Uber’s big buyback ??

Hey there,

This week, Uber buys back billions worth of stock, Lyft has a truly hectic week, and Manchester United finally has its ownership deal approved.

?? But first, the macro wrap-up:

US stocks took a dive at the start of the week after January’s consumer prices came in higher than expected. It was down to inflation climbing 3.1%, the most in eight months. But, the S&P 500 still remains 5% up year-to-date.

Uber gains 12% after $7bn share buyback ??

Big buyback: In last week’s newsletter, we discussed rumours of Uber buying some of its own shares back off the market. On Wednesday, it happened. The taxi firm bought back $7bn worth of its own shares, and here’s why it’s important.

• Uber believes its stock is undervalued: When a company buys its own shares back off the market, it’s a sign it thinks its stock is undervalued. The bigger the buy, the more confident the company is.?

• All-time high: Investor confidence is high, which has resulted in Uber shares hitting new heights. Executives of the company said they expect to make more buybacks in the future, which is music to investors’ ears.

Lyft surges 60% after accidental typo and… Taylor Swift? ??

An expensive typo: Shares in Lyft surged 60% after a typo was made in its latest earnings report. The company had predicted it would grow by 5% in 2024, but later corrected itself to 0.5%. The CEOs response? “My bad”.?

• Still in the green: Lyft’s profit margin last year was 1.6%, meaning investors thought it could reach 6.6% after reading the typo - that’s a big gain. In reality, the prediction was to 2.1%, and although it’s not as impressive, shares still closed up 35%.?

• The Taylor Swift effect: Year-on-year, Lyft is up 37% on trips to stadiums, with the vast majority being rides to see Taylor Swift’s Eras Tour. Rides in Nashville and Cincinnati were up 25% and 60% respectively when Swift was performing there, with Swifties tipping three times higher than average customers.

Manchester United up 8% as ownership deal is approved ??

A year in waiting: This time last year, Sir Jim Ratcliffe and Sheikh Jassim submitted their United takeover bids. On Tuesday, the saga officially came to an end, with The Football Association confirming Ratcliffe’s minority investment had been approved.

• $300m pledge: Ratcliffe has pledged $300m of investment into infrastructure for this year. Discussions are already taking place regarding United’s stadium and training facilities.
• Poaching goals staff: Ratcliffe is thought to have been behind the appointment of new CEO, Omar Berrada. Berrada was Manchester City’s Chief Football Operations Officer; who are one of United’s main rivals, boasting better success in recent years both on and off the pitch.?

What have we learnt this week? ??

• Share buybacks are a market mover: Companies saying they believe in their future is one thing, but buying back billions of dollars worth of stock is proving it.
• Celebs can move stocks: This isn’t the first time Taylor Swift has affected a stock, and given her stardom, it probably won’t be the last.?
• Manchester United shares could now stabilise: It’s been a volatile year for the stock, but now that the ownership deal is settled, investors are likely to see a calmer year.

Stock announcements ??

Here are the key earnings dates to look out for next week:

• Tuesday: Walmart, Home Depot
• Wednesday: Nvidia, Etsy, Lucid, Rivian
• Thursday: Moderna, Block

• Friday: Berkshire Hathaway

Author: James Ashoo

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*Figures correct as of February 15th 2024.

Past performance does not guarantee future results. Capital at risk when investing.

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