Weekly Reads - September 26, 2022
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Electric vehicle sales are expected to hit an all-time in 2022 with the International Energy Agency (“IEA”) forecasting EVs to account for 13% of total light duty vehicle sales globally by the end of the year. The IEA believes that both EVs and lighting are fully on track for their 2030 milestones and in its net-zero scenario by 2050. The IEA remains bullish that the global energy economy is advancing toward renewable energy and is pushing for stronger efforts to help ensure the world can meet its energy and climate goals. One area in which significant progress is needed is emerging countries who have been slow to adopt EVs due to their higher cost and lack of charging infrastructure. The IEA also pointed to 23 areas that were “not on track” including energy efficiency of building designs, developing clean and efficient district heating, phasing out coal-fired power generation, and making cement, chemical, and steel production cleaner. The transition to renewable energy remains challenging with a global economy that is still highly reliant on fossil fuels with many countries not investing and developing the necessary foundation for widespread alternative energy use/adoption. As we move closer to IEA’s 2030 milestone and 2050 net-zero scenario it is likely we see more governments and organizations push for programs that deemphasize fossil fuels in favor of renewable energy.
The battle between investors and Kohl’s continues to drag on with activist investor Ancora calling for the termination of the company’s CEO and board chairman. This new drama follows the company’s failed attempts to sell itself, recently rejecting a bid of $53 per share from the Franchise Group. With shares trading under $26 a share as of this writing, the market has not responded well to recent news. Ancora’s cites “unsettling c-suite turnover ”and “picking suboptimal personnel” as their key reasons why the current CEO should be terminated. Ancora also citied management compensation of nearly $60million for Kohl’s CEO paid between 2017 and 2021, a period in which the company delivered poor returns to investors. Kohl’s management team faces an uphill battle in repairing its relationship with its investor base with economic conditions expected to get worse reducing the probability of an operational turnaround leading to more pressure from investors to either sell itself or make a change in management.
Amazon’s $1 billion deal for exclusive rights to Thursday Night Football from the NFL is already paying dividends with the company’s first broadcast attracting a record number of new Prime signups over a three-hour period. This is more than any other period including Prime Day, Black Friday, and Cyber Monday according to a company memo. This record number of new Prime signups shows the value of sporting rights and the importance live sports playin the eyes of the consumer. Even in a worsening economic environment consumers are still shelling out $139 per year to get Prime in order to have access to live sports. With the company having exclusive rights to stream Thursday Night Football till 2033, Amazon is likely to see more Prime signups over the next few years as football fans who never had Prime before signup or miss out on a major weekly sporting event. We see Thursday Night Football as another steppingstone in Amazon’s quest to increase the stickiness of its Prime membership, while differentiating it from rival products such as Walmart+.