Two years can seem like a long time. When Wall Street’s finest merger bankers and lawyers last convened in New Orleans for the Tulane Corporate Law Institute conference in March 2020, it was less than a week before cities across the United States first shut down to keep Covid-19 at bay. Stocks were plunging, but that didn’t stop advisers from clinking shared shrimp bowls while Centerview Partners founder Blair Effron touted the merits of special-purpose acquisition companies. Two record years of deal activity later, the conference is hopping again, this time against the backdrop of war in Europe. There are reasons

New lockdowns in the Chinese manufacturing hub of Shenzhen presage more supply disruptions for companies like Apple and higher prices for consumers. Past snafus are one of the reasons that U.S. inflation has surged to a four-decade high of nearly 8%. As items from electronics to cars become ever more expensive, or even unavailable, households will revert to pre-pandemic habits and focus their non-essential spending on services like restaurants and travel. In the past two years, cooped-up Americans bought more stuff. For example, spending on durable goods rose 14% in the fourth quarter of 2020 compared with a year earlier, according to

LVMH’s once hot pursuit of Tiffany has descended into acrimony. That’s unfortunate, because the U.S. jeweler doesn’t look well suited to life alone. If the $16 billion deal craters, Tiffany could be worth almost a third less than its closing value on Monday. The French conglomerate led by boss Bernard Arnault has filed a lawsuit saying Tiffany has bungled its response to the coronavirus pandemic, and claiming the right to walk. LVMH suggests that Tiffany’s future looks “dismal.” Tiffany, of course, disagrees – and the jeweler filed its own lawsuit against Arnault’s empire earlier in September, accusing it of dragging

Tiffany is no longer worth the $16 billion LVMH offered to pay for it last November. Nonetheless the U.S. jeweler’s board seems bent on forcing French billionaire Bernard Arnault to keep his word, and thinks it has the law on its side. If it wins the day, shareholder value will have prevailed – but an American icon could end up permanently tarnished. The 29% slump in sales in the May-to-July period from a year earlier that Tiffany reported on Thursday isn’t that bad. LVMH’s own watches and jewelry sales halved in its own latest quarter to June 30. But bigger

A strong stock market does not equal a strong economy. There’s a different explanation for the record level the S&P 500 Index hit during Wednesday’s trading day. The recovery in share prices – including Apple becoming the first U.S. public company to hit a $2 trillion valuation – may reflect little more than the Federal Reserve’s squashing of interest rates. In simplified theory, a company’s worth should be the value today of a never-ending stream of cash flows to investors. Over the long term, that’s roughly equivalent to future earnings. They’re usually valued using a discount rate, which knocks down

The coronavirus pandemic hit the European fund industry with declining markets and estimated net outflows of €125.9 bn in the first quarter of 2020. This trend reversed over the course of the second quarter as central banks and governments around the globe started quantitative easing programs and economic relief packages to cushion the economic drawdowns caused by the spread of the coronavirus and the lockdowns of economies around the globe. The measures taken led to a rebound of the equity markets accompanied by falling interest rates. The return to somewhat normal market circumstances led investors to buy back into mutual

Kraft Heinz is cooking up something new. The $43 billion food giant grew sales 4% in the quarter after Covid-19-induced lockdowns created new opportunities to eat packaged mac and cheese. That’s a double helping of luck, because higher profit makes the company’s high debt load more manageable. If its biggest shareholder 3G Capital uses the moment wisely, the boost could be more than just a flash in the pan. The maker of Velveeta cheese, 47%-owned by Jorge Paulo Lemann’s private equity firm and Warren Buffett’s Berkshire Hathaway, said that increased sales of condiments, frozen potatoes and other foods desirable in

The pandemic is bad financially for Twitter today, but it’s good news for tomorrow. Bored consumers flocked to the $29 billion social network in the second quarter as they sought news about protests, the spread of Covid-19 and the upcoming presidential election. What Twitter calls monetizable daily active users surged 34% year-on-year to 186 million in the period. That dragged costs up. Advertisers meanwhile pulled in their horns, so revenue fell 19% compared to the same quarter last year. The result was an operating loss, but investors shouldn’t be too worried. That’s because Twitter’s long-run problem has always been finding

Property and real estate investments are in general considered as safe-haven investments because bricks and mortar are real assets which can survive a storm in the equity markets. This claim can be considered as true if an investor invests directly into property. But as fund managers try to optimize the return for their investors, this might not be true for direct property funds and real estate investment trust (REIT) funds investing in commercial properties in the aftermath of the COVID-19 pandemic. Under current economic conditions, the optimization of returns— especially the use of leverage (debt capital)—may cause a problem for

The recent Refinitiv/Ipsos reading on consumer sentiment around reopening the economy suggests that the bulk of consumers are willing to attend a live concert, theater performance or movie theater — when there is a proven coronavirus vaccine, even if that’s a year or more from now. This doesn’t bode well for mall retailers that had already been hurting from weak store traffic pre-coronavirus pandemic. Recently, Simon Property sued Gap for not paying rent, and if shoppers are not ready to return to the mall, owners could potentially face more financial trouble. This is reflected in the Refinitiv earnings forecasts. What’s

The 2008 crisis helped birth a new breed of financial company. Digital banks like Chime and Revolut, and online lenders from Kabbage to Klarna, spent the past decade stealing established institutions’ customers with technologically slick, low-cost products. The current crisis will prompt a brutal comedown for some of this richly valued crop. Fintech is an increasingly diverse sector, but two broad types of business have gained particular traction among investors and consumers. First are the so-called neobanks. America’s Chime, Germany’s N26, Brazil’s Nubank and London-based Revolut, Monzo Bank and Starling Bank have collectively raised $4.6 billion and turned it into

Does cash make a company strong, or do only strong companies get the cash? Equity markets are putting it to the test. May has already seen a record number of issuances of stock – beating the previous monthly peak set in December 2009. Selling stock and other similar investments to fortify coffers beats raising more debt for most companies. But finding cash will also be easiest for those that already have it. So far this month 135 companies raised $69 billion globally, according to Dealogic, beating the previous record of $64 billion. While business has withered, stock-market valuations haven’t. Government