Moelis: Cost Of Capital Risks Mean Dealmaking Snag Could Endure

Valkyrie Trading SocietyInvesting Group LeaderFollow5ShareSavePlay(8min)CommentsSummaryMoelis & Company faces a worse Q1 containing the Iran War, SaaS-pocalypse effects, and a translation upwards of the yield curve.Deal momentum in general has been affected by the Iran War; Q4 revenue growth had already decelerated to 11% despite marquee transactions and added managing directors.The factors that might have led to a sponsor return and sustained megadeals, i.e., rate cuts and lower cost of capital with inflation calming, are in reverse.Logically, we should expect an environment now more akin to the Ukraine war outbreak environment of 2023 and 2022. Expectations are a dangerous thing with inflation.Mid-market players have also been struck YTD almost as much in stalled price performance. While all should have declined, mid-market should have declined less than MC.Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More » alexsl/iStock via Getty Images A lot of coverage lately due to reinflation risks must focus on how things could return to the previous high inflation state. Moelis (MC) and other shops focused on advice in the target ticketThis article was written byValkyrie Trading Society5.54K FollowersFollowThe Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.