3 Big Scoops

Hello Folks,

Happy Friday!!

Here’s what’s on the menu for today:

👉 Shein’s big-ticket IPO

👉 The Tesla sell-off

👉 Bitcoin’s recent gains

All Eyes on Shein

According to Bloomberg, Shein might go public at a valuation of approximately $90 billion. The company has reportedly told prospective investors it aims to fetch a valuation of at least $80 billion via an initial public offering.

But will equity investors be willing to pay a hefty premium for a company that was recently valued between $50 billion and $60 billion during its last funding round in May?

At its peak, Shein was valued at $100 billion in 2022, making it the third-most valuable startup in the world. But similar to other startups, its lofty multiples have dragged lower due to a sluggish macro environment.

Moreover, Wall Street investors might be worried about investing in Shein due to:

👉 Increasing competition

👉 Allegations of copyright thefts

👉 Potential use of forced labor

A China-based company, Shein, was founded more than a decade ago. It is now headquartered in Singapore and aims to end 2023 with $2.5 billion in net income.

If the stock is priced at 30x forward earnings, Shein may go public at $75 billion.

Tesla Stock Falls……Again

Shares of Tesla fell over 5% on Thursday after HSBC initiated coverage on the stock with a rating of “reduce” and a price target of $146. Tesla stock is currently priced at $210.

HSBC believes Tesla is pitching itself as a business built around disruptive tech such as AI and autonomous vehicles, making it a much riskier bet. The regulatory and technological challenges surrounding AI mean Tesla should have a higher cost of capital, which suggests its shares are less valuable right now.

Tesla stock is currently trading 49% below all-time highs and is down over 20% since its Q3 results when the EV maker reported revenue growth of just 9%.

Investors are worried about Tesla’s

• Narrowing profit margins

• Slowing sales and

• Rising competition

The U.K. Economy Flatlines Amid Inflation

The U.K.'s gross domestic product, or GDP, showed no growth in Q3 after it rose 0.2% in the June quarter. In the year-ago period, the U.K.’s GDP grew by 0.6%.

The region’s Chancellor, Jeremy Hunt, attributed high inflation as the single greatest barrier to economic growth, as the consumer price index stood at 6.7% for September.

Bitcoin Roars Past $36k

Bitcoin prices have surged almost 40% in the last two months and are up 120% year-to-date. Here’s what is fueling the recent gains.

Two ETF experts from Bloomberg- James Seyffart and Eric Balchunas, believe there is a chance for the SEC to approve all 12 Bitcoin ETFs in the eight-day window (between November 8 and November 17).

Even if the Bitcoin ETF is not approved this month, there is a 90% chance of approval by Jan. 10.

Headlines You Can’t Miss!

China’s chip maker, SMIC, posts 80% drop in Q3 profits

China’s Li Auto is gaining market share from Tesla

Take-Two Interactive expects AI to disrupt gaming

Unity shares slide on Q3 revenue miss

BlackRock files for IShares Ethereum ETF Trust in Delaware

Chart of the Day

The COVID-19 pandemic might have changed the way we work forever. The shift towards a hybrid or remote-working environment will likely result in a steep decline in demand for commercial real estate.

The above chart shows commercial U.S. real estate prices might likely bottom by the end of 2024.

The WeWork bankruptcy might further accelerate the price decline as it has long-term lease obligations totaling more than $13 billion.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.