I am sorry, because today's learning will be some orders of magnitude more pathetic than yesterday's, at least in terms of analysis. I read a few different things as part of my regular media consumption ("hundreds of websites," to quote the Columbia professor). There were a few different things that I got more context on, but did not learn today. For example, mergers & acquisitions activity is down 32% from last year, even lower than 2020. From Semafor: "Wall Street has nothing to do." This is bad news for investment bankers and M&A lawyers. Fortunately for us normal people, mergers aren't necessarily good. Most of them destroy value. Big ones are even worse. This is mostly because of higher rates. More expensive money means less splurging on poor ideas, such as buying other companies. This is sad for us in the bleachers, who like to watch mergers and acquisitions, because they are fun, but most importantly very sad for bankers, who are tragically impacted in the form of smaller bonuses. The first year analyst who signed an offer to work 100 hours a week in exchange for 100k base salary and the hypothetical 100k bonus at the end of the year will now have to live on exclusively that 100k base. Very sad (eh). This is also sad for business majors who want to get hired as bankers, because banks will now hire less 22 year olds and pay them less than a bazillion dollars.
Anyway, the coolest thing I learned today was actually about "financial printers". From WSJ: "The $900,000 Tomes That No One Really Wants to Read" When you want to do some kind of large financial transaction (buy a company, issue stocks or bonds, etc) you need to make a legal document that you file with the SEC. In the past, you would mail it, or drop it off, I guess. Now, you just submit it online. The SEC is pretty specific about the format, but it is easier to do now. You also sometimes show it to "customers," i.e. people who will buy your security. You usually enlist investment bankers and lawyers to help you write this, and the bankers take it on the road and show it to people they think will buy it. Since I'm 21 years old, I didn't realize that these things used to exist in paper and haven't always just been a word doc printed out as a PDF. Back in the day, apparently, you would enlist the help of a financial printer, who would make print copies of these documents to be sent to the SEC and investors.
I read about this in Matt Levine's Money Stuff today. The lawyers and bankers negotiate the terms of the document, then when they are ready they send it to the printer. The printer prints it on giant paper, and the lawyers and bankers stay up all night making edits in pen, then the printer adds the changes the next day. Also, reportedly they would drink beer while doing this, because, finance, I guess. Also, the lawyers and bankers picked the printer, and the business doing the transaction paid the fees. So the printers spent lavishly on the lawyers and bankers, throwing them parties (and buying them beer).
Anyway, nowadays, it is really easy to make more pdfs, because you kinda just email them, but there are still financial printers. Financial printers have changed their business from like, actually offering regulatory value, to being a marketing agency for your offering, except securities document themed. So they'll help you make some fancy marketing with your document to give to investors so they are happy. Lyft had theirs in pink, for example. Morgan Stanley has an agreement that for deals they underwrite, the font is Morgan Stanley blue instead of black. Silly stuff like that. They make a lot less money now, but I guess they get to have fun in the process.
