Log in
Register
Search
Search titles only
By:
Search titles only
By:
Log in
Register
Search
Search titles only
By:
Search titles only
By:
More options
Toggle width
Share this page
Share this page
Share
Facebook
Twitter
Reddit
Pinterest
Tumblr
WhatsApp
Email
Share
Link
Menu
Install the app
Install
Forums
Law Firm Events
Law Firm Deadlines
TCLA TV
Members
Leaderboards
Premium Database
Premium Chat
Commercial Awareness
Future Trainee Advice
Forums
Aspiring Lawyers - Interviews & Vacation Schemes
Commercial Awareness Discussion
Commercial Awareness Update - July 2019!
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Message
<blockquote data-quote="Sara Moon" data-source="post: 12271" data-attributes="member: 525"><p><strong><strong>Commercial News Update: 31st July 2019</strong></strong></p><p><strong></strong></p><p><strong>Welcome to this week’s commercial write up everyone. I can't believe it's the last day of July already! The topics covered this week are:</strong></p><p></p><p>1. SoftBank’s Vision Fund II [USER=1]@Jaysen[/USER]</p><p>2.ECB laying the groundwork for a potential stimulus [USER=1643]@Moni[/USER]</p><p>3. WeWork’s earlier than expected September IPO [USER=2115]@Lewis James[/USER]</p><p></p><p></p><p><strong><u>1. SoftBank’s Vision Fund II [USER=1]@Jaysen[/USER]</u></strong></p><p></p><p><strong>The Story:</strong></p><p><strong></strong></p><p>SoftBank just announced the launch of its second mega fund, Vision Fund II. It comes two years after the Japanese company launched the world’s biggest tech fund, disrupting the venture capital industry as it pumped billions into fast-growing companies like Uber, WeWork and Flipkart.</p><p></p><p><strong>Impact on Businesses and Law Firms:</strong></p><p><strong></strong></p><p>It was Linklaters that was offered the job on the first fund after a specialist from the firm successfully pitched to the CEO in Tokyo. Fund lawyers from London, Tokyo and New York were then involved in drafting the fund documentation.</p><p></p><p>The nature of investors in that fund made for an interesting yet challenging job. SoftBank’s first fund was supported by substantial checks from Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Company. Linklaters’ lawyers would have been responsible for negotiating the terms on which the investors contribute their money. They would also help to reconcile the different interests and any conflicts between investors. Due to the size of their investments, terms appear to have been negotiated to allow the UAE and Saudi Arabian sovereign wealth funds (funds owned by the state) retain a say over certain deals, including veto rights on deals over a certain size.</p><p></p><p>Linklaters’ lawyers also helped to structure the fund, which is notable because of its size and because of its reliance on leverage. This is because the Vision Fund, unlike most funds, raises its capital through a combination of preferred debt and equity. Preferred debt promises a regular payment and more security if things go wrong, but it also means investors receive less of the upside.</p><p></p><p>With the influx of new capital, the fund’s portfolio companies can also do more deals. This means plenty of legal work to go around, such as the 16 law firms currently involved in the upcoming Sprint/T-Mobile merger.</p><p></p><p><strong><u></u></strong></p><p><strong><u>2. ECB laying the groundwork for a potential stimulus</u></strong> <strong><a href="https://www.thecorporatelawacademy.com/forum/members/1643/" target="_blank">@Moni</a></strong></p><p></p><p><strong>The Story:</strong></p><p></p><p>At its most recent meeting on Thursday, the ECB announced that it expects interest rates to remain "at their present or lower levels" through the first half of 2020. The announcement is a change to previous statements and suggests that a rate cut, to provide more stimulus to a region that has been experiencing <a href="https://www.cnn.com/2019/07/18/business/europe-economy-lost-decade/index.html" target="_blank">weak economic growth</a> and low inflation. Following the announcement, ECB President Mario Draghi reassured investors that the risk of recession in the region is very low. However, data released last week shows that <a href="https://www.marketwatch.com/story/german-flash-manufacturing-pmi-slumps-to-seven-year-low-2019-07-24" target="_blank">German manufacturing output fell</a> to its lowest level in seven years in July, which suggests that a slowdown in trade has significantly affected German exports. The ECB also suggested there could be additional or alternative measures taken to stimulate the eurozone economy including "a tiered system for reserve remuneration", and a potential reintroduction of <a href="https://www.investopedia.com/terms/q/quantitative-easing.asp" target="_blank">quantitative easing</a>. Draghi also suggested that some members may have doubts on specific aspects of the stimulus package; however, the concerns appear to be regarding the nuances of the package and not necessarily on the need for a package.