As was leaked over the weekend, first by the FT, moments ago Pfizer, still stinging from its foiled mega-acquisition of Allergan earlier in the year, announced it would acquire prostate-cancer drug maker Medivation for $81.50, a 21% premium to the Friday closing price, in a $14 billion deal.
Concluding a transaction that surprised the world when it was announced one month ago, and which we hope the regulators are poring over as a result of a myrida of "related party transactions", moments ago SolarCity (whose stock is currently halted) announced that Tesla and SolarCity would combine in all-stock deal; in which SCTY stockholders will receive 0.110 Tesla common shares per SCTY share, valuing SCTY common stock at $25.37 per share.
Over the next year, the BoJ is scheduled to purchase ¥6t ($58b) in ETFs, and $116b over the next two years. By June of 2018, BoJ is likely to hold ¥20.5t ($200b) in ETFs. Putting this in context, this new stimulus can be viewed as equivalent of the Fed purchasing $580 billion in ETFs over the next two years, and the Fed holding $1 trillion in ETFs.
As of July 8th, Pokemon Go was being used for an average of 43 minutes, 23 seconds a day, higher than Whatsapp, Instagram, Snapchat, and Messenger. At this rate, Pokemon could soon surpass the undisputed attention hog - Facebook.
There was a reason why we warned readers two days ago that "The World's Central Bankers Are Gathering At The BIS' Basel Tower Ahead Of The Brexit Result": simply enough, it was to facilitate an immediate response when a worst-cased Brexit vote hit. And that is precisely what has happened today in the aftermath of the historic British decision to exit the EU. It started, as one would expect, with Mark Carney who said the Bank of England is ready to pump billions of pounds into the financial system as he stands at the front line of Britain’s defense against a Brexit-provoked market crisis.
Here is the chart that confirms that any light at the end of the industrial and heavy manufacturing tunnel is most likely just one of the few trains still running: there are now 42 consecutive month of CAT retail sales declines. This has never happened in the company's history.
While company officers - who have given up on major stock upside as a result of busted M&A - and investment bankers are lamenting the bursting of the M&A bubble, some of the biggest losers are on the buyside, where merger arbs have seen billions in paper profits turn into billions in paper losses in moments upon the announcement of deal termination. Indeed, broken deals have whipsawed hedge funds that focus on merger arbitrage. As the NYT poetically puts it, according to one "arb" the current mood of the industry: "Every day is like showing up unsure of whether to wear a helmet or a diaper."
The great megadeal M&A drought of 2016 just came to an end when moments ago Abbott announced it would acquire St. Jude Medical for $25 billion, roughly a 37% premium to St. Jude's Wednesday closing price. According to the press release, under the agreement, St. Jude Medical shareholders will receive $46.75 in cash and 0.8708 shares of Abbott common stock, representing total consideration of approximately $85 per share. At an Abbott stock price of $43.93(2), this represents a total transaction equity value of $25 billion.
It's not just the shale drillers who are in danger as they see their liquidity evaporate. As the WSJ writes today, and as covered here since January, it is the lenders themselves whose unfunded revolver exposure may suddenly become funded and expose them to even greater risks from the energy sector should oil not rebound far more forcefully and put US oil and gas companies back in the black. How big is the exposure? Very big: $147 billion.
Yesterday's stunning announcement by the US Treasury, which released a report titled "Treasury Announces Additional Action to Curb Inversions, Address Earnings Stripping", and which was clearly aimed at ending not only all tax inversions, but the biggest pharma M&A deal in history, Pfizer's tax-inverting takeover of Allergan (pardon Actavis) hit AGN like a ton of bricks, sending the stock crashing 20%. But is the deal over? Here are some Wall Street opinions.
In mid-February, we warned of the looming carnage for equity market-neutral funds, and sure enough, as Bloomberg reports, one of the most popular (and successful) hedge fund trades - playing the difference between high- and low-momentum stocks - crashed by the most since 2009 in Q1. After 6 years of almost unstoppable gains, equity market-neutral funds suffered their biggest losses since 2012 - comparable to the 2007 quant crisis devastation - as weak momo stocks massively outpeformed crushing the hedgies' models.
" I would only add that even if one were Bullish at this point, which is perfectly reasonable (not my call, but reasonable), that with almost 94% of stocks above their 50 day ma while volatility, currencies and inflation expectations have surged into levels which coincided with prior inflection points across the risk spectrum, a consolidative pause and pullback remains on the table. 2077-2086 stop."