Month: May 2013

Vodafone: To do or not to do? That is not the only problem

AT&T Inc. (Market Capitalization as of 24/05/2013: $197.6bn) Verizon Communications Inc. (Market Capitalization as of 24/05/2013: $147.0bn) Vodafone Group PLC (Market Capitalization as of 24/05/2013: $144.7bn)   Vodafone: M&A since 1985 The strong winds of market activity in the US telecom landscape have recently reignited a dormant flame in the relationship between Vodafone and Verizon […]

Danone continues with its efforts to penetrate the Chinese dairy market

Type of deal: Joint Venture Danone (Market Capitalization as of 23/05/2013 €34.63bn) COFCO: state-owned food company in China China Mengniu Dairy Company Ltd.: (Market Capitalization as of 23/05/2013 HK$ 46.87bn, i.e. €4.68bn) On May 20th 2013, with a press release, Danone, the world leader in fresh dairy products, announced its third attempt to enter the […]

Yahoo! Acquires Tumblr for $1.1 Billion

Yahoo! (Market Capitalization as of 25/05/13: $28.5bn) Tumblr (Market Capitalization: N/A)   On May 20th, Yahoo! continued its aggressive strategy since Marissa Mayer took over as CEO by announcing the takeover of New York-based blogging platform Tumblr for $1.1bn, all in cash. Tumblr was founded in 2007 and has more than 108mln blogs and nearly […]

We’re all watching the rally: is S&P500 overvalued?

On May 3, 2013, more than thirteen years since its first close above 1500, the S&P 500 closed above 1600 for the first time, at 1,614.42. Last week it closed at 1,667,47, some say by the end of the summer it may reach 1700 points. There has been a lot of talking lately about the […]

‘Over the summer’ trade on commodities

Not so long ago, prices of oil, steel and gold (just to name a few) were thought to continue floating upwards forever as China entered its third decade of growing with breakneck speed. However, commodity prices have been deteriorating since 2008-2009, in line with sluggish growth and fall in demand in the developed world. This […]

Trade idea: short put Nikkei – strike 14000

From a technical point of view, NIKKEI recent movements do not deliver any blatant signal to ground expectations on: last closure stands close to the moving average and the RSI lies flat around 50.  However, we believe it’s worth to take a stand on the general markets’ sentiment over Japan. Specifically, BoJ speech delivered on […]

Follow-up on last week Japan trade idea

Last week we suggested shorting three Japanese financials in light of the 10-years JGB price fall, going at the same time long Olympus Corp. and the Nikkei index, in case no more easing was announced on Tuesday night. Kuroda kept monetary policy on hold and so we entered the trade on Wednesday Tokyo early trading. […]

Commerzbank joins the European recapitalization effort

Commerzbank Market Cap (as of 17/05/13): €4.42bn Deal Type: €2.5bn Rights Issue On Tuesday Commerzbank announced the details of the rights issue it previously declared in March. This rights issue will aim to raise €2.5bn in line with Basel III capital requirements. An earlier vote of the Board of Directors on April the 19th approved to […]

Shopping in UK for JC Flowers

JC Flowers & Company LLC: $2.3bn under management Cabot Credit Management Group Ltd Market Cap: N/A Deal size: £800mln   On 15th of May it was announced that funds managed and advised by JC Flowers & Company LLC have acquired Cabot Credit Management Group Ltd. in a secondary buyout from AnaCap Financial Partners LLP and its co-investors, Morgan […]

Activism and value creation in Japan

Third Point LLC, Asset Under Management (as of 17/05/13): $12.9bn Sony Corporation (SNE), Market Capitalization (as of 17/05/13): $20.37bn Deal type: Spin-off Proposal via IPO Mr. Daniel Seth Loeb, manager and founder of the NY based hedge fund Third Point LLC, has recently turned his attention toward Japan and Sony in particular. Mr. Loeb’s view […]

TowerBrook to Acquire True Religion Apparel for $835 Millions

TowerBrook Capital Partners L.P ,Market Cap(as of 16/5/2013): N/A True Religion Apparel, Inc, Market Cap(as of 16/5/2013): $814mln Deal size: $835 mln, all cash The private equity firm TowerBrook Capital Partners agreed on Friday 10th of May to acquire True Religion Apparel, the designer jeans company based in Southern California. Under the terms of the […]

Conditioned order in Japan: short financials if no more stimulus is added by BOJ on Tuesday night

INTRODUCTION During last months in Japan, extreme monetary policies – also known as Abenomics – implemented by the duo Abe-Kuroda to fight deflation and give a kick to the stagnant economy, have caused a huge reaction all over the markets: the Yen has been slashed, Nikkei index has been skyrocketing in an impressive rally and […]

Long Tesla Motors

Elon Musk’s creation, after having beaten analysts’  estimates just 11 days ago following the release of its first quarter earnings – which proved to be way beyond expectations – is now on a tough up-going rally. Surely this trade should have been implemented earlier but we believe there is still room for profit. Tesla intends […]

Atlantia-Gemina merger

On March 15th the merger was approved by the boards of the two companies, based on an exchange ratio of 1 newly issued ordinary share in Atlantia for 9 ordinary shares in Gemina. Atlantia shares seemed to be quite overvalued (8,9x the adjusted EBITDA; 7,5x for Gemina), but since March the price has increased from […]

Trade idea: multifractal volatility and Apple calendar spreads

Given the turbulence in the implied volatility observed in the aftermath of Apple’s Q1 results, we adopt a sophisticated quantitative model to better understand its dynamics. What we have observed so far in the option market is a large decrease in the 1-month implied volatility, and a sustained level of 4-month implied. We pave our […]

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