Elon Musk and Twitter at Odds Over Terms of Agreement to Close Deal; The struggling bond market; Herb Greenberg's brand-new publication; Charity poker tournament tonight; Networking can help get a job in the finance industry
1) In yesterday's e-mail, I discussed the breaking news that Elon Musk would abandon his efforts to get out of his contract to buy Twitter (TWTR) and would instead proceed with the deal at the agreed-upon price of $54.20 per share, which caused the stock to soar to $52 per share. But in conclusion, I wrote:
If you own the stock, congratulations! But I wouldn't stick around for the last $2.20. There's a lot of downside and, as this New York Times DealBook article this morning notes, there's still financing risk (though I think it's very small)...
I should have added that there's also Musk-is-totally-flaky risk because, sure enough, the stock was down slightly this morning on this news: Elon Musk and Twitter at Odds Over Terms of Agreement to Close Deal. Excerpt:
Representatives of Elon Musk and Twitter are still grappling with terms of an agreement that would enable his purchase of the social-media company to proceed, continuing a monthslong drama surrounding the fate of the blockbuster deal.
The discussions are the latest the two sides have held as a courtroom clash draws nearer. They quietly held unsuccessful talks about a possible cut to the price of $44 billion for the social-media platform before Mr. Musk reversed course Monday and said he would return to the original agreement's terms, people familiar with the matter said.
As of late Wednesday, representatives of Mr. Musk and Twitter were trying to hash out the details of his proposal this week to stick to that original agreement, the people familiar with the matter said. Sticking points include what would be required from both sides for litigation over the stalled deal to be dropped and whether the deal's closing would be contingent on Mr. Musk's receiving the necessary debt financing, some of the people said.
There was initially hope a deal could be reached Tuesday or Wednesday, averting a trial scheduled to start Oct. 17, the people said. The two sides have agreed to delay Mr. Musk's deposition, which was scheduled to begin Thursday in Texas, some of the people said, to continue efforts to reach agreement on how to move forward.
I continue to believe that it's highly likely that Twitter shareholders will receive $54.20 in the near future, but I wouldn't stick around in this very hairy arbitrage situation...
2) In Monday's e-mail, I argued that we are nowhere near the brink of a calamity like the global financial crisis in 2008, and on Tuesday, I wrote that the chaos in the U.K. isn't likely to spread here.
That said, there are definitely strains in the market that I'm following closely. With stocks down more than 20% this year, I think this has already been discounted, but there are no certainties here, only probabilities...
I actually think a crisis is more likely to emerge in the bond market (which would then ripple into the stock market), as 10-year U.S. Treasurys are having their worst year ever (hat tip to Charlie Bilello for the tables below):
Ditto for U.S. investment grade corporate bonds:
And the bond market overall has declined over the past five years for the first time in history:
3) Again, as I just said, I don't think we're near the brink of a calamity like the 2008 financial crisis... So while there certainly could be more downside from here, some of the world's best businesses are trading at some great discounts right now.
That's why I'm thrilled to announce that my colleague Herb Greenberg just launched a brand-new monthly newsletter to take advantage of this situation: Empire Real Wealth.
Enrique, Herb, and I had been collaborating on ideas for our flagship newsletter, Empire Stock Investor, which focuses on large-cap, blue-chip stocks – the kind we'd put in our parents' retirement accounts.
However, with all of our experience as professional investors, there are times when we disagree on which stocks to recommend during any given month. As such, we decided that the best thing we could do for our readers was to launch another newsletter.
The recommendations in Empire Real Wealth have ideas reflecting Herb's background. He's geared toward real businesses with sound business models and solid fundamentals, and he vets these ideas through his invaluable network of contacts.
And given the bloodbath in the markets this year, many large-cap, blue-chip stocks have gone "on sale" – making this an ideal time for Herb to shop for bargains. For long-term investors, this is an incredible opportunity to own some of the best businesses in the world... and build a foundation for wealth in the years to come.
Right now, we're making charter memberships to Empire Real Wealth available for what's likely the lowest price we'll ever offer – click here to learn more about it.
4) The 12th annual Take 'Em to School Charity Poker Tournament I co-host, which I wrote about in my September 15 e-mail, is taking place tonight at Gotham Hall in New York City. Here's a picture from last year's event:
Every $2,500 poker seat is sold out, but there are still some $250 tickets available for cocktail guests, for whom there will be unlimited food and drink as well as a variety of casino games and entertainment. If you would like to attend, e-mail Yarah Kassam at yarah@edreformnow.org and she'll take care of you. (And be sure to find me and say hi!)
Some people will come to support the charity or just to have fun, but there's one group that should come for selfish reasons: those looking for a job (or looking to switch jobs) in finance. Here's why...
I've had a lot of success over the years building professional relationships, which has helped my career immeasurably. One of the ways I've done so is showing up at events like this.
Poker is huge in the hedge fund and banking communities, so the room will be filled with senior executives in the finance industry – the kind of people who make hiring decisions.
And let's be clear: While the big banks have formal hiring procedures, smaller firms (like most hedge funds) don't. They don't post open positions on LinkedIn – they hire people they know or through word of mouth.
So if you're looking for a job in this sector, it's a no-brainer to donate $250 to come to a six-hour event where you'll have the opportunity to meet and chat with exactly the people you want to connect with to find a job...
Best regards,
Whitney
P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.