ArkMalibu Weekly Update: Assessing the Impact of COVID-19

Below are our weekly summary thoughts on the M&A market, the economic outlook, and reasons to be optimistic.

Reasons for Optimism in M&A and Capital Markets

  • 157 deals closed in the U.S. & Canada over the past 7 days (last week 136 deals closed)
  • Corporate Bond Market is open – airline companies sell a combined $32 billion of debt as aviation industry races for cash
    • Includes Delta’s $3.5 billion bond sale, the largest ever by an airline
  • “Phase 4” stimulus proposals in discussion in Congress
    • Includes payroll tax cut, immediate expensing, limiting corporate liabilities related to reopening, deductions for corporate business meals and entertainment
  • Bank of England considers June expansion of monetary stimulus, paired with slashed interest rates and increased quantitative easing since March
  • Nasdaq trading in positive territory for the year!
  • Other than a brief spike at the end of March, average short interest is stable, a solid indication of stock market health

Good News We’ve Been Reading

     Economic Recovery Beginning Across Globe

  • United States: 42 states have lifted or eased restrictions, as U.S. records lowest one-day death toll in past 30 days
    • Starbucks to reopen 85% of U.S.-based stores this week, targeting 90% by June
    • Gap Inc. to reopen 800 stores this month
    • Macy’s to reopen majority of its 775 stores by mid-June
  • Germany: reports lowest number of new infections and deaths since March 30th; targets large events resuming in September
  • Portugal: restaurants resume May 18th at 50% capacity; malls and movie theaters resume June 1st
  • Switzerland: museums and libraries resume May 11th; universities and professional sports (without fans) resume June 8th
  • Austria: places of worship and restaurants resume May 15th; hotels resume May 29th
  • China: Volkswagen sales return to pre-crisis levels with V-shaped recovery

Vaccine Development Update

  • Moderna’s Phase Two clinical trials approved by FDA, targeting production of 1 billion annual doses through manufacturing partnership with Lonza
  • Pfizer developing antiviral treatment and targeting summer launch, in addition to current human vaccine testing
  • Virtual summit hosted by EU sees $8 billion+ pledged to fund vaccine developments
    • Includes $800 million by Japan, $575 million by Germany, $110 million by both Spain and Italy

Testing Update

  • Switzerland’s Roche Holding antibody test gains FDA approval for emergency use
  • Crispr gene-editing technology being studied as cheap at-home testing alternative

Innovations Bloom, Habits Change as Society Adjusts to COVID-19

  • Belgium’s SkaGeN theater collective launches WhatsApp based theater
  • Virtual reality company Zoan creates online concert in virtual version of Helsinki
  • Cine Colombia launches balcony cinemas in Bogota
  • Japanese robots attend to COVID patients with mild symptoms that are quarantined in hotel rooms
  • Instagram account “NYCthanksyou” shares handwritten thank you notes delivered to NYC frontline workers
  • Unemployed workers in Pakistan are given jobs planting trees

ArkMalibu is happy to answer any questions you may have and to offer guidance during this challenging time. Please visit our website (https://www.arkmalibu.com) for more information.

Until our next update, we send best wishes to you and yours for safety and health.

Stay informed with ArkMalibu and receive periodic news, reports, and invitations.