What we’re reading (8/14)
“Venture Capital’s New Reality Check: ‘A Ton Of People Looking To Get Out Everywhere’” (Business Insider). “During the zero-interest-rate years, the ranks of the VC industry swelled…Now, the market downturn has cast many aspects of the industry in a harsh light. Rising interest rates, delayed initial public offerings, and a slump in public markets have hit the venture industry hard…Poor fund performance has made carry worthless, a growth-stage principal said. Many investors received meaningful carry in funds only a few years ago. But funds from the pandemic years didn't perform well because many companies were overvalued.”
“Mars’ Biggest Deal Clinched By Secretive, Deep-Pocketed Family” (Reuters). “A running joke among residents of McLean, Virginia is that the most secretive organization headquartered in their Washington D.C. suburb is not the Central Intelligence Agency, but rather a confectionery and pet products company. Here, the second-richest U.S. family runs Mars Inc, maker of M&M's candies and Pedigree pet food, out of a nondescript building with no corporate logo or any other identifying signage. The CIA's offices, on the other hand, even have a parkway exit sign…Mars, flush with cash and dominant in the food categories it is active in, decided to place its biggest ever bet on expansion -- the $36 billion acquisition of snack and cereal maker Kellanova it announced on Wednesday.”
“In Mars Megadeal, Big Food Wants To Get Bigger” (Wall Street Journal). “The agreement, one of the biggest on record among food makers, comes as consumers are balking at higher grocery prices and scrutiny is growing over the potential health impacts from processed food. Conditions are ripe for a fresh wave of consolidation as food companies’ sales growth slows and their stock-market valuations are depressed, according to Wall Street analysts and consultants. Pandemic-era pantry stocking and sharp price increases that continued in its aftermath fueled a sales boom for food companies. That growth has cooled, prompting executives to search for new ways to boost their businesses and cut expenses.”
“What Should We Do About Google?” (New York Times). “[C]onsider the remedies imposed on AT&T, the greatest tech monopoly of the 20th century. In 1956, the Justice Department settled a major antitrust suit against AT&T by requiring the company to stay out of computing — and to license, free, all of its 7,820 patents.”
“Temasek Spent Billions On US Tech Stocks Before July Selloff” (Yahoo! Finance). “Temasek increased the value of its holdings in 11 big tech firms by $3.3 billion in the three months ended June 30, according to an analysis of its two most recent 13F filings. The vast bulk of the increase — some $3.2 billion — went into six of those firms: Microsoft Corp., Apple Inc., Nvidia Corp., Alphabet Inc., Meta Platforms Inc. and Amazon.com Inc. By the end of July, however, most of those companies saw their stocks slide amid concern about the extent of AI-related gains and fears of a recession. Alphabet and Amazon’s share prices have fallen by about 12% since the end of June, while Microsoft’s are down around 7% over that period.”
