Dogecoin’s wild ride

December 15, 2021 Dogecoin's wild ride Good morning traders, Welcome back to The Daily Setup. Markets were in the red again yesterday. Here’s what’s on the docket today: - US Producer Price Index rises ~10% YoY - Tesla accepts Doge as payment for merchandise - Colgate Energy Partners may be going public Let’s get to work. Jeff Terminix, Auto stocks, and the US Producer Price Index BIGGEST MOVER Talking murders and executions [Terminix Global Holdings Inc (TMX) Stock Price & News – Google Finance]( Move over technology sector, the hot new M&A industry is rat poison. UK firm Rentokil (which sounds like a new prescription drug about to bombard football games with annoying commercials) is [buying US counterpart Terminix]( (TMX) in a $6.7B deal. The transaction values TMX at $55 per share and will be funded by an [80/20 split in Rentokil shares and cash](. - The deal values TMX at a 47% premium to Monday’s closing price, but the stock rallied only 18.3% to close at $44.15 on Tuesday. - Ratatouille Rentokil is traded on the London Stock Exchange, so US shareholders may not be thrilled about getting foreign stock that may be hard to liquidate instead of pound sterling, I mean cash. - The British company said it will list ADRs on the NYSE, and the deal is expected to close by EoY 2022. We might be looking at a good old fashioned arbitrage situation here. There is a gap of almost 11 bucks a share available for those who are confident the deal will get done and don’t mind waiting several months. Regardless, we have the biggest rat poison related news since Nick Saban went on his [epic diatribe]( against the college football media. No-Wheel Drive: Ford, GM, and Tesla take a hit [Car Crash GIF - Find & Share on GIPHY]( [The ghost of Henry Ford goes for a Sunday drive]( Auto stocks were rusted-out on Tuesday with Ford, GM, and Tesla all experiencing a drop in shares. The hit came on the heels of Toyota’s announcement that it plans on making a [$35B investment]( in electric vehicles, in addition to scrutiny from Daiwa analyst Jairam Nathan, who downgraded shares in Ford and GM. It looks like as the market develops, these producers might need to hit the nitrous for the road ahead. - TSLA is feeling the burn partly due to Musk’s continued habit of selling-off stock, who is expected [to sell roughly $18M]( in TSLA by EoY. - One of Nathan’s (can I call you Nathan?) primary concerns for these manufacturers lies in the cost of transitioning to EVs, in addition to the growing cost of necessary components such as [lithium](. - There is also growing skepticism about the consumer desire to purchase new vehicles as the Fed seeks to curb bond-buying (usually a precursor to heightened interest rates). Most American consumers purchase new vehicles via loans. This wasn’t much of a problem when interest rates were low, but if that changes the public might be more hesitant about purchasing a new vehicle and demand could drop. It’s not all gloom and doom in the auto market though. The companies that took a hit today are still [performing well](. Across the board, the buy rate for GM and Ford remain positive, at 88% and 54% respectively. The same can’t be said for Tesla, however, as it [entered a bear market]( for the third time this year. The Only Thing Transitory was the Definition of Fully Vaccinated [Are Federal Reserve Notes 2-Ply?]( Inflation continues to run hotter than the proverbial two dollar pistol (miss you George Jones) as the US Producer Price Index [rose a whopping 9.6%]( YoY in November. The measure represented the [largest rise]( since November 2010, when the 12 month rate began being calculated. That whole ‘transitory’ call turned out to be as accurate as the pre-draft evaluations of Mac Jones. - Categories seeing large price bumps included iron and steel, fruits and vegetables, industrial chemicals, and jet fuel... so sorry for anybody who enjoys eating, traveling, or [making things out of metal and braun.]( - It’s not all bad news however, as prices decreased for diesel fuel, light motor trucks, and processed young chickens. So good news for poultry farmers I guess? - The Fed may take the first baby step towards a rate hike, as it’s expected to announce [later today](. Stocks of companies that can pass rising costs along to consumers may be the smart strategy for the foreseeable future, assuming of course that consumers don’t burn all of their dollars to heat their homes this winter. The Fed may provide some clarity this week, no word on if JPow is frantically searching the playbook for a page that says something other than ‘Print’. Doge Boards SpaceX and heads to the moon Token Talk ^[Does this thing have a parachute?]