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    Satori's Dan Niles: S&P 500 will fall in 2022, likes Google, Facebook and cash

    Widely followed hedge fund manager Dan Niles predicted Wednesday that the $S&P 500 index(.SPX.US)$ will decline in 2022, as the Federal Reserve is forced to raise interest rates and stock valuations come further off of all-time highs.
    "My favorite investment idea right now is cash," the founder and portfolio manager at Satori Fund told CNBC.
    In terms of individual stock picks, Niles pointed to Google's parent company $Alphabet-C(GOOG.US)$$Alphabet-A(GOOGL.US)$ and Facebook's parent $Meta Platforms(FB.US)$, which he says provide growth at a reasonable price.
    "Those are great names. The names you want to be scared about are the ones that have no earnings and are valued off of revenues," he said. "Those are the stocks that are going to have huge troubles as rates continue to ratchet up."
    Niles argued that signs of weakness have been popping up in the equity markets for the past several weeks, with indexes like the Russel 2000 falling dramatically over that span.
    "Underneath the surface, there's a lot of damage being done and people are just continuing to crowd into some of the biggest names," he said.
    Detailing his prediction for 2022, Niles projected that the Fed will be forced to raise rates to counteract inflationary pressures. This, in turn, will push stocks off of lofty valuation levels, which reached a peak above figures seen during the dot-com bubble of the late 1990s and early 2000s.
    Meanwhile, for the end of the year, Niles contended that most fund managers are "either window dressing or tax-loss selling," which means that value stocks will have trouble finding support during December.
    Niles has long supported FB and GOOGL. See what tech giant he previously labeled "the most overpriced tech stock."
    Satori's Dan Niles: S&P 500 will fall in 2022, likes Google, Facebook and cash
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    SPAC Altimeter Growth gains after holders approve deal to take Grab public

    SPAC$Altimeter Growth Corp(AGC.US)$rose 3% in after hours trading after holders approved the deal to take Southeast Asian ride-sharing company Grab public.
    Shareholder redemptions were almost 0%, at 0.02%, according to a statement. The transaction is expected to close tomorrow and Grab is expected to begin trading on the Nasdaq under the ticker symbol "GRAB" Thusday.
    Grab is Southeast Asia's most valuable startup and is set to undergo a merger with Altimeter at a valuation of $40B.
    The deal is expected to be one of the largest-ever U.S. equity offering by a Southeast Asian company. A public debut from Grab will offer investors access to a regional consumer market of more than 655M people across countries including Indonesia, Thailand and Vietnam.
    Earlier this month, Brad Gerstner's SPAC Altimeter Growth announced that that the SEC declared effective the Form F-4 registration statement of Grab Holdings and set the shareholder vote for today.
    SPAC Altimeter Growth gains after holders approve deal to take Grab public
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    Square changing corporate name to Block; crypto operation to be named Spiral

    $Block(SQ.US)$ is changing its corporate name to Block as the company continues to focus on developing blockchain tech solutions.
    Shares rise 1.1% in after-hours trading.
    There will be no organizational changes as Square, Cash App, TIDAL and TBD54566975 will continue to maintain their respective brands.
    As a result of the name change, Square Crypto, a separate initiative of the company dedicated to advancing Bitcoin, will also change its name to Spiral.
    The legal name "Square, Inc." is expected to be officially changed to "Block, Inc." on or about Dec. 10 of this year, and the company's NYSE ticker symbol "SQ" will not change at this time, the company says.
    "Block is a new name, but our purpose of economic empowerment remains the same," Square Co-founder and CEO Jack Dorsey says.
    Previously, (Nov. 29) Square's CEO Jack Dorsey steps down as CEO of Twitter.
    Square changing corporate name to Block; crypto operation to be named Spiral
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    Grab IPO: Q3 Performance Breakdown

