A continuing standoff is stifling deals. With equity at rock bottom, banks are wary of raising money or selling. On the other end, prospective buyers are unwilling to swallow a huge loss, absent either a huge price cut or a government-brokered arrangement on sharing losses. Banks may be wary of selling for other reasons, particularly in cases where management owns a large amount of depressed stock, and/or it has taken out loans against that stock when it was worth much more.
DealBook was told to expect that banks will try to work a range of deals, including offloading assets and raising debt. There could be movement on the latter once they have announced their latest financial results. Also, if a big merger happens without government support, expect others to follow suit.
Beware the fault lines. The uncertainty of the commercial real estate market is a big worry for Wall Street. Shares of First Republic, a major lender, are down roughly 90 percent this year. First Republic, which has been largely mum since the country’s largest banks announced an emergency effort to prop it up, reports earnings on April 24.
How Google is rethinking search
ChatGPT and other chatbots pose the biggest threat to Google’s dominant search business, worth $162 billion last year, in more than two decades. But that became more alarming to the company in March, when Samsung began weighing replacing Google as the default search engine on its devices with Microsoft’s Bing, putting a contract worth an estimated $3 billion annually at risk.