In today’s top stories, Elon Musk agrees to buy Twitter for $44bn, Micron invests $100bn to build a chip factory in New York and Ray Dalio hands over the reins at Bridgewater. Meanwhile, ESG funds’ sustainability claims are questioned in a recent report and RBC names its Q4 stock picks.
Musk U-turns on Twitter deal
Following Elon Musk’s surprise move to proceed with the original terms of the Twitter [TWTR] deal, the social media firm’s share price had its second best day of trading on record, closing up 22% on Tuesday. Hedge fund investors like Carl Icahn profited from Twitter’s reversal, having bought in at the mid-$30s when sentiment had turned sour, reported MarketWatch. Musk intends for Twitter to be part of X Holdings, which he plans to be an ‘everything app’, which Bloomberg has likened to China’s WeChat.
Micron announces $100bn investment
Chipmaker Micron Technology [MU] has announced ambitious plans to invest $100bn in a chip factory in New York over the next two decades. President Biden, who signalled his intention to boost domestic semiconductor production by signing the US Chips Act in August, hailed Micron’s announcement as “another win for America plan”. White House chief of staff Ron Klain called the move “one of the largest industrial job-creating projects in US history”.
Ray Dalio steps back from Bridgewater
Legendary hedge fund manager Ray Dalio has released control of Bridgewater Associates. Looking ahead, ex-CEO and now co-CIO Greg Jensen told Bloomberg that the $150bn firm is more likely to invest aggressively in technology and people now that the reins have been handed to the board. As for Dalio, he intends to “continue to be a mentor, an investor and board member … hopefully until I die”.
ESG funds’ sustainability claims questioned
Analysis carried out by technology platform ESG Book has found that one in seven funds branding themselves as sustainable emit higher carbon levels than the average across all funds, while no climate-friendly fund is in full alignment with Paris Agreement goals. The problem is that these investors are more equipped to review performance, ESG Book CEO Daniel Klier told Reuters, with few of them asking, “is the fund actually delivering on [its] climate targets?"
RBC’s fourth-quarter upside picks
With September out of the way, investors will be hoping that the fourth quarter is nowhere near as ugly as the third. While things could still be murky, RBC Capital Markets has confidence in 30 tickers with potential to withstand the rough waters ahead, according to a research note seen by CNBC. The list includes Crowdstrike [CRWD], Palo Alto Networks [PANW], Restaurant Brands International [QSR] and UnitedHealth [UNH].
UK dividend stocks
With the UK stock market having been rattled by the chancellor’s mini-budget and the pound’s nosedive against the dollar, cash has lost its value. Investors seeking to weather the volatility should consider turning to dividend stocks instead. Homebuilder Vistry Group [VTY.L], British Gas owner Centrica [CNA.L], and aerospace manufacturer BAE Systems [BA.L] are all expected to release dividends in October.
Shorting the pound
Hedge funds have been making huge profits on short positions against the pound. Most noticeable has been chancellor Kwasi Kwarteng’s former boss Crispin Odey. The flagship fund of his eponymous asset management gained 25% in September and is up 193% since the start of the year. Speaking to the Financial Times, Odey rejected rumours that information about the mini-budget was leaked to him ahead of its release.
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