</p><p></p><p><strong>Impact on Businesses and Law Firms:</strong></p><p></p><p>Markets have been somewhat prepared for a potential stimulus package since June when Draghi <a href="https://www.cnbc.com/2019/06/18/ecb-president-mario-draghi-speech-sintra-portugal.html" target="_blank">announced</a> that the ECB would use all necessary measures to boost the economy if there were no apparent signs of improvement. However, stock markets have risen this week as more concrete signs of a stimulus package are on the horizon. Optimism around the stimulus is heightened by the fact that many expect the <a href="https://www.wsj.com/video/fed-poised-to-cut-rates-even-as-us-economy-shows-signs-of-strength/64DC154B-8F8A-416D-9A0C-67B9A0B334E8.html" target="_blank">US Federal Reserve to cut its key interest rates</a> this week, and simultaneous stimuli from key central banks will likely give a substantial boost to global growth. A stimulus package would be positive news for most businesses as it suggests lower future costs of funding and lower costs of investments. Lower interest rates also can boost consumer spending, which in turn, boosts business. The stimulus is also positive news for law firms as higher-performing businesses tend to invest more and participate in more deals which bring in business for city law firms.</p><p></p><p><strong><u></u></strong></p><p><strong><u>3. WeWork’s earlier than expected September IPO [USER=2115]@Lewis James[/USER]</u></strong></p><p><strong><u></u></strong></p><p><strong>The Story:</strong></p><p></p><p>The technology start-up providing shared workspaces is planning to go public in September, the <em>Wall Street Journal </em>reports. WeWork is meeting with Wall Street banks to help advise upon their IPO, after confidentially filing with US securities regulators last year. Meanwhile, WeWork is also trying to raise up to $6 billion through an asset-backed loan to ease the pressure on their IPO.</p><p></p><p>There is controversy surrounding WeWork, with many investors feeling apprehensive. The IPO is happening sooner than expected, especially in light of WeWork’s recent financial report. The report illustrated how WeWork is reflecting the pattern of other tech companies, being both growth-intensive while making persistent losses. It almost hit $2 billion in net losses just last year alone.</p><p></p><p><strong>Impact on Businesses and Law Firms:</strong></p><p></p><p>Debate surrounds the CEO Adam Neumann, who recently raised $700 million through share sales and debt backed by his ownership stake. This ‘cashing out’, coupled with Neumann’s ‘self-dealing’ (leasing his own properties back to WeWork) and unpredictable management style has caused claims that WeWork’s IPO “doesn’t pass the smell test”. There does remain optimism in Neumann, especially with backing from Masayoshi Son’s SoftBank and T Rowe Price, but many investors remain unconvinced.</p><p></p><p>WeWork’s IPO raises some interesting legal questions for firms when advising clients. For example, Neumann’s ‘self-dealing’ and scandals like WeWork banning meat for employees may be something firms would like to distance clients from.</p><p></p><p>Nevertheless, the start-up was recently valued at $47 billion; as such, it is certainly going to be one of the main IPO’s this year. Indeed, WeWork is now the largest tenant in New York and is growing fast in London. It will be interesting to see whether WeWork manages to successfully disrupt a traditional industry, but a current environment of underwhelming disruptor IPO’s with Uber and Lyft potentially casts doubt upon this prospect.</p></blockquote><p></p>
[QUOTE="Sara Moon, post: 12271, member: 525"] [B][B]Commercial News Update: 31st July 2019[/B] Welcome to this week’s commercial write up everyone. I can't believe it's the last day of July already! The topics covered this week are:[/B] 1. SoftBank’s Vision Fund II [USER=1]@Jaysen[/USER] 2.ECB laying the groundwork for a potential stimulus [USER=1643]@Moni[/USER] 3. WeWork’s earlier than expected September IPO [USER=2115]@Lewis James[/USER] [B][U]1. SoftBank’s Vision Fund II [USER=1]@Jaysen[/USER][/U][/B] [B]The Story: [/B] SoftBank just announced the launch of its second mega fund, Vision Fund II. It comes two years after the Japanese company launched the world’s biggest tech fund, disrupting the venture capital industry as it pumped billions into fast-growing companies like Uber, WeWork and Flipkart. [B]Impact on Businesses and Law Firms: [/B] It was Linklaters that was offered the job on the first fund after a specialist from the firm successfully pitched to the CEO in Tokyo. Fund lawyers from London, Tokyo and New York were then involved in drafting the fund documentation. The nature of investors in that fund made for an interesting yet challenging job. SoftBank’s first fund was supported by substantial checks from Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Company. Linklaters’ lawyers would have been responsible for negotiating the terms on which the investors contribute their money. They would also help to reconcile the different interests and any conflicts between investors. Due to the size of their investments, terms appear to have been negotiated to allow the UAE and Saudi Arabian sovereign wealth funds (funds owned by the state) retain a say over certain deals, including veto rights on deals over a certain size. Linklaters’ lawyers also helped to structure the fund, which is notable because of its size and because of its reliance on leverage. This is because the Vision Fund, unlike most funds, raises its capital through a combination of preferred debt and equity. Preferred debt promises a regular payment and more security if things go wrong, but it also means investors receive less of the upside. With the influx of new capital, the fund’s portfolio companies can also do more deals. This