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Inside Arbitrage Friday Wrap – Economy On The Upswing

  • January 27, 2023


Our list of curated tweets for the current week


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.


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


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