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October 4, 2022

Musk offers to buy Twitter at original price!

Twitter jumps after Musk offers deal on original terms

Tesla (TSLA) CEO Elon Musk is proposing to buy Twitter (TWTR) for the original offer price of $54.20 per share, Jeff Feeley and Ed Hammond of Bloomberg reports, citing people familiar with the matter.

Musk made the proposal in a letter to Twitter, sources told Bloomberg. Shares of Tesla (TSLA) moved well off their highs after Bloomberg reported, and CNBC followed, that its CEO Elon Musk is proposing to buy Twitter (TWTR) for the original offer price of $54.20 per share. Shares of Twitter are halted at $47.93 pending news while Tesla shares paired their gains to up about 2% to $247.29.

Tesla (TSLA) CEO Elon Musk has offered to close his acquisition of Twitter (TWTR) on the terms he originally agreed to, Cara Lombardo and Dana Cimilluca of WSJ report, citing a person familiar with the matter.

Musk’s lawyers communicated the proposal to Twitter’s lawyers overnight Monday and filed a letter confidentially with the Delaware Chancery Court ahead of an emergency hearing on the matter Tuesday, the person said.

The two sides are discussing how to ensure the deal can be closed, according to Lombardo and Cimilluca. The judge overseeing the case requested they come back to her by the end of the day with a potential plan that would allow the litigation to be dropped, a source told the Journal.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

September 27, 2022

Eisai reports positive Alzheimer data, shares jump!

Biogen/Eisai’s phase 3 trial of lecanemab in MCI meet primary endpoint

Eisai (ESALY) and Biogen (BIIB) “announced positive topline results from Eisai’s large global Phase 3 confirmatory Clarity AD clinical trial of lecanemab, an investigational anti-amyloid beta protofibril antibody for the treatment of mild cognitive impairment due to Alzheimer’s disease, AD, and mild AD with confirmed presence of amyloid pathology in the brain.

#Lecanemab met the primary endpoint and all key secondary endpoints with highly statistically significant results.

#Eisai will discuss this data with regulatory authorities in the U.S., Japan and Europe with the aim to file for traditional approval in the US and for marketing authorization applications in Japan and Europe by the end of Eisai’s FY2022, which ends March 31, 2023.

Additionally, Eisai will present the Clarity AD study results on November 29, 2022, at the Clinical Trials on Alzheimer’s Congress, and publish the findings in a peer-reviewed medical journal. Lecanemab treatment met the primary endpoint and reduced clinical decline on the global cognitive and functional scale, CDR-SB, compared with placebo at 18 months by 27%, which represents a treatment difference in the score change of -0.45 in the analysis of Intent-to-treat population.

Starting as early as six months, across all time points, the treatment showed highly statistically significant changes in CDR-SB from baseline compared to placebo.

All key secondary endpoints were also met with highly statistically significant results compared with placebo.

Key secondary endpoints were the change from baseline at 18 months compared with placebo of treatment in amyloid levels in the brain measured by amyloid positron emission tomography, the AD Assessment Scale-cognitive subscale14, AD Composite Score and the AD Cooperative Study-Activities of Daily Living Scale for Mild Cognitive Impairment.”

ESALY last traded at $39.79. BIIB last traded at $197.50.

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September 21, 2022

Rail Traffic Declines as Growth Slows!

North American rail traffic down 1% for the week ending September 17

The Association of American Railroads, AAR, reported U.S. rail traffic for the week ending September 17. For this week, total U.S. weekly rail traffic was 490,654 carloads and intermodal units, down 2.9% compared with the same week last year.

Total carloads for the week ending September 17 were 239,528 carloads, up 2% compared with the same week in 2021, while U.S. weekly intermodal volume was 251,126 containers and trailers, down 7.3% compared to 2021.

Five of the 10 carload commodity groups posted an increase compared with the same week in 2021.

They included coal, up 3,948 carloads, to 72,774; nonmetallic minerals, up 2,491 carloads, to 35,163; and motor vehicles and parts, up 2,185 carloads, to 13,879.

