🐂 Tesla Win

Markets

Stocks experienced a decline yesterday as investors exercised caution in anticipation of the Federal Reserve's upcoming announcement regarding interest rates (Hint: They are expected to remain unchanged). In contrast, Instacart had a positive day, surging by 12% during its inaugural day of trading following its eagerly awaited IPO..

American Labor’s Real Problem: It Isn’t Productive Enough

The demand for increased pay and improved work-life balance by the United Auto Workers may be entirely reasonable in the context of a historically tight labor market, where many workers are enjoying these benefits.

However, what appears sensible to striking factory workers may not align with the broader interests of the manufacturing sector. Compensation is fundamentally linked to productivity, which encompasses both the quantity and quality of products generated by a company's workforce. In this regard, American manufacturing faces challenges. The issue is not confined to labor-intensive products like clothing and furniture, which have largely relocated offshore in the past. Instead, the concern extends to highly advanced products such as electric vehicles and batteries, power-generation equipment, commercial aircraft, and semiconductor manufacturing.

Entertainment

Disney’s $60b parks expansion

Let's hope that the setback experienced by the Galactic Starcruiser Hotel served as a valuable learning opportunity for Disney. According to the New York Times, Disney has announced its plan to invest $60 billion in its global parks and cruise line over the next decade, effectively doubling its investments compared to the previous decade.

While Disney has not provided specific details, its focus will be on incorporating more intellectual property (IP) into its in-person experiences. Disney has already enriched its parks worldwide, including Disney World and Disneyland, with attractions based on blockbuster franchises like Avengers and Guardians of the Galaxy. However, there are still many franchises that have not yet been integrated into the parks. Josh D'Amaro, the head of Disney Parks, Experiences, and Products, hinted at the possibility of bringing Wakanda to life, as mentioned in a company blog post.

Despite the challenges posed by the pandemic, Disney's parks have rebounded impressively and are expected to generate approximately $10 billion in profit this year, a nearly fivefold increase compared to a decade ago. While domestic park visitation has dipped following COVID-19 shutdowns, Disney's international parks are experiencing robust growth, with approximately 121 million visitors in 2022.

CEO Bob Iger has identified the parks as one of the three key businesses that will drive significant growth and value creation in the next five years, alongside Disney's movie studios and streaming services. However, there are uncertainties surrounding the profitability of Disney+ by 2024 due to ongoing strikes in the entertainment industry, and cable TV is no longer the reliable revenue source it once was. As a result, Disney is placing a substantial bet on the belief that fans will continue to spend their vacations in themed destinations like Pandora.

Nonetheless, this growth journey may not be without its challenges. Disney's legal dispute with Florida Gov. Ron DeSantis, in which the company alleges its free speech rights were violated in response to its opposition to the "Don't Say Gay" law, has created a powerful adversary. This dispute has already led Disney to abandon plans for a $1 billion corporate campus in Florida.

Politics

Biden and Zelensky seek support for Ukraine at the UN

President Biden and Ukrainian President Volodymyr Zelensky have both traveled to New York City this week to participate in the UN General Assembly, commonly known as a gathering for world leaders to engage in diplomatic discussions. Their primary objective in Manhattan is to rally support from nations, particularly those with lower and middle incomes, for Ukraine's ongoing war effort.

Their speeches and statements have been directed towards countries that have thus far refrained from taking sides in the conflict. President Biden emphasized that supporting Ukraine is not just about safeguarding one nation but about preventing aggression against any country. He highlighted efforts to increase financial assistance for lower- and middle-income nations and showcased advancements in reducing global poverty.

President Zelensky drew a parallel between climate-change-induced natural disasters in places like Libya and the man-made disaster initiated by Moscow through its war in Ukraine.

While the United States and its allies have committed substantial funds, amounting to at least $245 billion, to aid Ukraine in the 17 months following Russia's invasion, certain countries have reasons to maintain a neutral stance. China and India, for instance, have taken advantage of affordable Russian energy resources, and lower-income economies rely on Russia for cost-effective food imports.

However, there is a diminishing appetite for providing further aid to Ukraine among certain quarters. Some hardline Republicans in Congress are opposed to President Biden's proposal to allocate an additional $24 billion to Ukraine. Furthermore, recent polling data indicates that this position aligns with the majority of GOP voters.

Business

MBA acquisitions are super hot right now

In the past, MBA graduates would invest in new suits for traditional desk jobs, but today, they're more likely to invest in acquiring entire companies. This reflects a contemporary business trend known as "entrepreneurship through acquisition" or ETA, which is gaining significant popularity in business school classrooms.

So, how does ETA operate? MBA programs teach students how to identify and purchase an existing company, a process often referred to as "a search." Once they find a suitable company, they essentially adopt a "show me the money" approach, securing the necessary funds to make the acquisition. Unless they are among the fortunate few at Wharton, who receive a $50,000 grant to kickstart their ETA search, most students typically follow one of two routes:

1. Self-funding, often with assistance from a Small Business Association loan.

2. Utilizing a "core" search fund, which involves two rounds of fundraising from investors.

Why has ETA become so popular? In 2023, the job market for elite MBA graduates saw a slowdown, prompting some young professionals to seek alternative ways to demonstrate their business expertise. Graduates report that acquiring small businesses provides them with a sense of purpose that they may not find in typical consulting or banking roles. The timing aligns well with this trend, as many baby boomers are looking to sell their companies and retire, creating opportunities for the next generation of entrepreneurs.

Sports

Michigan State Moves to Fire Mel Tucker Amid Harassment Probe

Michigan State University has initiated the process of terminating football coach Mel Tucker's employment for cause. This decision comes after previously suspending him without pay while an investigation into allegations of sexual harassment against him was ongoing.

In a statement, athletic director Alan Haller stated that the university has gathered a substantial body of evidence of misconduct that justifies the termination for cause. Specifically, Tucker has been accused of making unwanted sexual advances and engaging in inappropriate behavior, including masturbating during a phone call with a university vendor hired to educate the football team on sexual misconduct prevention.

These actions, which the university claimed Tucker admitted to, are in direct violation of clauses in his contract that prohibit behavior considered as "moral turpitude" or that brings "public disrespect, contempt, or ridicule upon the university."

On the following day, Tucker's agent released a statement on behalf of the coach, in which he expressed the belief that the university is not concerned with his rights, the truth, or potential future legal liability in regards to monitoring its employees' private lives.