London to lose software pioneer in potential Private Equity takeover: Blue Prism to be acquired by Vista Equity Partners

Download PDF Introduction On September 28, 2021, Blue Prism, a British enterprise software company that specializes in software robots that automate monotonous jobs, announced that it has reached an agreement with private equity firm Vista Equity Partners to be acquired for £1.1bn ($1.5bn) in cash. Blue Prism, whose clients include Daimler, eBay, and the NHS in the United Kingdom, said it intends to propose that shareholders approve the offer published on Tuesday, calling the terms Read more…

Merck to acquire Acceleron Pharma: the largest biopharma acquisition of the year

Download PDF Merck & Co. (NYSE: MRK) Market Cap as of 8th October 2021 – $204.10bn Acceleron Pharma, Inc. (NASDAQ: XLRN) Market Cap as of 8th October 2021 – $10.68bn Introduction  On Thursday 30th September, Merck & Co.’s acquisition of Acceleron Pharma for a total consideration of about $11.5bn was announced. Merck has agreed to pay $180 per share in cash, which represents a premium of roughly 2.5% to the stock’s closing price on Wednesday. One of the main Read more…

Harnessing the European Energy Crisis: Shortfalls of Carbon Permits and Natural Gas

Download PDF Introduction Is the energy inflation in Europe transitory or structural? The plethora of factors that are affecting the energy market highlights the complexity of this question. The kind of inflation seen in energy is catching some Governments on their back foot, in need of rapid reactions. With many of them – namely Italy, Greece and the UK – already backing with financial aid national companies and households, this issue sparked a serious note Read more…

Chance for a Solid EV Maker at last? – Polestar’s SPAC Confirmed

Download PDF Introduction Polestar, the Swedish premium electric car maker, has announced it will go public. It will do so by merging with a blank-check company backed by private equity investor Alec Gores and investment bank Guggenheim Partners. The implied enterprise value will amount to $20bn. The transaction will mark Polestar as one of the most valuable electric-vehicle companies to go public via a SPAC; with a valuation of three times its current projected revenues Read more…

Opportunities in Small Cap Stocks: Iervolino & Lady Bacardi Entertainment

Download PDF Introduction In the following article we will shortly analyse the implications of the current macroeconomic environment for equities, and we will propose a trade idea on a small cap stock we have identified in the Italian stock market. The Macroeconomic Background In the last week it has become increasingly clear that higher inflation may be more persistent than it was previously expected. For this reason, central banks will have to decide whether they Read more…

Market Recap 10/10/2021

Download PDF USA The DJIA, S&P 500, and Nasdaq composite ended the week recording gains, despite weaker than expected U.S. jobs data, which brought about concerns over the recovery for the world’s largest economy. The DJIA and S&P 500 increased by 1.22% and 0.79% respectively, this week, while the Nasdaq Composite gained 0.09% and the Russell 2000 decreased by 0.38%. However, almost all American Stock Indexes lost ground on the last session of the week: Read more…

Straddling outside and into earnings

Download PDF Introduction An ATM equity long straddle position is delta neutral. If systematic risk is the only factor predicting expected returns, a delta neutral strategy should have an expected return equal to the risk-free rate. In this article we will review academic literature suggesting that not only is this not the case, but that the expected return of a single stock long straddle is time varying, becoming positive close to earnings and negative throughout Read more…

Carbon Trading And The Road To $100

Download PDF Introduction Financial instruments related to carbon emissions have been described in the past two years as a “one-way” bet for hedge funds and other financial players, who think the value of these contracts will rise in the future. The rationale behind these products is that negative externalities like pollution, not reflected in market prices, should be internalized. There are two main approaches to carbon-pricing systems: Carbon Tax Regimes, in which a price on Read more…

Prenetics’ SPAC merger: Hong Kong’s first unicorn to be publicly listed in $1.25bn deal

Download PDF Introduction On September 16, 2021, Prenetics Group Limited, a world leader in the field of genomics and diagnostics, announced that it has reached a definitive merger agreement with Artisan Acquisition Corp., a special purpose acquisition company privately founded by famed entrepreneur Adrian Cheng and listed on the Nasdaq with the ticker “ARTAU”. Through the deal, Prenetics will benefit from Cheng’s expertise and portfolio of well-diversified companies across retail, hospitality, healthcare, property, and other Read more…

Universal Music Group Out into the Wild: The Story Behind its IPO

Download PDF Introduction On September 21st, Universal Music Group (UMG), the world’s biggest music label, went public via an IPO on Amsterdam’s Euronext exchange. Universal’s shares surged at the start of trading on Tuesday, as owner Vivendi VIV.PA spun off the record label in the biggest European listing of the year. Recently, Vivendi sold a further 2.9% of Universal’s shares to Pershing Square Holdings, increasing their stake to 10%. Tencent, the Chinese internet conglomerate, bought Read more…

Market Recap 02/10/2021

Download PDF USA A rough week for the American stock market ended with solid gains Friday. After rising Treasury yields were a headwind for much of the week, Friday’s sharp drop in the 10-year yield help spurs equities. Small caps led the way, with the Russell 2000 up 1.7%. For the week, Russell lost just 0.29%. The Dow Jones industrials jumped 1.4% Friday, the S&P 500 rallied 1.10% and the Nasdaq gained 0.80%. For the Read more…

Renewable Energy transition: are “Green Finance” and “ESG” good enough? – Part II

Download PDF Introduction Green Finance and ESG investing are the answers of public capital markets to the climate crisis. Oftentimes they are reduced to buzzwords whose actual effectiveness is subject of fierce discussion. However, despite some criticism, these instruments have been incredibly successful in recent times and the appetite of institutional investors seems increasingly strong. In the past article in this series, we have explored the deep economic and strategic reasons behind the renewable rapid Read more…

Renewable Energy transition: is it really “sustainable”? Part I

Download PDF Introduction Renewable energy sources are finally gaining traction, pushed by the international community rushing to slow down climate change before consequences become unrepairable. But the shift towards clean energy has much deeper and structural roots from geopolitics to economics, that explain why certain countries have invested with more or less conviction. This article, the first out of two on the renewable sector, will explore the underlying industry dynamics and showcase the challenges that Read more…

Asian Options with Monte Carlo Pricing

Download PDF Introduction In this article, we will present the pricing of Arithmetic Asian Options using Monte Carlo simulations. Additionally, we will introduce variance reduction techniques and the advantages of using Asian options in the oil market. We will show the functioning of the Monte Carlo models and analyze the option price evolution under various simulation methods. There are three main types of options: European Options, American Options, and Asian Options. European Options give the Read more…

Hunting for Yield and Equity in the Corporate Hybrids World

Download PDF Introduction By typing “hybrid” in the Google search bar, the first results that come out are hybrid cars and their cutting-edge technology that is revolutionizing the automotive sector. If, on the other hand, the same question is made to a bond trader, the first thought that springs to his mind will be corporate hybrids, a rapidly expanding market niche that concerns bonds with hybrid characteristics between equity and debt. In this article, we Read more…