Dell to Buy EMC for $65 Billion–Largest Tech Deal Ever

Dell just went private for $25 billion two short years ago, in  the midst of sucking some serious wind, operationally. Tonight they announced they agreed to terms to acquire EMC for a transaction worth $65 billion, making it the largest tech takeover ever.

Under the terms of the deal, Dell will pay the equivalent of $33.15 a share in a complicated transaction involving both cash and a special kind of stock. That price is about 27 percent higher from where EMC’s shares were trading before news of the deal first emerged.

You’ve got to love financial engineering. This deal bodes well for the overall health of the tech sector, as it pertain to liquidity in getting financing for deals.

In a research note out by the pencil pushers at Morgan Stanley, they cite potential upside in Q3 earnings.

Could Q3 earnings results be a positive driver for the US equity market? The S&P 500 was down 7% last quarter, the worst fall in any quarter since Q3 2011. Q3 2015 earnings expectations have once again been lowered to the point where we would be quite surprised to not ultimately see aggregate earnings upside for the 27th consecutive quarter. With this decline in estimates, we expect reported results to show modest upside. The sample size is small, but earnings for the group of companies reporting as of October 5 generally have been above estimates. The market is following the typical pattern of rewarding companies that beat consensus revenue and earnings while harshly punishing revenue and earnings misses.

 

Here are their high conviction ideas.

Essentially, they believe expectations have been reduced, alongside the prices of equities, to a point where possible reward outweighs risk.

Trading accordingly.

Abenomics is the real deal. Japan isn’t fucking around with their perverse version of QE, one that is virtually without boundaries. At $1.4 trillion, Japan’s QE is helping their equities shit on all other markets, especially their Chinese counterparts. For the year, the NIKKEI is up around 6%.

The other index that is outperforming is Russia, up 12% for the year. Truth be told, Russia’s gains are more of a dead cat bounce, after getting their fucking clock cleaned last year, amidst a currency crisis and spiraling stock market. Like China, Russia is entirely a scam, so I’d avoid.

The other markets that are outperforming are France (+10%) and Italy (+18%). This is a reflection of the euro getting hammered, providing a competitive advantage for their greasy corporations. For the most part, Europe has been an excellent place to invest, ever since they started QE.

The last real economy that is outperforming is Germany, up 3%. They’ve been hampered due to exposure to China and their retarded automobile companies, who comport themselves in the most fraudulent ways.

Other indexes with phantom economies are ripping higher in 2015, such as Venezuela (+200%), Jamaica (+39%), Argentina (+30%), Hungary (+31%), Iceland (+29%), Denmark (+26%), Portugal (+19%), Ireland (+17%). But those markets aren’t really real; they’re super phantom.

How to play them? Don’t be a jackass; just buy the ETFs.

Japan: EWJ
Russia: RSX
France: EWQ
Italy: EWI
Germany: EWG

I was mortified as a child, after seeing this movie. I felt as if Freddy Krueger was going to murc me in my sleep.

A little background on this one. I believe I was about 8 years of age when my mother thought it’d be a good idea to take my sister and I to the cinema. Instead of a choice John Candy movie, she opted for this fucking shit.

I was always in the streets, playing about the sewers, lighting firecrackers and tossing them into iced cream trucks (true story), so I wasn’t exactly virigin to the horror film genre, even at the tender age of 8. But this wasn’t your ordinary horror film; this was terrifying. After seeing this horrifying classic, my mother thought it’d be wise to see it again, back to back.

So I saw this movie, which scared the shit out of me, not once, but twice. After leaving the theatre, the entire parking lot was vacant and it was dark, and also foggy. I can still remember that moment, after the film, in the dark fog thinking Freddy Kreuger was going to hand knife me to death.

For the remainder of the month, I will dedicate Saturday’s to review a horror film, in honor of hallows eve. Jar my memory and name your scariest film. I’m looking for scary as shit movies, so keep your child’s play suggestions the fuck out of here (double entendre!).

