Posts belonging to Category bonds



Takeda buys Shire for $62 billion

Stock decline nearly 20 percent due to doubts about the deal

After five proposals and more than month of back-and-forth, it looks like this thing is happening. Takeda Pharmaceutical Co Ltd. agreed Tuesday to purchase rare-disease drugmaker Shire Plc for $62 billion. But this blockbuster deal comes with blockbuster risk. Takeda will be paying a steep premium and taking on big debt to acquire a company with uncertain prospects.
Takeda’s desire for geographic and drug diversification led it to overlook a lot of warts. Shire’s hemophilia business provides more than a quarter of its revenue. It faces near-term peril from Roche Holding AG’s recently launched Hemlibra, and long-term threats from potential one-time treatments being developed by companies such as BioMarin Pharmaceutial Inc. that could reduce demand for Shire’s older drugs.

Shire has an attractive pipeline of high-margin rare-disease drug candidates, but its research projects will have to over-deliver in order to compensate for competitive threats to current core business. The substantial research and development cuts that Takeda plans if the deal goes through won’t help.

 https://www.bloomberg.com/

15 companies likely to get bought this year

Morgan Stanley list

Wall Street expects M&A activity to accelerate in 2018, which should create opportunities for investors looking to profit from accompanying stock spikes. After all, when an acquisition offer is made, the company being bought usually sees its share price increase. So the process is simple — identify potential acquisition targets, buy them, and hope a deal gets announced.

The firm Morgan Stanley has developed a model that sorts stocks by acquisition likelihood. The methodology involves calculating the probability that a company will be on the receiving end of at least one tender offer. And in figuring out its list, Morgan Stanley weighs a combination of cohort information and stock-specific fundamentals. Without further ado, here are 15 stocks that the firm says are among the most likely to receive an acquisition offer sometime in the next 12 months:

SpaceX’s Valuation Climbs to $25 Billion

Company authorized raising $507 million on April 5

The value of Elon Musk’s Space Exploration Technologies Corp. keeps reaching new heights.
The rocket maker authorized a $507 million fundraising round on April 5 at a valuation of about $25 billion, according to PitchBook Data. With that increase in SpaceX’s worth, Musk’s fortune would rise about $1.4 billion to $21.3 billion, according to Bloomberg Billionaires Index calculations.
http://www.bloomberg.com/

The Greatest Bubble in History ?

Bank of America “Kills” Bitcoin for 278th Time

The Bitcoin Bubble is popping… this time for real… because Bank of America says so. For the 278th Time.

Bitcoin is not only the king of cryptos but also the king of bubbles. According to Bloomberg, a study by Bank of America Merrill Lynch on the behavior and evolution of Bitcoin’s prices places it as the most significant asset price bubble in history.

The study compares the price trends of bitcoin with other similar phenomena such as the U.S. stock market in 1929 crash in the Stock Markets, the Mississippi Company, and South Sea Company in the 18th century, the behavior of gold pricing, and the famous Dutch Tulip bubble.

http://www.cryptocurrencynews.com/

Markets not panicking yet over trade war threat

Heavy sell-off in financial markets over the last week

The heavy sell-off in financial markets over the last week shows greater caution among investors, but moves into Japan and emerging market stocks suggest no mass panic yet about a full-scale trade war or tech meltdown.

A weekly compilation of fund flow data by Bank of America Merrill Lynch showed a big $19.9 billion redemption from equity funds, the largest outflow of the year from financials and a record move out of inflation-linked U.S. ‘TIPS’ bonds. The firm’s Bull & Bear indicator eased further away from a zone of exuberance.

http://www.reuters.com

Britain unveils new fintech plans, including cryptocurrencies

G20:  no consensus for global regulation of cryptocurrencies

Britain announced a task force on Thursday to exploit the technology underpinning cryptoassets, such as bitcoin and other cryptocurrencies, as part of new plans to help fintech companies find more customers.

British finance minister Philip Hammond said he was committed to helping fintech grow and flourish by taking a series of domestic steps and forging links overseas.

“As part of that, a new task force will help the UK to manage the risks around cryptoassets, as well as harnessing the potential benefits of the underlying technology,” Hammond told a fintech conference hosted by the finance ministry.

Investors have flocked to cryptocurrencies like bitcoin despite wild price swings.

Regulators have warned that investors could lose all their money, but see promise in the blockchain technology that underpins cryptoassets.

Britain’s announcement comes after finance ministers from the Group of 20 richest economies (G20) were unable this week to find enough consensus for global regulation of cryptocurrencies.

http://www.reuters.com

Machines have replaced human stock market traders

Impact on the next financial crisis could be devastating

The February sell-off in stocks demonstrated the impact of automated trading on markets, according to Charles Himmelberg, Goldman Sachs’ cohead of global markets research.
“In this new market structure, machines have replaced humans, and speed has replaced capital,” Himmelberg said in a note.
This new ecosystem dominated by machines has dried up the sources of liquidity that would be needed in the next major wave of selling, he said.
http://www.businessinsider.com

Amazon is Eyeing the Banking Industry

How Amazon is planning to break into Wall Street

Banks have been warily watching Amazon.com Inc. for signs it would threaten their world. The tech giant’s latest move looks more like an opportunity — at least for one of them. A proposal to start offering a product similar to checking accounts is “for now not showing any signs of disrupting the industry,” Brian Foran, an analyst at Autonomous Research, said in a note to clients Monday. “While the ‘Amazon effect’ has dictated trading in several sectors, for banks it seems a much tamer story.”

Amazon is in talks with JPMorgan Chase & Co. and Capital One Financial Corp. about the product, people familiar with the matter said Monday. The targets are millennial consumers, the people said, asking not to be identified because the discussions are private. The strategy could help Amazon lower fees it pays to financial firms and give it a bigger window into customers’ income and spending habits. The Wall Street Journal reported the talks earlier Monday.

http://www.bloomberg.com…  March 07, 2018

Berkshire got a $29 billion gift from new tax code

Aversion to debt

Warren Buffett published his annual letter on Saturday, and it came with some of the usual trimmings: sage advice and reflections on the past year’s success.

With bonds, the “coupon rate” is the interest rate that an issuer uses to calculate regular interest payments to investors. The longer the term of a bond, the higher the coupon is likely to be; you’re paid more to wait longer to get your principal back. Higher risk, too, affects the coupon, with high-yield bonds from less solid companies offering more generous interest payments than you’ll get from higher-rated corporations or from U.S. Treasury bonds. Buffett told investors that Berkshire Hathaway (BRKB)made a $65.3 billion net gain in 2017 — but “only $36 billion came from Berkshire’s operations.”
The rest was a gift from the new U.S. tax code.

http://www.cnn.com…  Febuary 26, 2018

Dow futures tumble over 400 points

Markets: Fasten your seat belts

The Dow has already plummeted more than 1,800 points over the previous two trading sessions. Monday was particularly brutal: the index tumbled a record 1,175 points. The 4.6% plunge was the Dow’s worst day since August 2011 and knocked it into the red for the year.
The tremors also spread to the other side of the globe, with stocks in Asia plummeting overnight. Japan’s Nikkei lost more nearly 5%, while stocks in Hong Kong dropped almost 4%.

http://www.cnn.com...  Febuary 06, 2018