Finimize - 🤩 Buffett's beauty battle

What’s going on here?

Warren Buffett bought into Ulta Beauty last quarter, giving Berkshire Hathaway a makeover.

What does this mean?

The world’s most famous investor dipped his toes into new waters, snapping up around a million shares of aerospace company Heico Corporation and about 700,000 shares of Ulta Beauty. While that $260 million stake in Ulta is a minnow by Berkshire’s standards, it signals faith in the industry – despite the firm’s stock sliding by a third this year. Buffett made room by trimming Berkshire’s holdings in Capital One, T-Mobile, and Floor & Decor Holdings – and by ditching Snowflake entirely. But he stood by some old familiars, upgrading his investment in Chubb Insurance by 4.3% and keeping Apple, Bank of America, American Express, Coca-Cola, and Chevron as his top five.

Why should I care?

For markets: Make-under time.

Beauty products were the retail world’s hot cakes during the pandemic. But now that rising prices are pinching shoppers and competition is mounting, beauty stores – once seen as inflation-proof – are struggling to empty their shelves. So Ulta’s stuck duking it out with LVMH-owned Sephora, with both leaning into "store-in-store" strategies – Sephora’s nestled inside Kohl’s, and Ulta’s found spots in Target. That hasn’t paid off yet: Ulta has warned revenue growth is slowing down, while even beauty giants like L’Oréal and Estee Lauder have seen shares drop.

The bigger picture: The Buffett effect.

Berkshire’s Ulta stake might be comparatively small fry, but the mere mention of the Oracle of Omaha’s interest sent shares up 11% on the day. And if you’re looking for more ways to channel your inner Buffett, you have options. Route one is buying shares in Berkshire Hathaway, which are up 22% this year – beating out the S&P 500’s 17% gain. Or, you could DIY by downloading Berkshire’s portfolio each quarter and picking your favorites. Finally, a hands-off approach would be investing in an ETF mimicking Buffett’s strategy.

What’s going on here?

A share sale by Revolut employees scored a $45 billion valuation, securing the fintech’s reputation as one of Europe’s priciest startups.

What does this mean?

Revolut’s sitting pretty: the firm recently secured a UK banking license, its bold push into new markets seems to be paying off, and its customer numbers are towering over British rivals Monzo and Starling. Plus, Revolut nearly doubled its revenue to $2.3 billion last year – meaning it raked in $565 million in pre-tax profit, bouncing back from a $32 million loss the year before. So to share the success, the company let employees sell about $500 million worth of shares to big-league investors like Coatue, D1 Capital Partners, and Tiger Global. The transaction means that Revolut’s now valued at $45 billion – a serious upgrade from 2021’s $33 billion.

Why should I care?

For markets: Europe’s tech titans need some tips from America.

Revolut’s valuation has now surpassed those of traditional banking giants like Barclays, Lloyds Banking Group, and NatWest. In fact, only one British bank boasts a bigger figure: HSBC. And Revolut doesn’t just hang out in old-fashioned circles: the company has cemented a top spot in Europe’s tech elite, with a worth that beats even famed fintechs Klarna and Checkout.com. It’s a big wide world out there, though, and US-based Stripe and Brazilian digital bank Nubank are setting the bar even higher for their European rivals.

The bigger picture: London’s a ghost town.

Companies are steering clear of listing on the UK stock market, wary of strict tax rules and regulation – as well as an uncertain economic outlook. The country’s doing more to entice the next generation of public companies, slashing bureaucratic hassles, fine-tuning listing rules, and even inviting Revolut for a meeting with the Treasury this fall. But despite the red carpet rollout, Revolut still seems tempted by the American Dream of a stateside listing.