means plenty of legal work to go around, such as the 16 law firms currently involved in the upcoming Sprint/T-Mobile merger. [B][U] 2. ECB laying the groundwork for a potential stimulus[/U][/B] [B][URL='https://www.thecorporatelawacademy.com/forum/members/1643/']@Moni[/URL][/B] [B]The Story:[/B] At its most recent meeting on Thursday, the ECB announced that it expects interest rates to remain "at their present or lower levels" through the first half of 2020. The announcement is a change to previous statements and suggests that a rate cut, to provide more stimulus to a region that has been experiencing [URL='https://www.cnn.com/2019/07/18/business/europe-economy-lost-decade/index.html']weak economic growth[/URL] and low inflation. Following the announcement, ECB President Mario Draghi reassured investors that the risk of recession in the region is very low. However, data released last week shows that [URL='https://www.marketwatch.com/story/german-flash-manufacturing-pmi-slumps-to-seven-year-low-2019-07-24']German manufacturing output fell[/URL] to its lowest level in seven years in July, which suggests that a slowdown in trade has significantly affected German exports. The ECB also suggested there could be additional or alternative measures taken to stimulate the eurozone economy including "a tiered system for reserve remuneration", and a potential reintroduction of [URL='https://www.investopedia.com/terms/q/quantitative-easing.asp']quantitative easing[/URL]. Draghi also suggested that some members may have doubts on specific aspects of the stimulus package; however, the concerns appear to be regarding the nuances of the package and not necessarily on the need for a package. [B]Impact on Businesses and Law Firms:[/B] Markets have been somewhat prepared for a potential stimulus package since June when Draghi [URL='https://www.cnbc.com/2019/06/18/ecb-president-mario-draghi-speech-sintra-portugal.html']announced[/URL] that the ECB would use all necessary measures to boost the economy if there were no apparent signs of improvement. However, stock markets have risen this week as more concrete signs of a stimulus package are on the horizon. Optimism around the stimulus is heightened by the fact that many expect the [URL='https://www.wsj.com/video/fed-poised-to-cut-rates-even-as-us-economy-shows-signs-of-strength/64DC154B-8F8A-416D-9A0C-67B9A0B334E8.html']US Federal Reserve to cut its key interest rates[/URL] this week, and simultaneous stimuli from key central banks will likely give a substantial boost to global growth. A stimulus package would be positive news for most businesses as it suggests lower future costs of funding and lower costs of investments. Lower interest rates also can boost consumer spending, which in turn, boosts business. The stimulus is also positive news for law firms as higher-performing businesses tend to invest more and participate in more deals which bring in business for city law firms. [B][U] 3. WeWork’s earlier than expected September IPO [USER=2115]@Lewis James[/USER] [/U] The Story:[/B] The technology start-up providing shared workspaces is planning to go public in September, the [I]Wall Street Journal [/I]reports. WeWork is meeting with Wall Street banks to help advise upon their IPO, after confidentially filing with US securities regulators last year. Meanwhile, WeWork is also trying to raise up to $6 billion through an asset-backed loan to ease the pressure on their IPO. There is controversy surrounding WeWork, with many investors feeling apprehensive. The IPO is happening sooner than expected, especially in light of WeWork’s recent financial report. The report illustrated how WeWork is reflecting the pattern of other tech companies, being both growth-intensive while making persistent losses. It almost hit $2 billion in net losses just last year alone. [B]Impact on Businesses and Law Firms:[/B] Debate surrounds the CEO Adam Neumann, who recently raised $700 million through share sales and debt backed by his ownership stake. This ‘cashing out’, coupled with Neumann’s ‘self-dealing’ (leasing his own properties back to WeWork) and unpredictable management style has caused claims that WeWork’s IPO “doesn’t pass the smell test”. There does remain optimism in Neumann, especially with backing from Masayoshi Son’s SoftBank and T Rowe Price, but many investors remain unconvinced. WeWork’s IPO raises some interesting legal questions for firms when advising clients. For example, Neumann’s ‘self-dealing’ and scandals like WeWork banning meat for employees may be something firms would like to distance clients from. Nevertheless, the start-up was recently valued at $47 billion; as such, it is certainly going to be one of the main IPO’s this year. Indeed, WeWork is now the largest tenant in New York and is growing fast in London. It will be interesting to see whether WeWork manages to successfully disrupt a traditional industry, but a current environment of underwhelming disruptor IPO’s with Uber and Lyft potentially casts doubt upon this prospect. [/QUOTE]
Insert quotes…
Verification
Our company is called, "The Corporate ___ Academy". What is the missing word here?
Post reply
Forums
Aspiring Lawyers - Interviews & Vacation Schemes
Commercial Awareness Discussion
Commercial Awareness Update - July 2019!
Top
Bottom
This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
By continuing to use this site, you are consenting to our use of cookies.
Accept
Learn more…