Thought Starters

Lithium in short sellers’ sights as Hindenburg blows up tech stock

Last week, short sellers were in focus as Hindenburg Research released a short report about Block (the owner of Buy Now, Pay Later pioneer Afterpay). Recent data from ASIC, as reported in this article from The Age, suggests that Australia’s lithium miners have also been a target for short sellers.

Three lithium miners that have seen increasing short interest (the percentage of a company’s shares that are held short - i.e. investors are betting the share price will fall) are Core Lithium, Liontown Resources and Sayona Mining.

These three lithium miners are in the top six shorted Australian companies. (Side note: top three overall are #1 Flight Centre, #2 Core Lithium and #3 Zip)

These lithium companies have seen big share price rises as the price of lithium has run up over the past few years. But as the lithium price falls (for example, China’s lithium price is down about one-third in the past month) there is concern that some of these lithium miners will fall alongside it.

WWE in talks with state gambling regulators to legalise betting on scripted match results

We don’t know who needs to read this, but: WWE is fake. The athleticism may be real, but the results are not. That hasn’t stopped WWE executives from trying to create betting markets for their matches.

The obvious question is: how can bookie offer markets on a scripted match where the WWE team and the wrestlers themselves know the results before they start?

To try and mitigate the risks of insiders betting on matches, WWE are taking the same approach awards shows like the Academy Awards and the Emmys use. They are working with EY to secure the results of matches and don’t plan to inform wrestlers who will be winning until hours before a match.

There is a fundamental difference though. Sure, the winners of these entertainment awards are known by a handful of judges. But WWE fights are scripted by a room full of writers. Reports are that if WWE’s bid is successful other scripted shows may follow - for example, allowing people to bet on the next character to die in a major TV series.

Uncovered: Hit-IQ (ASX: HIQ)

Around the world, concussions are the biggest challenge in sport. As the 2023 AFL and NRL season kicks off here in Australia, we are seeing multiple class actions from former players and rule changes to extend the time out of the game players must take after getting concussed.

As such, we thought it was the right time to uncover an Australian company working on the problem of head knocks in sports - Hit-IQ (ASX: HIQ).

This is a tiny company - valued at just $5.5 million - but is working on a novel technology: a smart mouthguard. In a nutshell, Hit-IQ have taken a traditional mouthguard and inserted a number of sensors that measure every head knock allowing coaches and doctors a better way to measure at-risk players.

As they’ve tested the technology over the past few years, Hit-IQ report that 50% of concussions go undetected. That is a number they hope to take to 0% with their mouthguard. They have just launched their consumer product and so August’s reporting season will be our first look at how everyday athletes and parents are thinking about their smart mouthguard.

Whether or not it is a good investment, we think it is a fascinating company working on a hard problem. The perfect company for us to uncover.

Disney blocks Ron DeSantis’ Florida power play with a royal family clause

As Florida’s Governor Ron DeSantis prepares for a 2024 run for the Presidency of the United States, he has been picking high profile fights. And there has been none more high profile than against one of Florida’s largest employers: Disney.

However, recent reporting shows that Disney may have quietly struck a giant blow back against the Governor and his plans.

This story stretches back a year ago, to March 2022. Governor DeSantis was pushing his ‘Don’t Say Gay’ bill that would prevent public school teachers from instructing on sexual orientation or gender identity to students in kindergarten through third grade. Disney came out against the bill, and then-CEO Bob Chapek pledged $5 million to groups working to protect LGBTQ+ rights.

That put Disney in Governor DeSantis’ crosshairs. He responded by announcing an end to Disney’s special tax district - since 1967 Disney World has had state tax exemptions so they can develop the theme park at no cost to the Florida taxpayer and in return Disney provide their own services (street cleaning, garbage collection etc.).

As this article explains, Disney didn’t take that move lying down. Instead, they quietly worked to blunt the effect of Governor DeSantis’ move and gave themselves power over the district right before the Florida government enacted DeSantis’ plan.

Bill Gates: The Age of AI has begun

Bill Gates has shared his thoughts on the current AI wave led by ChatGPT. He writes that there has only been one other demonstration of technology that has struck him as revolutionary in his lifetime - when he was first introduced to a graphical user interface in 1980. The graphical user interface went on to revolutionise computing, led to Microsoft Windows, and is how you’re reading this email today.

Gates believes that over time, our main way of controlling a computer will not be by pointing and clicking or by tapping on menus and dialogue boxes. Instead, we’ll be writing instructions for the computer to execute (which ironically, feels like a step back to when you’d write instructions in code for a computer to execute - it is just that now we’ll be writing them in plain language). He also sees the opportunity for every person on earth to have a “personal agent” aka a digital EA.

In this article, Gates then zooms in on two specific industries - health and education - and outlines how he believes AI can revolutionise them both.

_{Disclaimer
All information contained at EquityMates.com and in any content produced by Equity Mates Media is for education and entertainment purposes only. Any advice is general advice only, and has not taken into account your personal financial circumstances, needs or objectives. It is not intended as a substitute for professional financial, legal or tax advice.}

_{Before making any financial decisions you should read the Product Disclosure Statement (PDS) and, if you are unsure, consult a licensed financial professional.}

<sub>Equity Mates Media operates under Australian Financial Services Licence 540697.

Equity Mates respects your privacy. All personal information collected is protected in line with Equity Mates' Privacy Policy.</sub>

_{Copyright © 2023 Equity Mates Investing Podcast, All rights reserved.}