What You Need To Know This Week — January 11th, 2020
What You Need To Know This Week
A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.
HUDSON’S BAY CHAIRMAN SETTLES WITH SHAREHOLDER ACTIVISTS, RAISES BID TO $11.00
Hudson’s Bay Co. Chairman Richard Baker increased his offer to take the retailer private from $10.30 per share to $11.00. This bump in price was sufficient to get the deal’s most vocal opponent, Catalyst Capital, on board. My thoughts on the deal? “The worst-case scenario is to end up in that purgatory where the stock tanks 50 percent and there’s really no hope for public shareholders. So it is a small win here.”
HP REJECTS XEROX APPROACH AFTER FINANCING SECURED
In a battle of the printer makers, HP Inc spurned a $33 billion takeover proposal from the much-smaller Xerox Holdings. HP claims the $22 per share bid, made up of $17 cash and $5 in Xerox shares, “significantly undervalues HP — and is not a basis for discussion”. Activist investor Carl Icahn continues to push the companies to merge, a move that the octogenarian claims is a “no-brainer”.
SOFTBANK’S VISION FUND CONTINUES TO STRUGGLE AFTER ZUME PIZZA CRUMBLES
Zume Pizza, which raised $375 million last year from Softbank at a $2.25 billion valuation (up from a $170 million valuation one year prior), announced that it is laying off 80% of its staff. This coincides with a pivot of the business from pizza to packaging. The difficulties at Zume aren’t an isolated incident, as Softbank-backed startups Getaround and OYO announced large layoffs as well.
JOBS: CANADA BEATS WHILE U.S. MISSES
Canadian employment bounced back after two consecutive months of declines with the economy creating 35,200 jobs in December, coming in ahead of the consensus economist estimate for a 25,000 gain. Meanwhile, the U.S. economy added 145,000 jobs last month, slightly fewer than the 160,000 expected by economists.
Recommended Articles, Podcasts, Books and Tweets
Listen to author Greg Zuckerman discuss his new book, “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution”, on the Capital Allocators podcast.
Real interest rates have driven the price performance of gold bullion over the past ten years.
Why have value stocks underperformed since 2008? “The simple explanation for value’s underperformance is the relative increase in the valuations of growth stocks.”
Economist Robert Schiller discusses what’s driving today’s high stock market valuations: “gut feelings” and visceral emotion of investors directed by President Trump.
Despite a history of problems, individual investors are putting money into private REITs again. Much of the fund flows are due to high commissions paid to the sales agents.
Canadian investors are increasingly buying asset allocation ETFs.
Global index fund assets have grown past $10 trillion, up from $2.3 trillion a decade ago.
Bank of Canada Governor warned about “froth” in the Canadian housing market, particularly in B.C., Quebec and Ontario.
Hey, they stole our idea! A hedge fund that doesn’t charge any management fees.
Europe is looking to cut back its eight-and-a-half hour trading sessions.
Telus’ pension plan faces losses given its exposure to Strategic Group’s Alberta real estate holdings, which have recently been put into receivership.
Boeing employee claims the 737 Max was “designed by clowns, who are in turn supervised by monkeys”.
