🚴♀️🖥 Peloton Prime Coming Soon?
Happy Hump Day everyone!
Congrats to everyone for making to the 6th Hump Day of 2022! That’s 6 weeks already that have passed in 2022, crazy. I’ve personally been trying to think of ways to innovate on YouTube content and make more story-telling and investigative videos. If you have any financial topics you think are SUPER confusing (besides NFTs, I feel like I’ve made enough videos on that), email me! I’d love to hear from you.
If you’re looking for another reason to go into tech (besides the free cafeteria, sleeping pods, on-site massage therapists and dry cleaning services, etc), I come to you with great news: there’s a tech talent shortage. Can you believe that? With the $200k starting salaries, the over-the-top perks and work-life balance, you’re telling me there’s a shortage of tech talent?
This week, I learned a new term in the mergers & acquisitions (M&A) space called "acqui-hire” wherein large-IT sector companies assess an acquisition target beyond the potential synergies and give greater weighting towards the talent that the target has in-house. With how tight the labor market is for premium tech talent, more and more companies are willing to put all options out on the table, including M&A.
M&A deal flow in the global IT and business services sector increased by 10% from 2020 and the pace is only starting to pick up with deal flow jumping 23% in the second half of 2021. One of the reasons why tech talent is in such high demand is because at the start of the pandemic, many companies were thrown into the deep end when it came to their IT functions. The world is also changing and the pandemic expedited the shift towards the digital world, which necessitates high end tech talent to see the vision through.
If you thought tech jobs were already saturated, from the looks of it, you might want to take a second glance. If companies are looking to acquire a company and a key motivator is their human capital, it means that there isn’t enough supply of good coders in the open marketplace. Time to brush up on your interview skills and maybe take a coding bootcamp!
Enjoy your week everyone! Hopefully we helped make your Hump Day a little better :)
-Humphrey & Rickie
In the Markets
Weekly News Roundup
Peloton Deal May Pose Regulatory ‘Headache’ for a Tech Giant (BBG)
Home-fitness darling Peloton Interactive has become a potential takeover target following a sharp plunge in its stock price. However, regulatory barriers stand in the way of a deal as tech companies are being probed by the FTC for their reach and influence (with some deals even being blocked). Amazon, Apple and Nike are all considered potential buyers.
RH: Bidding starts at $1.00! Going once! Going twice…
HY: I’d love to see Peloton acquired, I don’t think their business model is completely garbage - there is a lot of value in Peloton’s subscription model, it was perhaps just a bit overvalued before.
Russian Forces at 70% of Level Needed for Full Ukraine Invasion (CNBC)
U.S. officials claim that Russia has ~70% of the combat power it would need for a full scale invasion of Ukraine. The ground is expected to reach peak freeze around Feb. 15, allowing for off-road mechanized transit by the Russian military. Given the timeline and the growing number of Russian forces, it would seem that the window for diplomacy is closing.
RH: The ancient tribal group in Kenya called the Kikuyu people have a proverb that reads “when elephants fight, it is the grass that suffers”. Hopefully, this is just Putin flexing his muscles… Hopefully.
Tech Talent Shortage Is Helping Drive M&A Deals (WSJ)
IT companies looking for top end talent are looking to structure entire M&A deals in order to get their employees. While M&A has traditionally been used as a means for growth or competitive strategy, some companies now see it as a means for talent acquisition.
HY: This is interesting because it plays into the narrative of the Great Resignation. But top workers in tech make a lot of money — so I don’t know if that completely applies to them either.