- No BS. Just Bullish.
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- No BS. Just Bullish.
No BS. Just Bullish.
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The Wall Street Skinny
January 09, 2025
This Week on The Floor
We are BACK after the holiday break and excited to dive into the latest deal news & markets action!
We’ve got some incredible content coming your way on the podcast, and will be announcing TWO live opportunities to learn from us this month, so stay tuned.
Getty announces acquisition of Shutterstock: case study for interview prep
Bond bears are loading up on shorts. What’s really going on?
The Goal Setting Workshop – Design Your Master Plan for 2025!
Kickstart 2025 with clarity, strategy, and ambition! Join top alternative investment professionals in NYC for an evening of goal-setting, actionable tactics, and high-value networking.
Date: Tuesday, January 14th
Time: 6–10 p.m. ET
Location: LAVAN Midtown, 641 W 42nd St, New York, NY
Attend in-person or via Zoom live stream
Led by Rich Bello, co-founder and COO of Blue Ridge Capital, and Yohan Kim, CEO of RFA, this workshop delivers insights on portfolio management, investor relations, compliance, and more. Learn the 10-step framework that drives success for top-performing industry leaders.
Dinner, drinks, and exclusive networking included. Plus, receive a copy of The Goal Principles and a complimentary results coaching call.
Make 2025 your best year yet.
Markets Recap / Deal News
Interviewing this week? Here’s some content for your conversation.
On Tuesday, Getty Images announced it would acquire its rival Shutterstock to create a combined $3.7bn company.
These are the two big legacy names in licensed images merging after a period of decline.
As it stands now, AI image production seems to be going parabolic, diluting the value of traditional image providers.
The company is clearly trying to diversify and expand to combat the recent shift in market dynamics.
Getty was co-founded in the 1990s by Mark Getty, a grandson of oil tycoon J. Paul Getty. You may or may now know the family from the 2017 movie “All the Money in the World”, which was about another one of his grandsons being kidnapped and held for a $17mm ransom back in 1973. It particularly made headlines when Kevin Spacey was recast after filming had wrapped due to allegations brought against him.
The company went public in 2008, then was taken private by Carlyle in 2012 in a $3.3bn deal.
Six years later in 2018, the Getty family wrested control back from Carlyle with a $3bn valuation, and went public again by merging with a Neuberger Berman backed SPAC in 2022 it was valued at approximately $4.8bn.
According to Bloomberg, Getty has lost nearly three quarters of its market cap since then, while Shutterstock has lost 50% of its value over the same time period.
This is one of the first big merger announcements poised to test the new administration’s antitrust vigilance.
At the end of last year, the M&A world was rocked by the Biden administration blocking the Kroger/Albertson’s merger and the JetBlue/Spirit Air merger. It seems likely that the new administration will be less likely to block a deal like this going through.
Sample Interview Questions:
Which type of synergies do investors give the most weight to: cost synergies, CapEx savings, or revenue upside?
What does it mean to go public through a SPAC merger?
Getty is offering $28.80/share to Shutterstock. Assuming an all stock deal: if Getty’s PE is 20x and Shutterstock’s EPS is $2.50, is the deal accretive or dilutive? What are we ignoring in this back-of-the-envelope math?
HINT: We teach you how to figure the last one out using relative P/Es here!
Why Are Bonds Selling Off?
Every fixed income pundit in the news is talking about the recent rise in yields.
So what’s really going on?
10 year Treasury yields have sold off 100 bps (1.00%) since the fall.
Half of that move has happened in the last month.
Many point to the combination of the recent election — Trump’s tough talk on tariffs being generally viewed as inflationary — and the surprising hawkishness out of the Fed in December.
But I do want to point out that there are other factors at play here.
January tends to be a gangbusters month for corporate bond issuance. This year feels like it’s going to be one for the record books.
2024 was the biggest year for corporate bond issuance by total volume across IG, HY, and Convertibles since 2021 (when interest rates were at historic lows) with a total of $1.957tr in issuance.
Biggest year since 2021, and look at Jan 24 vs. Dec 24!
Corporate issuance from 2000-2023
But the 2025 calendar looks like it will put 2024 to shame.
In the first 9 days of January 2025, we’ve seen more than $81bn in corporate bond issuance.
And the pipeline continues to build.
The combined impact of increased corporate supply with the robust monthly Treasury auction calendar tends to cause bonds to sell off under the best of circumstances.
More supply = higher yields and cheaper prices.
Combined with pressures from monetary and fiscal policy shifts on the horizon, 10s are hovering around 4.70%.
Skew (the market bias implied by option prices), open interest, and positioning surveys all suggest that market participants are loading up on shorts (Source: Bloomberg).
Yet how do we reconcile this with yield-based buyers?
With equity valuations as rich as they’ve ever been — and 10-year real yields north of 2.00% — structural demand is still strong for dollar denominated debt.
In summary, take all the headlines with a grain of salt.
I think there are strong seasonal factors at play that matter just as much as the fiscal and monetary policy story.