Commodity groups that posted decreases compared with the same week in 2021 included metallic ores and metals, down 3,192 carloads, to 21,581; miscellaneous carloads, down 1,623 carloads, to 8,250; and forest products, down 1,362 carloads, to 9,076. North American rail volume for the week ending September 17, on 12 reporting U.S., Canadian and Mexican railroads totaled 342,034 carloads, up 3.5% compared with the same week last year, and 341,595 intermodal units, down 4.7% compared with last year.

Total combined weekly rail traffic in North America was 683,629 carloads and intermodal units, down 0.8%.

North American rail volume for the first 37 weeks of 2022 was 25,025,034 carloads and intermodal units, down 2.4% compared with 2021.

Publicly traded companies in the space include CSX (CSX), Canadian National (CNI), Canadian Pacific (CP), Kansas City Southern (KSU), Norfolk Southern (NSC), Union Pacific (UNP) and Trinity Industries (TRN), Greenbrier (GBX), FreightCar America (RAIL) and Wabtec (WAB).

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September 19, 2022

KnowBe4 receives buyout offer!

KnowBe4 confirms receipt of $24 per share proposal from Vista

KnowBe4 (KNBE) confirmed the receipt of a non-binding proposal from Vista Equity Partners to acquire all outstanding shares of the Company for $24 per share in cash.

KnowBe4, Inc. engages in the development, marketing, and sale of its Software-as-a-Service-based security awareness platform. The company provides a platform incorporating security awareness training and simulated phishing with analytics and reporting that helps organizations manage the ongoing problem of social engineering.

The company also offers Security Coach, a solution to address human behavior risks through human detection and response; and PasswordIQ that would be used to mitigate risk related to password hygiene issues, such as weak or breached passwords. It serves its customers directly through inside sales teams for enterprise and small and medium businesses, as well as indirectly through channel partners and managed service providers.

The proposal represents a 39% premium to KnowBe4’s closing price on September 16, 2022.

The Company’s Board of Directors regularly considers opportunities to enhance value for its stockholders.

In response to an inquiry from Vista, the Board formed a special committee of the Board, comprised solely of independent directors, to engage with Vista and take other actions that it deems appropriate, with the assistance of independent financial and legal advisors.

Consistent with its mandate, and in consultation with its legal and financial advisors, the Special Committee will carefully review the Vista proposal and other potential value creation opportunities to determine the course of action that it believes is in the best interests of KnowBe4 and its stockholders.

KNBE is up 29% to $22.30.

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September 16, 2022

Rig Counts Rise as Oil Stablizes!

Baker Hughes reports U.S. rig count up 4 to 763 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 4 from last week to 763.

U.S. Rig Count is up 251 rigs from last year’s count of 511 with oil rigs up 239, gas rigs up 58 and miscellaneous rigs up 4.

The U.S. Offshore Rig Count is unchanged at 16, up one year-over-year.

The Canada Rig Count is up 6 from last week to 211, with oil rigs up 3 to 140, gas rigs down 4 to 63.

The Canada Rig Count is up 47 rigs from last year’s count of 156, with oil rigs up 45, gas rigs up 3 and miscellaneous rigs down 1.

The International Rig Count is up 27 rigs to 860 and up 81 from last year’s count.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up 28 cents to $85.34 per barrel (down from a high of $123.70). Brent crude is up $0.72 to $91.54 per barre (down from a high of $127.98). Gasoline last traded at $2.418 per gallon (down from a high of $4.31 per gallon).

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September 9, 2022

FOMC to raise rates by 75 bp on September 21

Fed’s Waller supports ‘significant increase’ in policy rate at next meeting

The Federal Reserve release a transcript for a speech to be delivered by Governor Christopher Waller at the 17th Annual Vienna Macroeconomics Workshop, in which he plans to state:

Christopher J. Waller took office as a member of the Board of Governors of the Federal Reserve System on December 18, 2020, to fill an unexpired term ending January 31, 2030.

Prior to his appointment at the Board, Dr. Waller served as executive vice president and director of research at the Federal Reserve Bank of St. Louis since 2009.

There are three takeaways from my speech today.

First, inflation is far too high, and it is too soon to say whether inflation is moving meaningfully and persistently downward. The Federal Open Market Committee is committed to undertake actions to bring inflation back down to our 2% target.

This is a fight we cannot, and will not, walk away from.

