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Hedge funds don’t own as many homes as you think

In the wake of the housing boom during the pandemic that spanned from summer 2020 to spring 2022, institutional homebuying witnessed a surge due to a confluence of factors, including soaring rents, low interest rates, easy access to capital, and spiking home prices. However, this institutional frenzy swiftly dwindled as interest rates experienced a spike.

Contrary to recent claims on social media, the reality is that institutional homebuying remains relatively restrained. According to data provided by Parcl Labs, among 21 major institutional operators, only one increased its total home portfolio by over 2.0% in the past three months. Tiber Capital stood out, acquiring 165 single-family homes during this period, resulting in a 2.3% increase in its total home portfolio.

On an overall basis, Progress Residential led the way by acquiring the most homes, adding 1,140 to its portfolio over the past three months. These statistics paint a picture of a market where institutional players are not universally expanding their holdings.

You can read more on the matter here.

What’s going on?

• Suez Canal Authority Monitoring Red Sea Tensions, Rerouting Ships (theDeepDive)

• The (Continuing) Growing Mortgage Problem In Canada (theDeepDive)

• Trevor Milton Lied About Nikola’s Zero-Emission Trucks. Is That Worth a Decade in Prison? (WSJ)

• Chileans Reject Proposed Constitution in Pivotal Referendum (theDeepDive)

• Oil major BP becomes latest to pause Red Sea shipments as Houthi attacks continue (CNBC)

• Trans Mountain Pipeline Expansion Faces Further Delays, Potential Billions in Losses (theDeepDive)

• Teamsters union authorizes potential strike at Anheuser-Busch (FOX)

• Kitco Down For Multiple Days After Cyber Security Incident (theDeepDive)

• Colombia Senate Rejects Legalization of Adult-Use Cannabis (theDeepDive)

• United Steelworkers Union Says Nippon Deal for US Steel ‘Won’t Work’ (Bloomberg)

• X Refuses to Pay Bug Bounty On Critical Vulnerability, Kicks Out Whitehat Instead (theDeepDive)

• Alex Jones Attempts To Get Out Of $1.4 Billion Defamation Judgement With $55 Million Offer (theDeepDive)

• DEA warns Georgia to cancel plans to become first state to allow pharmacies to sell medical marijuana (FOX)

• EU Agrees to Open Membership Talks with Ukraine While Hungary Vetoes Aid (theDeepDive)

What’s the latest?

• Red Sea Risk: Oil and gas giant BP has temporarily paused all transits through the Red Sea due to escalating security concerns following recent attacks on vessels in the area by Yemen's Houthi movement. This decision follows similar actions taken by major shipping companies like MSC, Hapag-Lloyd, CMA CGM, and Maersk. BP's move highlights the growing apprehension about the safety of shipping routes in the Red Sea, a crucial corridor for global trade.

• US Steel Sold Off: Japan's Nippon Steel has agreed to acquire U.S. Steel for $14.9 billion in cash, offering $55 per share, which is a 142% premium over the price before the bid by Cleveland-Cliffs. This acquisition marks a significant expansion for Nippon Steel in the U.S. market, aligning with their goal of achieving 100 million tonnes of global crude steel capacity. The deal is set to close in the second or third quarter of 2024, pending regulatory approvals.

• Adobe Shelves $20 Billion Purchase: Adobe has canceled its proposed $20 billion acquisition of Figma, a cloud-based designer platform, due to regulatory concerns in Europe and the UK. The deal faced scrutiny over potential antitrust issues and its impact on competition in the software market. Adobe will pay a $1 billion termination fee to Figma.

• Apple Patent Issues: Apple announced that it will temporarily halt sales of its Series 9 and Ultra 2 smartwatches in the United States due to a patent dispute with medical technology company Masimo. This decision follows an order from the U.S. International Trade Commission, which found that the devices infringe on Masimo's patent rights, particularly concerning the blood oxygen feature.

• BC Quake: A minor earthquake with a magnitude of 4.9 struck in British Columbia's Coast Mountains, about 220 kilometres north of Vancouver, on Sunday afternoon. Although there are no reports of damage or secondary impacts like landslides, the quake was felt by residents over a wide area. This event is relatively rare for the central part of B.C.'s coastal mountain range, with the last similar quake occurring in 2017.

Doug Casey: Rough road ahead

The stock market and stuff

• Not So Safe: SafeMoon Files For Bankruptcy After Founders Were Arrested (theDeepDive)

• Crypto super PAC network goes into 2024 with more than $75 million as it aims to influence election (CNBC)

• Southwest Hit With $140 Million Penalty for 2022 Holiday Meltdown as It Prepares for Next Christmas Weekend (WSJ)

• NFT Heist: Trader Faces Largest Cybersecurity Breach in History (theDeepDive)

• Meta’s stock wrapping up record year, spurred by cost cuts that followed disastrous 2022 (CNBC)

• GFL Environmental CEO Unloads US$25 Million In Shares (theDeepDive)

In the juniors

• Canopy Growth Records Another Huge Loss With Sale Of This Works (theDeepDive)

• ATHA Energy: Major 3 Player Uranium Merger (theDeepDive)

• Sigma Lithium To List Sigma Brazil On Nasdaq In Confusing Move (theDeepDive)

• Orla Mining Loses US$120 Million Investment In Panama After Mining Concessions Denied (theDeepDive)

FULL DISCLOSURE: Power Nickel is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Power Nickel. The author has been compensated to cover Power Nickel on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.