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How A Massive Oil-Drilling Company Sells a Million Kids' Toy A Year

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Small Bite
December 17, 2024

Hey Small Biters,

How A Massive Oil-Drilling Company Sells a Million Kids' Toy A Year

On the day that oil giant Chevron disclosed it would acquire Hess in a merger deal valued at $53 billion, Hess issued a separate but equally significant press release.

“An Important Hess Announcement,” read the October 2023 statement, which wasn’t filed with the Securities and Exchange Commission but could move the market — the toy-collectibles market, that is. “We want to assure all of you that the Hess Toy Truck, a long-standing, cherished tradition, will continue on for future years!”

For its everyday business, Hess HES $135.86 (-2.76%) is a huge oil-and-gas producer that ranks 378th on the Fortune 500. It jams gargantuan drills into the ground and builds towering steel rigs offshore in the Gulf of Mexico to extract crude oil and natural gas from the ground. It even explores for petroleum products in places like Guyana and Malaysia. 

Oh, and it also makes some of the hottest Christmas toys on the planet.

Every year, Hess sells over 1 million toys, largely around the holiday season, and it claims to be the largest direct-to-consumer toy seller in America.

  • SoftBank CEO Masayoshi Son announced a new round of investments into U.S. projects with President-elect Donald Trump on Monday.

  • The CEO said he plans to invest $100 billion in the U.S. by the end of Trump's upcoming term.

  • At the start of Trump's last term, Son promised to invest $50 billion in the U.S., though some investments failed to deliver returns, such as WeWork.

The S&P 500 was up 0.4%, the Nasdaq 100 rose 1.5%, and the Russell 2000 notched a 0.6% gain to kick off the week.

Breadth was — you guessed it — negative despite the move higher in the benchmark US stock index, with more S&P 500 constituents falling than rising for the 11th straight session, matching the streak set in September 2001.

Consumer discretionary and tech paced gains among S&P 500 sector ETFs; only four of 11 were up on the day. Energy was at the bottom of the leaderboard, down 2.2% as West Texas Intermediate crude oil futures slumped 1%.

Broadcom AVGO $250.28 (11.21%) built on Friday’s colossal post-earnings gain with another double digit advance, adding more than $300 billion in market cap over the course of two sessions in which it was the best-performing S&P 500 constituent on each day. Nvidia NVDA $131.08 (-1.68%) once again moved in the opposite direction as its competitor and the semi space broadly with a 1.7% decline, and was the only member of the Magnificent 7 to decline.

Index additions and deletions helped drive price action on Monday, with Super Micro Computer SMCI $33.06 (-8.29%) down 8.3% after the Nasdaq said it would be booted from its closely-watched Nasdaq 100 Index at the end of this week.

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