( Well the madman is at it again. Probably after the (really unnecessary) ego boost from being named [TIME person of the year](, Elon decided to shake up the crypto world by announcing that Tesla would be accepting DogeCoin for purchases on some [Tesla merchandise](. The sudden announcement by the Grand Poobah of coin pumping sent the price of Doge beyond the stars with prices rising more than 20%. - Musk actually went into further detail about his stance on Doge in an interview with TIME, citing [its ability to facilitate more transactions]( than Bitcoin. He did cover his ass however and reiterated his belief that crypto will never totally eclipse fiat currency on the whole. - It’s important to remember however that the token is still [70% down from its record high]( (a height boosted by Musk’s shenanigans of course) and [many players]( in the crypto space see it more akin to a ‘meme-stock’ than a serious investment. Tuesday’s Doge excitement is representative of the potential for more mainstream adoption of crypto for transactions. Sure, Musk is following in the footsteps of other business owners like [Mark Cuban]( but all it would take is for one tweet from Elon that the experiment is over to sink a portfolio full of doge. Crypto is here to stay for sure, but it might be worth remaining wary of going all-in on Doge instead of investing here-and-there and observing how the situation develops. Harley hits the open road Rumor has it [Pictured: Elon’s Twitter Feed... Or maybe just Twitter in general]( Rumors swirled around the Permian Basin as an anonymous source close to Colgate Energy Partners III has disclosed that the energy producer is preparing plans for an IPO mid-2022. If this ends up being true, it would be the first major US oil IPO since Berry Petroleum Corp in 2018. However, unlike Berry’s [$300M]( IPO goal, the parties involved (Buyout firms Pearl Energy Investments and NGP) allegedly have set their sights for a [$4B valuation](. If this is true, then Colgate Energy could make quite the gooey splash in the energy sector with their black gold. - On November 7th, Colgate Energy announced that they had entered an agreement to purchase 22k acres in the New Mexico region of the Permian Basin, adding [200 ‘high-quality’]( drilling locations for near term development. The deal is expected to close in Q1 of 2022. - The US Energy Information Administration expects the Permian Basin to have its best year for oil production in 2022. The EIA expects rates to rise an additional [71k barrels per day to 5.031M bpd.]( This coincides with OPEC’s prediction that global thirst for oil will increase in the new year. It’s important to remember that while this IPO is currently a rumor, when presented with the evidence it becomes ever more compelling. The Permian basin has been a hub for US petroleum drilling for close to 100 years and if it is expected to hit its highest production yield of all time, it would be an excellent opportunity for Colgate and its partners to reach that supposed goal of a $4B valuation. Add to that their deal for strategic acquisitions across the basin closing in Q1 of 2022, a mid-2022 IPO seems possible. For now it might be smart to keep your ear close to the ground and keep track of the Basin’s production in the coming months to get a clearer picture of the possibilities. Link Roundup 📿 Other News Other News Link Roundup - Stop raising the roof – Congress passes $2.5T debt ceiling increase ([Read]() - Institutional Bitcoin firm NYDIG just puts it right on the table – NYDIG raises $1B ([Read]() - Shut up and drive – Uber has its best week ever ([Read]() - Nothing runs (on batteries) like a Deere – Deere buys Kreisel Electric ([Read]() - Shut up and take my money – JPMorgan and Goldman raise bonuses ([Read]() A peek into the Fed meeting, [via @finance_god]( [Image] RagingBull, LLC 62 Calef Hwy. #233, Lee, NH 03861 [Unsubscribe from all RagingBull emails]( Questions or concerns about our products? Call or text us on your mobile: 1.800.123.4567 © Copyright 2020, [RagingBull]( - [Refund Policy]( - [Privacy Policy]( - [Terms & Conditions]( DISCLAIMER: To more fully understand any Ragingbull.com, LLC ("RagingBull") subscription, website, application or other service ("Services"), please review our full disclaimer located at [(. 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