The second takeaway is that the fears of a recession starting in the first half of this year have faded away and the robust U.S. labor market is giving us the flexibility to be aggressive in our fight against inflation.

For that reason, I support continued increases in the FOMC’s policy rate and, based on what I know today, I support a significant increase at our next meeting on September 20 and 21 to get the policy rate to a setting that is clearly restricting demand.

The final takeaway is that I believe forward guidance is becoming less useful at this stage of the tightening cycle.

Future decisions on the size of additional rate increases and the destination for the policy rate in this cycle should be solely determined by the incoming data and their implications for economic activity, employment, and inflation.”

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August 17, 2022

Great News for Thalassemia patients

Bluebird Bio confirms FDA approval of Zynteglo

bluebird bio (BLUE) announced the U.S. Food and Drug Administration has approved Zynteglo, also known as beti-cel, a one-time gene therapy custom-designed to treat the underlying genetic cause of beta-thalassemia in adult and pediatric patients who require regular red blood cell transfusions.

“Due to the complex nature of gene therapy, Zynteglo will be available exclusively at Qualified Treatment Centers, which are carefully selected based on their expertise in relevant areas such as stem cell transplantation, cell and gene therapy, and beta-thalassemia; and receive specialized training to administer Zynteglo.

Information on bluebird’s QTC network, as well as personalized support focused on the needs of each patient throughout their treatment journey and information on insurance coverage and access will be available through bluebird’s patient support program,” the company stated.

“The FDA approval of Zynteglo offers people with beta-thalassemia the possibility of freedom from burdensome regular red blood cell transfusions and iron chelation, and unlocks new possibilities in their daily lives.

After more than a decade of research and clinical development, and through the perseverance of clinicians, patients, and their families, the approval of Zynteglo marks a watershed moment for the field of gene therapy.

As the first ex-vivo lentiviral vector gene therapy approved in the U.S. for the treatment of people with beta-thalassemia, we are ushering in a new era in which gene therapy has the potential to transform existing treatment paradigms for diseases that currently carry a lifelong burden of care,” said Andrew Obenshain, CEO of bluebird bio.

Expensive Treatment

The lifetime cost of medical care for a patient with transfusion-dependent beta-thalassemia can reach up to $6.4M in the U.S. and the average total health care cost per patient per year is 23 times higher than the general population. bluebird estimates that there are approximately 1,300-1,500 individuals with transfusion-dependent beta-thalassemia in the U.S.

” bluebird has set the wholesale acquisition cost of Zynteglo in the U.S. at $2.8M, in “recognition of its robust and sustained clinical benefit demonstrated in clinical studies and its potential to alleviate a lifetime of health care costs associated with regular RBC transfusions and iron management.” Tom Klima, chief commercial and operating officer of bluebird bio, said.

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August 15, 2022August 15, 2022

Investor takes position in Disney, seeks changes

Third Point lays out case for Disney to spin off ESPN

Third Point’s Dan Loeb has sent a letter to Disney CEO Bob Chapek to outline recommendations.

ESPN

Third Point said, “ESPN is a great business that currently generates significant free cash flow, enabling the Company to pay down debt and increase strategic options down the line.

In addition, we realize ESPN content is part of the bundle being offered to subscribers of other products, both in Disney’s Linear and DTC businesses.

Despite these advantages, we believe that a strong case can be made that the ESPN business should be spun off to shareholders with an appropriate debt load that will alleviate leverage at the parent Company.

The important questions to ask before commencing a spinoff are: Will both companies be better off? Will the needs of customers be better served? Can any synergies that exist between the two companies be replicated by contractual arrangements? Will the transaction contribute to creating long-term value for Disney shareholders?

While acknowledging that broader capital structure considerations may be at issue, we believe that the answer to all four of these questions is affirmative.

Employees of ESPN could be compensated in a security directly tied to their performance.

ESPN would have greater flexibility to pursue business initiatives that may be more difficult as part of Disney, such as sports betting.

Customers of ESPN and sports leagues would be better served by a focused management team driving a leadership position in sports distribution. We believe that most arrangements between the two companies can be replicated contractually, in the way eBay spun PayPal while continuing to utilize the product to process payments.

