Daily Musings

Evening all

Pixar and Robosen just collaborated to create the most realistic Buzz Lightyear toy yet. Comes complete with 3,000 tiny parts, 75 microchips, and 23 servo motors. Naturally a price tag of USD 600. Considering VC investors love all things Moon and Space, I no longer need to think about what I will be going as for Halloween.

While I am trying to figure out where I can get a space suit for one night (anyone with contacts to the European Space Agency hit me up), I share today’s musings.

Cheers
Philip

Today’s Stories

Acrew Capital turns five and gets a birthday present of USD 700m in fresh funding. The VC firm has yet to comment on which strategy will get how much:

• Early stage: Seed to Series A. USD 1m to 15m for initial tickets

• Late stage / what they call discovery strategy: Series B and C. USD 10m to 20m

Some notable exits from Acrew: Divvy exit to BILL for USD 2.5bn in 2021; Superpeer sold to Skillshare this year. In their latest deal: USD 15m Series A in Treehouse just two days ago. The company offers electrification services to simplify resi, commercial and fleet mobility electrification. In essence positioned as charging installation as a service.

Chart Art

S&P market implied earnings growth sits @ c. 14%. 22x NTM P/E vs. 1.3x PEG. 20% implied EBITDA margins - market looks frothy. Just reached ATHs as the bull market in US equities celebrated its two-year birthday late last week (+69% total return since reaching post-Covid nadir on 12 October 2022). Communication Services deserves a closer look. The sector is looking relatively cheap. Not just on the Z Score (how many Std. Devs. we are above / below the mean) but looking at the implied EBITDA margin (c. 36%) as well and contextualising that with the below market trading levels on Price and EV metrics.

Perhaps with all the talk of interest rate decisions, becoming a central banker has become a more en vogue career dream than becoming a football star. Accordingly - a summarising table of global central bank standings. Noting Switzerland in this picture. Low rates. Low inflation. Cutting cycle. Nothing neutral about those liquidity dreams.

French bonds are continuing to make waves. The 10Y French government issues have just surpassed Spanish yields. Investors are placing increasingly high risk premia on the country as the economy is looking @ a fiscal deficit of potentially 6% of GDP if the current trend continues. This exceeds even the pessimists out there. Yet the French government also does not have a ton of fiscal levers to pull. Taxation - the highest relative to GDP in the EU - is already high enough to cause unrest in the country. Without fiscal shenanigans, Paris may be left to have to borrow. To borrow yields will need to come up.