Honda Invests In GM’s Autonomous Vehicle Business; Hedge Fund Highfields Capital Closes Its Door; Hortonworks And Cloudera Join Forces
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You know what they say: “if you can’t beat ’em, stick your tail between your legs, and open your checkbook.”
Apparently, Honda subscribes to the Kevin Durant school of thought. The Japanese automaker will join forces with GM’s Cruise division to make autonomous vehicles a reality. The partnership will cost Honda $2.75B.
When it comes to the autonomous car game there are really two players: Alphabet’s Waymo, and everybody else. But GM has more than a little bit of fight in it. Earlier this year General Motors secured $2.25B from Masayoshi Son’s Softbank. NBD. After this latest round, the GM Cruise division is valued at $14.5B.
This could be the first of many consolidations in the autonomous vehicle industry as laggards like Uber and Tesla look to make up ground. GM’s stock rose 5% on the news.
Water Cooler Talking Point: “Welp, this puts the “Made in America” faithful in quite a pickle …”
TRIMMING THE HEDGES
Highfields Capital, a $12.1B Boston-based hedge fund plans to return money to investors and exit the biz. In a letter to investors, Highfields’ Jon Jacobson cited the precarious investing environment and “three-and-a-half decades of sitting in front of a screen” as reasons for pulling the plug. Felix Gray. Ever heard of ’em?
Jacobson’s fund is down approximately 1% this year but has returned 10.2% annually for the better part of two decades, besting the S&P 500. For context, these are Bernie Madoff numbers. The legendary investor who earned his stripes at the Harvard endowment fund will convert the fund to a family office to watch over his $2.7B fortune.
And Jacobson isn’t the only hedgie heading for exits. Beaten down by abysmal returns a who’s who of Bobby Axelrods have hung up their deal sleds, including Richard Perry, Eric Mindich and John Griffin.
Some are starting to question the validity of these massive pools of capital as they continually lag the market, yet command massive management fees.
Water Cooler Talking Point: “Yet, somehow this isn’t even the worst news coming out of the industry as of late. Just last week a New Jersey fund manager attacked a bride on her wedding night with a sword.”
HORTON HEARS A MERGER!
A merger’s a merger, no matter how small. But size isn’t a concern here, no, not at all. Because Cloudera and Hortonworks will become one. Total value of the companies: $5.2 billion.
Cloudera and Hortonworks announced a $5.2B merger on Tuesday, a move that has already garnered approval of the respective “big data” companies’ boards. Shares of both companies jumped more than 25% on the news, with Hortonworks halting trading prior to the announcement and climbing as high as 29% after hours.
Both entities specialize in Hadoop open-source software that allows companies to store, analyze, and process different types of “big data.”
While the deal was announced as a merger of equals, it appears that Cloudera stockholders will hold a 60/40 ownership advantage and Cloudera’s Chief Executive will lead the combined company.
Water Cooler Talking Point: “Here’s a fun game to play: how many tech buzzwords can fit in one merger press release?”
IN OTHER NEWS
- Despite the endorsement of self-proclaimed “Boss,” Rick Ross, Aston Martin’s IPO in London was nothing short of a fiery, head-on collision with no survivors. Shares of the luxury car company failed to impress investors, falling by 8% on their first day of trading.
- “What is it you’d say you do here?” Chipotle’s head of food safety is stepping down … finally. After a less than stellar run that has been marred by multiple, widespread food-safety debacles, James Marsden will step down in 2019. We just wish our day jobs had that kind of leniency.
- Upwork, the global freelancer platform, got off to a hot start in its stock market debut. After pricing above its $15 per share estimate (at $23) the stock rose 50%. The IPO raised $187M at a $1.5B valuation.
- The US job market saw private payrolls surge by 230k. Who knew Dexter Holland of mid-90’s pop-punk fame was so influential?
- Both 10 and 30-year treasury note yields have hit a multi-year high. Remember kids, diversify your bonds.
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