A Special Purpose Acquisition Company (SPAC) is a type of investment vehicle that allows public market investors to participate in the initial public offering (IPO) and merger and acquisition (M&A) processes. SPACs are essentially shell co…

Impact investing 101 Impact investing, particularly in the Environmental, Social, and Governance (ESG) field, refers to the practice of investing in companies and funds with the intention to generate a measurable, beneficial social or envi…

Adaptive Market Theory (AMT) provides a useful framework for understanding the impact of black swan events on financial markets. Black swan events are rare, unpredictable, and have severe consequences, which makes them difficult to anticip…

www.hbs.edu We wrap up our journey to learn M&A process with reviewing the whole process by looking at small and middle size deals. When you sell your company to typical buyers such as strategic buyers and PE firms, you need to consider th…

Hedge fund Hedge fund is the unique and interesting player to help you understand the physics of Adaptive Market Theory. Hedge fund: Pools capital from investors. Uses diverse strategies for high returns. Charges performance and management…

How we should evaluate technical capability in M&A from PE perspective? Is there enough room to improve? How was the price? Over-pricing or underestimated? We reviewed three acquistion targets, Seagate-Hard drive manufacturers, McAfee, and…

LBO modeling Leveraged Buyout (LBO) modeling is a key tool used by private equity (PE) firms to evaluate the potential acquisition of a company using a significant amount of debt. The goal is to achieve high returns by using leverage, impr…

Adaptive behaviour Modern sharks appeared 100m years ago. In all the races, the great white charks are number one. The great white shark (Carcharodon carcharias) is an incredible testament to the power and adaptability of nature's apex pre…

Fund setup Private Equity is a group of investors pools their money together to purchase ownership stakes in companies that are not publicly traded (i.e., not listed on a stock exchange). The group of investors is typically organized as a …

Valeant, Allergan and Ackman: overview from ChatGPT www.reuters.com In 2014, Valeant Pharmaceuticals International made an unsolicited bid to acquire Allergan, a company specializing in aesthetic medicine, for $47 billion. Allergan rejecte…

Hostile take over Why We Need More Hostile Takeovers In the 1980s, hostile takeovers were not a rare strategy, and many activists tried to take over inefficient companies. And then, they fired board members and cut down the majority of cos…

Roche and Genentech case www.hbs.edu Franz Humer, CEO of the Roche Group, must decide whether to mount a hostile tender offer for the publicly-owned shares of Roche's biotechnology subsidiary, Genentech. The case provides opportunities to …

In today's lecture, Prof Andrew Lo explained that our neuron system is hardwired to some feelings and would make our decision better and worse depending on the situation. Neuroscience of decision making Various factors actually affect our …

What is the lean analytics?Lean Analytics are used to measure progress, helping us to get clear answers quickly. In product management, it is one of the essential activities to improve your products Too Many frameworks If you look for book…

Spin off basics Nowadays, a lot of companies simplify their business and improve the clarity of business. This kind of simplification through spin-off and split-off opposed to diversification has frequently been examined in the healthcare …

Stock price has seasonality Winter Blues: A SAD Stock Market Cycle - American Economic Association There are several academic articles explaining why stock prices go down in winter and rainy days. This is a typical critique of human behavi…

Anadarko case www.cnbc.com www.chron.com We studied how to evaluate different offers from multiple buyers as a shareholder/board member of target companies. Today's case is Anadarko, the middle size oil exploration company. After 2015, the…

Type of merger Reading: Forms of Takeover: Mergers Statutory merger: In a statutory merger, the acquiring firm absorbs the assets and liabilities of the target company and the target company ceases to exist. Subsidiary merger: In a subsidi…

When a company buys a target, there are many ways to offer your target. In this blog, I will write down who the stakeholders are and what typical questions they have. Stakeholders and questions about valuation Shareholders of target compan…

Course briefing This course develops a new perspective on the dynamics of financial markets and the roles that human psychology and the business environment play in determining the evolution of investor behavior and institutions. ( From Sy…

8I am taking a Merger and Acquisition class and the following textbook is the best one to study fundamental of M&A. ISE Principles of Corporate Finance 作者:Brealey, Richard,Myers, Stewart,Allen, Franklin McGraw-Hill Education Ltd Amazon T…

Dixons Key concepts Valuation Models Earning multiples P/E Vf/EBIT Vf/EBITDA Asset multiples BV NetWorth Liquidation Value MV/BV DCF FCFf@WACC FCFe@Re APV - equity firm + value of debt tax shields EVA - Economic Value added Comparables Oth…

Molycorp Concepts Convertibles bond/stock + option to convert into common stock option works with conversion ratio Signaling to market Pecking order Internal funds Debt Equity Working capital calculation +A/R +Inventory -A/P -Accrued Expen…

Mariott Concepts How to make fast growth companies possible consistency between financial policy and product market strategy Excess debt capacity Financial policies about debt Short or long-term debt? Secured or unsecured debt? Fixed or va…

Gilbert Concepts Cash Flow Management Proforma analysis Source and Use Key findings Operation/Product strategy and Financial strategy should be consistent Minimize Days A/R, Maximize Days A/P Diagnose firm health with operation ratios and …

Sustainable Growth Rate Sustainable Growth Rate (SGR): Formula and Calculation This ratio is checking how fast can you grow assets without increasing the leverage ratio and without issuing new equity. Increasing the leverage ratio would ha…

CAPM(Capital Asset Pricing Model) Assumptions Efficient portfolios are combinations of market portfolio and risk-free rates(Treasury bills) The expected return of an asset i must satisfy There is a linear tradeoff between risk and expected…

Principles for NPV calculation Project, project, project. Don't use company's CF, capital structure and cost of capital. Unlevered and Levered beta If you identified "pure boys", as I described in the following article, you need to be care…

Three things to consider When the company proceed M&A, what we should consider initially? Strategic benefits(Why?) Valuation(How much?) Execution(How?) Strategic benefits Why should we sell or buy a company? This is the most important ques…

Diversification Asset returns are quite unpredictable and some assets are correlated each other. Investors look for portfolios that maximize their returns with the least amount of risk. The main factors you need to consider when you build …