The End Of Meme Stonks

AMC shares have hit a new record low closing price of $8.62, a 2-year return of -98.35% [The Daily Peel... ](=) September 8, 2023 | Peel #537 Silver banana goes to... [SRS Acquiom. ]( In this issue of the Peel: - China banned the use of iPhones and other Apple devices for government workers while on the job - AMC shares have hit a new record low closing price of $8.62, a 2-year return of -98.35% - Canadian energy company Enbridge agreed to purchase $14bn worth of American-based Dominion Energy’s natural gas distribution assets Market Snapshot Happy Thursday, apes. As the northern hemisphere looks ahead to entering fall in a few short weeks, markets are frontrunning that seasonal change with their own fall in stock prices. It's safe to say that the whole “September Effect” thing has played out so far, but with a sample size of 3, calling that significant is like calling Justin Fields the GOAT. Markets sold off once again yesterday on a generally down day. Inflation concerns seem to be steaming back even faster than actual inflation, sending every sector but utilities and energy lower. Yields continued their march higher in the meantime, with the 10-year parking it above 4.3% and vibing around those decade-and-a-half highs. Meanwhile, the 2-year pushed back above 5% and the U.S. Dollar got in on the fun too and pushed higher, over 105 in the DXY. Let’s get into it. To Win the M&A Game, It Helps to Know the Terrain [image]( You’ve got enough things to worry about. A thumb drive full of deal docs and data shouldn’t be one of them. With SRS Acquiom, it doesn’t have to be. Because once your files are up and organized on the VDR, they can stay there until you decide to take them down. Since there’s no additional charge to keep the VDR open, it’s totally up to you whether and when to close it. In the meantime, all that confidential data stays as secure as ever. It gets better: transparent, flat-rate pricing for however many users and uploads you need, for as long as you opt to keep the VDR open. No pay-by-the-page nonsense or unexpected upcharges here. It’s obviously a win-win as far as VDRs go. It’s also one more way SRS Acquiom maximizes efficiency throughout the deal process— from due diligence, to payments, all the way through post-closing. That’ll keep your clients happy and you looking great at what you do. Need more convincing? [Here’s more convincing]( > Macro Monkey Says Apple Falls from One Tree Kind of like you and that kid back in 8th grade who started vaping, Apple’s parents don’t like it when it hangs out with China. But this time, it was China and its parents limiting the hangouts. We all know that the U.S. and China’s economies have been best frenemies for the past 20 years or so, but that relationship seems to be quickly losing the “fr-” part. Yesterday, that took one step further, with China banning the use of iPhones and other Apple devices for government workers while on the job. Not an outright ban, but similar to U.S. laws about TikTok on federal and some state government devices. Quite honestly, it’s the closest tit-for-tat possible. Already, Apple shareholders are tweaking, and the scary part is that they just might have a damn good reason for it. Shares were off almost 3.6% today, bringing the stock back below that $3tn market cap line and leaving us all wondering how f*cked Apple’s top and bottom lines will be. "Shares were off almost 3.6% today, bringing the stock back below that $3tn market cap line... " To be clear, Apple products and iPhones are still allowed in China, just not on government employees while they’re in the office. Still, that rule is ripe for network effects. While common for people to have a work phone and a personal phone, how many people do you know like to switch their operating systems rather than lean into one? Moreover, the social stigma of having an iPhone and the potential “Americanization” of the phone’s owner will almost certainly play a role in damaging the romance between these two. Based on the below chart of Apple’s quarterly revenue by major region, this ban could seriously pack a punch: [image] [Source]( "It’s a bid to enhance their own national security while giving homegrown competitors the chance to step up" Aside from the hit to Apple’s margins and the domino effect hindering your 401(k)s performance, this move by the Chinese government is nothing if not an escalation of feuds. Clearly, Commerce Secretary Gina Raimondo’s recent Beijing visit wasn’t too helpful, but at least we got to pay all those tax dollars for her flights! Anyway, the ban extends to more than just Tim Appl- I mean, Cook’s* baby. Foreign-branded tech devices used at government employee’s work have been hit as a whole. The rules and messaging of enforcement aren’t completely clear at this stage, but the country’s intentions are. It appears that this ban comes as China seeks to curb its reliance on other nations and their company’s technological capabilities. It’s a bid to enhance their own national security while giving homegrown competitors the chance to step up. What's Ripe AeroVironment (AVAV) ↑ 20.74% ↑ - To paraphrase one of the most legendary non-Donald Trump [Presidential debate quotes](), “What is this? Why is it here?” - Thanks, James Stockdale. The “it” in question here is of course, AeroVironment, a company I bet less than 5% of us have heard of prior, but after yesterday’s performance, might soon need to be known by all. And as a defense contracting