1st February 2021
Melvin Capital Can't Catch A Break As Redditors In Their PJs Wipeout Years Of Gains
Welcome to another edition of Under60 Daily - a brief rundown of the top happenings in the business world, compiled by hand to exclude the clutter and ensure you get up to speed in under a minute.
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[Oil] The CEOs of Exxon and Chevron reportedly discussed a merger after the pandemic sent demand shockwaves through the oil market in 2020. Should the deal go through, it would reunite the two largest descendants of John D. Rockefeller’s Standard Oil monopoly, broken up by U.S. regulators in 1911. A merger would create the second-largest petroleum company in the world by production. Such a merger would likely encounter significant regulatory scrutiny from the climate change forward Biden administration.
[Markets] Hedge fund Melvin Capital lost 53% of its investments in January due to soaring stock prices of heavily shorted stocks such as GameStop and AMC. Amateur investors such as those on Reddit’s WallStreetBets have made hedge funds public-enemy number one as they seek to increase their call options on GameStop and bleed firms such as Melvin Capital and its shareholders such as Citadel and Point72.
[Economy] Argentina’s finance minister Martín Guzmán is pushing for a deal by May with the International Monetary Fund to repay $44 billion in debt. Mr. Guzmán has frequently accused the IMF of imposing draconian austerity measures on countries it has worked with in the past, hinting at the IMF’s belt-tightening policies.
[IPO] TikTok rival Kuaishou seeks to raise $5.4 billion from its Hong Kong listing and value the company at nearly $61 billion. Kuaishou, which is backed by Tencent Holdings, competes with ByteDance, the Chinese company behind TikTok, and its sister app Douyin.
[SPAC] Wheels Up, the seven-year-old startup that seeks to be the Uber or Airbnb of private aviation, plans on IPO via SPAC, valuing the company at $2 billion. This move highlights the rapid recovery of private jet companies during the pandemic, as the wealthy flocked to private jets' safety for travel. At the same time, the commercial airline industry continues to struggle.
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