Lastly, as a result of this transaction, both companies will attract shareholders seeking the respective qualities of each company, allowing the Disney parent multiple to expand as its earnings growth rate increases and the remaining business is no longer haunted by the specter of cord cutting. While I understand you have considered this idea in the past, we urge the Company to retain advisors to reassess the desirability of the transaction in the current environment, recognizing that a key determination would be the proforma capitalizations, cashflow and credit profile of both companies.”

HULU

Third Point said, “We believe that integrating Hulu directly into the Disney+ DTC platform will provide significant cost and revenue synergies, ultimately reigniting growth in the domestic market.

We urge the Company to make every attempt to acquire Comcast’s remaining minority stake prior to the contractual deadline in early 2024.

We believe that it would even be prudent for Disney to pay a modest premium to accelerate the integration but are cognizant that the seller may have an unreasonable price expectation at this time while noting the seller has already made the decision to prematurely remove their own content from the platform. We know this is a priority for you and hope there is a deal to be had before Comcast is contractually obligated to do so in about 18 months.”

COST CUTTING

Third Point said, “Disney’s costs are among the highest in the industry, and we believe Disney significantly underearns relative to its potential. We urge the Company to embark on a cost cutting program that addresses both margins and the disposal of excess underperforming assets.”

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August 9, 2022

AppLovin offers to buy Unity!

ironSource drops as AppLovin’s Unity bid contingent on ironSource deal exit

Shares of ironSource (IS) are down 12%, to $4.16 in Tuesday morning trading after AppLovin (APP) announced it has submitted a non-binding proposal to the board of directors of Unity Software (U) to combine AppLovin with Unity in a stock-based transaction.

Under the terms offered, current Unity shareholders would receive approximately 55% of the outstanding shares of the combined company, with the Class A shares representing approximately 49% of the outstanding voting rights of the combined company.

AppLovin, which markets software platforms for app developers to help them find customers and bring in revenue, is offering gaming platform Unity an alternative to its recently announced a deal to buy IronSource.

The all-stock merger consideration payable in a mix of AppLovin Class A and Class C common stock would value Unity at $58.85 per share and $20B enterprise value, representing a 48% premium to the Unity share price as of July 12 and 18% to yesterday’s closing price based on the closing price of AppLovin’s Class A common stock on August 8, AppLovin stated.

The execution of a definitive merger agreement between AppLovin and Unity would be subject to approval by each company’s board of directors, the termination of the proposed acquisition of ironSource LTD, and other customary signing conditions, the company noted.

Previously, on July 13, Unity and ironSource had announced that they entered into a definitive agreement under which ironSource will merge into a wholly-owned subsidiary of Unity via an all-stock deal, where each ordinary share of ironSource will be exchanged for 0.1089 shares of Unity common stock.

Under the terms of that deal, current Unity stockholders will own approximately 73.5% and current ironSource shareholders will own approximately 26.5% of the combined company.

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August 8, 2022

Global Blood Therapeutics sold for $5.4 billion

Pfizer to acquire Global Blood Therapeutics for $68.50 per share in cash

Pfizer (PFE) and Global Blood Therapeutics (GBT) announced the companies have entered into a definitive agreement under which Pfizer will acquire GBT, a biopharmaceutical company dedicated to the discovery, development and delivery of life-changing treatments that provide hope to underserved patient communities, starting with sickle cell disease.

Under the terms of the transaction, Pfizer will acquire all the outstanding shares of GBT for $68.50 per share in cash, for a total enterprise value of approximately $5.4B, including debt and net of cash acquired.

The Boards of Directors of both companies have unanimously approved the transaction. Pfizer expects to finance the transaction with existing cash on hand.

The proposed transaction is subject to customary closing conditions, including receipt of regulatory approvals and approval by GBT’s stockholders.

Due to the proposed transaction, GBT will not hold its previously scheduled conference call to discuss its second quarter 2022 financial results. The company will file its quarterly report on Form 10-Q for the quarter ending June 30, 2022 with the U.S. SEC announcing those results on August 8.

Global Blood Therapeutics, Inc., a biopharmaceutical company, engages in the discovery, development, and delivery of treatments for underserved patient communities with sickle cell disease (SCD). The company offers Oxbryta tablets, an oral, once-daily therapy for SCD.

