Hi Reader, here's what you need to know for May 18th in 3:03 minutes.

☕️ Finimized over a mint mocha at Old City Coffee in Philadelphia, Pennsylvania (14°C/58°F 🌧)

Today's big stories

AT&T’s WarnerMedia and Discovery agreed to merge their businesses to create a new entertainment giant
Pre-owned fashion stocks are suddenly all the rage, and there are a few that could make your portfolio look very chic – Read Now
Investor enthusiasm for emerging market investments has been on the wane this year

Animal Magnetism

What’s Going On Here?

US telecoms giant AT&T agreed on Monday to merge its WarnerMedia content business with rival Discovery, in a bid to create a brand new king of the media jungle.

What Does This Mean?

AT&T only bought WarnerMedia – home to HBO, CNN, and Warner Bros. Entertainment – three years ago. But it’s already planning to spin off the unit into a standalone company which – combined with Discovery’s sports, science, and reality TV empire – could be worth up to $150 billion.

WarnerMedia and Discovery currently have complementary content footprints, and the combined business – 71% of which would be owned% by AT&T and 29% of which by Discovery’s current shareholders – would control everything from Superman movies to European Olympics coverage. So if the deal ends up getting the go-ahead from regulators, it’d mean some potent competition for the likes of Disney+ and Netflix…

Why Should I Care?

The bigger picture: Be skeptical of the hype.
If you think AT&T’s ownership of WarnerMedia sounds short-lived, you’re not wrong. But big merger deals don’t always go to plan, which is why investors – like Discovery’s on Monday – often send their shares down on the back of the announcement (tweet this). In fact, research from management consultancy McKinsey suggests that a lot of small linkups over a longer period tend to add more value than one blockbuster merger.

Zooming out: There are bigger fish to fry.
Netflix may have 208 million subscribers, but AT&T and Discovery’s flagship subscription services – Discovery+ and HBO Max – both grew faster than the streaming frontrunner last quarter. Still, even if these two do join forces, it’ll likely be a long time before they feel confident enough to start cranking up prices on their combined 59 million customers – and even longer before they start turning a profit like the OG streaming platform.

You might also like: The trouble with blockbuster mergers.

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2. Analyst Take

Fast Fashion Is Out. Pre-owned Fashion Is In.

What’s Going On Here?

Eco-conscious shoppers are paying more and more attention to sustainability these days.

No wonder, then, that they’re increasingly turning to second-hand fashion marketplaces – so much so that the industry’s expected to grow 20% a year for the next five years.

That wouldn’t just make it a fast-growing segment: it’d make it one of the fastest-growing segments in the entire retail industry.

And investors are taking full advantage: several second-hand fashion marketplaces have made hugely successful stock market debuts this year, and there could be a lot more to come.

So that’s today’s Insight: which stocks stand out in this increasingly competitive marketplace.

Read or listen to the Insight

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