Kapil Mehta

Signs of a Market Top & Bottom TOP SIGNS 📉  1. Large Number of IPO  2. Rapidly Rising Prices  3. High Merger & Acquisition Activity  4. Easy Availability of Credit  5. Optimistic Covers of Newspapers & Magazines  6. Higher Than Average Trading Volumes  7. Historically High Valuation Multiples  8. Art & Luxury Markets Booming  9. Financial Media Viewership Soars 10. "This Time is Different" Declared 11. Amateur Investors Move To Equities Asset Class 12. Speculative Assets Prices Spike 13. Record Venture Capital Funding BOTTOM SIGNS 📈  1. No Mergers and Acquisitions  2. No IPOs  3. Low Venture Capital Funding  4. Historically Low Price/E & EV/EBITDA Multiples  5. Many Companies Trading Below Book Value  6. Speculate Asset Prices Down Huge  7. Central Banks Easing for 6 Months  8. Recession Officially Declared  9. Previously Favorite Sectors are Hated 10. Credit Only Available to High-Quality Borrowers 11. Amateur Investors are Filled with Caution 12. Negative Covers of Newspapers and Magazines 13. Negative and Depressed Consumer Sentiment Do you see more top or bottom signs right now? Let me know in the comment section below! Follow me Brian Stoffel for more content like this *** P.S. Want to master the basics of accounting (for free)? I created a 5-day, email-based course that explains the Balance Sheet, Income Statement, and Cash Flow Statement in plain English. Check it out here (It's free) → https://lnkd.in/eKbRV7g6 If you found this post useful, please repost ♻️ to share with your audience.

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Is it the beginning of the end of zero brokerage fee or Discount brokers ? The Securities and Exchange Board of India (SEBI) has issued a circular that could mark the end of zero brokerage fees for brokers' clients. Effective October 1, the new regulations will require Market Infrastructure Intermediaries (MIIs) to recover charges from clients. This will impact those accustomed to zero or low brokerage on delivery-based trading. Key Points: 1. Starting October 1, clients may need to pay higher brokerage fees for intraday and futures trading. 2. New-age brokers would earn significant revenue by routing clients' orders to market makers. The new charges could affect this revenue stream. 3. BSE and NSE will charge small transaction fees (0.00375% and 0.00322%, respectively), becoming a significant revenue source for brokers when aggregated over large volumes. 4. SEBI's mandate is to ensure all market participants have equal access to MIIs, promoting fairness and equality. 5. New-age brokers, funded by VCs and PEs, may face increased costs, potentially passing these to clients to maintain competitiveness. Lastly, SEBI aims to level the playing field by mandating that charges be uniformly applied across all members. This move promotes fairness in the market, ensuring everyone gets what they need.  However, the debate continues on whether this approach is fair. So, what’s your take? #sebi #brokeragefees #equitup #finance

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Let me share few stories regarding capital structure arbitrage to show you how this intriguing strategy plays out in real-world scenarios. Capital structure arbitrage is like uncovering hidden treasures within a company’s financial makeup, finding and exploiting mispricings between its debt and equity. ### Example 1: Distressed Company 1. Company Overview: Suppose a company, ABC Corp, is in financial distress. Its stock price has fallen significantly due to concerns about its ability to meet debt obligations, but its bonds are still trading at a relatively high price. 2. Arbitrage Opportunity: Investors believe the market has overreacted regarding the stock but has not fully reflected the distress in the bond prices. 3. Action: Investors take a long position in ABC Corp's stock (expecting the stock price to recover) and a short position in ABC Corp's bonds (expecting the bond prices to fall). 4. Outcome: If the company manages to recover and improve its financial situation, the stock price will increase, and the bonds' value may decrease as the company restructures its debt. Investors profit from the increase in stock value and the decrease in bond value. Example 2: Merger Arbitrage 1. Company Overview: Two companies, XYZ Inc. (acquirer) and DEF Ltd. (target), are undergoing a merger. XYZ Inc. announces that it will acquire DEF Ltd. in a stock-for-stock transaction. 2. Arbitrage Opportunity: After the announcement, XYZ Inc.'s stock price drops due to market skepticism about the merger's benefits, but DEF Ltd.'s bonds remain stable or even rise due to the perceived increased creditworthiness post-merger. 3. Action: Arbitrageurs short XYZ Inc.'s stock (expecting further decline or stable price) and go long on DEF Ltd.'s bonds (expecting bond prices to increase as the merger completion becomes more likely). 4. Outcome: If the merger goes through, XYZ Inc.'s stock might drop further due to merger integration costs, while DEF Ltd.'s bonds benefit from the improved credit profile, resulting in a profit for the arbitrageur. Example 3: Convertible Bonds Arbitrage 1. Company Overview: LMN Corp. has issued convertible bonds, which can be converted into equity at a predetermined price. 2. Arbitrage Opportunity: The convertible bonds are trading at a discount compared to the company's stock price. The arbitrageur believes this mispricing is temporary and can be exploited. 3. Action: The arbitrageur buys LMN Corp.'s convertible bonds and simultaneously shorts the company's stock. The hedge ratio is adjusted to account for the conversion rate and other factors. 4. Outcome: If the stock price decreases, the value of the short position increases, offsetting any losses on the bonds. If the stock price increases, the arbitrageur can convert the bonds into equity and profit from the undervalued purchase price of the bonds.

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It seems that PE firm TPG is in talks to acquire a stake in Vinted at a $5 billion valuation #Vinted, Europe’s largest second-hand fashion platform founded in 2008, is reportedly in talks with US #PE group #TPG to sell a stake at a valuation of €5 billion. TPG, known for its investments in major consumer brands like Reliance Retail and Neiman Marcus Group, is in discussions to lead a transaction that would see several hundred million euros worth of existing shares change hands, allowing current shareholders, including employees, to cash in on their investments. Vinted, which was last valued at €3.5 billion in May 2021, has shown remarkable growth, recently posting its first annual profit of €18 million compared to a loss of €20 million in 2022, alongside a 61% increase in sales to €596 million. The company, supported by investors such as EQT Group, Accel, Burda Principal Investments, Insight Partners, Lightspeed, and Sprints, is positioning itself as the leader in the sustainable fashion market. Beyond being just a marketplace, Vinted is also enhancing logistics with services like Vinted Go, offering dedicated lockers for customers to deliver and collect clothes, further cementing its innovative approach to the second-hand market. The article on the Financial Times in the first comment. Want to stay up to date with the market? Here my newsletter: - Linkedin: https://lnkd.in/d4h8zqKA  - Substack: https://lnkd.in/dzfGJzmW

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2024 Indian #IPO Market so far. Total IPOs in 2024: 100 Filtering with a minimum of USD 50 Mn revenue at the time of IPO: - Total IPOs: 23 - Average Revenue at IPO: USD 313 Mn - Average Price/Sales ratio: 3.5 - Average Market cap/EBITDA: 45 (couldn't calculate EV value due to lack of availability of debt data at the time of IPO) - Average P/E ratio: 81 (skewed by ABDL's P/E ratio at 1394) Comment your interesting findings on the IPO market in the comment section below. #IPOs #StockMarket #Investing #Finance

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