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August 8, 2022

Emerson Electric to sell InSinkErator to Whirlpool for $3B

Whirlpool confirms pact with Emerson Electric to acquire InSinkErator for $3B

Whirlpool (WHR) announced that it has entered into a definitive agreement with Emerson Electric (EMR) to acquire InSinkErator, the world’s largest manufacturer of food waste disposers and instant hot water dispensers for home and commercial use, in an all-cash transaction for $3B.

The acquisition is expected to be immediately accretive to Whirlpool Corporation’s margins, adding approximately $1.25 EPS accretion in fiscal 2023.

Whirlpool also expects to generate revenue upside by capitalizing on InSinkErator’s leading consumer brand preference, an installed base that is five times larger than the rest of the industry driving a recurring sales profile, the strong underlying secular tailwinds of the U.S. housing market, and the expansion of the InSinkErator brand into new markets and product offerings.

Whirlpool plans to initially fund the acquisition through available liquidity, with new debt put in place at a later date.

The acquisition, which has been approved by the Board of Directors of both companies, is subject to customary closing conditions, including regulatory approvals, and is expected to close in the fourth quarter. Whirlpool’s 2022 guidance remains unchanged.

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August 5, 2022

Hey Alexa vacuum my room!

iRobot to be acquired by Amazon for $61/share in deal valued at $1.7B

Amazon (AMZN) and iRobot (IRBT) announced that they have entered into a definitive merger agreement under which Amazon will acquire iRobot. Amazon will acquire iRobot for $61 per share in an all-cash transaction valued at approximately $1.7B, including iRobot’s net debt.

We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, SVP of Amazon Devices.

“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive-from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin.

Customers love iRobot products-and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.”

Amazon will acquire iRobot for $61 per share in an all-cash transaction valued at approximately $1.7B, including iRobot’s net debt.

Completion of the transaction is subject to customary closing conditions, including approval by iRobot’s shareholders and regulatory approvals.

On completion, Colin Angle will remain as CEO of iRobot.

In light of the transaction with Amazon.com, iRobot will not hold its Q2 financial results conference call, which was originally scheduled for August 10.

In addition, iRobot has withdrawn its prior 2022 financial expectations issued in early May, as well as its long-term financial targets provided in December 2021. Given the ongoing disruptions and uncertainty that could impact the company’s outlook, iRobot is suspending its practice of providing financial guidance.

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August 3, 2022

What is FOMC’s next move?

The Fed says go, go, go, the markets’ say whoa, whoa, whoa

There is a lot of uncertainty on the Fed outlook and just how fast and how far will the FOMC go in hiking rates in orders to bring inflation down to the 2% average target.

Though Chair Powell gave no clear indication in last Wednesday’s press conference that the Fed was near done with its mission, the markets nevertheless heard what they wanted to hear, putting on a dovish spin and pricing in a pivot to rate cuts in the spring of 2023.

But over the last week policymakers have been out in force, including several doves, strongly contradicting that outlook.

They have stressed the necessity of getting to restrictive territory while playing down the fear that the economy is already in recession.

Meanwhile, the U.S. ISM-NMI services index rose to 56.7 from a 2-year low of 55.3 in June that was last seen in February of 2021, translated to an ISM-adjusted ISM-NMI rise to 54.3 from a 2-year low of 53.7 in June.

Today’s rise joins big declines for the ISM, Chicago PMI, Dallas Fed and Philly Fed, but gains for the Richmond Fed and Empire State, to leave an 8-month producer sentiment pull-back from robust November peaks.

Surging interest rates and a flattening in real household spending as prices rise are aggravating the downtrend, though sentiment also faces support as businesses continue to restock.

The ISM-adjusted average of the major sentiment surveys in July fell to a 2-year low of 52 from prior lows of 53 in June and 54 in May. Analysts saw a 62 all-time high in both November and May of 2021. Analysts expect a 52 average in Q3, after averages of 55 in Q2, 57 in Q1, and 60 in Q4.

The futures are now repricing for about a 50-50 risk for a third straight 75 bp hike in September.

James Bullard
Federal Reserve Bank of St. Louis

Meanwhile, the hawk Bullard continues to look for a policy rate around 3.75% to 4% by year-end, though implied Fed funds still reflect a terminal rate in the 3.5% area.

