Tag: equity

Further Downward Pressure On Equities

Further Downward Pressure On Equities

Given higher interest rates some Private Equity deals have been executed with 100% equity. This means Private Equity firms will become more valuation sensitive in order to generate higher returns. In months and years past PE firms would use minimal equity (subscription loans were popular), when executing transactions. Minimizing the equity component would goose PE … Continue reading Further Downward Pressure On Equities

Rolling Over Corporate Debt At Higher Rates

Rolling Over Corporate Debt At Higher Rates

Prepare for equity dilution and layoffs as companies roll over cheap maturing debt at higher rates. Companies have been living off of ultra-low interest rates since 2008. Many companies got addicted to 14 years of ultra-low rates and abused the reality by taking on enormous sums of debt, primarily to buy back stock in order … Continue reading Rolling Over Corporate Debt At Higher Rates

The Return of Active Management

The Return of Active Management

Our view of the Equity market over the next few years calls for a choppy market that will reward Active Managers and penalize the Buy & Hold crowd. This forthcoming "choppy" market will not be a market where most Technology stocks move up or down, or where certain sectors move in unison. Rather, we are … Continue reading The Return of Active Management

CEO Compensation Ought To Tightly Align With Company Performance

CEO Compensation Ought To Tightly Align With Company Performance

When a company Founder & CEO whom owns 14% of the company's equity pays himself $211 million (the approximate equivalent of one quarter's revenue), it sends the wrong message to the management team and employees (not to mention shareholders). Perhaps if Paycom Software (ticker: PAYC) were doubling Revenues and EBITDA each year for five or … Continue reading CEO Compensation Ought To Tightly Align With Company Performance

Tesla Should Acquire Volkswagen

Tesla Should Acquire Volkswagen

Volkswagen AG would provide Tesla with a large scale unit base (approximately 11 million vehicles sold in 2019 compared to 370,000 Tesla vehicles sold) that Tesla could leverage in part to accelerate technology development by 1.) deploying Tesla's technology across VW's much larger fleet and 2.) utilizing VW's cash flow to fund technology development. Tesla … Continue reading Tesla Should Acquire Volkswagen

Layoffs Have Extended Beyond Hotels and Restaurants

Layoffs Have Extended Beyond Hotels and Restaurants

Layoffs are not only taking place across the retail, restaurant, travel and hospitality industries. A number of other industries including the Technology industry have absorbed their fair share of layoffs as well. Some early-stage Technology companies are conserving cash by replacing cash compensation with equity. The list below includes approximately 60 companies (primarily Tech companies) … Continue reading Layoffs Have Extended Beyond Hotels and Restaurants