💻 Extra chips
Cathie Wood says Nvidia is making too many GPUs...Harry’s files for an IPO; US banks sue the CFPB; UniCredit fined $3.1M; Apple Canada’s $14.4M settlement; Nikki Haley leaves GOP primary; and more.
Hello friends and enthusiasts 👋,
I usually find self-promotion selfish and tend to avoid it. As a preface to the paragraph below, I hope not to come off as selfish:
My goal of guiding others is one that will never go away. People will always strive to learn more, and I will always strive to teach those who want to learn to the best of my ability. For J. Nicholas, my goal is to reach 1,000 subscribers. That would mean having 1,000 enthusiastic learners. But to achieve this goal, I need your help in spreading the word.
By forwarding this email to your colleagues, friends, and family, or by sharing it using the link below, you help me reach this goal. (Okay, sorry for the self-promotion.)
By the way, you might notice that I changed up the layout of Weekly Brief. Instead of three extra stories at the start, I replaced it with one 'featured story.' Today’s feature story is about Cathie Wood and her worries about Nvidia.
IN THIS ISSUE
🪒 Harry’s files for an IPO
🍎 Apple Canada’s $14.4M settlement
🇺🇸 Nikki Haley leaves GOP primary
On this day. On March 8, 1817, The New York Stock Exchange (NYSE) was formally created. It would grow to become the world's largest stock exchange with a present market capitalization of over US$23 trillion.
FEATURED STORY
👾 Cathie Wood Is Worried About Nvidia
“Without a significant increase in software revenue to validate the overbuilding of GPU capacity, we might witness a pause in spending, exacerbating a correction in excess inventories, particularly among the cloud customers responsible for more than half of Nvidia's data centre sales.”
Those were the words of Cathie Wood, the manager of the $60 billion ARK Invest portfolio in a letter to shareholders on Thursday, showing her concerns about Nvidia's (NVDA) massive surge in share price recently.
Nvidia shares have skyrocketed by almost 300% in the past year, driven by absurd fiscal revenue growth of $61 billion, (a 126% increase Y/Y). According to Wood, Nvidia's stock might be in trouble because they're making too many GPUs, but not enough people are buying the software needed to use them. She also talked about increasing competition from customers like Tesla who are starting to develop their own AI chips.
“Stocks do not only go up, and this current investor mentality which feels nearing a frenzy starts to remind me of 1999 into early 2000 across Tech.” — Jordan Klein, analyst at Mizuho.
All in all, the AI and semiconductor sectors are slowly turning into what many would call a bubble. However, prices won’t be slowing down soon, and we’ll only really know if we’re in a bubble when the bubble pops.
FINANCE
🪒 Harry’s files for an IPO
Harry’s Inc, a maker of razors and other grooming products, has confidentially filed for an initial public offering with U.S. regulators. The company has teamed up with investment banks including Goldman Sachs, JPMorgan, Barclays, and Wells Fargo for its debut on the NYSE.
Harry’s is approaching $1 billion in annual revenue, is profitable, and was valued at around $1.7 billion according to a 2021 funding round. It owns brands like Lumē, Mando, Flamingo, and Cat Person, along with its own factory in Germany and an in-house development studio called Harry’s Labs.
💰 UniCredit fined $3.1M
Italy's data protection authority has just fined UniCredit, the country's second-largest bank, €2.8 million ($3.1 million) for a 2018 data breach affecting thousands of customers. The breach exposed personal information of about 778,000 individuals.
UniCredit plans to appeal, stating there was no compromise of bank data and they reached a quick resolution for the incident. After shouting from the rooftops about how much they care about keeping customer data safe, UniCredit announced a €2.8 billion programme to advance privacy protection.
BUSINESS
🍎 Apple Canada’s $14.4M settlement
The B.C. Supreme Court has just approved a $14.4 million settlement from Apple in a class-action lawsuit alleging intentional slowing of older iPhone models through software updates. Apple settled to avoid prolonged legal proceedings but denied wrongdoing.
Eligible Canadians with specified iPhone models (6, 6 Plus, 6s, 6s Plus, SE, 7, or 7 Plus) running certain iOS versions may qualify for compensation ranging from $17.50 to $150 by providing a serial number. The claims process will be online for two months, with no immediate action required. Residents of all provinces except Québec are eligible, but the deadline to apply was January 10, 2024. 😔
🏦 US banks sue the CFPB
The Consumer Financial Protection Bureau (CFPB) has just been slapped with a lawsuit challenging its new rule limiting credit card late fees to $8, much lower than the average fee of $32. Plaintiffs, including unnamed US banking groups and the U.S. Chamber of Commerce, argue that the rule penalizes timely payers and claim the bureau exceeded its authority.
They also suggest that capping late fees would raise issuer costs, impacting credit card users. The CFPB, on the other hand, says the rule will save consumers over $10 billion and will help curb credit card company abuse. The case is currently before U.S. District Judge Reed O'Connor.
POLITICS
🇺🇸 Nikki Haley leaves GOP primary
Former UN Ambassador Nikki Haley, despite raising concerns about various aspects including age, mental state, and leadership capacity when faced with criminal charges, could not overcome former President Donald Trump in the race for the presidency.
On Wednesday, she announced suspending her campaign, allowing Trump to receive the Republican Party nomination. Her suspension came after Super Tuesday primary votes where she only secured one state. Haley finished with just 89 party delegates to Trump’s 995, and even though she didn't endorse him, she called on Trump to ‘win over doubting voters.’
🇨🇦 Canada reaches deal with Michael Spavor
Canada's federal government has reached a million-dollar compensation settlement with Michael Spavor, a businessman detained by China for nearly three years during a diplomatic feud. Spavor and Michael Kovrig, dubbed "the two Michaels", were both held captive in retaliation for Canada's arrest of Huawei executive Meng Wanzhou.
Spavor's settlement is said to be worth C$7m (US$5.2m), including legal fees. Despite the resolution, details of the compensation were not disclosed. The arrests of Spavor and Kovrig drew accusations of "hostage diplomacy". The two were released after Meng Wanzhou made a deal with US prosecutors.
Thank you for reading! Consider following me on social for sneak peaks and extra content. (Optional, yet appreciated.)
— Jacob
📚 Book of the Week
Note: I don’t recommend books that I haven’t read or that I would never read. The books I recommend are books I have already read or that I will eventually read.
The Wisdom of Finance — Mihir A. Desai
Book Description:
In 1688, Josef de la Vega described finance as a contradictory field - both fair and deceitful, noble and infamous, refined and vulgar. This characterization still holds true today, especially after the 2008 financial crisis. But what happened to the fairness, nobility, and refinement that de la Vega saw?
De la Vega highlighted an important truth: finance can be principled and uplifting, or fraught with questionable practices. Today, finance is often seen as mysterious to outsiders, while insiders struggle with the tarnished reputation of their profession. How can finance become more accessible and regain its dignity?
This book offers a fresh perspective on one of the world’s most complex professions, bridging the gap between finance and humanity while combining finance with unexpected subjects: Jane Austen and Anthony Trollope offer insights into risk management, Jeff Koons becomes a symbol for leverage, and Mel Brooks’s The Producers teaches about fiduciary responsibility.
In Desai’s view, financial principles also offer guidance in our personal lives: bankruptcy teaches how to handle failure, mergers relate to marriages, and the Capital Asset Pricing Model reflects the value of relationships.
As of Jan 31, 2024, (resulting from my Amazon.ca Associates account being terminated) I do not earn any affiliate commissons from the links below.