Analysts continue to project a 50 bp boost in September followed by 25 bps in November and December to bring the median funds rate to 3.375%.

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July 14, 2022

Unity Buys IronSource, Shares Tumble

Unity Software, IronSource to merge in a$4.4B all-stock deal

Unity (U) and ironSource (IS) announced that they have entered into a definitive agreement under which ironSource will merge into a wholly-owned subsidiary of Unity via an all-stock deal, where each ordinary share of ironSource will be exchanged for 0.1089 shares of Unity common stock.

Once closed, current Unity stockholders will own approximately 73.5% and current ironSource shareholders will own approximately 26.5% of the combined company.

The companies’ complementary offerings create a unique end-to-end platform that allows creators to create, publish, run, monetize, and grow live games and RT3D content seamlessly.

The proposed all-stock transaction has been approved by the boards of directors of both companies, is expected to close during Unity’s fourth quarter of 2022 and is subject to customary closing conditions, and regulatory and shareholder approval.

The combined company is expected to generate a run rate of $1B in Adjusted EBITDA by the end of 2024.

Unity Cuts Guidance

Unity Software cut FY22 revenue view to $1.3B-$1.35B from $1.35B-$1.425B – FY22 consensus was for $1.47B. Cites current assessment of macro trends, product launch and competitive dynamic with the monetization business.

Unity expects second quarter financial results to be slightly higher than the top end of the guidance range provided during its first quarter earnings call.

Needham

Needham analyst Bernie McTernan downgraded ironSource (IS) to Hold from Buy after the company announced its intent to merge with Unity (U) in an all-stock transaction. The analyst notes that ironSource shares trade at a 8% discount to the implied takeout price.

McTernan adds that the companies’ complementary platform fit, plus profitability that ironSource provides, were reasons for the large premium paid and will likely prevent smaller players from making an over-the-top offer as consolidation continues to be a theme in the mobile ad-tech space.

Piper Sandler

Piper downgrades Unity to Neutral, says ironSource deal creates overhang – Piper Sandler analyst Brent Bracelin downgraded Unity (U) to Neutral from Overweight with a price target of $34, down from $55, after the company announced a deal to merge with ironSource (IS).

While stating that the pending merger “appears to be a highly strategic acquisition that not only adds material scale and product breadth to the gaming segment but could also help improve profitability,” Bracelin cut his rating based on the near-term overhang that he sees the merger creating as well as increased execution risk over the next six to nine months.

DA Davidson

DA Davidson analyst Franco Granda lowered the firm’s price target on Unity (U) to $60 from $85 and keeps a Buy rating on the shares. The company’s deal to acquire ironSource (IS) is “very attractive” due to the confluence of revenue and cost synergies, attractive valuation, and highly complementary tech stack amidst a backdrop of privacy-driven platform changes and macro pressures, though his reduced price target reflects lower broader market multiples, the analyst tells investors in a research note.

Ark Investments

Cathie Wood’s ARK Investment bought 1.02M shares of Unity on Wednesday.

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July 13, 2022

Beige Book says housing is slowing amid high inflation

Fed’s Beige Book reiterated the economy expanded at a moderate pace

Fed’s Beige Book reiterated the economy expanded at a moderate pace.

But there was a big “however,” something the Fed typically does not express:

“several Districts reported grow signs of a slowdown in demand, and contacts in five Districts noted concerns over an increased risk of a recession.”

Most Districts reported moderation in consumer spending as higher food and gas prices diminished households’ discretionary income.

Auto sales were sluggish with low inventories still impacting.

Leisure travel was “healthy.” Manufacturing was mixed. Non-financial services firms saw stable to slightly higher demand. Housing demand weakened.

As in the prior report, the outlook for future economic growth was mostly negative.

Employment generally continued to rise at a moderate pace and conditions were tight overall.

But there was some sign of modest improvement in labor availability.

Most Districts reported wage growth.

“Substantial” price increases were reported across all Districts, at all stages of consumption, with food, commodities, and energy (particularly fuel) cost remaining “significant.”

There was some moderation in construction materials.

Pricing power was steady, but firms in some sectors like travel and hospitality, were able to pass through sizeable increases to consumers. That is seen persisting through the year.

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