🍎 Apple Faces A Major Risk

1) Apple’s Ban Continues To Expand, 2) Space Deceleration, 3) The Titans Of Asset Management, and more!

Author

Carbon Finance
December 19, 2023

Happy Tuesday.

Yesterday, we crossed 2,500 subscribers. This is a huge milestone for our community as we continue to grow. A massive thank you to all of you for making this happen!

This Friday, December 22nd, will be the last issue for this year. The next issue will resume on January 5th! I have a lot of things in the pipeline for next year and I can’t wait to see what we build together.

Some key data bites you should know: 

  • Japan’s Nippon Steel is set to acquire U.S. Steel $X for $14.9B.

  • Adobe $ADBE and Figma have terminated their $20B merger agreement due to regulatory pressures, with Adobe paying Figma a $1B fee.

  • Goldman Sachs $GS increased their 2024 S&P 500 forecast to 5,100, up 9% from the previous 4,700 target, following the Fed’s dovish shift.

In today’s newsletter:

  • 🍎 Apple’s Ban Continues To Expand

  • đŸȘ Space Deceleration

  • 💰 The Titans Of Asset Management

Let’s dive right in!

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🍎 Apple’s Ban Continues To Expand

Chinese government and state firms are increasingly banning foreign devices like iPhones, intensifying a move to Chinese brands.

This shift is helping to accelerate Beijing's aim to reduce reliance on American technology, significantly impacting Apple and Samsung's market presence in China.

Although the directives vary among government agencies, they collectively pose a major challenge to companies like Apple, which relies heavily on China for manufacturing and revenue.

If we analyze Apple’s latest earnings report, we see that in the last twelve months, the company generated $383B in revenue, of which $72.6B came from the Greater China region.

This represents a considerable 19% of Apple’s total revenue.

Despite this, in the last earnings call, CEO Tim Cook expressed optimism about Apple’s future in China, highlight record iPhone revenue despite these challenges.

đŸȘ Space Deceleration

Recently, Billionaire Sir Richard Branson decided that he will not invest further in Virgin Galactic, as his business faces financial constraints post-Covid.

Last month, the company reduced 18% of its workforce and paused flights in an effort to consolidate cash to develop a larger space vehicle.

Branson remains passionate about the project's future in commercial space travel and believes Virgin Galactic has enough funds to continue to evolve on its own.

News of Branson’s decision sent Virgin Galactic’s shares tumbling by ~18% that day, but they have since recovered.

The company is down over 70% since it went public in October 2019 via a SPAC merger.

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💰 The Titans Of Asset Management

Over the past decade, asset managers have seen remarkable growth, greatly increasing their assets under management (AUM).

This expansion reflects a growing global interest in investment and wealth management services.

As a result, these firms have become influential players in global financial markets.

Data from the SWF Institute provides insight into the leading asset managers in the industry.

BlackRock tops the list with a staggering $9.4T in AUM, while Vanguard follows with $7.3T, and Fidelity ranks third with $3.9T.

Collectively, the top 10 asset managers oversee an enormous total of $32T in assets.

⌚ Apple Pauses Watch Sales. Apple $AAPL will halt U.S. sales of their Series 9 and Ultra 2 watches due to an IP dispute with Masimo over the Blood Oxygen feature - CNBC

đŸ§” Threads Launch. Meta $META launched its Threads social media platform in the EU, granting access to 450M people who live in the region - MW

đŸ§Œ Jail Time. Former Nikola $NKLA CEO Trevor Milton was sentenced to four years in federal prison for securities fraud - YF

đŸïž Early Retirement. Tenured Nvidia $NVDA employees, having gained significant wealth from substantial stock value increases, are perceived as being in "semi-retirement" mode by newer staff - TH

Notable Companies Reporting Earnings This Week:

  • Monday:

    • Heico $HEI

  • Tuesday:

    • Accenture $ACN, FedEx $FDX, FactSet $DFS

  • Wednesday:

    • Micron Technology $MU, General Mills $GIS, Carnival Corporation $CCL

  • Thursday:

    • Nike $NKE, Cintas $CTAS, Paychex $PAYX

All of the companies that are reporting earnings this week can be viewed here.

Major Trades Published Since 12/12. Trades may be those of family members. Buys and sells may be options trades. [Source: 2iQ, Quiver Quant]

Buys:

  • French Hill (R)

    • Company: Markel ($MKL)

      • Amount Purchased: $50K - $100K

    • Company: Visa ($V)

      • Amount Purchased: $50K - $100K

  • Debbie Dingell (D)

    • Company: Medtronic ($MDT)

      • Amount Purchased: $15K - $50K

Sells:

  • French Hill (R)

    • Company: Philip Morris ($PM)

      • Amount Sold: $100K - $250K

  • Richard Blumenthal (D)

    • Company: iHeartMedia ($IHRT)

      • Amount Sold: $150K - $300K

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