💸 Weekly Business News
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Welcome to ISOC's weekly newsletter! Here, we break down and analyze key current events in the markets, recent deals, and industry trends to help Wellesley College students better understand what's going on in the business world. Have any questions or comments? We love feedback! Email us at:
isoc-eboard@wellesley.edu
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First off... Upcoming ISOC Events
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Our FIRST Recruiting Office Hours! Sunday 10/14 6pm - 8pm
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Currently recruiting? Stressed out and need some direction? Interested in a finance career but don't know where to begin?
Drop in to office hours
where upperclass members of our e-board and the broader Wellesley community will walk you through the recruiting process, share interview tips, review resumes, and provide 1-on-1 advice. Our student advisors come from a range of finance backgrounds (from investment banking and private equity to investment management and sales & trading) and a range of firms (JP Morgan, Goldman Sachs, Morgan Stanley, KKR, Citi, etc.).
Office hour times and advisors change every week so keep an eye out for emails from us.
This week,
Tina Zhang
and
Jessie Xiao
will be leading our office hours. Combined, they have experience recruiting for roles in investment management, investment banking, and private equity.
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ISOC x Eaton Vance Trip on FRIDAY 10:45AM - 1PM
APPLY BY TONIGHT 10/10 11:59PM
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Learn about summer internship and full-time opportunities at Eaton Vance this Friday in the firm's Boston headquarters.
Eaton Vance is a leading global asset manager whose history dates to 1924. With offices in North America, Europe, Asia and Australia, Eaton Vance and its affiliates offer individuals and institutions a broad array of investment strategies and wealth management solutions. The company’s long record of providing exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today’s most discerning investors.
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- U.S., Canada and Mexico just reached a sweeping new NAFTA deal. After more than a year of intense negotiations, the U.S., Canada, and Mexico reached an agreement to update NAFTA, the 1994 pact that governs more than $1.2 trillion worth of trade among the three nations, with key provisions kicking in in 2020.
- The new deal will be known as the United States-Mexico-Canada Agreement, or USMCA
- Key change in the new deal is to have more cars and truck parts made in North America. Starting in 2020, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, up from 62.5%.
- Other parts of the new agreement include increased intellectual property protections and U.S.-Canada cooperation for U.S. farmers to access the Canadian milk market although U.S. tariffs on Canada steel remain unchanged.
- What this means for the economy: The new agreement gives some wins to U.S. farmers and blue-collar workers in the auto sector. Trump beat his doubters, and his team can now turn to the No. 1 trade target: China.

- China markets fall more than 3.7 percent after central bank cuts reserve ratio for lenders. Last week, we discussed China’s manufacturing slowdown and the intensifying trade war. The Chinese economy continues to lose steam with Chinese stocks experiencing the worst day in months on Monday despite central bank announcements cut the reserve requirement ratio for banks over the weekend.
- What this means for the economy: A cut to the reserve requirement ratio means that banks can hold less money as reserves, leading to more loans for people and businesses. This increases the money supply and is often intended to help the economy grow. The fact that the stock market fell after a reserve requirement ratio decrease is a strong sign of underlying investor anxiety over a heated U.S.-China trade war as shareholders now seem less eager to own Chinese stocks.
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- Data software companies Cloudera (NYSE: CLDR) and Hortonworks (Nasdaq: HDP) announced a $5.2billion all-stock 'merger of equals'. The deal will create one of the world’s leading next-generation data platform providers. Cloudera shareholders will own 60% of the combined firm while Hortonworks shareholders will own 40%.
- Why? Both companies commercialize Hadoop, an open-source big data processing platform, which companies can use to store, process, and analyze different types of data. The big data sector has been showing signs of maturing, and both companies have underperformed in 2018, leading to dips in their stock prices. A merged company would compete for a larger share of the market while experiencing "cost synergies" and "revenue synergies," which means it will save more on costs and earn more revenue faster than if the companies were separated. Ultimately, this will lead to higher profits and hopefully, higher stock prices.
- What's the difference between a merger and an acquisition? And what is a 'merger of equals'? The differences between the terms are quite murky since many use the terms synonymously. An acquisition occurs when one company takes over all the operational management decisions of another, whereas a merger occurs when two companies consolidate into new, joint organization on friendly terms (in most cases you will read about, there is technically still an acquirer and a target). A 'merger of equals' occurs when two firms of about the same size come together to form a single new company.
- What does 'all-stock' mean? When a merger or acquisition occurs, there are various ways the acquiring company can pay for the assets it will receive. The acquirer can pay cash outright for all the equity shares of the target company, paying each shareholder a specified amount for each share or pay with a mixture of cash and stock. Or, like in this case, it can provide its own shares to the target company's shareholders for all target stock according to a specified conversion ratio (here, each Hortonworks share can be converted to 1.305 shares of Cloudera). Because this increases the total number of shares of a company and decreases the per-share value of the company, companies will usually only choose to use only stock when they are certain the benefits and growth associated with the acquisition can outweigh the per-share loss in value.
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- Aston Martin struggles in its public debut. The company started trading on the London Stock Exchange under the ticker "AML". The company priced at £19, the low end of its range.
