🧬 Dollar Tree needs a dollar, dollar, a dollar is what they need (hey, hey) - The frugal company that sells goods at $1, Dollar Tree, may have overpaid for a competitor. In 2014, Dollar Tree bought Family Dollar for more than $8 billion. Turns out the merger was a mess from the jump; the 2 stores had vastly different clientele, but yet somehow managed to cannibalize each other's sales if stores were located near each other. After 10 years, Dollar Tree has had enough and has sold Family Dollar to a group of private equity investors for “one billion dollars.” Pretty ironic with the sales number...they must only think in denominations of $1.

🧬 I got no millions, I got no riches buildin’ in my DNA - Phenomenal Kendrick reference right there, wow. The company responsible for your friends telling you at a party, “I’m actually 1/72nd Navajo” is shutting down. Due to slowing sales for its primary product, the ancestry kit, and following a data breach in 2023 that has lost the trust of consumers, 23andMe has filed for bankruptcy. The worst part? Your data is up for sale. Whoever decides to buy 23andMe will receive the customers’ DNA data. Glad I never took one, but whoever has, make sure to delete your data. Not going to call out those of you nearest to me that have taken this, but you know who you are.

🎵 Next, you’re going to tell me MySpace sold for $300 million - Napster, yes that Napster, just sold for $207 million to a company focused on the metaverse. The company synonymous with the downfall of the recording industry had shut down in 2002, but in 2003, it was revived as an iTunes rival. Then, it changed hands some more, until in 2016 it settled as a legal streaming service. Now, it is being bought by a company that wants to turn it into a better way for artists to engage with fans in the metaverse. This short synopsis has used hype terms from every decade since 2000.  

What happened?

On Friday, Coreweave began trading on the Nasdaq in its Initial Public Offering (IPO).

So?

“So what, so let’s dance!” Jokes aside, the IPO was meant to signal a number of different things, more on that in just a second.

What is Coreweave?

Coreweave builds and operates data centers, and they make money by providing clients access to these data centers, which have been used to develop AI models. Broken down, they purchase Nvidia chips and rent out Graphics Processing Units (“GPU’s”) to companies. GPUs are specialized processors designed to perform complex mathematical calculations in parallel, which significantly accelerates the training and execution of AI models. Its business took off in 2023 when AI startups were scouring the market to obtain GPUs. To quote WSJ: “One founder at the time compared looking for GPUs to hunting for ‘toilet paper during the pandemic.’”

How did it do in its initial trading debut?

Not well, not well indeed. Last May, the company raised funds at a $19 billion valuation. This time around, the company was trying to achieve a $47 to $55 price per share range, which would have valued the company at $32 billion. Unfortunately, on Thursday night, the demand spoke, and the company was priced at $40 a share, or $23 billion in total value. The company traded down at first, but ended flat on the day. Additionally, they did not sell as many shares as they had planned to.

Why should I care?

The IPO was on the grand stage and was meant to indicate the level of investor enthusiasm for AI companies and the US market for new listings. Just last year, Nvidia had jumped to become the world’s most valuable publicly traded company (it has since given that title up).

What does this signify?

#1 AI isn’t what is used to be, like back in my day

As recently as last year, as long as you mentioned you had some tangential business line that may have used AI once, investors were ready to throw oodles of cash your way. Now, investor enthusiasm is beginning to wane in the AI space as uncertainty around the sustainability of the AI boom takes center stage.

#2 The capital markets are chilly

Investment bankers were looking at the performance of Coreweave as signaling what is to come for public offerings this year. A few companies have been on the sidelines, like Klarna, StubHub, Chime, and Medline. They have all indicated IPOs sometime this year, but with the most recent performance of Coreweave on the back of the gas exporter’s, Venture Global, disastrous 40% decline IPO earlier this year.

Conclusion

Stocks are volatile, buy real estate.

The Johnson II is not just our newest offering; it’s our largest property to date and a true testament to our commitment to excellence in Austin’s vibrant rental market.

Built by world-renowned Austin architect AD Stenger, this one-of-a-kind mid-century masterpiece spans over 2,400 square feet and blends timeless design with modern functionality.

With over a year of verified operating actuals yielding an NOI of over 8%, The Johnson II is projected to generate $300,000 in go-forward bookings in Year 1. Having over 50% of the year already booked, this asset provides immediate income generation from day one.

Nestled in the coveted Zilker Park neighborhood, the property is perfectly positioned next to the iconic site of Austin City Limits and just a short walk from Barton Springs Pool. Secured in a private, off-market sale at over 2% below asking price, The Johnson II comes turnkey with over $110,000 in stylish furnishings included. This strategic acquisition not only enhances the asset’s immediate appeal but also fortifies its long-term value.

Featuring a total offering amount of $1,058,200, The Johnson II delivers an impressive average yield of 12.3% and a Year 1 yield (pre-growth) of 9.4%. With an anticipated annual levered IRR of 14.4%, projected levered profits of $1.52 million, and a levered MOIC of 2.4x, this property offers a compelling opportunity for investors seeking robust returns and a strategic foothold in Austin’s thriving real estate market.

The Johnson II is so much more than just an investment; It’s your chance to own a landmark property where iconic design meets exceptional performance

Invest Now

• If you’re wondering why everything on social media is looking like the famous animated Japanese movie “Spirited Away”, it is because ChatGPT released a new version that allowed users to create images remarkably similar to the famed Japanese animation Studio Ghibli.
• The fat cats keep getting fatter. Wall Street bonuses hit a record high $47.5 billion, which is up 34% from last year.
• “If we're gonna turn this company around, we gotta start cutting the crust off this sh*t sandwich!” That’s a quote that if you get, you understand why I am referencing it in a note about the founder of Frank, who was found guilty of a $175 million defrauding of JPMorgan Chase.

This one is just a wild ride. The guy up and went to South Africa because he had a wet dream that he thought was trying to tell him something. He went in an RV throughout the US, and directors would pitch him on the road, while he drove.

This is more entertaining than anything else.

⭐ 4.63 / 5.0 in my book (no pun intended)

1. “If we're gonna turn this company around, we gotta start cutting the crust off this sh*t sandwich!”
2. “So what, so let’s dance!”
3. “Oh you know what, next week's no good for me. The Jonas brothers are in town.”

For DOGE to be successful in cutting government inefficiencies, one day at the very end, its last decision will be to shutdown itself.

1. It’s Always Sunny in Philadelphia (Frank Reynolds - couldn’t find the video)
2. Caddyshack (Rodney Dangerfield)
3. The Hangover (Alan)