☕️ Outfoxed

The world's most important manufacturer is building your next car.

November 03, 2023

Good morning.

I don’t know about you but I find Foxconn fascinating.

The Chinese manufacturer is probably the most important globally, crucial in churning out the iPhone, Pixel, Kindle, PlayStation, Dell’s laptops and much more.

But having placed itself at the heart of the consumer tech supply chain, Foxconn now has its eyes on an even bigger prize: building the world’s electric vehicles.

*Stock data as of the market close. Commodities and crypto data in USD.

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MARKET MOVERS

Market News: It badly wants Origin Energy. Now Brookfield has a Plan B if shareholders won’t let it through the front door.

Despite coming back with a sweetened offer, major shareholder AustralianSuper blocked another Brookfield takeover bid on Thursday, sinking Origin shares.

Never mind, Brookfield says. If investors reject its $19.3 billion offer on 23 November, it’ll launch a private takeover.

But AustralianSuper won’t make it easy, buying up more Origin shares on Thursday.

Together with Stake | Invest on Wall St and the ASX

THE QUICK SYNC

  • Amazon allegedly made US$1 billion from a secret pricing algorithm. (Financial Times)

  • Microsoft will use AI to try and prevent the kind of hacks that have plagued its products. (Bloomberg)

  • For the first time in its history, Ferrari hybrids have outsold traditional models. (Financial Times)

  • For US$8.6 billion, Disney will snap up the rest of streaming service Hulu. (CNN)

  • Tesla’s Chinese competitors Xpeng and Li Auto delivered a record number of EVs in October. (CNBC)

TRADING FLOOR

M&A:

  • Apollo and CIMIC sell their stake in Ventia Services Group via a $270m block trade at $2.71 per share. (AFR)

  • Fawkner Property and PAG buy Midland Gate shopping center for $465m. (BNA)

  • Pact Group's Contract Manufacturing unit in takeover battle led by Raphael Geminder's Kin Group with a 68c per share offer. (The Australian)

  • Cyclion partners with NDC for 18 waste-to-energy facilities in Manila by 2026. (BNA)

  • The Australian Shareholders' Association (ASA) and the Australian Investors' Association (AIA) have decided to merge by 2024. (Capital Brief)

  • Westpac acquires HealthPoint to improve e-health claims processing for healthcare professionals. (BNA)

  • Global suitors may need takeover bids to control Australian companies. (The Australian)

  • Australian Beer Co to acquire Ampersand Projects, a five-year-old RTD startup. (BNA)

  • PAG, after Australian Venue Co acquisition, mulls deal in the market; Retail Food Group a possible target. (The Australian)

Capital Markets:

  • Brookfield has raised $2.6 billion to go hunting for APAC infrastructure. (AFR)

  • Alpha HPA shares surge as short sellers cover positions following the $40m placement announcement at 73c per share. (The Australian)

  • Bowen Coking Coal $50m with support from Hans Mende, brokers Petra Capital and Shaw and Partners involved. (AFR)

  • Rent.com.au, backed by Bevan Slattery, raises $1.95m in rights issue to meet growing demand. (BNA)

  • Enlitic starts its IPO bid collection, targeting $20-35m for a market cap of $121.1-136.1m. (AFR)

VC:

  • Happly raises $1.75m from angel investors, including TAXIBOX co-founder Jeremy Rosen as new co-CEO. (AFR)

  • SunDrive opens a facility in Sydney with $11m ARENA funding. (Startup Daily)

Others:

  • Tiwi traditional owner secures injunction against Santos for Barossa export pipeline. (Capital Brief)

  • Internal Qantas documents document how trust in the brand blew up. (AFR)

  • Magellan wins legal battle to thwart the Global Fund wind-up attempt by Bolton. (Capital Brief)

  • CSR's half-year profit drops, lowers full-year earnings outlook. (Capital Brief)

  • Immediation enters voluntary administration after CEO's departure and capital injection. (Startup Daily)

INSIGHT OF THE WEEK BY STAKE

Value beyond borders

If you are a value investor looking for opportunities globally, a pretty straightforward investment strategy you may have considered is to check the price/earnings ratio in different countries, long the cheaper indexes and short the pricier ones. Well, not so fast. Not all indexes are constructed equally: while the S&P 500, for example, is weighed pretty heavily on tech stocks, Europe’s STOXX 600 focuses more on consumer staples, and these sectors tend to have pretty different valuations. Another thing to consider is the companies that make up the index. For instance, Europe’s biggest tech company is $SAP, and though it is large, its revenue and user base is currently no match for competitors like the American FAANGs, which should also impact its valuation.

This is not financial advice.

THE WATERCOOLER