Slack’s Pandemic Growth Takes Hit From Disappointing Billings [WSJ]
Slack’s shares fell almost 20% in after-hours trading with billings in the quarter falling short of expectations, even as the company lifted its full-year outlook and posted record sales…. Slack Chief Executive Stewart Butterfield said revenue retention suffered as some customers cut staff and, with that, use of its software. And some businesses also have slowed spending decisions on new technology as they try to make it through the downturn.
Tiffany Sues LVMH for Backing Out of $16 Billion Deal [Bloomberg]
Tiffany said that LVMH was trying to leverage the protests against police brutality and the Covid-19 pandemic to seek a lower price…. LVMH said the French government had asked the company in the letter to delay the deal beyond Jan. 6, 2021, citing a U.S. move to impose tariffs on goods from France…. The government’s request to LVMH for a delay in the closing date has no basis in French law, Tiffany said.
“LVMH has made clear its real goal is to attempt to renegotiate the merger price to which the parties agreed last November and, barring renegotiation, run out the clock,” Tiffany says in its suit, filed in Delaware.
Why Tesla Was Left Out of the S&P 500 [WSJ]
Tesla shares dropped 21% Tuesday, their biggest one-day fall on record…. “The quality of earnings could be a key issue with the committee,” Stephanie Hill, head of index-business and strategy at Mellon, wrote in commentary ahead of S&P’s announcement. “Tesla’s positive profitability has been driven by the sale of regulatory credits to other auto manufacturers who need offsets in order to reach their emissions standards.”
Short Selling Stocks Proves Costly for Some Investors [WSJ]
Investors say opportunities for shorting have been scarce since the Federal Reserve turned on a stimulus spigot to support asset prices in the March selloff. Short sellers only had a narrow window to profit from the broad stock market selloff that dragged major stock indexes into their fastest bear market on record….
Nicole Boyson, a finance professor at Northeastern University, said most investors, outside of professional money managers, have no business shorting stocks. “Stocks can go up forever,” Ms. Boyson said.
More Evidence That Hedge Fund Managers Share Information — And Alpha [II]
Author and business school professor Harold D. Spilker III found that the portfolios of connected managers overlap by as much as 50 percent more than the average hedge funds. The amount of overlap was highest for managers with the strongest connections, suggesting that the shared trades came from social ties and not just similar investment philosophies, according to the study.
This information sharing seems to be beneficial for the hedge funds involved: When Spilker constructed value-weighted portfolios based on the overlapping holdings of managers who worked at the same firm at the same time, those portfolios delivered alpha of 1.11 percent per month, or 13.3 percent annually.
David Beckham's Guild Esports to float on London stock market [BBC News]
An e-sports company in which David Beckham owns a significant stake is seeking to raise £20m by listing its shares on the London Stock Exchange.
Guild Esports will be the first in the UK to offer fans the chance to put money into backing its teams of gamers…. Money raised from the initial share placing will be used to expand the business, including recruiting new players.
The Two Men Buying Your Favorite Retailers [NYT]
The purchase of Brooks Brothers, where layoff notices have already started going out, has put a spotlight on this arrangement — and invited new scrutiny. Supporters say SPARC is saving the businesses it’s buying. Critics say it’s simply exploiting their traumas for fast profits in ways that cheapen the brands’ legacies. They say the SPARC strategy treats brands and stores less like hothouses of creativity that need careful tending, and more like chess pieces to be moved around for maximum, if momentary, gain…. Authentic Brands’ purchase of Barneys New York’s intellectual property last year was fiercely contested by a group of investors who waged a “Save Barneys” social media campaign to avert liquidations and the licensing of the name, painting Mr. Salter as a villain who sought to dismantle a cultural institution….
Mr. Salter’s brands have “variable rent” contracts with Mr. Simon’s malls, meaning their rent goes up and down with their sales and, in a lucrative arrangement, most don’t have minimums. Mr. Simon also receives a percentage of royalties from sales associated with the brand names.