Opening Bell: 6.12.20

Opening Bell: 6.12.20

The roller coaster rolls on; Ackman, Loeb raising money; M&A and IPOs; and more!
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The roller coaster rolls on; Ackman, Loeb raising money; M&A and IPOs; and more!

U.S. Stock Futures Rally Following Sharp Selloff [WSJ]
Futures tied to the Dow Jones Industrial Average gained 2%, suggesting that the blue-chips index will recover some of its losses from Thursday’s 6.9% tumble. The pan-continental Stoxx Europe 600 climbed 1%.... “We can’t discount the fact that there is a lot of money sitting on the sidelines,” said Brian O’Reilly, head of market strategy for Mediolanum International Funds. “It’s a trading market at the moment—more than a long-term fundamentals market—so on any setback like yesterday, you’re likely to see people come in and bid the market higher.”

Trump Says Fed’s Forecasts Are Too Gloomy [WSJ]
“The Federal Reserve is wrong so often,” Mr. Trump said on Twitter. “I see the numbers also, and do MUCH better than they do. We will have a very good Third Quarter, a great Fourth Quarter, and one of our best ever years in 2021….”
Mr. Trump also said on Twitter that “We will also soon have a Vaccine & Therapeutics/Cure” for the new coronavirus. “That’s my opinion. WATCH!”

Pershing Square’s Ackman eyes $1 billion-plus ‘blank-check’ company, sources say [Reuters via CNBC]
Ackman’s new vehicle could eclipse dealmaker and former Citigroup executive Michael Klein’s Churchill Capital as the largest U.S. SPAC IPO ever. Churchill III raised $1.1 billion earlier this year….
Ackman, best known as an activist shareholder who calls for changes at companies, was also a co-sponsor of Justice Holding, a SPAC which acquired restaurant chain Burger King for $1.4 billion in cash in 2012.
Justice Holdings is now called Restaurant Brands International, and has been a big contributor to Pershing Square’s recent investment gains.

Third Point Hedge Fund Seeks to Raise More Than $500 Million [Bloomberg]
The Third Point Structured Credit Opportunities Fund started fund raising on June 1 and has collected about $380 million, according to an investor update seen by Bloomberg…. The new fund will mainly invest in residential mortgages, consumer credit, consumer real estate and collateralized loan obligations. Investors’ cash is locked in for one year and the fund is aiming to return as much as 20% annually.

Bankrupt Hertz Pops 51% In Pre-Market On $1 Billion Share Sale Plan [Yahoo! News]
“The recent market prices and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the debtors to raise capital on terms that are far superior to any debtor-in-possession financing,” the company said, referring to a traditional bankruptcy loan….
Hertz said it would warn any potential buyers “the common stock could ultimately be worthless.”

Just Eat Takeaway to Acquire Grubhub for $7.3 Billion [NYT]
Just Eat Takeaway said it would value Grubhub at $75.15 per share, a 27 percent premium to Grubhub’s closing price of $59.05…. Uber had been in talks to buy Grubhub, but those discussions foundered over price and regulatory concerns, said people with knowledge of the discussions, who were not authorized to speak publicly.

Quicken Loans, the largest U.S. mortgage lender, is planning an IPO, sources say [CNBC]
The targeted valuation is still being decided, but it is likely in the tens of billions of dollars, one of the people said. That would imply a multi-billion-dollar IPO, one of the largest – if not the largest – this year…. Quicken Loans CEO Jay Farner said on CNBC in mid-April that March was the “biggest closing month in our company’s history -- nearly $21 billion in mortgages closed.” He said on CNBC that the company was estimating nearly $75 billion in mortgage applications in the second quarter, compared with almost $53 billion in the first quarter.

A Mossad Agent, an International Hedge Fund and the Mysterious Death of an Argentinian Prosecutor [Haaretz]
Argentinian federal prosecutor Alberto Nisman… was fatally shot in his apartment in January 2015, hours before he was set to present serious allegations in congress against then-President Cristina Fernandez de Kirchner….
[Former Mossad agent Uzi] Shaya says in the interview: “I brought a certain type of information to his attention, which could be what caused his death … material which apparently had to do with all sorts of monetary transfers by senior Argentinians that tie them to Iran….” Dayan asks if the information pertains to bank accounts belonging to Kirchner and her son. Shaya answers in the affirmative. 

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This makes us a quant, right? By No machine-readable author provided. Skies assumed (based on copyright claims). [Public domain], via Wikimedia Commons
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She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason. She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska. Sherry Hunt never expected to be a senior manager at a Wall Street bank. She was a country girl, raised in rural Michigan by a dad who taught her to fish and a mom who showed her how to find wild mushrooms. She listened to Marty Robbins and Buck Owens on the radio and came to believe that God has a bigger plan, that everything happens for a reason. She got married at 16 and didn’t go to college. After she had her first child at 17, she needed a job. A friend helped her find one in 1975, processing home loans at a small bank in Alaska...In March 2011, more than two years after Citigroup took $45 billion in bailouts from the U.S. government and billions more from the Federal Reserve -- more in total than any other U.S. bank -- Jeffery Polkinghorne, an O’Fallon executive in charge of loan quality, asked Hunt and a colleague to stay in a conference room after a meeting. The encounter with Polkinghorne was brief and tense, Hunt says. The number of loans classified as defective would have to fall, he told them, or it would be “your asses on the line.” Hunt says it was clear what Polkinghorne was asking -- and she wanted no part of it. Jobless Claims Increased Last Week (Bloomberg) First-time claims for jobless benefits increased by 10,000 to 383,000 in the week ended May 26 from a revised 373,000 the prior week, the Labor Department said today. The initial claims exceeded the median estimate of 370,000 in a Bloomberg News survey of economists. The number of people on unemployment benefit rolls dropped. For French CEO's, Politics Means Big Pay Cuts (WSJ) Top managers at France's state-owned companies are expected to face significant pay cuts next month, when Socialist President François Hollande plans to begin enforcing salary caps as part of his broader electoral pledge to get tough on the rich. During the presidential campaign, Mr. Hollande vowed to curb "excessive" remunerations at France's 52 state-controlled or partially state-owned companies by ordering that executive pay not exceed 20 times the salary of the lowest-ranking employees. New York Plans to Ban Sale of Big Sizes of Sugary Drinks (NYT) The proposed ban would affect virtually the entire menu of popular sugary drinks found in delis, fast-food franchises and even sports arenas, from energy drinks to pre-sweetened iced teas. 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