— JPMorgan Invests in Fertility Startup; First Republic May Be Removed from S&P 500; Jack Ma Named Visiting Professor at Tokyo University; Super Mario Breaks $1 Billion Box Office; Charlie Munger Bearish on Commercial Real Estate; Rivian Loses Investor Confidence; New York State Releases FY2024 Budget
1. JPMorgan Invests in Fertility Startup
Morgan Health, the healthcare venture arm of JPMorgan Chase, recently invested $25 million in New York-based fertility startup Kindbody.
Founded in 2018, Kindbody offers fertility-related outpatient services including egg freezing and surrogacy. Walmart, Lyft, and Medtronic are among the companies that have partnered with Kindbody to sponsor employee access to its services.
In March, Kindbody raised $100 million in funding from Perceptive Advisors.
Cheryl Pegus, President of Morgan Health, stated that Kindbody will leverage its medical experts to provide a differentiated fertility experience and help employers better support their employees. Pegus will also join Kindbody’s board of directors.
Founded in 2021, Morgan Health plans to invest $250 million to reduce the cost of employee healthcare benefits.
______
2. First Republic May Be Removed from S&P 500
Last Friday, reports emerged that First Republic Bank may be taken over by the Federal Deposit Insurance Corporation (FDIC) due to operational difficulties. The bank’s share price plunged 43% in a single day and trading was halted multiple times.
First Republic’s market value has declined by $22 billion to just $650 million, putting it at the bottom of the S&P 500 Index. To qualify for inclusion in the S&P 500, companies must maintain a market cap of at least $12.7 billion — making First Republic a likely candidate for removal.
However, Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, noted that companies are not required to remain profitable or above a specific market cap to stay in the index, and some current constituents fall below the threshold.
If First Republic is removed, index-tracking funds may be forced to sell the stock, potentially triggering a fresh wave of selloffs.
A large-scale bank run at First Republic is likely, and FDIC takeover appears to be the most probable outcome.
______
3. Jack Ma Named Visiting Professor at Tokyo University
According to the University of Tokyo’s official website, Alibaba co-founder Jack Ma will join the university as a visiting professor.
The 58-year-old will begin on May 1, advising on research related to sustainable agriculture and food production. He will also deliver lectures on entrepreneurship and innovation.
Ma previously worked as an English teacher and has expressed a desire to return to teaching after stepping away from the business world.
Sources said Chinese regulators had invited Ma to return to the mainland to demonstrate government support for private enterprises, but Ma preferred to stay overseas to focus on agricultural tech innovation.
Jack Ma stated he can still support Alibaba and Ant Group from abroad.
______
4. Super Mario Breaks $1 Billion Box Office
Last week, Universal Pictures’ animated Super Mario Bros. movie grossed $40 million, topping the U.S. and Canada weekend box office for a fourth consecutive week.
The film has earned $490 million domestically and over $1 billion globally, making it the tenth animated movie in history to surpass the $1 billion mark.
Based on Nintendo’s popular video game franchise, the movie dominated April’s box office and broke multiple records.
With little direct competition recently, Super Mario has amassed massive revenue.
______
5. Charlie Munger Bearish on Commercial Real Estate
In an interview with the Financial Times, Berkshire Hathaway Vice Chairman Charlie Munger said that many office buildings, shopping centers, and other property types are now under stress, and banks across the U.S. are issuing real estate loans far more cautiously than six months ago.
Although Berkshire has historically supported banks during recessions, it stayed on the sidelines after the collapses of Silicon Valley Bank and Signature Bank earlier this year. Munger said the reason for avoiding bank investments is their heavy exposure to commercial real estate loans.
With commercial real estate values plunging this year and loan risk rising, Munger is pessimistic about the health of bank assets.
______
6. Rivian Loses Investor Confidence
Since its IPO in late 2021, EV maker Rivian Automotive’s share price has dropped 93%, with its market cap falling from $150 billion to under $12 billion.
Rivian’s market value now roughly equals the cash it holds, suggesting investors have lost faith in the company.
Like many EV startups, Rivian has been unable to scale production cost-effectively. Established brands like Volkswagen are competing aggressively, while Tesla is using price cuts to squeeze out newcomers.
According to Bloomberg, Q1 revenue projections are down 25% from December. The R1T pickup’s base price is $73,000, higher than the $60,000 for Ford’s electric F-150.
Zack Investment Management analyst Brian Mulberry said investors now see Rivian as a niche brand — unless it boosts revenue and margins, it may need to raise $4 billion just to survive until 2025.
Rivian currently holds $11.6 billion in cash and has $1.6 billion in debt.
______
7. New York State Releases FY2024 Budget
After nearly a month of gridlock, New York Governor Kathy Hochul announced on Thursday the tentative approval of a $229 billion state budget.
Under the plan, the minimum wage in New York City will rise to $16 per hour in 2024. Meanwhile, corporate payroll taxes in the city will increase to help close the MTA’s budget shortfall.
Specific details of the plan are still being refined, and full implementation requires future legislative approval in Albany.
The FY2024 budget has only been conceptually approved and remains subject to revisions and a formal vote.
______
This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.