Global stock markets hit record highs, billion-dollar deals, and great news for diversity this week
Welcome to the first edition of In The Money
A warm welcome to the first edition of In The Money
You are probably wondering why yet another newsletter. Well, this is my way of trying to encourage more women to invest. You see, I read this report that 60% of women have never invested in individual stocks, bonds, mutual funds, etc. Long story short I did my own research and learned that women neither talk about money nor invest enough. On a more positive note, there was a massive interest in learning about investments. Thus, I hope this newsletter can be an easy and fun way to read and learn about finance. I do want to emphasize that while I may bring up a lot of topics related to women in finance, this is a newsletter for everyone interested in the financial markets. I hope you enjoy it.
Let’s start this off big time with some great news for diversity
No more all-white, male boards 🙅♀️
Nasdaq wants to require listed company boards to have at least one woman and one underrepresented minority or LGBTQ. If companies are not able to provide information on diversity, they may face delisting. Currently, over 75% of companies listed do not meet the proposed criteria.
“It’s not like we’re saying this is an optimal composition of a board, but it’s a minimum level of diversity that we think every board should have.” – Adena Friedman, Nasdaq CEO
And a conversation with the first female CEO of a major Wall Street bank 🏦
Jane Fraser will take over the role as Citi’s chief executive officer from Mike Corbat in February 2021. With that, she will become the first female CEO of a major Wall Street bank.
In an interview with the Financial Times, she says she received the advice to embrace her gender from Mary Barra, General Motors CEO. “Because at the end of the day, the most important thing is, can I do a good job in the day job?” Fraser says. And she will continue to push women forward because she believes that it’s good for business and makes a healthier culture.
It was a record-breaking week 📈
During the past week, global stocks hit record highs. On Thursday, the MSCI ACWI Index of developed and emerging markets stock set an all-time high. Similarly, Nasdaq hit a record high. This comes after the Dow Jones Industrial Average in late November hit a historic milestone of 30,000 points. The Dow, as it is often referred to, is a stock market index that measures the performance of 30 large companies listed on US stock exchanges. Among the thirty are companies such as Coca-Cola, Nike, Apple, and Walt Disney.
Bed and breakfast goes IPO
Airbnb, the name which stems from a wordplay of air mattresses and bed & breakfast is going public later this month and is planning to sell its shares at a price between $44 and $50 per share. This would value the company to $35 billion.
The company was severely hit by the pandemic. As a consequence, it raised an emergency funding round in spring which valued the company at $18 billion. With the IPO, Wall Street is betting that Airbnb will rebound post-pandemic.
Other tech companies that are planning on going public before the end of the year include food delivery company DoorDash, children’s game maker Roblox, and e-commerce company Wish.
Billion💲 deals
Millions to equalize the tech industry 💰
All Raise, the organization working to make the tech industry more inclusive raised $11 million from Pivotal Ventures, Melinda Gates investment firm; and the Reid Hoffman Foundation.
May the Slackforce be with you
Would we have survived WFH without Slack? In a deal announced on Tuesday, the WFH darling is getting acquired by Salesforce for $27.7 billion. Salesforce is making the purchase by a combination of cash and stock, $26.79 a share and .0776 shares of Salesforce. The shares of Salesforce closed down 8% after the acquisition announcement.
And the biggest deal of them all 🏆
S&P Global buys IHS Markit in an all-stock deal worth $44 billion – which makes for the biggest acquisition of 2020.
While $44 billion may seem like a whole lot of money, it’s nothing compared to the biggest acquisitions in history:
Vodafone acquired Mannesmann AG for $180.95 billion in 1999
American Online acquired Time Warner for $165 billion in 2000
Verizon Communications acquires Verizon Wireless from Vodafone for $130 billion in 2013
There are several reasons for the acquirer to pay such a high price tag for the target company. The difference between the real value of the company and the price paid is called an acquisition premium. Reasons to pay an acquisition premium include to ward off competition from other potential bidders and that the acquirer believes synergies will be created from the deal. Synergies are simply the belief that the combined value of the two companies will be greater than the sum of them as separate parts. In accounting an acquisition premium is recorded on the balance sheet as goodwill.
Woman of the Week
Adena Friedman
Adena was appointed CEO of Nasdaq in 2017. She became the first female to lead a global stock exchange. Prior to becoming CEO, Adena served as Chief Operating Officer. Originally, she joined Nasdaq in 1993 as an intern and has since then worked in a variety of roles. In March 2011 she joined The Carlyle Group as Chief Financial Officer and Managing Director, returning to Nasdaq in 2014.
Adena holds a Bachelor of Arts degree in political science from Williams College and a Master of Business Administration from Vanderbilt University’s Owen Graduate School of Management.
“We are rewriting ways to expand wealth, create jobs, and enrich people’s lives. We aim to set the pace for rethinking capital markets and economies anywhere and everywhere.”
Since becoming the CEO of Nasdaq she has been transforming and modernizing the stock exchange into a technology company. She also works actively with reforming the broader capital markets, and ultimately societies with initiatives such as the push for corporate diversity mentioned earlier in this newsletter.
Want to hear from Melinda Gates, Tracee Ellis Ross, Tory Burch, and other Power Women? Make sure to sign up for the 2020 Forbes Power Women’s Summit on December 9th – for FREE.
This was the first edition of In The Money. It is very much a work in progress, therefore I would love to hear your feedback.
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Thank you so much for reading and have a great weekend 💜