When Mark Hughs founded a multi-level marketing company called Herbalife in 1980, he probably thought it had the power to do a lot of things. Help people lose weight. Makes others rich. Shake up the diet industry. What he mostly likely did not expect, however, was that his li’l company that could would reignite a feud between two billionaires that would devolve into a flurry of press releases quibbling over who was dying to be friends with whom, shouting matches on live TV, and, we predict, someone telling someone else he has a right mind to “Rip the eyes out of your head and piss into your dead skull! You messed with the wrong hedge fund manager!” Read more »
I always feel bad bringing you academic papers because inevitably they’ve been on SSRN for, like, two years, but this one is new to me anyway and good glaven are these charts clever:
So these guys (Kenneth Ahern and Denis Sosyura of Michigan) went and looked at a bunch of stock-for-stock mergers. And they looked at the uptick in news coverage after those mergers were announced – and, far more interestingly, before they were announced but after negotiations had started (which they found out by reading the “Background” in the merger proxy) . Then they divided those mergers into (1) fixed exchange ratio mergers, where the acquirer could minimize the price it paid by pumping up its stock just before signing the merger (because buying a $540mm company for AAPL shares requires 1mm shares now, but would require many more/fewer if AAPL were not so over/underpriced, take your pick), and (2) variable exchange ratio mergers (“we’ll give you $540mm worth of stock based on whatever our stock price at closing” or more complicated versions thereof), where the acquirer could minimize the price it paid by pumping up its stock just before closing the merger. Then they charted where there were more – largely positive, company-driven, press-release-based – articles than usual. And lookit that!
Or if you like, like, words and numbers: Read more »