Forever 21? More Like Forever Gone

Forever 21? More Like Forever Gone

In this issue of the peel:

  • ?? Forever 21, once a millennial linchpin, is now on the brink of extinction.
  • ?? Hesai surges on expansion plans, Intel gains on a leadership shake-up, while Discover and Peloton struggle with uncertainty and competition.
  • ? Oil is on the rise amid geopolitical conflict in the Middle East.

Market Snapshot

Banana Bits

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Macro Monkey Says

Oil’s Well That Ends Well?

In the latest episode of "As the World Burns," oil prices took center stage, performing a gravity-defying act reminiscent of a caffeinated kangaroo.?

The catalyst? President Trump's stern warning to Iran, holding them accountable for any future Houthi shenanigans. It's as if the oil market suddenly remembered it's allergic to geopolitical tension and broke out in hives.

Over the weekend, the U.S. military decided to play whack-a-mole with Houthi rebels in Yemen. The U.S. has vowed to continue its "unrelenting" campaign until the Houthis agree to a ceasefire, aiming to safeguard the vital waterways crucial for global energy and cargo shipments.

Not to be left out, Iran received a sternly worded memo from President Trump, warning that any further Houthi hijinks would result in Tehran facing "consequences." It's the diplomatic equivalent of a parent threatening to "turn this car around" if the backseat antics don't stop.

Source

Meanwhile, oil traders, ever the drama enthusiasts, reacted predictably. Brent crude rose 0.6% to $70.52? per barrel, while West Texas Intermediate crude also climbed 0.5% to $67.48 a barrel. It's as if the mere hint of Middle Eastern tension sends them into a tizzy, clutching their pearls and bidding up prices.?

In summary, the geopolitical soap opera continues, with oil prices playing the role of the damsel in distress. As tensions ebb and flow, one thing remains certain: the oil market loves a good cliffhanger.

Career Corner

Question

As I’ll start my internship in 10 days, do you suggest I reach out to folks in the firm for an early catch-up?

Answer

Maybe the person who is directly managing you, but besides that, you will have plenty of time for coffee chats throughout your internship.

Head Mentor,?WSO Academy

Check out WSO Academy

What's Ripe

Hesai Group (HSAI) 12.6%

  • The LiDAR manufacturer's stock soared after announcing plans to establish its first overseas factory by 2026, aiming to mitigate geopolitical risks and tariffs. Investors are optimistic about Hesai's global expansion strategy.

Intel (INTC) 6.8%

  • Intel's stock soared after reports that incoming CEO Lip-Bu Tan plans to overhaul the company's manufacturing and AI strategies while cutting some meat off the bone. Investors are hopeful this leadership change will rejuvenate the tech giant's competitive edge.

What's Rotten

Discover Financial (DFS) 6.9%

  • Shares of Discover tumbled amid merger concerns with Capital One, leaving investors to wonder if this financial romance is more "miss" than "match."

Peloton (PTON) 6.5%

  • Peloton's stock slid as the company continues to struggle with declining demand and increased competition. It seems the once-beloved fitness brand is now pedaling uphill without a resistance knob.

Thought Banana

Forever 21’s Not-So-Trendy Ending

In a move that has fashionistas clutching their pearls, Forever 21 has filed for bankruptcy for the second time in five years, announcing plans to shutter all 350 of its U.S. stores.?

Once the darling of fast fashion, the retailer's fall from grace reads like a cautionary tale of what happens when you try to stay "forever" young in a rapidly changing market.

Source

The company's woes began as it faced stiff competition from online upstarts like Shein and Temu, who swooped in with trendier styles and rock-bottom prices.?

Forever 21's attempts to pivot, including a partnership with Shein in 2023, were akin to putting a band-aid on a bullet hole—too little, too late. The collaboration saw moderate success but wasn't enough to pull the brand out of its downward spiral.

As the retailer prepares for liquidation, shoppers are flocking to stores for final sales, eager to snag deals before the doors close for good. Meanwhile, the brand's international stores remain unaffected, continuing to operate under separate licensing agreements.

So, what lessons can be gleaned from Forever 21's saga??

Perhaps it's a reminder that in the fast-paced fashion world, staying relevant requires more than just slapping "trendy" on a neon sign. Adaptability, keen market insight, and a dash of humility might just be the new black.

The Big Question: Will other fast fashion giants learn from Forever 21’s mistakes, or are we looking at the beginning of more bankruptcies in the industry?

Banana Brain Teaser

Previous

A certain characteristic in a large population has a distribution that is symmetric about the mean m. If 68% of the distribution lies within one standard deviation d of the mean, what percent of the distribution is less than m+d?

Answer: 84%

Today

In a box of 12 pens, a total of 3 are defective. If a customer buys 2 pens selected at random from the box, what is the probability that neither pen will be defective?

Send your guesses to [email protected]

?

The individual investor should act consistently as an investor and not as a speculator.

Benjamin Graham

How Would You Rate Today's Peel?

?? All the bananas

?? Meh

?? Rotten AF


Happy Investing,

Chris, Vyom, Ankit & Patrick

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