Welcome to 2023. Recessions are looming, inflation is slowing but not by enough and Elon Musk has fired the janitors at Twitter, forcing staff to bring their own toilet paper to work. Hopefully your year is off to a reasonable start though.

The lowdown

• 📱 iPhone manufacturer Foxconn’s Covid-hit plant in China close to resuming normal production.

• 🚗 Tesla China boss Tom Zhu has been promoted to a global role providing executive support to Musk.

• 🚀 SpaceX to raise $750 million in fresh equity valuing the company at $137 billion.

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Featured Stories

The Hipgnosis Songs Fund

What is the value of a song? It is not an easy question to answer unless, of course, you are the Hipgnosis Songs Fund, which was founded on the premise that hit songs provide predictable cash flows unaffected by economic cycles, and can thus be accurately valued.

The Fund was recently in discussions to purchase Justin Bieber’s catalog for around $200 million.

Not everyone agrees with the Fund’s valuations, evidenced by the tumble of its share price. In October, to combat this sliding, the company undertook a debt-funded share buyback. It did nothing to prop up the share price – the value of the company is now far below the $2.2 billion it maintains is the value of its music catalog ($).

The firm’s next battle is to convince investors that it is reasonable to cling to its song valuations, even as interest rates rise ($) – and that the discount rates (used in discounted cash flow calculations to value assets with predictable cash flows) will too. If it can’t, the share price may hit an even lower note.

The content we're consuming today

• The Economist: A treasure trove of Hollywood intellectual property is heading for the public domain ($)

• Morgan Stanley: 2023 Investment Outlook

• The Washington Post: Here’s who helped Elon Musk buy Twitter

Off-balance sheet items

• Were you hurt by stocks, bonds and crypto in 2022? This is in no way investment advice but Lego Investing Is Booming. Here’s How It Works.

• Start your New Year finally learning that language with 60% off Babbel for Balance Sheet readers. (Ad)

The bottom line