In a recent episode of the “All-In Podcast,” Chamath Palihapitiya expressed skepticism about a potential boom in mergers and acquisitions (M&A) for the year 2025. He suggests that the market will remain restrained, contrary to popular expectations.
What Happened: During the discussion, Palihapitiya highlighted, “I think it’s going to still be pretty subdued,” he said. “I don’t think that you’re going to see these crazy M&A deals that I think everybody is expecting. I also don’t anticipate a lot of these big companies going public, at least in the first half of the year.”
He attributes this to the prevailing interest rates, which he argues are not conducive for companies that missed the opportunity to go public when rates were more favorable.
Palihapitiya further elaborated on the current economic conditions, noting that high interest rates make it challenging to execute substantial M&A deals or IPOs. He emphasized that successful M&A should be driven by industrial logic rather than regulatory uncertainties.
Additionally, Palihapitiya pointed out the appeal of risk-free returns, with figures like Warren Buffett investing heavily in T-bills, making large IPOs less attractive compared to the uncertain stock market.
Why It Matters: The anticipation of a surge in M&A activity has been a topic of discussion, especially with the potential policy shifts under the upcoming Trump administration. According to analysts, the Republican control of Congress could lead to a more favorable environment for deal-making. This includes the possibility of removing Federal Trade Commission Chair Lina Khan, known for her aggressive antitrust stance, which has been a significant barrier to M&A activity.
Furthermore, Jim Cramer expressed optimism about a resurgence in M&A under the Trump administration, predicting a more lenient approach to M&A approvals. He highlighted the potential benefits for the regional banking sector, which could see growth through acquisitions or mergers to form larger entities.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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