When Stocks Are So Expensive, Even Facebook and Warren Buffett Won’t Pay

This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.

Good morning and welcome back from the holiday weekend—I hope you had a relaxing Thanksgiving. Jen Wieczner here, filling in for Polina while she’s in Bulgaria.

This morning, Fortune published its “2020 Crystal Ball, Predictions for the Economy, Politics, Technology, and More.” It’s full of forecasts on issues Term Sheet readers have been following closely:

  • Tesla will have to raise capital again
  • Saks, after its parent company goes private, will merge with Neiman Marcus
  • Facebook will kill its Libra cryptocurrency project (after the withdrawal of high-profile partners like PayPal)

And that’s just for starters.

One Fortune prediction that may be less optimistic than it appears at first glance: The S&P 500 will stand at 3,200 at the end of 2020. While that figure represents a never-before-seen record for the stock market index, it’s actually just under 2% higher than where the S&P 500 closed last week, on Black Friday.

In other words, if stocks keep up their recent rally (the S&P 500 rose 3% in November), the market could already reach 3,200 by the end of this year—which means, by our predictions, that 2020 could end up being a wash for stocks (though that’s not to say there won’t be plenty of seesawing throughout the year). It might be time for the market to take a breather after all: The S&P 500 is up more than 25% so far this year, on track for its best performance since 2013—as long as there’s no repeat of last year’s December panic.

Given those lofty market levels, it’s interesting that recently, even two of the most cash-rich companies in the world were not willing to pay the high price to acquire some of the hottest targets.

First, Facebook lost out on buying Fitbit, according to CNBC, after bidding 5 cents less per share (or just $10 million less) than Google for the wearable health tracker company.

Then, Warren Buffett’s Berkshire Hathaway was outbid by Apollo Global, the private equity firm, when it tried to acquire Tech Data, a distributor of Apple products and other technology, also according to CNBC. Buffett’s offer was $5 a share, or about $140 million, below Apollo’s—though that’s a drop in the bucket compared to Berkshire Hathaway $128 billion in cash.

If neither Buffett nor Zuckerberg is comfortable with some of the current prices commanded in the market, it may not be long before other investors can’t stomach them anymore either.

Jen Wieczner
Twitter: @jenwieczner
Email: jen.wieczner@fortune.com


- Figure Technologies, a San Francisco-based fintech cofounded by SoFi cofounder Mike Cagney, appears to have raised $103 million per a SEC filing. Read more

- Tray.io, a San Francisco-based platform for workflow automation, raised $50 million in Series C funding. Meritech Capital, led the round.

- Genvid Technologies, a New York-based video streaming engine, raised $27 million in Series B funding. Galaxy Interactive led, and was joined by investors including Valor Equity, K5 Global, March Capital Partners, OCA Ventures, Makers Fund, and Horizons Ventures.

- Trouva, a London-based marketplace for brick-and-mortar boutique stores in spaces including clothing and home decor, raised £17 million ($21.8 million) in funding. Octopus Ventures, C4 Ventures, and Downing Ventures led the round, and was joined by investors BGF and LocalGlobe. Read more.

- Gorgias, a startup focused on using AI in customer service, raised $14 million in Series A funding. Read more.

- Kasada, a Sydney Australia-based cybersecurity startup focused on bots, raised $7 million in Series A funding led by In-Q-Tel.

- Ockam, a San Francisco-based company maker of developer tools for IoT applications, raised $4.9 million in seed funding. Investors include Core Ventures, Okta Ventures, SGH Capital, and Future Ventures. Read more.

- Altitude Sports, a Montréal-based high-end outdoor clothing retailer, raised funding from BDC Capital’s Growth and Transition Capital division. Financial terms weren't disclosed.


- The Canada Pension Plan Investment Board acquired a 12.4 percent stake ($255.9 million) in  Smartfit Escola de Ginástica e Dança S.A, São Paulo, Brazil-based fitness chain operating in Latin America. 

- Kensington Capital Partners acquired the surgical division of Centric Health Corporation, a Toronto-based healthcare provider, Financial terms weren't disclosed.

- Foreside Financial Group, a portfolio company of Lovell Minnick Partners, agreed to acquire Quasar Distributors, the Milwaukee-based mutual fund and ETF distribution business of U.S. Bancorp. Financial terms weren't disclosed.

- Ardenton Capital Corp invested in Pebbles Care, a Leeds, U.K.-based provider of residential care homes and specialist school academies for young people. Financial terms weren't disclosed.

- Newlook Capital invested in InSite, an Alabama and Georgia-based provider of wastewater treatment facilities. Financial terms weren't disclosed.


- Facebook agreed to acquire Beat Games, the Czech Republic-based developer of VR games including Beat Saber. Financial terms weren't disclosed.


- Thai Beverage, the maker of Chang and Archa beer, is weighing a Singapore IPO of its brewery business businesses that could value it at $10 billion, Bloomberg reports citing people with knowledge of the matter. Read more.

- ChinaData Group, a Beijing-based data-center operator, is seeking an IPO that would value the company at over $1 billion, Bloomberg reports citing sources. Bain Capital backs the firm. Read more.

F + FS

- Storm Ventures, raised $130.4 million for a sixth fund, per an SEC filing. Read more.


- Palo Alto Networks agreed to acquire Aporeto, a San Jose, Calif.-based cloud security firm, for $150 million. Aporeto previously raised funding from venture firms including Comcast Ventures, Norwest Venture Partners, and Wing VC

- The Jordan Co. acquired the polymer additives division of Arsenal Capital Partners-based Polymer Solutions Group, a Cleveland-based maker of chemicals. Financial terms weren't disclosed.

- Intel is seeking to sell its connected home unit, per Bloomberg citing sources. Read more


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