- About: The British luxury carmaker filed to go public for the first time in its 105-year history. Despite its glamorous associations with the James Bond franchise, the company has filed for bankruptcy 7 times in a little over a century. To avoid a repeat of its checkered history, the company will need to convince investors that it can hit its target of almost 10,000 vehicles sold per year by 2020.
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- Chinese news-and-video-sharing startup ByteDance is now the world's most valuable privately-held technology company. Japan-based Softbank and US-based KKR and General Atlantic are set to participate in a $3 billion funding round for the Chinese startup that is rumored to propel the firm to a $75 billion valuation.
- How? Bytedance is best known at home for Chinese news feed app Jinri Toutiao. It also operates TikTok, a video-streaming app that has 500 million monthly active users worldwide. Everyday, millions of users spend nearly an hour watching, sharing and discovering 15-second clips of themselves, friends or internet celebrities dancing and lip-syncing on Bytedance's addictive apps. The company doesn't disclose financials, but its reach should be a big draw for advertisers.
- Coinbase is an $8 billion company after its most recent $500 million funding round. The company is in talks with existing investors and new backer Tiger Global.
- How? Coinbase is the leading marketplace for the buying and selling of digital crypto assets, and it makes money on each transaction and sends information about those transactions out to the blockchain network in order to verify those transactions. Coinbase also serves as a wallet, too, where the digital currencies can be stored.
- AI-based travel app Hopper raises $100 million, valuing the firm at $780 million. The Series D round was led by Omers, along with other backers Caisse de dépôt et placement du Québec (CDPQ), Accomplice, Brightspark Ventures, Investissement Québec, BDC Capital IT Venture Fund, and Citi Ventures.
- How? At the beginning of the year, Hopper became the fourth-most downloaded travel app in the U.S. after Uber, Lyft, and Airbnb. Hopper uses artificial intelligence and crunches tens of billions of airline pricing data points to recommend when and to where consumers should buy plane tickets. Customers buy more than $1.5 million in flights per day across more than 300 airlines, and give Hopper a $5-per-ticket fee.
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- Google Exposed User Data, Feared Repercussions of Disclosing to Public
- A software glitch in the social site Google+ gave outside developers potential access to the private profile data of hundreds of thousands of users between 2015 and March 2018, when internal investigators discovered and fixed the issue. Google opted not to disclose the issue this past spring, in part because of fears that doing so would draw regulatory scrutiny and cause reputational damage. This incident threatens to give Google a black eye on privacy after public assurances that it was less susceptible to data gaffes like those that have befallen Facebook. Google+ has since been shut down.
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- The FDA raids Juul headquarters.
- Last week, the FDA raided e-cigarette company Juul's headquarters, seizing documents related to sales and marketing of their vape pens. Juul has been under scrutiny for appealing to minors, and the FDA announced in September that the company needed to submit a plan to curb youth access within 60 days. Juul's team responded that they are "committed to preventing underage use" and "look forward" to working with regulators.

- Amazon just raised its minimum wage but workers are fuming.
- Amazon garnered praise for raising the minimum wage for its hourly workers to $15 yesterday, but the widely-publicized move also came at the expense of monthly bonuses and stock options. Some workers believe that means their total compensation will shrink.
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- Natural gas is here to stay, says Big Oil. Demand for renewable energy won't outweigh the need for natural gas.
- Why? Energy companies are betting demand for natural gas (the least polluting fossil fuel) will rise at break-neck pace for decades, undermining warnings that tackling climate change would require a rapid switch to renewable energy. Despite top oil companies like Shell and BP increasing their investments in solar and wind power, top executives foresee natural gas playing a major role throughout the decades of transition and beyond as demand for electricity and plastics grows.
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Breaking the Glass Ceiling
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Shawn Luo,
ISOC Co-Vice President
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This week we will be introducing one of our co-vice presidents,
Shawn Luo
! Shawn is a junior from Taipei, Taiwan majoring in Economics. This summer, she interned in J.P. Morgan's Technology Investment Banking group in San Francisco. During the school year, she is a venture partner for Contrary Capital, a university-focused venture fund, and a venture fellow for the Female Founders Fund, an early-stage fund investing in female-founded startups. Next summer, she will be interning in Goldman Sachs' Investment Banking Division in New York.
Why did you join ISOC?
I have always had a strong interest in investing and finance, and ISOC provided me with a fantastic opportunity to further explore this interest through firm visits, WSJ readings, and other events.
What's your advice for Wellesley students who are interested in finance?
Hongyu mentioned the power of the Wellesley network last week, and I 100% agree with that: start making those connections early on! Another piece of advice I would add is that despite the fact that Wellesley is a liberal arts college, there are a ton of resources available for students to learn about the industry and the technical skills required. I really loved Prof. Joyce's Financial Markets course and the MIT finance courses that I took, and I learned a lot from the Stock Pitch competitions and projects that I participated in with other Wellesley students.
What ISOC event are you most excited for this year?
I'm really excited for our first New York firm visit of the year! Every year, we have at least a couple of trips where around 20 ISOC members head down to NYC to hear from alumni at a prominent Wall Street firm. It's always fun to travel with a large group of sibs and be inspired by successful Wellesley alumnae.
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