Author: Hayden Buckfire

Hicham Chahine, founder and CEO of the newly public NIP Group (NASDAQ:NIPG), joined Benzinga’s PreMarket Prep on Wednesday to discuss his company and the gaming industry’s future.

“For the industry, it’s extremely exciting,” Chahine said. “For our company, it’s also a new chapter — a new journey that we’re embarking on. It’s great to have the Olympics coming in… to drive that momentum that we’ve built our company up around.”

NIP Group is the first esports company to list on Nasdaq.

“When we look at the esports landscape, you have an industry which has been niched, niched in terms of if you look at the landscape our competitors [are] fragmented,” Chahine said. “What we felt with our IPO and taking the company public is we’ve created a global giant in terms of what is not seen, in terms of verticals, diversification, scale of footprints and operations from Europe, to China, to the Middle East, to South America.”

“I would say that looking at our company and how it sits in terms of where the space is going, it’s something that hasn’t really been seen before. We’re plowing uncharted waters,” he added.

Chahine is encouraged about the future of competitive gaming. He noted that early esports fans of the 2000s are having children who are “digitally native” and equally excited about competitive gaming. The founder and CEO sees esports’ momentum continuing as younger demographics become increasingly interested in the digital space.

Chahine said that NIP Group does not have easily comparable peers due to the breadth of its business operations. The company has revenue segments in esports competition, physical merchandise, ticketing and talent management. It also is diversified by geography across the world.

Chahine noted that people are more interested now in video games than ever and that momentum is on NIP Group’s side as the industry grows.

“It’s [the esports industry] already massive, and combined, it’s already exceeding music and film as an industry.”

Price Action: Hoping to raise $20 million, NIPG was listed at $9, selling 2.25 million depository shares. It shot up over 80% to trade at $16.50 on Monday before subsiding to $11.24 at the time of writing.

The Swedish-based company’s market capitalization is over $600 million according to Benzinga Pro.

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Project 2025 is a contentious set of policy proposals from the conservative think tank, The Heritage Foundation, intended for implementation should a Republican president assume office in 2025. Economists and tax experts argue that the 900-page manifesto’s proposed reforms to the U.S. tax system would exacerbate economic inequality.

Proposed Tax Reforms: According to Project 2025’s “Mandate for Leadership” document, the authors’ goal is to “simplify the tax code.”

The document proposes changing the U.S. tax system by adopting two flat tax brackets. Individuals making over $168,000 a year would pay 30% in federal income tax. Individuals making under $168,000 a year would pay 15%. It would also eliminate most deductions, credits and exclusions.

Project 2025 also proposes lowering the corporate income tax from 21% to 18%. In 2017, former President Donald Trump lowered the rate from 35% to 21%, and, according to a Bloomberg interview, he wants to lower it further to 15% if elected in 2024.

Why it Matters: Currently, the bottom 50% of Americans pay an average effective federal tax rate of 3.3% according to the Tax Foundation. This would likely rise under a new tax system. The poorest Americans already have higher tax incidence on regressive taxes such as sales or gasoline.

The U.S. currently has a graduated income tax system with seven brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. The idea of a graduated tax system is to lower the tax incidence of people with a lower ability to pay and institute higher tax incidence for people with a greater ability to pay.

Brendan Duke, senior director at the left-leaning Center for American Progress, told CBS News that Project 2025’s tax plan would mean that a middle-class family with two children and an annual income of $100,000 would pay an estimated $2,600 in additional federal income tax due to the loss of the 10% and 12% tax brackets.

Famed billionaire investor Warren Buffett has long advocated for higher tax rates for the wealthy. In May, Buffett said that no Americans would have to pay a federal income tax if corporations fulfilled their tax obligations.

William G. Gale, an expert at the non-partisan Tax Policy Center, wrote a blog post in March arguing for “a simpler and more progressive [graduated] system.” He also warned about the pitfalls of some ideas to simplify the tax system.

“The problem is that simplifying the tax system cannot occur in a vacuum. The tax system did not get complicated by accident. The provisions in the code were all inserted for some purpose, whether to promote fairness, economic growth, social policy goals, or better tax compliance,” Gale wrote.

The Heritage Foundation spent $22 million to finance Project 2025, according to the New York Times. The University of Pennsylvania ranks it among the most influential think tanks in the U.S.

Trump states he “know [s] nothing” about Project 2025, although the initiative was spearheaded by several of his former officials and allies.

According to Snopes, the Coors and Walton families’ billion-dollar empires donated to the Heritage Foundation in the past.

