Sep 30, 2021 Sign Up

"To me, a wise and humane policy is occasionally to let inflation rise even when inflation is running above target." – Janet Yellen

Good morning! Britney is nearly free after an LA judge suspended her father from his 13-year stint as the controller of the singer's business affairs. Fed Chair, JPow called inflation "frustrating" and sees it running into next year. Maybe inflation isn't transitory after all...

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1. Story of the Day: Warby Parker's Big Day

Warby Parker, the online eyewear retailer, went public via a direct listing yesterday, and its stock surged 35% to $54 a share, giving the company a market value of about $6 billion, more than double its valuation in a private round in April.

Warby Parker was founded in 2010 by four Wharton classmates and started by selling glasses for $100 a pair. Customers would receive several frames to try on, picked the one they liked best, then gave the company their prescription to get eyewear made.

Originally a digital-first platform focused on direct-to-consumer sales, Warby Parker has since expanded to have more than 100 physical locations, with plans to open more than three dozen this year.

The company is still not profitable and lost $7.3 million on $271 million of revenues in the first six months of 2021 (although a 53% YoY jump in revenue). 

As you can imagine, Warby Parker has an impressive cap table, with big names such as Tiger Global Management, T. Rowe Price, General Catalyst and D1 Capital Partners.

Short Squeez Takeaway: Although Warby Parker is not profitable, there is a strong bull case here with more people than ever being glued to their screens (about 75% of adults in the US use some form of vision correction). Warby Parker is well liked by their customer base shown by strong retention rates. They have also done a great job marketing themselves and their ESG efforts e.g. giving away a pair to someone in need for every pair sold, have resonated well with its younger core demographic.

Source: Bloomberg

2. Markets Rundown

• US stocks recovered modestly Wednesday, following the worst selloff for the S&P 500 in roughly four months, after climbing bond yields spooked investors already bracing for the Fed’s planned wind down of easy-money policies.

Movers & Shakers

• (+) Dollar Tree ($DLTR) +16% after it announced plans to add price points above $1 across all stores & also increased its share repurchases.
• (+) AutoNation ($AN) +5% after Morgan Stanley upgraded the stock, saying its bullish on the auto retailer’s management changes.
• (–) Generac ($GNRC) -4% after it issued new targets for 2024 at its Investor Day.
  

3. Top Reads

4. Book of the Day: The Antisocial Network

Bestselling author Ben Mezrich offers a gripping, beat-by-beat account of how a loosely affiliated group of private investors and internet trolls on a subreddit called WallStreetBets took down one of the biggest hedge funds on Wall Street, firing the first shot in a revolution that threatens to upend the establishment.

The unlikely focus of the battle: GameStop, a flailing brick-and-mortar dinosaur catering to teenagers and outsiders that had somehow held on as the world rapidly moved online. At first, WallStreetBets was a joke—a meme-filled, freewheeling place to share shoot-the-moon investment tips, laugh about big losses, and post diamond hand emojis. Until some members noticed an opportunity in GameStop—and rode a rocket ship to tens of millions of dollars in earnings overnight.

5. Short Squeez Picks

• If you are looking to invest in VC, check out Sweater Ventures, the first VC for the retail investor
• The highest grossing media franchises of all time
• Short selling is not simply the opposite of going long

6. Daily Visual: Where Living is Most Expensive
Countries with the highest cost of living plus rent index in 2020

Source: Statista

7.  Daily Acumen: Anxiety Loves Company

“Somehow, at least in our culture, we find relief when others are anxious too. So we spread our anxiety, stoking it in other people, looking for solace in the fear in their eyes.

And thanks to the media, to the microphone we each have, to our hyper-connected culture, it’s easier than ever to spread our anxiety if we choose. And when someone who seeks power offers to hear our anxiety in exchange for attention or a vote, it gets even worse.

It’s worth noting that there’s no correlation between the real world and anxiety. In fact, it’s probably the opposite–when times are good, people with a lot to lose start to get that itch.

Absorb the anxiety if you wish, spread it if you must, but understand that it’s an invention, and it’s optional.”

Source: Seth's Blog

8. Memes of the Day

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