Short Squeez
Posts
🍋 M&A Never Left

🍋 M&A Never Left

Short Squeez
August 16, 2022

Together With

"So much advantage in life comes from willing to look foolish in the short term." — Shane Parrish

Good Morning! With the US Open coming up later this month, tickets are jumping in price. Tickets for the women's final increased to a different level (as much as $12,728) as people are hoping to see Serena Williams play after the legendary tennis star announced it may be her last tournament. Prince Alwaleed, a Saudi billionaire, could easily afford that. Alwaleed recently invested more than $500 million in Russian companies like Gazprom, Rosneft, and Lukoil, in a geopolitical bet. Andreesen Horowitz is also betting big on Adam Neumann, a $350 million investment into his pre-launch start-up, Flow, valuing it at more than $1 billion.

Daloopa is giving away Disney's detailed financial model for FREE. Download here.

1. Story of the Day: M&A Never Left

Remember when people thought M&A activity was disappearing? Like that person at the bar that you just had the best conversation with? Well, they're walking back, drink in hand!

There is no doubt that M&A activity is off its peaks, but that's understandable given all the chaos going on in the world and markets. That won't stop you crafty bankers though, as 2022 is lining up to be one of the busiest years for deals on record.

Bain is forecasting that globally, 2022 will be the second largest year for M&A on record.

David Harding, an advisory partner at Bain & Company, said, "The conversation is now largely around how to take advantage of the situation that is being presented by turbulent markets, and a world where the footing doesn't feel quite as stable as it has been historically."

One of the differences compared to the "ignorance is bliss" bull market days of last year, is that there is a shift in deal type towards "scale oriented consolidation deals," vs "finding the next disruption."

Short Squeez Takeaway: Bets like the one Prince Alwaleed made, or betting on Adam Neumann have merit, no doubt. But I'll tell you, I will never bet against Wall Street. There's a reason it's so tough to get in, and even tougher to get to the top. The boys in charge will always find a way to do business.

2. Markets Rundown

Equities finished up after turning around a wobbly start, but unfortunately, crypto didn't do the same.

Movers & Shakers

(+) Poshmark ($POSH) +17% after Barclays upgraded the secondhand fashion company to overweight.
(+) Bed Bath & Beyond ($BBBY) +24% because meme stock. So far in August shares are up almost 180%.
(–) Vroom ($VRM) -10% thanks to JPMorgan signaling to sell, and taking a broader bearish stance on used cars.

Private Dealmaking

Hedge fund manager Dan Loeb takes $1 billion stake in Disney, pushing ESPN spin-off
Andreessen Horowitz invests $350 million in Adam Neumann’s residential real-estate company Flow
Arsenal Capital Partners, a healthcare and industrial private equity firm, raised $4.3 billion
.bit, a blockchain identity management startup, raised $13 million
Assetz Capital raises $242 million to boost SME lending
Solace Capital Partners sells Patriot Environmental Services for $156 million

3. Top Reads

Direct lending market helps keep private equity deals flowing (Axios)
This was a good week for inflation numbers - but can it last? (CNBC)
Payrolls increased 528,000 in July, much better than expected (CNBC)
Wall Street revives Russian bond trading after U.S. go-ahead (Reuters)
Growth stocks lift Wall Street out of slowdown worries (Reuters)
Housing market is officially in a recession, economist says (Fox)
Citi sues Revlon over lender status after $900 million mistake (BB)
Consumers snap up premium products despite cost-of-living crisis (CNBC)
New York manufacturing index posts sharp drop, clouding the economic picture (CNN)

A Message from Daloopa: Update Models with 1-click

Here's a dirty secret: part of being a finance professional consists of being one of the world's best-paid data-entry professionals.

It's a pain—and a rite of passage—to build a financial model by painstakingly transcribing information from 10-Qs, 10-Ks, presentations, and transcripts. Or, at least, it was: Daloopa uses machine learning and human validation to automatically parse financial statements and other disclosures, creating a continuously-updated, detailed, and accurate model.

Thomas Li (CEO) puts it best: “Daloopa collects literally everything a company discloses.”

Today is your lucky day because Daloopa is giving away one of their models to Short Squeez readers -> Disney whose stock is up 14% over the last 5 days after reporting earnings and Daniel Loeb’s Third Point took a new stake in the giant.

Download Disney's model for FREE here.

4. Book of the Day: The Upside of Uncertainty

Whether you're searching for courage to start a new project, change careers, launch a business, develop an idea, or reinvent yourself after a disappointment or life change, you will face uncertainty—that ambiguous and uncomfortable state that often makes us feel confused, anxious, and afraid to act. Though these moments are difficult, they offer opportunities for personal growth, innovation, and creativity.

In The Upside of Uncertainty, INSEAD professor Nathan Furr and entrepreneur Susannah Harmon Furr provide a sweeping guide to embracing uncertainty and transforming it into a force for good.

Drawing from hundreds of interviews, along with pioneering research in psychology, innovation, and behavioral economics, Nathan and Susannah provide dozens of tools—including mental models, techniques, and reflections—for seeing the upside of uncertainty, developing a vision for what to do next, and opening ourselves up to new possibilities.

In our fast-paced, ever-changing world, uncertainty is on the rise. We face it every day. But few of us have been taught the techniques to navigate it well. The Upside of Uncertainty provides the inspiration, tools, and strategies you need to thrive through the inevitable plot twists in your life and career.

“We’re always living in a state of uncertainty – two years ago, two years from now therefore, part of our challenge as I see it, is to make uncertainty… our home.”