Hi! Dan DeFrancesco in NYC, but I might be on my way to Virginia soon if these dolphins don’t stop it with the bullying.
I still need questions for the upcoming reader mailbag. Drop any finance-related (or non-finance) questions you have for me here. (No email needed!) I’ll answer them in Friday’s newsletter.
Today, we’ve got stories on crypto getting in on the AI bandwagon, the consultants still vying for the UBS-Credit Suisse mandate, and some more workout advice.
But first, iiiiiiiiiiiiiiiiiiiiit’s TIME!
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1. M&A from the top rope.
Wait, what’s that? Do you hear that? Is that…
M&A! M&A! For God’s sake, M&A is back!!
After nearly 12 months of a dealmaking drought, the bankers finally have something to cheer about.
Monday was quite the start to Q2 with not one, but two massive deals announced. First up was Extra Space Storage’s $12.7 billion acquisition of fellow real estate investment trust Life Storage. Citigroup, JPMorgan, Wells Fargo, and Bank of America were among the banks advising on the deal.
Not to be outdone, 20 minutes later the World Wrestling Entertainment and UFC announced plans to merge to form a new public company valued at more than $21 billion, per the deal. For this one, Morgan Stanley, Goldman Sachs, The Raine Group, JPMorgan, and Moelis all served as advisors.
Earlier this year, some pegged the merger market getting back into the swing of things by mid-year. But the bank crisis of the past few weeks led some to question whether that was still a reality.
Leave it to a bunch of professional wrestlers and cage fighters to throw caution to the wind and dive in head first.
When you think about it, the WWE-UFC deal might be the best way to get the market going again. It’s the type of transaction that has a little bit of everything, meaning companies could use it as a litmus test for their own potential deals.
For example:
Two public companies: Endeavor Group (UFC’s parent company) and WWE are publicly traded. (The new company will trade under the ticker “TKO.” Love that.)
Massive interest: The UFC is arguably the third-most popular professional sport in the US. WWE, meanwhile, has a rabid, wide-ranging fan base and one of the biggest social-media presences in the world.
Fight for media rights: Both UFC and WWE have streaming deals with ESPN and NBCUniversal’s Peacock, respectively. When those deals expire in the coming years, they could look to negotiate a joint deal, per Axios.
Outside-the-ring/cage issues: Earlier this year a video of UFC president Dana White slapping his wife made the rounds. Meanwhile, WWE executive vice chairman Vince McMahon returned to the company less than 6 months after retiring amid sexual misconduct allegations.
So are the floodgates going to open? Should analysts brush up on Excel?
There is a real case to be made for the market starting to pick up. And just like a pool party, nobody seems to want to be the first one in, but once things get going everyone’s putting their swim suit on.
In other news:
2. More people want out of Blackstone’s REIT…again. The giant investment firm once again stopped people from pulling money from the Blackstone real estate income trust (BREIT), Reuters reports. Here’s more on why the firm limiting redemptions from BREIT is bad news for its strategy of attracting smaller investors.
3. Crypto gets on the AI bandwagon. It was only a matter of time. The crypto community is now pitching itself as playing a key role in AI development thanks to its decentralized nature. Check out these 12 crypto projects touting their ability to make AI cheaper to develop.
4. What’s going on with Charles Schwab? Shares in the brokerage dropped 33% in March, its worst month since 1987. More on the company’s difficult March.
5. Nobody wants the bad bonds the banks are looking to sell. Banks hold as much as $30 billion of so-called hung debt on their balance sheets that is proving difficult to move in the wake of the fall of SVB, The Wall Street Journal reports. Speaking of SVB, The Washington Post has a report on how executives tweaked with the bank’s risk model until it showed them what they wanted. (Is that what they mean when they say they need to “recalibrate” the model?)
6. The next Joe Rogan? Lex Fridman has grown a massive following thanks to his popular show, “The Lex Fridman Podcast,” whose guests have ranged from Mark Zuckerberg to MrBeast. But his decision to interview controversial figures — such as Ye, the rapper formerly known as Kanye West — has drawn criticism from some, who suggest he’s contributing to the spread of misinformation. More on Fridman’s rise here.
7. One of the biggest prizes in consulting has almost been decided. Four consulting firms remain for the honor — and millions of dollars in fees — of advising UBS on how to fit Credit Suisse into its firm, the Financial Times reports. Here’s who remains in the latest “Hunger Games” of consulting.
8. Beats by AI. Even music is set to be disrupted by artificial intelligence. From mastering a track to writing lyrics to even creating music videos — they still make those? — everything is on the table for the tech. Check out these 13 startups primed to shake up the industry.
9. Peek inside a $7.5 million Manhattan brownstone. The three-story building is currently owned by an architect and includes an indoor waterfall and an open-aired rooftop. Check out pics from the 6,500-square-foot property.
10. More workout advice. We’ve got a personal trainer sharing “cheat codes” he wishes he knew when he started. And we’ve also go a bodybuilder who shares some advice on how to get better gains at the gym. Most important, get your mornings in order.
Curated by Dan DeFrancesco in New York. Feedback or tips? Email [email protected], tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London.
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