    $Grab Holdings(GRAB.US)$$Altimeter Growth Corp(AGC.US)$ Grab's Q3 adjusted net sales stand at $429mn, 22% decline QoQ. Grab's Q3 revenue also declined 13% QoQ. This implies incentives to consumers declined 27% QoQ. It is a comfort to see that revenue is less sensitive to consumer incentives. A more worrying sign would be increasing adjusted net sales (or incentives) and declining revenue. Since incentives to consumers declined more than revenue, there isn't evidence suggesting an anomaly or discrepancy. Rather, the decline is more likely to stern from the business environment, which is what Grab has reminded investors about in Q2.
    In Q2, Grab warned investors about potential severe COVID19-related mobility restrictions in Southeast Asia. During the period, Grab's full-year 2021 projection has considered the potential of partial and total lockdowns in various countries where the company operates as a consequence of COVID19's continued expansion. Grab's fear came true as COVID cases in SEA countries reached a new all-time high in Q3 due to the Delta variant. The Philippines reimposed lockdowns on Sept. 9, a day after announcing the lifting of stay-at-home orders for more than 13mn people. In August, Vietnam has also imposed a strict stay-at-home order in Ho Chi Minh City's southern suburbs and dispatched the army to assist quarantined citizens.
    Therefore, it is no surprise that Grab attributed the decline in overall revenue to the lockdown, especially in Vietnam. This claim is accurate. By referring to Table 1, we can see that the decrease in revenue is mainly derived from its mobility segment. If we expand our analysis time period, we can observe that Grab's underperformance (drop in revenue) in 2021 is caused mainly by its mobility segment. Grab's Q2 mobility segment revenue, and total revenue dropped $27mn and $35mn QoQ, respectively. Grab's Q3 mobility segment revenue and total dropped $30mn and $23mn QoQ, respectively. The decline in the mobility segment coincides with increases in COVID19 cases across SEA (Figure 4). Therefore, Grab's claim that its decline in revenue is contributed by the lockdowns and travel restrictions across SEA.
    Despite the drop in revenue, activities (GMV) on the company's platform actually increased 5% during the period. This may not seem like a big deal, but this statistic actually invalidated one of our previous hypotheses (maturing market). In Q2, Grab's GMV only increased 6.5% in spite of a 27% increase in incentives. This suggested that Grab's market is reaching maturity. However, Grab's GMV increased 4.1% (QoQ) in spite of a 27% (QoQ) decline in Q3. This means that Grab's GMV growth isn't fueled by incentives as much as initially thought.
    Following Grab's narrative, monthly transacting users (MTU) also declined due to lockdowns. This is also expected. However, what was unexpected is GMV per MTU actually increased. This further proves that Grab indeed has a network effect where activities (GMV) of existing users increase. This is crucial to Grab's overall growth for several reasons:
    It is unlikely for Grab to expand beyond SEA. This is because Grab, Uber, and DiDi (NYSE:DIDI) share equity with one another. Therefore, it is unlikely for them to compete with one another.
    Due to the limited geographical expansion, it is clear that Grab has to upsell and cross-sell new products to the existing userbase to increase the revenue stream.
    For these very reasons, Grab's increase in GMV and GMV per MTU is a positive takeaway. With UBER as comps, Grab has to grow at 35% CAGR on top of a fully recovered pre-pandemic mobility segment over the next five years. This feat is very challenging. Firstly, the majority of Grab's revenue is derived from its mobility segment. Based on the relationship between COVID19 cases and Grab's mobility segment (Figure 4 and Table 1), we expect Grab's Q4 mobility segment to be in between Q1's and Q2's, somewhere around $135mn. This figure only represents around 6.75% of the pre-pandemic level (approximately $2bn). Hence, there is still a very long way to go. Secondly, we don't expect food delivery to grow materially from here as we expect the need for food delivery to decrease when the economy reopens. Hence, food delivery is not expected to contribute to Grab's overall growth. Thirdly, financial service and enterprise & new initiatives' overall contribution to revenue is only marginal. Hence, it is difficult to justify Grab at its current $52bn valuation.
    Moreover, investors will lose the $10 NAV safety net once the Grab-AGC merger is completed. This adds to investors' downside risks. In addition, the overall macroeconomy conditions add to the difficulty in investing in high-growth companies. High inflation erodes the value of future earnings, while any form of tapering or rate hikes will devalue Grab's intrinsic value.
    Grab IPO: Q3 Performance Breakdown
    Grab IPO: Q3 Performance Breakdown
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    Fellow Investors:
    I have been telling everyone for quite a while that $Meta Platforms(FB.US)$ and $Alphabet-C(GOOG.US)$ are two of the best buys with the best balance sheets, along with deep and wide moats filled with crocs.
    I urge investors when they can, to get out of companies that have no earnings, have no margins, because investing them is, at best, "betting on the come." And people who place their money in companies that are eventually supposed to do all these great things that they're not currently able to do, usually lose money, and are sorely disappointed. This is especially true of the most potently hyped companies.
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    $Microsoft(MSFT.US)$ I'm forced to use MS Teams since it's what the DOD has purchased. I hate it. Confusing at times. We usually leave our cameras off because it bogs down if too many video feeds are running.
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    Disney names Susan Arnold chairman, as Bob Iger bows out at year end

    $Disney(DIS.US)$ names Susan E. Arnold, a 14-year veteran of the board, as chairman, effective Dec. 31, succeeding Bob Iger, who has led the board since 2012.
    "Having most recently served as independent lead director, Susan is the perfect choice for chairman of the board, and I am confident the company is well-positioned for continued success under her guidance and leadership," Iger said in a statement.
    The transition marks the an end to Iger's leadership at the media and entertainment company, where he was CEO for 15 years, overseeing the company's acquisitions of Pixar in 2006, Marvel in 2009, Lucasfilm in 2012, and 21st Century Fox in 2019.
    Bob Chapek became Disney's seventh CEO in 2020.
    Disney names Susan Arnold chairman, as Bob Iger bows out at year end
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    $Grab Holdings(GRAB.US)$ I expected Grab's mobility segment to recover to figures between Q1 and Q2, given that COVID19 cases are stabilizing in SEA. However, this minor recovery isn't enough to justify its current $52bn valuation, where its valuation implies an expectation of 35% CAGR on top of a fully recovered pre-pandemic mobility segment over the five years. On top of that, the removal of the $10 NAV floor post-merger and the high inflationary and high risk of tapering/rate hikes economic environment adds to investors' downside risk. Therefore, we chose the conservative alternative to take profits at this price level and only leave profits on the table to capture potential spike on announcements related to its merger.
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    Pfizer begins filing for COVID antiviral Paxlovid in Canada

    $Pfizer(PFE.US)$ said that it has begun a rolling submission of its COVID-19 antiviral Paxlovid (PF-07321332 and ritonavir) with Health Canada.
    The submission includes an analysis of data from a phase 2/3 trial.
    Paxlovid is intended for treatment of mild to moderate COVID-19 in adults at increased risk of hospitalizations or death.
    Pfizer sought Emergency Use Authorization for Paxlovid with the FDA last month.
    Pfizer begins filing for COVID antiviral Paxlovid in Canada
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    $Grab Holdings(GRAB.US)$ Grab is giving big discounts for their food service right now in Indonesia. Gojek is giving less, and shopee is the least.
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