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Travel, especially abroad, has historically been a luxury for most Americans. Despite a tightening labor market and uncertain economic conditions, the number of households traveling abroad has soared nearly 30% as households build wealth.

The number predictably fell in 2020 and 2021 during the COVID-19 pandemic but has increased in each of the past three years.

The Data: A post on X relayed data from Bank of America.

The number of households travelling abroad has increased in the past two years, and, as of June, is nearly 30% higher than 2019 levels pic.twitter.com/zhhq8DeQRo

— Mike Zaccardi, CFA, CMT (@MikeZaccardi) July 11, 2024

Meanwhile, spending on luxuries abroad has seen similar increases since 2019, according to Bank of America.

Why It’s Important: Amid a period of inflation, households have become price-sensitive in some areas and willing to spend in others. Consumers have gravitated toward luxury or bargains, with less spending on items or experiences in between.

Meanwhile, flying is as popular as ever. More than 3 million passengers were screened at U.S. TSA checkpoints on Sunday, July 7, a new record. 

Market Implications: Long-term changes in consumer behavior stand to impact companies in various industries, most notably airlines and luxury goods.

Airlines have struggled since the pandemic, not so much with filling seats but with margin contraction and declining profitability. Delta Air Lines, Inc. (NYSE:DAL) shares sunk on Thursday after beating revenue estimates but missing on earnings.

Delta’s luxury status seems to have insulated it better from industry trends better than competitors United Airlines Holdings Inc (NASDAQ:UAL) and American Airlines Group Inc (NASDAQ:AAL).

Online travel agency Booking Holdings Inc (NASDAQ:BKNG) is a stand-out name for its stock performance — up more than 100% — since 2019.

LVMH Moët Hennessy Louis Vuitton (OTC:LVMUY) and Hermes Intl S A Unsponsored France ADR (OTC:HESAY) have benefited from increases in American travel to Europe. Ralph Lauren Corp (NYSE:RL) has been a standout performer in 2024, up over 25%.

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A higher-for-longer interest rate environment has sent many companies reeling, as corporate bankruptcies hit a high in June. The data came during concerns about the U.S. economy slowing.

What Happened: A post on X relayed data from an S&P Global report on corporate bankruptcy.

US corporate bankruptcies in June reach highest monthly level since early 2020 pic.twitter.com/yxnZpBD6Wy

— Mike Zaccardi, CFA, CMT (@MikeZaccardi) July 8, 2024

Electric vehicle manufacturer Fisker Inc. and Redbox parent company Chicken Soup for the Soul Entertainment Inc. were among the most notable companies to file for bankruptcy in June.

According to S&P Global’s report, the 346 bankruptcies in 2024 year-to-date are the highest since 2010. The 2010 figure of 467 bankruptcies came in the aftermath of the 2008 financial crisis.

The consumer discretionary sector saw the most bankruptcies, 55 in total, through the first half of 2024. Healthcare and industrials both had 40 filings.

Why it Matters: Companies file bankruptcy for various reasons, but recent trends seem to be tied to high interest rates set by the Federal Reserve and rising wages. Corporations straddled with debt were simply unable to pay it off.

The year 2023 saw 635 bankruptcies, with WeWork and Bed Bath and Beyond among the most notable.

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Is FedEx Corp (NYSE:FDX) helping law enforcement spy on private citizens? A new report presents compelling evidence in the latest controversy over privacy.

What Happened: Forbes reported that the Memphis, Tennessee-based shipping giant has partnered with local law enforcement agencies by distributing surveillance footage from cameras on FedEx vehicles.

There are instances of local police departments reciprocating by sharing data with FedEx, which has a secretive, private police force. These include the Shelby County Sheriff’s Office in Tennessee and Pittsboro Police Department in Indiana.

Jay Stanley, senior policy analyst at the American Civil Liberties Union (ACLU), called the program “profoundly disconcerting.”

“It raises questions about why a private company…would have privileged access to data that normally is only available to law enforcement,” Stanley told Forbes.

The company utilizes surveillance cameras from the start-up Flock Safety.

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What is Flock?: Flock, a multi-billion dollar startup founded in 2017, leases surveillance equipment to the private and public sectors.

Flock uses artificial intelligence technology to track vehicles by license plate, make, model, color and other identifying qualities.

Why it Matters: FedEx operates in all 50 states, with over 200,000 vehicles and hundreds of operational centers. FedEx’s partnership expands surveillance efforts to the road.

The extent of data sharing between law enforcement and FedEx remains unclear. The arrangement underscores broader issues surrounding privacy, transparency, and the increasing use of private surveillance technologies in law enforcement efforts.

