Good Evening,

Welcome to Equity Espresso

We’re here to catch you up on all the day’s news in Australia and abroad.

Here’s a sample of what you may have missed today:

1. 👟 A Deep Dive on Globe International

2. ✍🏻 Telstra's Cloud Ambitions

3. 🏦 JP Morgan's Digital Dive

4. 🔥 Chevron Workers Strike

5. ⚽️ Messi’s Midas Touch

The Recap

Chevron Workers Strike -
Telstra Eyes Acquisition

Another negative day for the market to end a dour week as the September lull well and truly sets in. The ASX200 index finished the day’s session down 14.3 pts. to 7,156.70. The index finished 2.03% lower for the week.

Equity markets in Japan and South Korea also declined following falls on Wall Street overnight as the tech-heavy NASDAQ dropped by 0.9%.

Six sectors finished Friday lower, with Materials (-1.0%) and Discretionary (-0.8%) falling the most. While more defensively focused sectors in Utilities (+1.0%) and Health Care (+0.6%) ended the day higher.

Mineral Resources fell most of the stocks on the ASX200 as it traded ex-dividend, as did Nine Entertainment and WiseTech.

Workers at Chevron's LNG projects kicked off what could be three weeks of strikes after unsuccessful negotiations for a deal today. The Offshore Alliance, comprised of the Australian Workers Union and Maritime Union of Australia, initiated the strike, with approximately 500 members halting work for three hours at the Wheatstone and Gorgon onshore plants on Friday at 1 p.m. (AWST). The strikes will increase to approximately 10 hours per day until next Thursday when they escalate to two weeks of 24-hour strikes.

UK gas prices rose by almost 9% today on the back of the news.

ASX200 Stock Snapshot

Wall Street

U.S. markets fell for the fourth consecutive session, weighted down by the Tech sector as the NASDAQ dropped 0.89%. The S&P500 (-0.20%) also finished lower as Apple shares fell by another 2.9% as it deals with the fallout of the Chinese government banning iPhones for government officials.

Robust economic data continues to support sentiment that rates might stay ‘higher for longer’. Initial claims for state unemployment benefits fell to 216,000 in the week ending September 2 from 229,000 the previous week. This is the lowest point since February this year, indicating that the U.S. economy remains resilient.

DocuSign reported fiscal second-quarter earnings of $7.4 million. Adjusted earnings were 72 cents per share, which exceeded analysts’ expectations of 65 cents per share. Revenue of $687.7 million in the period also beat Street forecasts. The Docusign share price rose by 3% in after-hours trading.

Economic News

U.S. jobless claims have unexpectedly hit their lowest point since February, falling 13,000 to 216,000 in the week ended September 2 from a revised 229,000 in the prior week. The jobless claims figures indicate that the U.S. job market is unlikely to crack anytime soon.

Eurozone GDP rose by only 0.1% (QoQ) & 0.5% (YoY), coming in below the previous measure of 0.3% that was published in late July. Germany, the euro area’s biggest economy, and Italy, its third-largest, are likely in a manufacturing recession. The ECB meets next week to decide whether another rate hike is needed to slow inflation, currently at 5.30% for July.

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🪃 Local News

• AMA Group shares fell 49% after completing a capital raise of $55 million for $0.075 per share. The funds will be used to repay debt and provide the company with working capital. AMA’s share price closed at $0.06.

• GQG Partner’s total funds under management dropped to $US107.4 billion ($A168.42 billion) at the end of August from $US108.1 billion last month. The company’s emerging markets segment drove the most significant drop, falling $700 million to $US28.7 billion.

• Monadelphous announced it has successfully obtained a new construction contract worth $160 million. The contract is to build a chemical plant at Talison Lithium's Greenbushes location in the southwest region of Western Australia. The work is scheduled to begin later this year and is projected to be completed by the first half of 2025.

• Platinum Asset Management posted net fund outflows of $912 million in August, with funds under management of $16.7 billion, down from $17.8 billion in July.

• Telstra responded to an article by AFR Street Talk that reported it was preparing to table an offer to purchase Australian cloud computing company Versent. Telstra confirmed it is participating in the process, but there is no certainty a transaction would eventuate.

🌏 Around The Globe

• WeWork’s CEO published a letter outlining a plan to renegotiate “nearly all our leases” to stay solvent. WeWork’s business has been on a downward slide since its failure to conduct its IPO in 2019.

• Disney is expected to initiate a buyout of Comcast’s minority stake in Hulu this month. The deal would give Disney complete control of the streaming service.

• Caffeinated Noodles? - Japanese noodle maker Nissin Foods is releasing soup-free, caffeinated Cup Noodles to help late-night gamers stay awake. 😬 

• Warner Bros. Discovery has revised its full-year 2023 projections due to ongoing strikes by writers and actors, resulting in an anticipated earnings decline of $300 million - $500 million.

• The Messi Effect - There has been a surge in subscriptions for the Apple MLS Season Pass streaming service as soccer fans are eager to watch Lionel Messi play in the U.S. league. Reports indicate that since Messi's debut on July 21, there has been a 1,690% increase in signups, with 110,000 people signing up on the day of his first match.

• Facebook users in the UK, France, and Germany will no longer have access to a dedicated tab for viewing news articles on the social media platform. The company has announced that it intends to allocate additional resources and funds towards producing short-form videos.

• In its investor roadshow, Arm Holdings said it projects 11% revenue growth this fiscal year and a mid-20% range growth by 2025, driven by demand for chips for data centres and A.I. In related news, Arm's deal with Apple will extend through 2040. It will debut on the Nasdaq soon with a potential valuation of $52 billion, the largest tech IPO of the year.

₿ Crypto Corner

• Cathie Woods Ark Invest and crypto investment firm 21Shares are seeking regulatory approval from the U.S. SEC to set up an Ethereum ETF to hold the token Ether.

