The Era of M&A Continues

No slowdown in 2022 [Click to view in browser](. Dear Reader, We have some BIG UPDATES for all you Markets and Minds subscribers. [And you need to take action now to make sure you don't miss out!]( Our newsletter got a complete makeover. We overhauled the format and layout of the newsletter, making it easier to read and simpler to follow. And gave it a nifty new title - THE JUICE [But you won't receive this newsletter unless you sign up HERE.]( Because pretty soon, Markets and Minds will disappear FOREVER! Proprietary Data Insights Financial Pros Post-Merger SPAC Stock Searches Last 30 Days Rank Name Searches #1 Planet Labs 241 #2 Dave 235 #3 TMC Metals 8,816 #4 Redwire 206 #5 Aurora Innovation 108 Why Companies Do M&A and Buyback Stocks at the Worst Times Have you ever noticed that companies love to announce share buybacks when stocks are at record highs? How about planned acquisitions at record prices like all of 2021? It seems counterintuitive and counterproductive. But there’s a reason why this happens. You see, companies pull off these deals through owned or borrowed cash. And cash tends to come when business is booming, usually leading to higher stock prices. Debt can be had at any point. However, companies tend to have less debt when they generate more cash. As far as acquisitions, the cash discussion still holds true. However, when companies acquire another, they tend to do so to boost their growth prospects. So, the companies they buy likely demonstrate exceptional growth and consequently cost more. That might seem topsy turvy. But think about the other side of the coin. If a company held onto cash to possibly buy back shares at lower prices at a future date, that wouldn’t give investors much confidence since management is signaling lower prices in the future. Plus, wouldn’t it be prudent for management to acquire a company that proves itself rather than on the hopes that it might? Sponsored [Man who called 2020 Crash: Huge Event in 2022]( A historic event in 2022 will cause a massive shift in the wealth divide. It could soon impact the wealth of thousands of Americans. [More here.]( Mergers & Acquistions The Era of M&A Continues Key Takeaways - Mergers & Acquisitions peaked in 2021 with $5.8 trillion in deals. - Special Purpose Acquisition Companies (SPACs) collected $166 billion on more than 600 listings. - The SPAC market already shows signs of cooling with a spike in abandoned deals in January. - Expect M&A to remain above historical averages but declining throughout the year. 2021 was the year of acquisitions coming in at $945 billion by late November. That breakneck pace is expected to continue in 2022. A Record Year At 2.5x the volume of deals in 2020, last year’s private equity purchases came in at more than double the peak of 2007. Global mergers and acquisitions (M&A) smashed records with $5.8 trillion, up 64% from a year earlier and well above the previous record of $4.55 trillion set in 2007. This comes as Special Purpose Acquisition Companies (SPACs) outpaced initial public offerings (IPOs), the more traditional way to go public, with $162 billion raised during 2021. 2022 Outlook As 2021 trudged along, SPAC deals slowed down considerably. In fact, nearly half of the +600 SPAC deals occurred in Q1 of 2021 at 298 followed by 60, 89, and 166 listings in Q2, Q3, and Q4 respectively. 2022 isn’t looking friendly for SPACs. With heavy outflows from growth and speculative investments, investors are rotating money towards value plays. Signs emerged in the last month of trouble in SPAC markets with 20 SPAC listing withdrawals in January, a jump from single digits in the prior two quarters. The IPOX SPAC Index (SPAC), which tracks the aftermarket performance of US SPACs wilted over the last several months to its lowest levels since October, 2022. On the flip side, M&A deals are heating up, especially in the IT world, where 340,000 openings remain unfilled as of last month. Short on staff and struggling to acquire workers, companies are instead choosing to scoop up IT shops to fill the gap. That said, two headwinds are likely to push more M&A deals to the front-half of the year in an effort to get ahead of the game. First, regulators are ramping up scrutiny of deals. Washington policymakers have been signaling plans to apply more scrutiny, though nothing definitive has come out yet. More importantly, we’ve seen antitrust has become the word of the day, with agencies focusing on big-tech, digital platforms, as well as the burgeoning crypto markets. Second, higher interest rates increase the cost to borrow capital to pay for transactions. That won’t stop companies with large warchests, but it will hamper some of those massive buyouts we’ve seen proposed. The Bottom Line: We expect M&A activity to remain above historical averages but well below last year’s levels, tapering off as time marches forward. That may hurt the bottom line of companies like Goldman Sachs (GS) and JP Morgan (JPM) who thrive on M&A activity. SPAC stocks like SoFi (SOFI), BarkBox (BARK), and the like aren’t great stocks to bottom fish while rates continue to rise. Eventually, they may be worth a look, but it will be years down the road. News & Insights Freshly Squeezed - [Crypto Crash 2022: Top 10 Losers in January]( - [A new form of technology will cause a massive shift in the wealth divide in 2022. Do you own the stocks that will be affected? (Sponsered)]( - [Signs the Next Rally in Gold has Begun]( - [This Stock Could Double…]( [Make sure to sign up for The Juice to keep receiving our premier investment newsletter.]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [whitelist us](. Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright ©2022 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc. newsletter is for information purposes only and opinion-based. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or against losses. No representation or implication is being made that using any of these methodologies or systems will generate returns or ensure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](