Opening Bell: 6.22.17

Buffett rescues teetering Canadian subprime mortgage lender (FT)
Marc Cohodes, a California-based short-seller with a big position in the stock, said on Wednesday evening that Home Capital had struck “a deal with the devil, with the equity in the tank”. He said he will not be closing his short, as the punitive terms of the Berkshire Hathaway financing — for Home Capital and its existing shareholders — indicated big problems beneath the surface.

Ackman set to cash in as Blackstone eyes chemical deal (NYP)
Stephen Schwarzman’s buyout firm Blackstone Group has formed a bidding consortium that could shell out more than $4 billion to buy half of chemicals giant Platform Specialty Products, whose biggest shareholder is Ackman, three sources told The Post. “There is a reasonable possibility a deal happens,” a source said.

Leaking information about corporate deals adds millions to their value (BI)
Leaking information about mergers and acquisitions boosts the value of a deal by an average of $21 million, according to new research carried out by content management company Intralinks and Cass Business School. A report from the pair analysed deals between 2009 and 2016, and found that the median takeover premium for leaked deals was 47%, compared with 27% for non-leaked deals.

In the New Bond Market, Bigger Is Better (WSJ)
What’s happening in bond markets would be similar to a retail sector in which wholesalers—a role played by banks in financial markets—were scaling back their business. Small retailers would struggle to stock up, but big-box stores with their mega warehouses and access to international producers would get by fine.

The Reverse Tepper Moment? (Macro Tourist)
What do I mean about an anti-Tepper moment? When Tepper called the bottom, he did so because he believed stocks would rise because either; the economy would improve, or the Fed would come in with QE. Either way would be positive for stocks. In the current environment, we have the opposite situation. Either the economy rolls over (which should be bad for stocks), or it bounces, at which point the Federal Reserve continues on its tightening path (which could also be bad for stocks).

Uber's bad week: Doomsday Scenario or Business Reset? (Aswath Damodaran)
For the moment, my story for Uber is mostly unchanged from September 2016 with two shifts: there is now a change, albeit a small one (5%), that the company could fail and I believe that these events have increased the likelihood that Uber will have to follow a more conventional business path of treating drivers as employees (lowering target operating margins).

Price manipulation in the Bitcoin ecosystem (VoxEU)
In recent work, we show that the first time Bitcoin reached an exchange rate of more than $1,000, the meteoric rise was driven by fraud. We leverage a unique and very detailed dataset to examine suspicious trading activity that occurred over a ten-month period in 2013 on Mt. Gox, the leading Bitcoin currency exchange at the time. We first quantify the extent of the suspicious/fraudulent trading activity and show that it constitutes a large fraction of trading on the days the activity occurred. We then show how this trading activity affected the exchange rates at Mt. Gox and other leading currency exchanges.

The Next Big Thing In Cycling Could Be Poop Doping (Deadspin)
Read one particular way, the history of cycling is a history of riders doing all they can to stretch past the natural limits of the human body. Cheating has been at the very heart of cycling since its inception and riders have tried, at various points throughout the sport’s history, strychnine, EPO, cocaine, wine, horse tranquilizers, blood bags, cortisol, and even tiny hidden motors. Now we come upon a new frontier: poop. The future of cycling is shit.