them to take on new projects and make more money.”
“Is The Era Of Large-Cap Growth Stocks Over?” (Institutional Investor). “Only 28 percent of companies in the S&P 500 have managed to outperform the index year-to-date, compared to 59 percent in 2022, 49 percent in 2021, and 36 percent in 2020, according to RBA’s latest research. Between 2007 and May 2023, the median percentage of stocks that have outperformed the S&P 500 index is 48 percent.”
“Tech Stock Hail Mary” (Smead Capital Management). “We are very late in one of the greatest growth stock investing games in history. Technology, an investment sector with a few huge winners and mostly flame-out startups, has been on a roll dominated by the largest companies in the sector. These largest wide-moat monopoly stocks have feasted on nearly uninterrupted momentum. However, this tech stock investing era included the cheapest interest rates in my lifetime, which came to a screeching halt in late 2021.”
“Why Don’t More Voters Care About The Debt Ceiling?” (Vox). “Though there are reports that an agreement is near, a lot could go wrong if congressional Republicans and the White House are unable to work out a deal to raise the debt ceiling by late next week. At some point in the next few weeks, checks from the federal government would stop going out since the country wouldn’t be able to pay its bills. Interest rates would rise, the stock market would fall, and the country would likely enter a recession potentially resulting in millions of job losses. But do most Americans know this? And who would they blame for the economic calamity that would ensue?”