business supplying drones to the U.S. military, their products might soon have to be feared by all as well. - Shares surged on Wednesday on the back of an earnings report stronger than Putin’s tactical nuclear weapons. EPS of $1.00/sh slammed estimates for $0.40 while sales clocking in at $152mn beat expectations as well. - The company’s single-use Black Mirror-esque weapons system called the Switchblade 300 and 600, labeled the “kamikaze drone,” has become a warlord’s favorite within Russia’s invasion of Ukraine. Gotta love rooting for war! Roku (ROKU) ↑ 2.94% ↑ - When you trade down throughout the entire intraday session but still finish with a nearly 3% rise, you know it must be a good day. Gotta be a ton of layoffs. - And, it was. Shares opened up nearly 11% as the smart TV UI maker announced yesterday plans to cut 10% of its workforce in a bid to continue the Zuckerberg-started trend of cutting the sh*t out of costs amid wild rate hikes. - In the same filing, Roku also put even more money where its mouth is on performance for the rest of the year, upping Q3 sales guidance to $875mn. Amid the chaos of the SmartTV / streaming market going on now, a firm that makes a system that even my grandmother could figure out might be looking good. What's Rotten AMC Entertainment (AMC) ↓ 36.80% ↓ - And the full circle has been completed. From bouncing around between share prices from $50 - $100(ish) for years, AMC shocked the world with a run to well over $339. Shares had risen nearly 3,000% in just a few months, but now, our ape-minded brethren dumb enough to diamond hands this thing are feeling the other side of that coin. - Or maybe it’s just the lack of any coins present. Now, AMC shares have hit a new record low closing price of $8.62, a 2-year return of -98.35%. - As if the company hasn’t been f*cking with their capital stack and ownership enough lately, management went ahead and announced yesterday plans to sell up to 40mn new shares of America’s favorite movie theater chain. - The company already has 158.38mn shares outstanding, meaning that’s a nice ~25% dilution right off the bat. As expected through any kind of dilution, investors threw a full-on hissy fit, sending shares down over 35% to that record low. Zscaler (ZS) ↓ 2.70% ↓ - For a cloud security stock, the share price sure was heading in the exact opposite direction of the sky yesterday. Let me guess, another earnings beat with disappointing guidance?? - Yup, who would’ve thought. The company posted adjusted earnings of $0.64/sh against estimates for $0.49/sh on a sizable sales beat of $455mn as analysts were only looking for $430mn. - Guidance wasn’t even that bad compared to other players in the industry after reporting for the latest quarter. But still, analysts were apparently offended or something, dumping shares from A to Z. Thought Banana Oiling Yourself Up One man’s trash is another man’s treasure, and one man’s pollution is another man’s energy production and distribution capabilities. That’s how it goes, right? Late on Tuesday, Canadian energy company Enbridge agreed to purchase $14bn worth of American-based Dominion Energy’s natty gas distribution assets. Already, nobody’s happy. "The deal ... will be split between $9.4bn in cash while leveraging up for the remaining $4.6bn." Enbridge shares sold off nearly 6% yesterday in the immediate reaction, fairly standard for any large acquirer as they’re typically seen to be overpaying by the market. Dominion, who managed to lock down the sick-a** ticker symbol of just “D”, fell in solidarity, but only by 1.8%. The deal, which focuses on 3 of Dominion’s natty gas distribution businesses, will be split between $9.4bn in cash while leveraging up for the remaining $4.6bn. Maybe Enbridge’s Canadian-ness distracted them from this fact, but the U.S. is quickly turning on natty gas in large part. Despite being far cleaner (according to scientists; don’t trust me) than oil, coal, and the other members of the fossil fuel gang, natural gas has come under fire from some cities moving to ban the energy system in favor of renewables. But, with most of their business in fossil fuel-loving states, it’s unlikely those bans will come much into play. "... the energy sector is going hard into renewables for the long term" Dominion already announced a “top to bottom” self-assessment, much like you in the mirror every morning, to work on turning around a stock price that’s down almost 50% since last August when the $XLE is up over 10%. Clearly, the energy sector is going hard into renewables for the long term. How long it takes to get us there is anyone’s guess, but it doesn’t exactly take a genius to see that decisions like this in the interim will be heavily scrutinized…on both sides. The big question: Who will end up the real winner in the acquisition and how long will it take to have an answer? What does the future of energy production and distribution look like? Banana Brain Teaser Yesterday — I am a protector. I sit on a bridge. One person can see right through me, while others wonder what I hide. What am I? Answer: Sunglasses (they sit on the bridge of your nose). Today — I am tall when I am young. I am short when I am old. When I live I glow. From your breath I die. What am I? Shoot us your guesses at vyomesh@wallstreetoasis.com. Wise Investor Says “The stock market is filled with individuals who know the price of everything, but the value of nothing.” – Philip Fisher. 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