• Ex-FTX executive Ryan Salame has pleaded guilty to criminal charges that will also see him forfeit $1.5 billion.

• Bloomberg reported that JPMorgan Chase & Co. is currently in the initial stages of researching a digital deposit token based on blockchain technology. This token could potentially expedite cross-border payments and settlements, pending approval from regulators.

Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Recommendation

Movers and Shakers

✅ Biggest Gainers

IperoniX (IPX) - a developer of low-carbon titanium, announced yesterday that it executed a Test Services Agreement and Statement of Work with the U.S. Army Combat Capabilities Development Command Ground Vehicle Systems Center (DEVCOM GVSC). The agreement will centre around characterising the metal and testing the ballistics of IperionX's high-strength titanium plates.

IperionX stated that DEVCOM GVSC may relay the results to select contractors who are known OEMs of U.S. Army ground vehicles, alluding that there could be the opportunity for further agreements.

The U.S. imports over 95% of the titanium sponge required for the defence sector. IperionX plans to re-shore a fully integrated titanium supply chain to position it well for further agreements.

IPX shares ended the day up 6.6% to $1.38

Atlantic Lithium (A11) - rose 3.5% today after announcing it has agreed to a non-binding Heads of Terms with the Minerals Income Investment Fund of Ghana (MIIF), which will invest US$32.9 million (A$51.4m) in Atlantic and its Ghanaian subsidiaries. The proposed investment from MIIF will support the development of the company’s flagship Ewoyaa Lithium Project and the broader Cape Coast Lithium Portfolio in Ghana.

MIIF will acquire 19,245,574 shares in Atlantics Ghana portfolio, including the Ewoyaa Lithium project, for US$0.25 per share (A$0.41), resulting in a 6% interest.

🔻Biggest Fallers

Audinates (AD8) share price fell 9.6% after completing a $50 million institutional placement, where it will issue 3.8 million shares for $13.00. Eligible retail shareholders will be able to participate in the placement, where Audinate plans to raise a further $20 million at the same price.

The total estimated additional shares of 5.4 million will be added to Audinate's reported 78.3 million shares on June 30.

Audinate shares are up over 38% since reporting full-year earnings in August, with the company taking the opportunity to raise capital and add to its $41.8 million in cash and short-term investments as of the end of June.

On an unrelated note, Audinate CEO Aiden Williams exercised and sold over 51,700 in share options valued at $706,249 only 10 days ago. 🤨 

Duratec (DUR) shares dropped 5.6% after confirming that members of the company’s board and management have sold 8.5 million shares, representing 3.4% of the total issued capital! Ouch.

The sale of shares was finalised at $1.35 per share through an underwritten block trade. Typically, these trades involve a financial institution as the counterparty. Duratec's share register includes investment firms such as Regal Partners, Jawp Investments, and Fort Baramba.

Following the sale, founders Phil Harcourt, Chris Oates and Deane Diprose will each retain a 9.7% shareholding in the Company.

Post of The Day

Friday Feels

Deep Dive

Small Cap Deep Dive

A look at Globe International from our friends at ‘The Asymmetrical Edge’

Globe International (ASX: GLB) is a mini-conglomerate of fashion and skating brands worldwide through ownership and licensing agreements.

Through 2020/21, Globes’ Impala skate and skateboarding hardware segments exploded. While this drove higher profits, it also left the company with a higher cost base and more inventory to manage.

The last 12 months have been challenging for Globe as it cycles off the 2020/21 highs and slowing consumer demand from higher interest rates.

Globe reported its FY23 financials in late August and has seen its share price bounce as high as 43%. While at first glance, a fall in revenue of 17% and a profit drop of 92% didn’t look too hot, several one-offs drove that result, leaving a clear runway for Globe to grow.

Check out the full review of Globe International at the Aysemmtrical Edges free Substack.

Daily Quiz

Test Your Knowledge

Were you paying attention this week?

Yesterday’s Daily Quiz Question: Which of these Australian sports teams is listed on the Australian Stock Exchange?

Answer: Brisbane Broncos. The most popular answer, with 33% of you getting it right. Well done!

For those of you with wild dreams of owning a sports team. Well, you can - at least a very minor stake in one.

The Brisbane Broncos, one of the largest Rugby League teams in the NRL, are listed on the ASX under the ticker code ‘BBL’. In its half-year accounts ending March, the Broncos reported $29.4 million in revenue, with a Net Income of $3.7 million.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of September 4

1. Flight Centre (FLT) - 9.90%

2. Pilbara Resources (PLS) - 9.69%

3. Syrah Resources (SYR) - 9.14%

4. Elders Limited (ELD) - 9.02%

5. IDP Education (IEL) - 8.68%

6. Brainchip (BRN) - 7.56%

7. JB Hi-Fi (JBH) - 7.36%

8. Appen (APX) - 7.33%

9. Core Lithium (CXO) - 7.31%

10. Mesoblast (MSB) - 7.27%

📊Broker Ratings

What do the brokers have to say?

1. Atturra (ATA) - Upgrade to Add from Hold (Morgans)

2. Capricorn Metals (CMM) - Downgrade to Neutral from Outperform (Macquarie)

3. Data#3 (DTL) - Downgrade to Hold from Add Morgans

👨‍💼 Director Transactions

What are the insiders doing? (On-market only)

💲Dividends

Companies trading ex-dividend today

1. Base Resources (BSE)

2. Generation Development Group (GDG)

3. Mineral Resources (MIN)

4. Nine Entertainment Co. Holdings (NEC)

5. Objective Corporation (OCL)

6. Peet (PPC)

7. Wisetech Global (WTC)

📅 Economic Calendar

Data to keep an eye on this week

Reader Review

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.