Lululemon Gets The “Passive” Pop

With Microsoft’s acquisition of Activision Blizzard officially complete, the S&P 500 needs to replace it with another stock. And this time, that stock is Lululemon. 🤩

The athleisure retailer saw shares jump more than 10% today, reacting to Friday’s after-hours news that it would be added to the index before the market opens on October 18, 2023.

So why does this matter? Well, because the S&P 500 is one of the world’s most widely tracked and indexed products, asset managers will have to buy the stock in any of their products that track (or are benchmarked against) it. Otherwise, their funds risk developing a “tracking error,” meaning they’re not correctly matching the index’s performance. 💰

It’s important to note that inclusion in the S&P 500 index often leads to a short-term pop in the stock as buyers look to ride the wave of asset managers forced to buy the stock. However, several studies have suggested that index inclusion creates “no permanent effect” on market value after joining the index. 

Simply being included in the index doesn’t guarantee the stock’s long-term success. After all, it has to continue to be a strong business/security if it wants to hold its place in the index. Otherwise, it’ll be booted to the curb like many before it. 👋

In the meantime, today’s gap-up was a big move for traders and investors using technical analysis. With prices closing at nearly two-year highs and above multi-year resistance at 385-400, technical analysts say this likely marks the resumption of the stock’s long-term uptrend. Time will tell, but $LULU shares will surely be on people’s radars until the dust settles. 👀

JetBlue Jumps As Icahn Accumulates

It’s been a rough few months for JetBlue shareholders after the airline’s merger with Spirit Airlines was blocked by U.S. regulators. However, the stock is popping after hours on news that a billionaire hedge fund manager is dumpster diving and sees value in the stock. 💸

Activist investor Carl Icahn reported a nearly 10% stake, which he’s accumulated on the belief that the stock is undervalued following its recent selloff. He’s already had discussions with the company regarding possibly attaining board representation.

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Epic Wins A “Victory Royale” Against Google

It’s been three years since Fornite-maker Epic Games sued Apple and Google for allegedly running illegal app store monopolies. And despite losing a similar battle against Apple, the game-maker has secured a win against Google. 🏆

The jury in Epic v. Google delivered its unanimous decision after just a few hours of deliberation. They found a few key things:

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Pfizer’s Flop Continues

It’s been a rough ride for pharmaceutical giant Pfizer since the end of the pandemic, and that rollercoaster ride continues today. 🎢

The company last announced earnings in October but needed to update Wall Street on its 2024 forecast. It cited weak demand for its Covid products as the reason for a weaker-than-anticipated revenue and earnings forecast.

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Biotech Buyout Spree Continues

It may be the last week of the year, but many companies are rushing to get deals done before year-end. Two significant transactions in the biotech space were announced today, so let’s dive in. 👇

The first deal involves RayzeBio, which raised $358 million via an initial public offering (IPO) just three months ago. However, its time as a public company is being cut short by Bristol Myers Squibb, which is acquiring the radiopharmaceutical therapeutics company for $62.50 per share in cash. 💰

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