- Letter of Intent
- Posts
- ☕️ Buy signal
☕️ Buy signal
The first day of earnings season serves up a classic contrarian indicator.
Good morning.
When is an earnings miss actually a contrarian sign that the economy is improving? When the business in question collects bad debts for a living, and there are not enough of them to buy from banks.
Something to ponder after Credit Corp’s weak results and share price slide kicked off August reporting season yesterday. Could the numbers and the company’s assertion that the consumer is in “pretty good shape” be a buy signal for other parts of the market? We will find out over the next couple weeks.
Ps shout out to the LOI Interest Rate Prediction Poll™️ which was back to its historic form, accurately predicting yesterday’s RBA pause.
ps. if this was forwarded to you, you can sign up for LOI at letterofintent.com.au
LOI Subscriber #TBD
MARKET MOVERS
*Stock data as of the market close. Commodities and crypto data in USD.
Market News: TPG Telecom shares rocketed after the company confirmed it was in discussions with rival Vocus about a potential sale-leaseback of its fibre assets.
In doing so, TPG is following a well worn path. Telcos locally and globally have moved en masse to unlock value from their infrastructure assets, which appeal to a certain cohort of investors looking for reliable and low risk returns.
Evidently that includes Macquarie Infrastructure and Real Assets and Aware Super, which together own Vocus.
Both Optus and Telstra have spun off stakes in their mobile towers in recent years. TPG is going a step further by selling fibre that connects its towers. The company has also been looking to sell its wholesale broadband business, all with the view of making a dent in in its $6 billion debt pile.
THE QUICK SYNC
HSBC’s profit more than doubled in the June half. (CNBC)
Uber posted its first ever quarterly operating profit. (WSJ)
Steve Jobs’ son, Reed Jobs, is launching a US$400m venture capital fund. (The Information)
Dan Loeb says his hedge fund Third Point is cutting short bets because of a challenging market environment for short sellers. (Investing.com)
The US S&P 500 index had its best performance in the year to July (+21%) since 1997. (CNN)
TRADING FLOOR
M&A:
TPG gets a $6.3bn bid from Vocus Group for its fibre assets (AFR | The Australian)
Louis Vuitton is believed to be close to finalising a sale for its Australian swimwear brand Seafolly. (The Australian)
Wilson’s WAM Strategic Value was one of the buyers for a 14.4m parcel of shares in VGI Partners Global Investments. (AFR)
Superloop has tapped Luminis Partners for an acquisition of Symbio. (The Australian)
Melbourne SPAC Integral Acquisition Corporation has been reaching out to other startups as negotiations with Elenium flicker out. (AFR)
Marcus Blackmore will collect $334m in total from Kirin Corp’s Blackmores buyout. (AFR)
Bondi Sands has been offloaded Kao Corporation in a cash deal estimated to be worth $450m. (AFR | SMH)
Quadrant Private Equity is reconsidering the sale of myHomecare. (AFR)
Max Kelsen’s consulting division has been acquired by Bain & Company. (BNA)
Strike Energy and Talon Energy negotiations have stumbled over how to treat the latter’s Mongolian Assets. (The Australian)
Capital Markets:
High-net-worth investors and family offices tipped into MakerOps’ seed round led by 115 Capital. (AFR)
Ensombl is working up a $3m series A funding round, marking its largest capital raise to date. (AFR)
Midwest Lithium is exploring a listing on the ASX through Pac Partners. (The Australian)
VC:
Goterra, a food waste startup, raised $10m in a bridging round. (StartupDaily)
Global Sisters, an Australian non-profit, has received a $736,579
from Google’s charitable arm, Google.org. (SmartCompany)
Others:
SodaStream says demand for at-home sparkling-water machines is still growing despite the recent failure of local competitor SodaKING. (SMH)
Metals Acquisition Corp’s impressive drill results failed to rouse the market. (AFR)
Ainslie van Onselen, the CEO of Chartered Accountants Australia and New Zealand, has been named as the new chair of Chartered Accountants Worldwide. (BNA)