Morgan Stanley's big E-Trade bet; PE firms ramp up MBA hiring; inside AMC's turnaround

Hi readers,

I'm Michelle Abrego, a new finance editor at Business Insider, and I'm filling in for Meredith today.

It was a busy week for dealmaking. Wall Street bank Morgan Stanley revealed that it's set to buy discount broker E-Trade in the biggest bank deal since the financial crisis. Rebecca Ungarino spoke to insiders to learn why the traditionally white-shoe bank paid $13 billion for the brokerage firm once known for its talking baby ads.Advertisement

The deal could be great news for wealth-management fintechs looking for a partner to take them to the next level. Venture and growth-stage investors told Dan DeFrancesco it shows banks' willingness to pay up for client segments and digital capabilities they haven't been able to develop themselves.

And in a big role reversal, one M&A deal this week saw a fintech acquiring an established player. Shannen Balogh took a look at LendingClub's announcement that it is set to buy Radius Bank. The transaction would make it the first tech firm to buy a US-regulated bank. One analyst went so far as to call it "amazing."

If you needed further evidence that fintech has hit an inflection point, Dan also delved into data from CB Insights this week which showed exactly that. In 2019, investors put $17.2 billion into mega-rounds, or funding rounds worth more than $100 million. The focus on larger, later-stage rounds shows they're not the scrappy startups they used to be.
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Meanwhile, Casey Sullivan surveyed 13 top business schools and found that private-equity giants are hiring more and more MBAs for a wider variety of roles. As more money flows into private markets, so do the resources that these firms put into hiring and training top talent. Read here to see which schools have the best recruitment prospects.

We also had a fresh Friday afternoon WeWork scoop from Meghan Morris. Arik Benzino, WeWork's head of US, Canada, and Israel, is leaving. Benzino, who is a friend of former CEO Adam Neumann, was one of the few executives who stayed long after the founder was ousted. His departure also comes during the first week on the job for new WeWork CEO Sandeep Mathrani. Read on for a deep dive into how AMC is overhauling its business to prove the doubters on Wall Street wrong, a look at the new startup challenging Linkedin that just nabbed $8.5 billion led by Sequoia Capital, and more.Advertisement

Thanks for reading, and have a great weekend!

Michelle

If you aren't yet a subscriber to Wall Street Insider, you can sign up here. Are there stories you'd like to see more of, or new areas you'd like to read about? Get in touch with me at mabrego@businessinsider.com.Advertisement


Wall Street is betting AMC is in a downward spiral. Here's the inside story of how the world's biggest movie-theater chain is battling for a comeback.

Lately, AMC Entertainment's movie magic has sputtered in the eyes of investors and analysts. Its stock has plunged 75%, erasing nearly $3 billion in market cap, since the start of 2017.

Broadly, industry watchers are worried about an uninspiring pipeline of movies out of Hollywood and how the theater industry is positioned with Netflix and Amazon pumping out more movies every year.

Private-equity firm Silver Lake joined the cast of the AMC story in the summer of 2018. Advertisement

We spoke to 20 people who have worked at AMC during stints from 2016 through 2019, in locations including New York, New Jersey, California, and Kansas. And we chatted with insiders and analysts to understand how Silver Lake's entrance has changed up the story arc for AMC.

READ MORE HERE>>


This new startup just nabbed $8.5 million from Sequoia Capital and others to help companies map out their power players

The Org, a startup that wants to map out companies' org charts, just nabbed $8.5 million in funding in a round led by Sequoia Capital, with participation from Balderton and Founders Fund.Advertisement

As its database grows, The Org's co-founders Christian Wylonis and Andreas Jarbøl are focused on launching a premium offering for professional users like recruiters, salespeople, and journalists.

The startup is also exploring job posting functionality and building out its news feed. READ MORE HERE>>Advertisement


New housing laws around the country could give renters alternatives to cash security deposits. Here are 5 startups that could see a windfall.

The high upfront cost of a security deposit can dissuade some renters from moving into a new location.

Cincinnati recently passed a "Renter's Choice" law, which required landlords of a certain size to provide alternatives to security deposits. State legislatures and the City of New York are considering similar laws.

Some companies have started to offer insurance products that replace the large, but refundable security deposit with a much smaller, but non-refundable fee. Advertisement

Five startups have a lot to gain from these new laws.

READ MORE HERE >>


Robinhood, Fidelity, and Charles Schwab are racing to give customers the chance to buy $1 slices of stocks. We talked to a dozen insiders about who wins, who loses, and what it says about trading today.

The rise of self-directed fractional-share trading is a product of the fiercely competitive, margin-pressured environment that startup and legacy brokerages alike are operating in today.Advertisement

Players like Robinhood, Fidelity, and Charles Schwab have raced to announce their own offerings - marketed largely at customers still building up wealth - in recent months, or have hinted at launches it in the press.

We spoke with nearly a dozen insiders and execs about the feature's rise in mainstream retail investing to understand who wins, who loses, and what it says about the industry today.

READ MORE HERE>>Advertisement


Coatue's new quant fund lost money in the fourth quarter and it shows how hard it is for new entrants to break into the space

Coatue, billionaire Philippe Laffont's firm, opened a quant fund last May to outside investors even as many larger quant funds were struggling in an increasingly competitive space.

In the hyper-competitive space of quant funds, where the biggest managers like Two Sigma, D.E. Shaw, and Renaissance Technologies are investing more every year into new data streams and artificial intelligence, new players face an uphill battle. The fund, which sources say is closed, runs roughly $350 million now, and returned just under 2% in its first eight months of trading.Advertisement

READ MORE HERE>>


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