Good morning Voornaam,
- Pan African Resources took advantage of the gold price and DRDGOLD was saved by it.
- Lyft short sellers were slaughtered by a typo.
- The Magic Markets podcast showcases the momentum in alternative assets, together with Westbrooke.
- There's a brand new Ghost Wrap podcast bringing you the latest on Sasol, ArcelorMittal, Sappi, Curro and British American Tobacco - available here
Are you a founder of a business? Do you want to know more about "bootstrapping" vs. raising funding? The next bizval webinar will tackle this topic. Attendance is free for this webinar scheduled for 21st February at midday, but you need to register here>>>
Local company news:
Johannesburg was built on a foundation of gold mining, yet here we are with DRDGOLD giving us a clear view of just how difficult it is to mine the gold tailings found on the outskirts of the city. Not only are there security problems, but there are delays for new projects from water licences and community interference. If it wasn't for the higher gold price, the latest results would've been ugly.
There are thankfully no such issues for Pan African Resources, where production was higher at exactly the right time. There's a bullish undertone in the announcement about the rest of the financial year as well.
This brings us neatly to a group that specialises in teeth and toilets, along with payroll services and credit lending. In other words, they don't actually specialise in anything. Universal Partners has surely the most unusual portfolio on the JSE, which always makes the updates fun to read.
Get all the details in Ghost Bites>>>
For an efficient and insightful update on local news, the Ghost Wrap podcast should be a staple on your favourite podcast player. Made possible by Mazars, the latest episodde needs just 6 minutes of your time to update you on Sasol, ArcelorMittal, Sappi, Curro and British American Tobacco. Get it here>>>
You can also enjoy my latest Namibian radio segment, covering Santam, Transaction Capital, Cashbuild, Anglo American and why it was so lucrative to be an early employee at groups like Naspers. Find it here>>>
International company news:
I remember watching a Looney Tunes cartoon as a kid where an incredibly expensive piece of art gets broken. The characters look at the price tag (ridiculously along the lines of $1,000,000,000) and conclude that none of the zeros matter anyway. They then panic about where they will find one dollar to pay back the owner!
Those were the days, hey.
At ride hailing business Lyft, the zeros don't seem to matter either. A casual typo in the earnings release suggested that adjusted EBITDA margin would expand by 500 basis points. In reality, the expansion is 50 basis points.
What's a zero between friends?
Well, the share price initial traded as much as 67% higher before settling at a 20% gain. Even 20% is a painful outcome for short sellers, but a 67% jump based on a nonsense number could've wiped short sellers out.
Much of this is the danger of after-hours trading, a reminder that everything in the US is bigger but not always better. The press release was corrected soon after it went out, but not before the wild ride in after-hours activity.
The craziness of public markets is part of why alternative assets have become so popular. Westbrooke is no stranger to Magic Markets listeners and the alternative asset manager just achieved a record year in 2023.
To understand the favourable conditions for alternatives and whether they are set to continue, Dino Zuccollo of Westbrooke was the guest on the latest Magic Markets podcast. You absolutely don't want to miss it! Listen to it here>>>
Have a great day!
