| |  | TOGETHER WITH |  | | | Good morning.
We all know companies can go public. But why not buildings? On Monday, a small office building near the corner of West 125th Street and Lenox Avenue in Harlem revealed it had done just that when it quietly went public last week.
The building at 286 Lenox, which trades under the ticker symbol TESLU, marks the first time an NYC building has been securitized on the secondary market. A share only costs $248, but the ability to call yourself a “Manhattan property investor” is priceless. | | | • | | Jamie Dimon pens his annual shareholders letter. | | • | | Elon Musk “seized the memes of production” by becoming Twitter’s largest shareholder. | | • | | Hertz has a new electric vehicle supplier. | | | | |  | Global Economy | Dimon Warns Inflation and War “Dramatically Increase Risks Ahead” | | There are three letters Wall Street traders care about getting: the one from Warren Buffett, the one from Jamie Dimon, and the one back home from mom, of course.
On Monday, there was no care package with sweet treats from home. It was JP Morgan CEO Dimon’s turn to opine on markets. His annual letter to shareholders dropped on what is a sort of economic groundhog day where CEO punditry stands in for Punxsutawney Phil. The verdict? “I do not envy the Fed,” Dimon wrote. | Too Much Medicine | | In his letter last April, Dimon saw the chance for an economic “Goldilocks moment,” where fast growth matches inflation and interest rates slowly follow. Your bank account knows what happened next: The fast growth materialized but unfortunately got lapped by inflation, prompting the Fed to rethink rate hikes. “In hindsight, the medicine was probably too much and lasted too long,” Dimon wrote of pandemic stimulus measures that kept borrowing costs at historic lows.
JP Morgan thinks an inflating globe, set against political and supply chain realignment — thanks to Russia’s invasion of Ukraine — will see GDP in Europe grow 2% in 2022 instead of the 4.5% it forecast before the war. The US growth forecast was cut to 2.5% from 3%. More interesting were some subtler details: | • | | Dimon said the Federal Reserve shouldn’t bother wedding itself to 0.25% interest rate increases or a set number of rate hikes. The Fed, he said, should hike rates along with “data and events in real time…Our bank is prepared for drastically higher rates and more volatile markets.” | | • | | “The moats that protect this company are not particularly deep,” Dimon warned, adding that Apple and Walmart's growing suite of financial services pose a threat to banks, which should also expect “many mergers.” | | | | The Opposition: At least Dimon is bullish on the US economy, noting consumers are in good shape with “plentiful jobs with wage increases and more than $2 trillion in excess savings.” Not so with Morgan Stanley, whose chief US equity strategist Michael Wilson warned clients on Monday of an unforgiving economic backdrop featuring "demand destruction from high prices," adding the bank is “doubling down on a defensive bias.” Wilson was also pessimistic about the stock market last year, something he later admitted was “wrong.” | | | | | | Social Media | Elon Musk is Now Twitter’s Biggest Shareholder |  | Less than 10 days ago, Elon Musk — known to be a bit cheeky on Twitter — tweeted that he was giving “serious thought” to building a new social media platform that would rival, among other things, Twitter. On Monday, Musk instead opted to become Twitter’s largest shareholder. The news was not made public with a brash tweet but rather a nondescript SEC filing, which revealed the Tesla CEO’s massive 9.2% stake. “Oh hi lol,” Musk later tweeted to his 80 million followers. | “Seize the Memes of Production!” | For a CEO, Elon Musk tweets a lot. While most public statements from chief executives are vetted as cautiously as papal decrees, Musk has used the social media site to challenge Vladimir Putin to a duel, hype up joke cryptocurrency Dogecoin, and get himself in trouble with the Securities and Exchange Commission for claiming he was considering taking Tesla private. In fact, under an agreement with the SEC, Musk is supposed to have his tweets vetted by a lawyer, but the man loves tweeting so much that he is appealing. On Monday, Musk’s posting finally became more than just passion. Markets, in a year where tech firms have so far disappointed, hit the like button: | • | | News of Musk’s stake, worth $2.9 billion based on Twitter’s Friday closing price, drove shares up 27% Monday. That