You’d be wise to get your affairs in order, should you be short the stocked market. October is off with a bang, up almost 5% so far. I entered the month of October a new man, hell bent on seeing it increase in value by 10%. My thesis lies in the fact that we are following a trading pattern of 2011. My comrade in arms, Option Addict, believes we are in 1998. Whatever the case, we are not living in today’s world, and have instead transferred our physical persons into the multi-verse, where we enjoy a whole new and extraordinary array of physical laws.

I do believe the dollar is going lower. It’s in our nation’s best interest to see this happen. As a result, many ancillary benefits will occur, such as higher crude, copper, and coal prices. That’s right, I said coal. If elected. President Donald Trump is going to shove bricks of filthy black coal down your stupid necks.

SLCA, CNX and FCX is how I will play it.

Finally, BIDU is a screaming buy here. The stock has been weaker because two fledgling competitors merged and people feel BIDU will lose market share. Like Google, BIDU dominates its host country with more than 70% of search market share. If you recall, ever since GOOG came public people feared MSFT and YHOO, even fucktard upstarts like Looksmart and Askjeeves, would merge and crush google. Learn your history, boy. When it comes to search, humans are creatures of habit. BIDU got there first and have dominated. They will continue to dominate, eventually translating into a much higher share price. At 5.5x sales, BIDU is the cheapest its ever been.

NOTE: There is just 14 days left until the 2nd and last iBankCoin conference, Reserve your seats now and be sure to join us in the library room at the Yale Club, NYC, for an after-hours cocktail party.

I added to my SHAK, SLCA, NK and FCX, with zero fucks given– into the bell.

Because this job wasn’t hard enough to do, the stock Gods felt we needed to go old school Tammany Hall and have our politicians work towards the end goal to see lower stock prices. To the unlearned man, that last statement sounds absurd; but it was common practice back in the late 19th century. The politicians controlled the banks and would purposely squeeze liquidity out of the system in order to make the market panic and go lower. Pools were set up to affect this negative change and fortunes were made. Hell, it was common for a CEO of his own corporation to purposely hurt his own company and sell it short, in order to make his stock go lower.

With all of the things in the world distracting us now: Russian planes over Syria, weakness in China, the Federal Reserve here et al, the republican party feels it’s incumbent upon them to “save” the republic by destroying it.

Let me rephrase that and explain.

By November 5th of 2015, the treasury department will be almost out of cash, unable to meet its many obligations. In order to avoid this, the debt ceiling has to be raised. Well, the GOP feels enough is enough and that it’s time to take a stand and to reject the notion of debt ceilings and national obligations. If you haven’t noticed by now, they are a rudderless party, without a leader, because of this very issue.

It’s entirely possible that they will attempt to disrupt the government this holiday season, something that isn’t being talked about yet, but will be soon. If the far lunatic portion of the GOP, aka “The Suicide Caucus”, is successful, then these markets are going to be entirely naked, forked, fucked, radish.

Happy fucking Friday.

Just as some people called a top in privately held ‘unicorn’ companies this week, deriding the God given glamour that blesses the multitude of billion dollar Silicon Valley franchises, the old and tattered public varietal caught a bid.

Over the past week Z (up 21%), TWTR (up 11%), ANGI (up 10%), GRUB (up 10%), GRPN (up 7%), even YELP trended higher–breaking a long and hellish decline that has crushed the souls of many enthusiastic shareholders.

There is a very wide divergence between the publicly traded, reality based/market filtered social media space versus the Fred Wilson version in the private markets, one that produces over 1 new billion dollar valuation company–PER WEEK– in Silicon Valley.

Part of me thinks it’s all bullshit. Then again, I was a very early investor in the first internet boom, way back in 1995. There was a general malaise in the first dot com explosion for years, up until they broke out in 1998. Maybe the same thing will play out again. Or, maybe the landscape is forever changed, thanks to the perverse nature of the venture capital driven valuations in some of our best and youngest growth companies.

I bet most of you never heard of VLRS.

Data provided by Exodus

In all, there are 71 stocks with market caps over $10 billion that are up 20% or more this year.