While the program may help police departments reduce crime, it also opens the door for questions about curtailing personal liberties.

Simon Property Group Inc (NYSE:SPG), Lowe’s Companies Inc (NYSE:LOW) and Kaiser Permanente similarly share data with law enforcement, per Forbes.

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Honda Motor Co Ltd (NYSE:HMC) has continued its push into sustainable vehicles with a car that can run on hydrogen and electricity.

The Car: Electric vehicle news site Electrek reviewed the Honda CR-V e:FCEV fuel cell plug-in hybrid following the Tokyo-based company’s announcement of lease costs.

The fuel cell plug-in hybrid has 29 miles of range from its electric capabilities and a hydrogen tank with 241 miles of range.

The CR-V, Honda’s compact SUV, is currently sold in gas and hybrid models (gas and electric capabilities).

How Much Does it Cost?: Honda unveiled three leasing options for drivers wanting to drive the vehicle. Monthly payments range from $389 to $489 per month over a two to six-year lease. A substantial hydrogen fuel credit is offered to drivers to pay for expensive hydrogen fueling.

Is it Practical?: Electrek’s review expressed amusement at the vehicle’s existence and skepticism that it would be practical for drivers.

Non-commercial fuel cell vehicles are almost exclusively driven in California. Honda only plans to offer 300 fuel cell hybrids in a state with 30 million vehicles.

Not many hydrogen fueling stations exist, making fuel cell vehicles impractical for some drivers. The review posed the question, “Why not just get a battery-electric car instead?”

Why it Matters: Honda’s continued experiments with fuel cell vehicles come amid an industry-wide decline in price for electric vehicles. The Tesla Model 3 now costs less than the Honda vehicle mentioned above.

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Photo: Honda CR-V e:FCEV 2025, courtesy Honda

The Triple Crown is among the highest pinnacles of achievement in sports.

Since 1919, there have been only 13 winners. Can 2024 Kentucky Derby champion Mystik Dan‘s name echo with the likes of Secretariat, Seattle Slew and Justify amid this year’s limited field?

The Trend is Not Your Friend: The Triple Crown is a challenging feat. Horses must win the Kentucky Derby in early May, the Preakness Stakes in mid-May and the Belmont Stakes in June.

This is a tall task, partly due to the differences in course length among the three races. The Kentucky Derby is 1.25 miles long, while the Preakness Stakes is the shortest at 1.1875 miles.

The finale at the Belmont Stakes is the longest, at 1.5 miles. 

Since Justify in 2018, no horse who won the Kentucky Derby has been able to follow up their win at the Preakness. To win the Triple Crown, Mystik Dan must first break this streak at Saturday’s Preakness Stakes.

Baffling Baffert: Controversial trainer Bob Baffert’s horses have won the last eight Preakness Stakes. His horse Muth, who was originally favored to win this year’s Preakness, was scratched after reporting a high fever per ESPN.

His other entry, Imagination, does not seem to be as strong of a contender. 

No Pimlico Special: The Preakness is held at the Pimlico Race Course in Baltimore, Maryland. It is not uncommon for horses whose home track is Pimlico to skip the Kentucky Derby to race at the Preakness, often succeeding. There are no such cases this year.

Fresh Legs: Horses whose home track is not Pimlico but still skip the Kentucky Derby also find success at the Preakness. 

Preakness winners this century who did not compete at the Derby include Red Bullet in 2000, Bernardini in 2006, Rachel Alexandra in 2009, Cloud Computing in 2017, Rombauer in 2021, Early Voting in 2022 and National Treasure in 2023

Only three horses in 2024’s field raced at the Derby: Champion Mystik Dan, fourth place finisher Catching Freedom, and 17th place finisher Just Steel.

He’s A Mudder: With rain forecasted on Saturday, Mystik Dan could have an edge due to his prior success racing in the mud; he won the Southwest Stakes in January on a muddy course.

Closing it Out: Triple Crown winners must pull through in three highly competitive races. A win is a monumental event that occurs infrequently. If Mystik Dan can edge out wins at the Preakness Stakes and the Belmont Stakes, it would be among the most exciting sporting accomplishments of the year.

With Mystik Dan as the favorite at low odds, perhaps playing him in exactas with Catching Freedom and some other long shots may yield a good return. Just remember: Mystik coupled with the second favorite in the Derby, Siera Leone, returned $256.58 on a $2 wager.

Joel Elconin contributed to this report.

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Image by Clarence Alford from Pixabay