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Two Sides To The NVIDIA Earnings Coin – InsideArbitrage Friday Wrap

  • February 24, 2023

FRIDAY WRAP

Our list of curated tweets for the current week

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Special Situations

Microsoft and Sony are squaring off in an EU showdown over Activision and Call of Duty today.

Microsoft president @BradSmi on not reaching an agreement with Sony over Call of Duty.

$TGNA HSR approved, waiting on @FCC . They expect the deal to close in March or April.

DOJ reportedly set to sue Adobe over $20B Figma acquisition - Bloomberg

$TECK is stripping 90% of FCF from the metcoal biz, post spin off, via a Royalty payment at 60% of gross revs AND slapping $4.4bn of prefs onto EVR, carrying a 6.5% cumulative div.

We added $INDT as a potential deal in the works on November 28, 2022, when INDT received an unsolicited, non-binding proposal from Centerbridge and GIC for $65.00 per share.

Had been watching Redfin $RDFN to see when CEO @glennkelman would step in to make an insider purchase.

Foot Locker $FL appoints Robert Higginbotham as interim CFO, effective March 1, 2023.

$AAPL share count peaked in 2012 and has since declined ~38%.

$BIDU board of directors has authorized a new share repurchase program under which the Company may repurchase up to US$5 billion of its shares, effective through December 31, 2025.

$NVDA: "We returned $1.15B to shareholders in the form of share repurchases and cash dividends. At the end of Q4, we had approximately $7B remaining under our share repurchase authorization through December 2023"

"During the quarter ended December 31, 2022, we repurchased 45.4M ADSs (the equivalent of 363.3 million ordinary shares) for approximately US$3.3B under our share repurchase program.” $BABA

Nutrien $NTR Announces $2 Billion Share Repurchase – Buyback Wednesdays

Investing

"The young man knows the rules, but the old man knows the exceptions."

"The 2022 decline did nothing but remove the most extreme froth from valuations. To expect an extended market advance from here is essentially to view the area in the red box as the 'new normal' and to dispense with all of market history before late-2020."

David Einhorn’s Speech at the Value Investing Congress in 2006.

Life is almost a trick, in that the second order consequences are so often the opposite of the first order consequences

$AMZN is doubling down on healthcare. They have launched Amazon Pharmacy, RxPass, Amazon Clinic and One Medical.

Sources say Stripe is telling investors that it expects to generate a profit again this year and that it expects to process $1 trillion in payment volume.

$KKR-backed BMC Software has confidentially filed for an IPO, in which it could be valued up to ~$15 billion

It is very much unexpected how much of the disruptive possibilities of AI are going to impact highly-skilled, complex analysis.

Earnings

Hermes is a superlative business. Yes 2021 & 2022 were exceptional but long term track record of protecting brand equity & even limiting supply to maintain exclusivity is second to none, not just in luxury, but much vaunted tech.

Every investor complaining about $NVDA being up 8% AH needs to re-read The Intelligent Investor.

$NVDA data center grew 11% which is a joke. It’s dead. It’s growing less than pricing increases on cereal.

$NVDA NVIDIA Q4 FY23.

$COIN in a nutshell: - consumer volumes down 88% from Q4 a year ago; institutional volumes down 66%

Fundamentals will eventually matter, particularly as the earnings recession worsens.

Now that most public, top-rated companies have reported earnings, BofA finds that "actual earnings were -0.1% below expectations at the start of the season - the weakest surprise since 1Q-2020" and significantly below +3.7% pre-Covid average.

Corporate earnings have been trending in an upward channel for 70 years.

This has been the worst earnings season outside of a recession in 24 years

Bull market, or bear market rally? Either way, my sense is that the stock market remains a bit over its skis, given the ratcheting up of interest rates amid falling earnings estimates. It doesn’t seem sustainable.

U.S. Economy

If you compare sentiment to one month ago, people were expecting the Fed might only have a little room left to hike.But now it looks like inflation may not ease up and the Fed will have to raise rates repeatedly.

Fed Futures: March 22 FOMC Rate Hike

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