—— University of California’s Blackstone Deal Angers Unions; BofA Net Interest Income Misses Forecast; Pfizer COVID Shot May Raise Stroke Risk; Tesla Launches Major EV Price Cuts; Messi Apparel Stock Soars 232%; U.S. Stocks Up 6 Days Straight; Williamsburg Hotel Sells for $96M
1. University of California’s Blackstone Deal Angers Unions
Today, the union representing 110,000 University of California (UC) employees sent a letter demanding that the UC system withdraw its investment from Blackstone, citing concerns that Blackstone’s real estate strategy exacerbates housing shortages and harms both staff and students.
Last month, the UC investment office allocated $4 billion to Blackstone’s BREIT fund.
In a letter to UC Chief Investment Officer Jagdeep Bachher, the union’s spokesperson wrote that UC’s current real estate investment strategy would worsen housing shortages for millions of California residents.
Housing and living costs have become unaffordable in many California cities. Last year, thousands of UC graduates and staff held months-long protests demanding wage increases.
In recent years, firms like Blackstone have acquired large quantities of housing stock and acted as landlords to raise rents.
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2. BofA Net Interest Income Misses Forecast
Today, Bank of America Corp., the second-largest U.S. bank, told analysts in an online meeting that its net interest income for the first three months of the year may reach $14.4 billion—below analysts’ forecast of $15 billion.
In Q4 of last year, BofA earned $14.7 billion in net interest income, benefiting from rising benchmark interest rates and increased loan volume. Although this was a 29% year-over-year increase and the highest in over a decade, it still missed analyst expectations.
Net interest income is one of the most important revenue sources for banks. Given current economic uncertainties, future performance remains difficult to predict.
Over the past 12 months, Bank of America’s stock price has fallen 30%.
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3. Pfizer COVID Shot May Raise Stroke Risk
According to a statement published today on its website, the U.S. FDA said preliminary data suggests that Pfizer’s bivalent chromosome COVID-19 vaccine may increase the risk of stroke in people aged 65 and older.
However, the early data still requires further investigation and confirmation, and the FDA continues to recommend COVID vaccination.
The FDA stated that while the initial data does not conclusively prove that Pfizer’s vaccine increases stroke risk, the agency believes the public should be informed.
Preliminary stroke risk signals were detected in a vaccine safety database maintained by the FDA.
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4. Tesla Launches Major EV Price Cuts
On Thursday, Tesla cut prices for several electric vehicle models in the U.S. and Europe by as much as 20%, slashing top-tier configurations by up to $21,000. In October last year, Tesla had already lowered vehicle prices in China for the second time.
During the pandemic, EV supply shortages boosted Tesla’s margins, with some buyers paying premiums to secure delivery. Now, the company is sacrificing margins to preserve volume.
Evercore ISI analyst Chris McNally stated that Tesla’s short-term profit margins will definitely take a hit, and 2023 revenue could fall 30% to 40% short of current expectations.
Many U.S. customers who purchased Teslas before the price cuts are now furious.
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5. Messi Apparel Stock Soars 232%
Today, soccer star Lionel Messi’s lifestyle and clothing brand MGO Global made its trading debut in the U.S.
On its first trading day, MGO shares soared as much as 232% to $16.61, but later fell below the $5 IPO price within hours. Due to extreme volatility, trading was halted multiple times.
Founded in 2018, MGO launched the flagship Messi Brand a year later. In 2021, the company generated $880,000 in revenue but posted a net loss of $906,000.
Although Messi is not a shareholder, he is entitled to 12% of brand-related revenue.
Fresh off his World Cup victory, Messi commands hundreds of millions of fans globally.
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6. U.S. Stocks Up 6 Days Straight
On Thursday, the latest CPI data showed further easing in inflation. Driven by this positive news, the S&P 500 index rose again, breaking above the 200-day moving average at 4,000 points. The Nasdaq 100 extended its gains for a sixth consecutive day, marking the longest streak since November 2021.
Shares of JPMorgan, Bank of America, Citigroup, and Wells Fargo—all of which reported earnings today—also rose.
David Donabedian, Chief Investment Officer at CIBC Private Wealth, said he is not overly bearish on the economy, but he also doesn’t believe a new bull market is underway. He added that he would not be surprised if the Federal Reserve pauses rate hikes.
With inflation cooling, investors expect lower U.S. Treasury yields, leading to bond selloffs and higher yields.
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7. Williamsburg Hotel Sells for $96M
Nearly two years ago, Heritage Equity Partners’ flagship project—the Williamsburg Hotel—filed for bankruptcy. On Thursday, the property was auctioned off for $96 million.
Quadrum Development won the bidding rights at auction.
Located at 96 Wythe Avenue, the Williamsburg Hotel features 147 rooms. A hearing to approve the sale is scheduled for January 17.
The hotel sits in Brooklyn’s vibrant Williamsburg neighborhood, popular with young residents.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.