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THE HEADLINES
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THE STUDENT BECOMES THE MASTER
Michael Gelband, the former heir apparent to Millenium Management’s Izzy Englander is launching his own hedge fund startup that has raised over $8B. That’s enough money to make it the largest hedge fund launch of all time by more than $1B.
Gelband, the former head of capital markets at Lehman Brothers (yes, that Lehman Brothers) and Millennium coworker Hyung Soon Lee are starting ExodusPoint in early June. They’ve already hired over 125 employees, including some heavy-hitters like John Hoffman, also formerly of Lehman Brothers.
Everything about ExodusPoint, including the name, appears to be a jab at Englander and Millennium Management.
Water Cooler Talking Point: “Hmm, gathering a bunch of former Lehman Brother’s employees that were at the firm during the collapse of the US economy. What could possibly go wrong?”
PLAYING FOR KEEPS
Epic Games, the creator of Fortnite, is offering a $100M prize pool to support this year’s tournaments revolving around its wildly popular game.
This massive figure dwarfs other game’s prizes: Blizzard’s popular Overwatch league will hand out just $3.5M in prize money in its inaugural season.
The free video game and app pits foes against each other in a battle royale format and generated a mind-boggling $223M of revenue in March alone from sales of in-game character upgrades etc.
Water Cooler Talking Point: “Kids will never know the pure, unadulterated joy of playing Halo simply to be able to virtually corpse hump and call an opponent a “n00b” via headset.”
THE LITTLE ENGINE DIVISION THAT COULD
“I think I can, I think I can.” – John Flannery, probably
GE plans to merge its railroad business with Wabtec in a deal worth $11B. The merger is part of Flannery’s process to shed $20B from its ailing portfolio. GE will receive $2.9B in cash and own 40.2% of the combined company. Its shareholders will hold 9.9%.
This type of deal helps avoid a major tax burden associated with a sale. Thomas Edison’s brainchild structured a similar deal to shed its oil and gas division last year.
The combined company will have 30k employees working on the railroad, all the live long day. Wabtec’s CEO doesn’t expect any layoffs … which means there will definitely be layoffs.
GE hasn’t exactly been a beacon of success as of late: over the past year alone its stock price has declined by more than half and the company slashed dividends.
Water Cooler Talking Point: “Here’s a fun fact: GE was started by Thomas Edison. The name Wabtec is derived from Westinghouse Air Brake Technologies Corporation. As in George Westinghouse. You may remember from history class that these two men despised each other more than most people hate Nickelback.”
IN OTHER NEWS
- The female-centric daily newsletter, TheSkimm closed a $12M Series C funding round.
- The Obamas are back in the spotlight, signing a multiyear deal with Netflix to produce movies, series, and features. These productions will be focused on inspirational stories and will not be intended to address the current administration.
- Sony announced Monday that they’ll purchase 60% of EMI Music Publishing for roughly $2B.
- Lyft may be planning to get into the electric scooter game, applying for a scooter service permit in San Francisco. Hide your girlfriends.
- Blackstone Group will buy LaSalle Hotel for $3.7B. Apparently, Blackstone moves on quickly, having exited its stake in Hilton just last week
- US indices were up yesterday:
- DOW: +1.21%
- S&P 500: +0.74%
- NASDAQ: +0.54%