Hi Reader, here's what you need to know for April 26th in 3:11 minutes.

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Today's big stories

Luxury conglomerate LVMH upped its stake in Tod’s, and it might be eyeing up more buys before too long
America’s debut bitcoin ETF is (probably) coming, but you might be better off with the real thing – Read Now
Snap Inc. reported stronger-than-expected first-quarter results, and it’s got a trick up its sleeve going forward

Fashion Victim

What’s Going On Here?

No more Mr. Nice Luxury Conglomerate: LVMH announced on Friday that it’d agreed to up its stake in Italian luxury shoemaker Tod’s.

What Does This Mean?

It’s par for the course for the world’s biggest luxury companies to buy stakes in smaller rivals, if not acquire them outright. And LVMH is no exception: in recent years it’s partnered with Stella McCartney and Rihanna, as well as buying out fashion brand Christian Dior and – after some second thoughts – American jeweler Tiffany’s.

And now for the low, low price of $90 million, LVMH will increase its ownership of Tod’s from 3% to 10%. That won’t just allow it to benefit when the Italian company does well: it’ll put it in prime position to buy the whole company down the line (tweet this). See, unlike old-school industrial conglomerates whose various businesses didn’t cross over much, LVMH specifically wants that overlap. That way, it’ll drive “synergies” – i.e. remove duplicate costs across marketing and distribution – and boost its profit.

Why Should I Care?

For markets: LVMH could be tempted to spend more.
Investors took it as a good sign when luxury brands Hermès and Pernod Ricard announced stronger-than-expected sales early last week, and they rushed to buy up shares of the industry’s other companies. But they might’ve been too hasty: Moncler’s results on Friday were “only” in line with expectations, and the skiwear brand’s stock fell 4% – a drop some analysts think might be enough to tempt LVMH to dig deep again…

Zooming out: Luxury conglomerates are the new private equity firms.
One way to look at LVMH is as a sector-focused private equity firm, taking over companies and setting them up for success. If it’s looking to make US school buses look chic, though, it’s been beaten to the punch by a generalist private equity firm: Sweden’s EQT – having just closed a near-$20 billion fund – agreed to buy FirstGroup’s US school bus business for almost $5 billion on Friday.

You might also like: What makes luxury companies like LVMH so special.

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2. Analyst Take

America’s Debut Bitcoin ETF Can’t Compete With The Real Thing

What’s Going On Here?

At long last, regulators in the States look like they’re ready to greenlight bitcoin exchange-traded funds (ETFs).

That’ll make it easier than ever to buy and sell the crypto, since there’s no wallet to worry about. You’ll be able to track its price more closely than you would with other types of fund too.

That – plus the general booming popularity of crypto and ETFs – might be why one of Canada’s four new bitcoin ETFs has already racked up $1 billion of investment in two months.

But step back for a second and you may find that directly investing in bitcoin – rather than investing via an ETF – might be a much better idea.

That’s today’s Insight: why you might be better off investing directly in bitcoin even when these ETFs roll out.

Read or listen to the insight here

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