🐪 Hi! You may be familiar with the question: "It's one banana...What could it cost?" Well, Trader Joe's has a new answer.

  • But today we ruminate on other matters, including DJT stock, child care benefits, and a line of credit that is unlike any other. Let's do this. Today's newsletter is 968 words, 4 minutes.

1 big thing: The newest meme stock

Data: YCharts; Chart: Axios Visuals

Trump Media & Technology Group — trading under the ticker symbol DJT — is America's newest meme stock, boasting a market capitalization, at the close of trade yesterday, of $7.9 billion, Felix writes.

The big picture: That's astonishingly high for a company that brought in a mere $3.4 million in revenue over the first nine months of 2023, losing a total of $49 million.

  • Meme stocks don't trade on fundamentals, however, and by meme-stock standards, DJT could rise much further yet.

Zoom in: In snagging the DJT ticker symbol — Donald Trump's initials — TMTG effectively ensured that it would trade more on Trump-related sentiment than on fundamentals.

Zoom out: The height of the meme-stock craziness was probably Jan. 27, 2021. On that day...

  • BBBY (Bed, Bath & Beyond) closed at a valuation of $6.4 billion. Since then, it filed for bankruptcy, and the shares went to zero.
  • BB (BlackBerry) was worth $14.1 billion; today it is worth $1.6 billion.
  • GME (GameStop) was worth $22.6 billion. Its current market cap is $4.7 billion.

Between the lines: Other meme stocks rose even further in valuation, with Upstart and AMC peaking at more than $31 billion and Robinhood maxing out at just shy of $60 billion.

The bottom line: If we learned one thing in January 2021, it's dangerous to bet against a meme stock that's going up.

  • DJT stock might seem as though it's exorbitantly priced today, but that doesn't mean it can't rise even further tomorrow.

2. Child care's ROI

Illustration: Shoshana Gordon/Axios

The cost of providing child care benefits to employees — like stipends and onsite day care — is an investment with outsized returns, finds an intriguing new study from Boston Consulting Group (BCG) and nonprofit Moms First, Emily writes.

Why it matters: The increasing cost of child care in the U.S., along with a shortage of providers, keeps parents out of the workforce — a drag on the economy overall and a hit to employers in a tight labor market.

The big picture: These benefits are gaining more attention, particularly in the wake of the pullback of pandemic-era child care funding — but they're still pretty rare.

  • 12% of workers in the U.S. have access to child care benefits from an employer — a number that falls to 6% for part-timers and those in the lowest income quartile, per BCG.
  • Yet those are the workers who typically lose out on pay because of a child care emergency.

What they found: For every $1 spent on child care benefits, employers saw a net gain of between $0.90 and $4.25 through reduced absenteeism, less lateness, and lower rates of attrition.

  • The study debunks the idea that child care is a cost center. "These benefits pay for themselves," the authors write.

Zoom in: Researchers looked at five companies of varying sizes, across a range of sectors, employing both salaried and hourly workers.

  • UPS: The shipper piloted an onsite emergency day care for hourly workers at a warehouse in Northern California. In place for three months, the benefit led to three fewer employee absences a day, according to UPS data. It plans on expanding this to eight more sites by year's end.
  • Etsy: The e-commerce company offers $4,000 for backup child care and a $1,000 annual work-life stipend. 79% of employees there said they're more likely to stay with the company because of these benefits.
  • Steamboat: The Colorado ski resort, started a child care center — with funding from the state — in the wake of the pandemic. Employees, who pay a subsidized rate, reported an average of 13 avoided absences per year.
  • Fast Retailing: The global company that operates Uniqlo and Theory, gives a monthly $1,000 child care stipend to hourly management track employees — these folks avoided 11 absences a year on average.

Reality check: This is a limited study, conducted in part by a group that advocates for these types of benefits. More research needs to be done.

3. New math on a line of credit

Illustration: Aïda Amer/Axios

One part of financial literacy banks don't usually push is the ability to notice when banking products are unattractively priced, Felix writes.

Driving the news: Varo Bank announced yesterday a new product called "Varo Line of Credit," which is advertised in the neobank's app as giving customers the opportunity to borrow up to $2,000 instantly for an "affordable fee" and "0% APR."

Reality check: This is like no line of credit you have ever seen before.

  • Rather than being able to make draws on the line whenever they need to, Varo customers have to take the full amount up front — and they have to pay all the interest up front, too.
  • The repayment schedule is then fixed rather than flexible. That means borrowers can't repay the loan early to reduce its cost.

By the numbers: This "0% APR" product looks a lot like a term loan. If you calculate the APR as though it were a term loan, it comes out to 34.6%.

  • That's significantly higher than the average interest rate on credit cards, which is 21.5%.

How it works: Charging a $400 fee on a one-year $2,000 loan looks like an interest rate of 20%, not 35%. But when the $2,400 is paid down at the rate of $200 per month for 12 months, then the average amount outstanding over the course of the year is not $2,000 but rather $1,100. That makes the $400 paid in interest more expensive.

  • For the record: Varo CEO Colin Walsh says the appeal of the loan is its simple and transparent fee structure; and that the product will provide borrowers who are often overlooked by banks with access to credit.

Fun fact: It's not just folks living paycheck-to-paycheck who can get tripped up by bank fees. Variety notes that The Will And Jada Smith Family Foundation ended up paying $3,304 in bank overdraft fees in 2022.

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Axios Markets is edited by Kate Marino, and copy edited by Mickey Meece.