Disney shares jump after Dan Loeb dismisses ESPN spinoff

In today’s top stories, Dan Loeb reverses calls for Disney to spin off ESPN and JPMorgan buys payment fintech Renovite. Meanwhile, analysts weigh in on investing in water, which metaverse stocks to pick in China and where to find value in the semiconductor industry.

Loeb backtracks on ESPN spinoff

Disney shares [DIS] opened higher on Monday after activist investor Dan Loeb pulled back his call for the entertainment giant to spin off its sports network ESPN. The Third Point CEO previously acknowledged ESPN’s significant free cash flow generation but argued selling it would help Disney reduce its debt load. Meanwhile, Disney also announced plans to continue expanding its parks, experiences and products division at its D23 Expo on Sunday.

Diversifying in water

With extreme droughts in the US and Europe this summer, investors may be assuming that the demand for water means the theme is a guaranteed winner. Not so fast. Andrew Chanin, CEO of ProcureAM and issuer of the Procure Disaster Recovery Strategy ETF [FEMA], told MarketWatch that if investors want to play the water theme, they need to diversify. Consider companies that transport water and desalination technology, Chanin advises.

JPMorgan buys payments fintech

California fintech startup Renovite has been snapped up by JPMorgan [JPM] for an undisclosed price. Max Neukirchen, the bank’s global head of payments, said in a statement that the acquisition would “accelerate our roadmap for helping our clients stay at the cutting-edge of payments innovation”. It will enable the bank to offer merchants commerce solutions and allow it to compete with the likes of Block [SQ].

Analysts’ metaverse picks

The metaverse may be years from becoming a fully-fledged reality and regulation may yet stand in the way, but JPMorgan analysts believe there are three Chinese stocks that will benefit from the metaverse push. Tencent [0700.HK] and NetEase [9999.HK] have potential to be leaders in virtual gaming, especially given the former’s partnership with Roblox [RBLX]. Bilibili’s [9626.HK] “high user engagement will enable it to capture rich monetisation potential”, the analysts say.

Chip equipment stocks to buy

The semiconductor industry is in agreement: the chip crunch is expected to stretch beyond 2023. Despite this, Stifel analyst Ruben Roy believes semiconductor equipment providers are still set for future growth. In a note to clients seen by MarketWatch, Roy highlighted areas including so-called field programmable gate array devices and electronic design automation. His recommendations are Lattice Semiconductors [LSCC], Cadence Design Systems [CDNS] and Synopsys [SNPS].

Ocado’s Q3 customer growth in focus

A big question facing Ocado [OCDO.L] on Tuesday when it reports third quarter earnings is whether it has lost customers to more affordable rivals. The average basket value fell 13% year-over-year in the first half of 2022. The online grocer blamed this on “a challenging trading environment” and “the cost of living crisis compounding the impact of changing customer shopping behaviour trends towards shopping smaller baskets”.

Fever-Tree’s share price loses its fizz

Premium drink mixer Fever-Tree [FEVR.L] will be hoping that it experienced strong revenue growth in the first half of the year when it reports earnings on 13 September. The cost of living crisis and inflation has squeezed the Fever-Tree share price, which has plummeted 65% year-to-date as of 9 September. The group recently announced that its gross margins would only reach 37%, much lower than previously forecast.