Was this email forwarded to you? Sign up here. (Smart Brevity count: 1,049 words / ~4 minutes.)
Photo: Drew Angerer/Getty Images
In the absence of strong balance sheets or strong profits, the U.S. stock market is lavishing dollars on any new company that can put together a plausible theory of future success.
What's happening: The 2019 FOMO market may not have been willing to look past Uber or Lyft's $1 billion a year in losses — at least on IPO day — but the unbridled enthusiasm for companies like Beyond Meat, Shockwave Medical and Zoom show investors are desperately seeking a winner and they're willing to pay top dollar to find one.
Driving the news: Gig economy marketplace Fiverr became the latest IPO to catch fire. Despite being in business for nearly a decade, the company is not profitable, manages to lose more money the more revenue it earns (-$36 million on $75 million in revenue last year) and has no real plan for turning a profit in the near future. Nevertheless, it rose 90% on its opening day.
Watch this space: Even when companies came to market with a plan to make money, things didn't often work out that way. University of Florida professor Jay Ritter's data shows more than 60% of the over 7,000 IPOs from 1975 to 2011 had negative absolute returns in the 5 years following their first day of trading and "only a handful produced extreme positive returns."
Comcast and Merck entered the ranks of the most owned stocks in the world, data firm eVestment found in its first quarter report.
Methodology: The report utilizes long-only active equity strategies' portfolio holdings data reported directly to eVestment by asset managers. The firm said 6,053 active equity strategies submitted Q1 2019 portfolio data as of the publication date.
More than 600 U.S. companies and industry trade associations — including Walmart, Costco, Target and Foot Locker — wrote to President Trump, CC'ing senior members of his cabinet, urging them to relent on the trade war tariff battle with China.
"Broadly applied tariffs are not an effective tool to change China’s unfair trade practices," the group said in the letter, which was backed by the National Retail Federation's anti-tariff lobbying campaign Tariffs Hurt the Heartland. "Tariffs are taxes paid directly by U.S. companies, including those listed below—not China."
The annual rebalance of the S&P 500 ESG (Environmental, Social, and Governance) Index removed a number of big companies, including Wells Fargo, Oracle and IBM, but the largest component dropped was Facebook — pulled for its low rating on social factors and abysmal rating on governance.
What happened: Facebook's overall S&P DJI ESG Score fell to 21 in April's review on a scale of 0-100, with 100 being best.
Of note: Governance carries 52% of the ESG score weighting. The 3 largest S&P 500 ESG ETFs together have about $575 billion in assets, according to Quartz.
What they're saying:
Acorns CEO Noah Kerner has no respect for Goldman Sachs CEO David Solomon's skills on the 1s and 2s.
Driving the news: Onstage at the CB Insights "Future of Fintech" event in Manhattan Thursday, the $860 million digital wealth management startup's chief executive said he would challenge Solomon to a DJ Battle.
Behind the scenes: Inside the green room, Kerner gave Axios the exclusive details of his terms.
Kerner says his skills are ample, asserting that he's a better DJ "when it comes to scratching" than childhood friend Mark Ronson, a DJ and recording artist best known for his 2014 hit "Uptown Funk."