OPEC Agrees to Cut Production by 2M Barrels per day (FoxBiz)
Families Tweak their Holiday Plans in Response to Inflation (CNBC)
Investors Remain Cautious About Investing in Britain (WSJ)
Elon Musk Gives Up the Twitter Court Battle, Agrees to Original Deal
In a move Tuesday that shocked many, Elon Musk made a proposal in a letter to Twitter offering the initial deal established between the two sides back in April. The Musk v. Twitter trial was set to begin proceedings on October 17th in Delaware, however signs point to the two parties coming to an agreement while avoiding litigation that would seemingly cost extraordinary amounts of legal fees. According to insider reports, Musk's legal team began to recognize that the case was not going well for their side, citing many instances where the judge sided with Twitter during pretrial rulings. In a recent tweet from Musk, he mentioned that the twitter deal would "accelerate" his plans for X Corporation, a business idea he explains as "the everything app".
“It's a pretty grand vision and of course that could be started from scratch but I think Twitter would accelerate that by three to five years."
Elon Musk
Private Funding Pulse Check
Allow Therapeutics, Inc., a biotechnology research company, has closed on a $42M Series D round that included West Hollywood, CA-based Single-Family Office Thiel Capital
The Hunter Family Office, Bluesky Equities has participated in a Seed round that totaled $3.6M for Ownly, a software development company that allows customers to shop, finance and buy new homes online
Ingleside Investors engaged in a Series A investment with Volantio Inc., a company that seeks to revolutionize the biosafety airline industry, totaling $6M
Smedvig Capital took part in a $15.4M Series A deal with Lunio, an information technology company developing click fraud software
Warren Buffett's Namesake Indicator Suggests Further Declines
The "Warren Buffett Indicator", a gauge for how U.S. assets are valued, has topped 200% in recent months and still remains above 150%. The reading combines the market capitalization of all active U.S. equities and divides it by a factor of the most recent GDP output number. The current ratio of 151% is roughly 19% above the historical trend line, suggesting that valuations remain marginally higher even after a period that witnessed major indexes drop by as much as 20% since mid-August. Dating back to a Fortune article in 2001, Buffett suggested that an index reading north of 200% would be "playing with fire" and that a long-term buy and hold strategy of purchasing when the reading is near 70% to 80% would "likely work very well". However, The Buffett Indicator doesn't come without its inefficiencies, as it uses the current value of the stock market with a backwards looking GDP reading. In addition, GDP excludes incomes from overseas while many U.S. listed companies have global operations.
“[The indicator is] probably the best single measure of where valuations stand at any given moment...[and serving as a] very strong warning signal."
Warren Buffett, Berkshire Hathaway
Bearish Bets Experience an Uptick Among Retail Traders
After multiple months of difficult market trading, retail investors have now switched stances and have begun to bet against the market by opening short positions. This comes in sharp contrast to the period when stimulus checks fueled astronomical moves in a handful of well-known names, most notably GameStop. In a report that interviewed many retail investors who recently opened short positions, a number pointed to the lack of optimism moving forward, specifically in regards to inflation, FED rate hikes and a declining economic output. Matching what retail traders are saying, the trading platform, eToro has witnessed an uptick in the number of newly opened short positions, rising 61% compared to last years number. In addition, ETFs that track short indexes have witnessed $5.8M of new inflows, surpassing all of last year.
“Clients know that the economic landscape is rapidly changing...In light of this, opening short positions has been an increasingly popular approach this year as it provides more flexibility to exploit opportunities when they arise."
Dan Moczulski, eToro
British Billionaire's Family Office Executes Over a $1B Cash Transfer
James Dyson's Family Office, Weybourne Holdings, has accepted the largest cash transfer in its history. According to recent filings, Dyson Holdings paid the family office $1.1B over the course of 2021 and is prepared to receive another $500M this year as of a result of a dividend declared by Dyson Ltd. In total, Weybourne has accepted more than $3B from Dyson over the last four years, pointing towards a desire to free up capital to allow for unrestrained asset allocation. Originally founded in 2013, Weybourne has investments across real estate, farming and public markets. More recently, the group has expanded its staff to more than 30 employees between the U.K. and Singapore.
Pittsburgh, PA-based Federated Hermes, Inc., a global leader in responsible investing, has acquired C.W. Henderson & Associates and their $3.5B worth of SMAs (Cision)
Edelman Financial Engines has acquired Danville, CA-based Herrmann & Cooke, expanding its strong presence in the Northern California market (BW)
Wealth Enhancement Group has completed an acquisition of Scroggins Wealth Management, an independent RIA with over $370M in assets (WM)
Written by:
Andrew Popp | Data Research Associate
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