Opportunities in Decentralized Finance: Yield Farming

Download PDF You might have heard of Decentralized Finance, or DeFi for short, in the news lately. It is a part of the broad blockchain ecosystem that has taken the world by storm in the last couple of years. But what is DeFi, and what opportunities does it present? This article will offer an in-depth overview of the ecosystem, make parallels to traditional finance to help make sense of the disruptive innovation taking place, and Read more…

Are simple Pairs Trading Strategies still profitable?

Download PDF Introduction Pairs Trading is a well known and one of the earliest statistical arbitrage trading methods. This article will present two rather simple pairs trading strategies, namely the Distance and Cointegration Method and discuss their levels of profitability over time and in the present day. Intuitively, pairs trading takes advantage of temporary deviations of the prices of two securities relative to each other which otherwise have a strong correlation in prices. When such Read more…

Healthy salads are now publicly listed: Sweetgreen goes public to fuel its expansion

Download PDF Introduction On Thursday November 18th, the fast food restaurant chain serving salads, Sweetgreen (SG) debuted on the New York Stock Exchange. The IPO was priced at an initial offer price of $28 per share. On the first day of trading, Sweetgreen’s opened with a stock price of $52 per share, reflecting a market value for SG of more than $5.5 billion. The newly listed company raised $364 million, selling 13 million shares. About Read more…

Market Recap 28/11/2021

Download PDF USA The US main index dropped sharply on Friday, after the Thanksgiving session, following a new Covid variant thread found in South Africa. “This variant has a large number of mutations, some of which are concerning,” the WHO said on Friday. The new variant is still under examination, but health experts are worried that the virus will be more transmissible, threatening unvaccinated people and making existing vaccines less effective. Concerns of a new Read more…

CVC to acquire Unilever’s tea business, the leading global tea producer, for €4.5bn

Download PDF Introduction On November 18th, CVC Capital Partners announced that it reached an agreement with Unilever to acquire its tea business for €4.5bn on a cash-free, debt-free basis. The deal is expected to close in the second half of 2022. The agreement concludes a two-year process of reviewing and unbundling the division, which is the world’s largest tea producer. The announcement was overshadowed by the fact that two of the three bidders in the Read more…

Nuclear Energy – Doomed or Blessed?

Download PDF Introduction Currently, nuclear energy provides about 10% of the world’s electricity, producing it in 440 active power reactors as of 2021. The United States has almost 100 nuclear reactors, even though it generates most of its electricity from fossil fuels and hydroelectric power. Unlike in the US, nuclear provides practically all the electricity in countries like Lithuania, Slovakia, and France. Despite the proliferation of nuclear energy, its development and use have long been Read more…

Market Recap 21/11/2021

Download PDF USA A mixed performance in equities this week, as the inflation debate continues to bemuse investors. Indications of continued strong economic growth, such as the 1.7% monthly increase in retail sales, prompted the superior performance of consumer discretionary firms’ shares. The sector, which rose by 3.81% this week, was aided by the partial recovery of Tesla’s stock price from a recent drawdown and hopes that the upcoming holiday shopping season will help firms’ Read more…

Myopic Loss Aversion and the Equity Premium Puzzle

Download PDF Introduction In this article, we are going to summarize “Myopic Loss Aversion and the Equity Premium Puzzle”, published by Shlomo Benartzi and Richard Thaler in 1995. The purpose of revisiting this paper is introducing our readers to the domain of behavioral economics. Behavioural economics is the field of economic studies which aims to explain the anomalies deriving from the standard model of rational expectations. The findings of behavioural economics are applicable to finance Read more…

DoorDash acquires Wolt in bid to conquer Europe

Download PDF Introduction On November 9th, 2021 food delivery company DoorDash, Inc. announced they had reached an agreement to acquire Wolt Enterprises in an all stock transaction, valued at approximately € 7.0 bn. DoorDash equity issued as part of the transaction will be valued at $206.45 per share. The deal is one of the most expensive takeovers yet in Europe’s hyper-competitive delivery market and opens up for DoorDash a new (already crowded) market. The food Read more…

Investor consortium to acquire Security software company McAfee for $14bn

Download PDF Introduction McAfee, a global leader in online protection, announced on the 8th of November that it had reached an agreement with a consortium of investors, including Advent International Corp., Permira Advisers and Crosspoint Capital Partners, to be acquired after giving effect to McAfee debt payback, in an all-cash transaction valued at about $12 billion on an equity value basis and over $14 billion on an enterprise value basis. The Investor Group will buy Read more…

The end of an era? While global conglomerates as GE, J&J, and Toshiba may breakup, new forms of conglomerates evolve

Download PDF Introduction Every course of Management or Business Administration covers organizational structure, simply because it is the cornerstone of every company. Some firms are very specialized and have well-established chains of command, therefore do not require an elaborate system of structures. Others have so complex and expansive activities that not even employees can fully comprehend them. Conglomerates belong to this category: Large, usually multinational business entities that unite firms in different industries under one Read more…

The Econometrics of Tech Stocks

Download PDF Introduction We are now over a year and a half into the Covid pandemic. Disruptive as this exogenous shock has been, markets have quickly recovered, and proceeded to reach one new record after the other. More interestingly, several information technology stocks have stood the challenge without a bruise. Remote work has forced the world economy to rely on the likes of Apple, Zoom, Nvidia and others on a daily basis. Improved software and Read more…

Market Recap 14/11/2021

Download PDF USA The US stock rally came to an end this week when the S&P 500 registered its first decline after nine sessions, ending the longest positive since 2017. The US index fell 0.31% this week, after some shocking news. Dow Jones and Nasdaq composite followed suit, with losses of -0.63% and -0.69% respectively, as well as the Russell 2000 Index, which has plunged more than -1% this week. The week started with the Read more…

Is the S&P 500 P/E ratio mean reverting?

Download PDF Introduction The price-to-earning ratio, known as P/E ratio, is one of the most basic valuation measures. It measures how expensive a company is relative to the earnings per share (EPS). In simple words, it measures how much an investor is paying for a stock compared to each dollar of a company’s earnings. It is important to highlight that a high P/E ratio does not necessarily mean that a company’s stock is overvalued and vice Read more…

Electric Vehicles: Traditional Automotive Giants vs Disruptive Tech Companies

Download PDF Introduction The global electric vehicle (EV) market is experiencing an unprecedented growth spurt, and all signs point to it accelerating further in the near future. Reasons for this are government initiatives in the world’s leading economies to support sales of EVs by reducing selling prices through means of subsidies, lowering registration fees and introducing free charging at charging stations. Such policies were implemented in order to meet strict vehicle emission goals. For instance, Read more…