added more than $8 billion to Twitter’s market cap and Musk himself made more than $700 million — roughly double Twitter’s net income over the past three years. | | • | | As of Friday, Twitter shares had dropped about 8% in 2022, but Musk erased that and more in just one session. At a smidge under $50, Twitter's share price is now up 17% this year. | | | Passive Aggressive: Twitter has aggressive plans to reach $7.5 billion in annual revenue by the end of 2023, up from $5 billion last year. Musk, who has questioned whether the site's content moderation policies protect free speech, may soon play a role in those plans. “We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter,” Dan Ives, an analyst at Wedbush Securities, wrote in an investor note. Hit the Road, Jack: Musk’s stake in Twitter is over four times the 2.25% owned by Jack Dorsey, the company’s founder who stepped down as CEO in November to focus on running Square. Dorsey, for the record, is a fan of Musk’s tweets. | | | | | | SPONSORED BY STARTENGINE | The Startup Behind The Startups | | | | | | | | Electric Vehicles | EV Manufacturer Polestar Lands Major Deal With Hertz | | French philosopher René Descartes often theorized that pain and pleasure exist on a continuum — you can't have one without the other. And Polestar, Volvo’s soon-to-be spun-off EV unit, can attest: Its latest deal is a major win even if it hurts. Or, we should say, Hertz.
On Monday, the EV maker signed a major deal with the rental car agency, agreeing to supply 65,000 cars over the next five years. | Racing to Production | | First, let’s shift gears into a quick history lesson. Polestar traces its roots back to the Swedish touring car racing scene of the mid-1990s. By 2009, it became an official partner of Volvo, designing both commercial and racing vehicles. By 2015, Volvo (itself a subsidiary of China-based multinational Geely) acquired Polestar outright. Two years later, it shifted focus entirely to electric vehicles, and, in September 2021, Polestar announced plans to go public via a SPAC merger (expected later this year) at a $20 billion valuation.
The Hertz deal is a major step for the Swedish carmaker, and the 65,000-unit order represents more than double its 29,000 unit sales last year — and Polestar is hoping to use it as a launching pad to catch up to pack leader Tesla (which already inked a 100,000 unit deal with Hertz in October): | • | | Details of the deal are still undisclosed, but the entry-level Polestar 2 model retails for $49,000, meaning a full price order value would be roughly $3.2 billion. | | • | | By 2025, Polestar says it hopes to ramp up production to deliver 290,000 EVs per year — a figure Tesla currently notches in less than three months, according to Bloomberg. | | | | Red Light, Green Light: For Hertz, which filed for bankruptcy in May 2020 (no need to tap the brakes and explain this one), both the Polestar and Tesla agreements mark two major steps in its pledge to offer North America’s largest electric rental fleet — and “one of the largest in the world.” Tesla’s deal with Hertz last year sent its share price surging, leading to its first-ever $1 trillion valuation. And the latest news has shares of Gores Guggenheim — the blank check firm Polestar plans to partner with — spiking to their highest point so far this year. | | | | | | Extra Upside | • | | The Grammy Awards for the first time handed a trophy to a project that started on TikTok. | | • | | Thanks, volatility: Exxon estimates its first-quarter profits could top $11 billion, the highest since 2008. | | • | | Turn your email away message on, pack your bags, and set your watch to island time. The Daily Upside is giving you a chance to escape to the Bahamas with a plus one. Enter here.* *Partner | | | | | | |  | Just For Fun | | | | | Written by Sean Craig and Brian Boyle. | Disclaimer | | | *This regulation A+ offering is made available through startengine crowdfunding, inc. Startengine is not currently accepting investments from Washington or Texas. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. For more information please see the offering circular and risk related to this offering. [1]The number of users is determined by counting investor profiles with unique email addresses which are active and have been confirmed. [2]Total raised includes startengine’s own raises and is inclusive of investments that have been closed on and investments that are received but not yet closed on. | | | | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
