The Dark Side of M&A

Valens Research would like to share with you the Litman Letter we released last April 2016, on a topic that our Chief Investment Strategist, Joel Litman, discussed at a recent panel event held last week by NYSSA, on “The Dark Side of M&A” .

This Litman Letter discusses how GAAP and IFRS-based accounting on mergers and acquisitions create misleading credit and equity analysis, mixing apples and oranges through the financial statements. Instead of providing relevant and useful data, our analysis shows that users of a company's financial statements actually experience a data loss , due to these styles of accounting.

In the file linked below, you will find case studies on some major acquisitions that happened in recent years, and how, more often than not, reported figures for revenue and other key valuation metrics are WAY off from reflecting how well the company is actually doing.

Hope you find the article interesting.

Valens' equity and credit research relies on a bedrock of deep fundamental forensic analysis with a coverage of over 4,000 equities and all major corporate credit. That means “cross-capital” equities and credit research are not siloed, but instead are fundamentally aggregated and compared with orthogonal data points.