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Inside Arbitrage Friday Wrap – Economy On The Upswing

  • January 27, 2023

FRIDAY WRAP

Our list of curated tweets for the current week

Earnings

Earnings report to watch in the morning is Baker Hughes.


NextEra Energy slips after Q4 sales miss estimates; FLP chief Silagy to retire


Another tough quarter for Verizon -- shares down 25% in the last year $VZ


$JNJ at 16x current year’s conservative EPS guide. No net debt (despite AAA rating).


$FCX Freeport-MCMoRan Q4 22 Earnings


$MSFT Microsoft Q2 FY23


Security is probably the highest margin cloud service out there. And $MSFT made $20B in the last 12 months.


$CSX with solid earnings; might be the best of the rails so far

Special Situations

2022 was an interesting year considering merger arbitrage performed well but spinoffs took a hit.


Historically, arbitrage has produced the most consistent returns compared to other alternative and traditional investments


when a company is on your watchlist for further analysis but gets acquired before you had time to take another look.. #Evoqua (water play) is acquired by #Xylem $AQUA


Another victory for arbs


Important new decision from the Federal Court of Appeal upholding the decision of the Competition Tribunal that allowed the Rogers-Shaw merger.


$fstx grinding lower. Tender deadline, Jan 31st, approaching and still no news on CFIUS.


$ATVI / $MSFT continues going through the gauntlet with the EC


$TGNA: At this point the market is pricing in roughly 50% probability of the takeover closing.


In a major reversal, Rupert and Lachlan Murdoch decided that News Corp. and Fox Corp will no longer recombine.


$TIGO - Millicom confirms takeover interest from FT story.


ok then - Apollo and Claure are attempting to structure their bid in a way that would avoid them needing to refinance roughly $6.9bn of Millicom’s existing debt


Jacobs' Board Approves $1 Billion Share Repurchase Authorization and Increases Quarterly Dividend Rate by 13%


$LBRT: Liberty Energy increases existing share repurchase authorization to $500 mln


Radian Completes a Series of Capital Actions to Enhance Financial Flexibility, Approves New $300 Million Share Repurchase Authorization


C-Suite Transitions – CEO Transitions at Netflix


Dollar Tree $DLTR CEO Mike Witynski steps down.


Speaking of spinoffs, wrote about $VTS's spin here:


U.S. Economy

Real U.S. gross domestic product grew at a 2.9 percent annual rate in the final quarter of 2022.


The economy cooled in 2022 from a red-hot pace during the pandemic rebound.


Q4 real GDP growth 2.9%, initial jobless claims 186k. Really not sure why anyone thinks the economy is weak or even slowing.


*GOOGLE CUTTING 12,000 JOBS IN 6% SLASH TO GLOBAL WORKFORCE


Eye on the Fed: The market continues to price in a very fast pivot from a terminal rate of 5% to less than 3%.


Investing

MORGAN STANLEY: The “YTD rally in credit — led by lower-quality paper — has been driven in large part by technicals that cannot run counter to fundamentals for long


Bed Bath & Beyond said banks have determined it has defaulted on its credit lines and it doesn’t have the funds to repay them, as the retailer prepares for a potential bankruptcy filing


Returns, Last 10 Years...


"What does the rest of the world not get about India?"


Finally, Ken catches a break