M&A

Summer Hiatus Due to Internship

It’s time to switch gears from school to work.   I will be spending this summer interning as a Summer Associate in the investment banking division of Credit Suisse, focusing on mergers and acquisitions, IPOs and private placements.  As a result of the increased workload, and more importantly because of the private nature of the work that I will be doing, I am taking a summer break from blogging.  I am looking forward to posting again in the fall when it’s appropriate.  In the meantime, if there are any topics you would like me to post about in the future, please drop me a line.  Have a great summer everybody.

Advice from Marshall Heinberg, Oppenheimer’s Head of Investment Banking

Some classmates and I had the chance to sit down with Marshall Heinberg, the head of Oppenheimer’s investment banking practice, for an overview of his firm and an outlook on the investment banking industry.  Mr. Heinberg’s insights were unique and bold; below are three general takeaways from our conversation.

  1. If you’re an MBA student looking to get into banking, he suggested that you consider industry versus product roles carefully.  He recommends finding a career that will provide you with a depth of non-commoditized intellectual knowledge.  I took this to mean select industry coverage over product investment banking, as industry coverage gives you the chance to develop a deep knowledge base of a particular industry, which brings me to the next great insight… (more…)

Readings: Solar, Terra Firma vs. Citi, Dividend Recaps, Facebook + Bing, Management Consulting

Silicon Valley’s Solar Innovators Retool to Catch up to China: Selling energy (a commodity) is all about price, which means in order to turn a profit in a competitive market when prices are driven down, one has to be able to produce at the lowest cost (or at least within a competitive low-cost band).  Competing with China’s subsidies, cheap labor, scale advantages, and not to mention depressed currency, is a hell of a battle.  I’m glad that I didn’t pick this fight at Solyndra with $1B riding on it.  But then again, as a U.S. tax payer, I guess I do have an interest in this fight by promising to lend Solyndra  $1.74 ($535M loan guarantee / 307M U.S. Pop.), so I do have a stake in this fight.  We better use technology to close the cost advantage, it’s our only hope.

Terra Firma, Citi in Spat over EMI: Wow.  This is an ugly tussle between a PE firm with buyer’s remorse and a bank double-siding a deal.  Kudos to Citi for a job well done; Terra Firma should just fess up to it’s mistake (but then again, if I were Terra Firma, I would be (more…)

Economics: Are People Always Rational?

Am I always rational?  Yes.  At least I would like to think the answer to this question is yes, but in reality, I’m guessing the answer to this question is somewhere closer to usually.  Presumably most people are in the same position (except for those who are irrational — yes Kim Jong-il, I’m looking at you).  I raise the issue of rationality because yesterday in Professor Eastin’s MicroEcon class we touched on a topic I have recently been interested in: behavioral economics.

For the non-econ members of the crowd, let’s quickly review the three tenets of economics: 1) people respond to incentives, 2) optimal decisions are made at the margin (e.g. marginal cost, marginal utility, etc.), and 3) people are rational.  I’m on board with (more…)

Readings: Bank Failures, Employee Equity, and AOL Kicking The Tires at TechCrunch

Banks Keep Failing, No End in Sight: Blood in the streets equals opportunity.  I guess this is why PE firms are busy buying banks.

Employee Equity: A good explanation by Fred Wilson from Union Square Ventures about the role and structures of employee equity at start-ups.  As Fred says, this stuff gets complicated quickly and can cause costly mistakes — seek counsel when pricing (because you don’t want to get burned by 409A) and structuring employee compensation.

Breaking: AOL Close to Buying TechCrunch: Wow, if this is true, what a coupe for Michael Arrington, et al.

Tom Barrack and Rob Lowe Speak at USC

Last week I attended a talk by Tom Barrack and Rob Lowe about “Making Movies, Making Deals, and Making it Big”, held at USC’s Bovard Auditorium (capacity approx. 1,000).  Tom Barrack is the CEO, Founder and Chairman of Colony Capital, a private equity real estate company based in Los Angeles; and Rob Lowe is an actor who is well known (in my mind) for his roles in Tommy Boy, The West Wing and Wayne’s World.  The talk, which was moderated by a USC professor, gave the opportunity for each man to give some interesting insights into their recently announced deal to acquire Miramax from Disney as well as their ethos toward life, investing and acting.

I took more away from the event in the form of life lessons than insights into their transaction, however, the advice each man offered was quite valuable.  The key points raised during the talk were: (more…)