What we’re reading (7/19)
“Amid Mega-Mergers And Acquisitions, ViacomCBS May Be In Play” (New York Post). “The cliché describes those preliminary M&A powwows between CEOs that are so commonplace, you probably shouldn’t label them ‘deal discussions.’ Except on those occasions when they deserve that designation, which is why Shari Redstone, the matron of the ViacomCBS media empire, caused such a stir two weeks ago at the Allen & Co. media conference in Sun Valley, Idaho. People who attended the event say Redstone was “talking to everyone,” which again may or may not lead to a deal.”
“Bill Ackman’s Deal Machine Must Try Again” (DealBook). “When Bill Ackman’s jumbo-sized SPAC, Pershing Square Tontine Holdings, struck a deal last month to buy a 10 percent stake in Universal Music Group, it did so with a highly complex transaction that took a lot of explaining. Now, pushback from the S.E.C. has forced Ackman to change course.”
“Cathie Wood's Flagship ARK Fund Shows Dot-Com Bubble Traits And May Be Luring Investors Into A ‘Bull Trap,’ JPMorgan Strategist Says” (Business Insider). “In a note dated July 15, [JPM analyst Shawn] Quigg wrote that a second-half pick-up in Treasury yields and a shift in the growth dynamic of the economy could trigger a bull-trap reversal of shares in the exchange-traded fund. ‘A looming rise in yields could be a catalyst to accelerate ARKK shares lower, in addition to the continued outperformance of large staple-tech stocks over disruptive-tech stocks, and pressing ARKK into the capitulation phase,’ he wrote.”
“Robinhood Is Seeking A Market Valuation As High As $35 Billion In Upcoming IPO” (CNBC). “The stock trading app will attempt to sell its share at a range of $38 to $42 per share, according to the updated prospectus. Robinhood is looking to sell 55 million shares at that range to raise as much as $2.3 billion. Robinhood’s last private market valuation was $11.7 billion as of September.”
“Taming Wildcat Stablecoins” (Gary Gorton, Jeffery Zhang, working paper). “Cryptocurrencies are all the rage, but there is nothing new about privately produced money. The goal of private money is to be accepted at par with no questions asked. This did not occur during the Free Banking Era in the United States—a period that most resembles the current world of stablecoins…Based on lessons learned from history, we argue that privately produced monies are not an effective medium of exchange because they are not always accepted at par and are subject to runs. We present proposals to address the systemic risks created by stablecoins, including regulating stablecoin issuers as banks and issuing a central bank digital currency.”
