Musk Takes Over

October 29, 2022

Good Morning,

The New Zealand competition watchdog will investigate Jetstar, Air New Zealand has had a cyber breach, Australian tradies' wages are up 10.4%, the US economy grew 2.6% in the three months ending in September, Credit Suisse will cut 9,000 jobs & a number of top Twitter officials, including the CEO, have reportedly been fired.

Let's jump in.

Before The Bell

Markets

  • Mining stocks dragged the Aussie markets lower as iron prices hit their lowest since 2020. (AFR)

  • Tech stocks dragged down the S&P 500 and Nasdaq.

Earnings

  • Credit Suisse missed on Q3 estimates, posting a $4.09B net loss as the bank continues to be plagued by poor IBD revenues, losses from Russia withdrawal, and scandal-related litigation costs; their shares fell ~20% yesterday (CNBC)

  • Apple beat Q4 EPS and revenue estimates. However, it fell short on iPhone sales amid a rising dollar. It also provided no Q1 guidance citing uncertainty; its stock fell ~2% yesterday (CNBC)

  • Amazon missed on Q3 EPS and revenue estimates due to the slowdown in their core retail business while also issuing weak Q4 sales guidance; their stock fell ~20% in immediate AH trading (CNBC)

  • Shopify beat Q3 revenue estimates and posted a smaller-than-expected loss on their growing tools and payment services and exploitation of offline retail opportunities; their stock gained 17.3% yesterday (RT)

  • McDonald's beat Q3 comparable sales and profit estimates, helped by higher menu prices and increased traffic from inflation-weary customers; their stock rose 3.3% yesterday (RT)

News Summary

  • The New Zealand competition watchdog will investigate Jetstar after allegations made by Consumer NZ. (Stuff)

  • Air New Zealand has had a cyber breach leading to multiple accounts being compromised. (Stuff)

  • Stats New Zealand has said they don't have enough money to more frequently report on inflation. (Stuff)

  • The NZ dollar has dropped from the 10th most traded currency to the 14th. (Herald)

  • A fee-free philanthropic fund in New Zealand has raised $475k in its first year. (NBR)

  • Australian tradies' wages are up 10.4%. (9 News)

  • The NSW government will buy flood-damaged homes in a new $800m (AUD) buyback scheme. (9 News)

  • Russia has deployed more than 30 drone attacks on Ukraine in the last few days. (BBC)

  • The US economy grew 2.6% in the three months ending in September. This was higher than expected. (BBC)

  • Credit Suisse will cut 9,000 jobs to reduce the losses. (BBC)

  • A number of top Twitter officials, including the CEO, have reportedly been fired after Musk completed his takeover. (BBC)

  • Audi will partner with Sauber and enter Formula 1 in 2026. (F1)

Deal Flow

Investments/ M&AE

  • Elon Musk has completed his $44B (USD) takeover of Twitter. (BBG)

  • PT Telkom Indonesia has picked its advisors for the merger of its broadband and wireless business, which will create an entity with a valuation of over $30B (USD). (BBG)

  • Aegon, a dutch insurance company, has agreed to merge with the Dutch arm of insurance company A.S.R in a $4.9B (USD) deal. (BBG)

  • The Ontario Teachers' Pension Plan Board is considering selling Busy Bees, a UK nursery group. Any deal could value Busy Bees at more than $3.5B (USD). (BBG)

  • Mobile donations company Pushpay has received a $1.54B (NZD) takeover offer from PE firm BGH Capital and investment firm Sixth Street. (RNZ)

  • UserTesting, a digital customer insights business, will be acquired by PE firms Thoma Bravo and Sunstone Partners for ~$1.1B (USD). (BBG)

  • Comcast Corp, a US broadcaster, is considering the sale of its German unit Sky Deutschland. It is valued at $1B (USD). (BBG)

  • Suncor Energy will acquire a further 21.3% in the Fort Hills oil sands mine from Teck Resources for $734m (USD). (BBG)

  • Crypto Exchange Binance has committed $500m (USD) in equity financing for Musk's Twitter deal. (BBG)

  • Potentia Capital, a PE firm, has made a $1.80 (AUD) per share offer for software company Nitro Software. (AFR)

  • Saudi National Bank is set to become one of Credit Suisse's biggest shareholders with a 9.9% stake. (BBG)

  • The UK government is close to closing a deal to sell power supplier Blub to UK-based Octopus Energy. (BBG)

Equity Raises

  • Credit Suisse has drawn $500m from investors for its First Boston Spinout. (BBG)

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