A Strategic Look at the State of the Capital Markets in Q3 2022

In this episode, Cowen & Company Co-President Larry Wieseneck once again joins David Erickson, Senior Fellow at Wharton Business School, and Grant Miller, Head of Cowen’s Capital Markets Group, for a follow-up to their Q2 podcast. Like that podcast, these three capital markets experts started with the question, “Where do you think we are now, and how are you advising companies to prepare for the near term?”

There has been a significant change in the Macro environment over the last few months, which has had an impact across both the public and private markets.

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TRANSCRIPT

Speaker 1:

Welcome to Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.

Larry Wieseneck:

Hi, everyone. I’m Larry Wieseneck, co-president of Cowen and Company, and welcome to our podcast. As always, I’m here with my good friend and former colleague, David Erickson, senior fellow at the Wharton Business School. And today, I’m happy to say that we’re once again joined by my partner Grant Miller, Cowen’s head of capital markets. The three of us last sat down to discuss the state of the capital markets during the second quarter of this year and now, as we begin the fourth quarter, we’re ready to pick up the discussion with quite a lot to talk about. So David, once again, let me turn it over to you.

David Erickson:

Great. Thanks, Larry. When we started the podcast back in February and again in June, I started with the question, “Where do you think we are now, and how are you advising companies to prepare for the new term?” I’m going to start with that same question now that we’re sitting here in October. Larry, why don’t you start?

Larry Wieseneck:

Sure. Well, I think that there is a significant change in the macro environment from where we were, say, certainly in February and maybe versus June, which is further along, which is we have to start with where we are relative to inflation and the interest rate environment certainly if we’re talking about here in the United States. And where in February it felt like the Fed’s really behind, we’re late, the market’s worried about it, I think now the market has priced in as we just see, continuing to price in that the Fed is very serious about getting ahead of the inflation story such that it does not become an endemic story of inflation. Whether you believe we’re behind or ahead, the market now understands the intention, and we’ve significantly priced that in.

Sure, you’ll get a situation where, one week, some news will come out a little bit hot and people worry if that means that they’re going to have to go from one more 75-base point increase to… Whatever the discussion is, but that change from “Will the Fed be serious?,” to “They are serious” means that now what the market is trying to understand and price in is when will inflation come down and are we in a recession and if we are, are we turning nine months from now? Because the market is really nine to 12 months ahead. So with that as the backdrop, I’d say from the market standpoint it does feel as if there’s still a lot more work to be done, the market’s trying to find the other side. So now let’s take it to what does that mean for companies? I mean for companies, we’re now 12 months into a very challenging capital markets for majority of companies. And as Grant could talk about, in areas like life sciences, we’re 24 months in, because we started seeing the turn in life sciences at the beginning of ’21, the downturn.

Companies are now having to make decisions and what we’re preparing them for, what we’re saying to them is “You need to think about what is it like if you have another 12 months of a very choppy environment? What does it mean for if you’re in a business that has significant cash needs?” You may have to raise capital even though you don’t like the environment, but if you need the capital to survive, you got to find a way to do it. It means companies thinking about “Am I on an offense or defense?” Now, I’ll just leave it at that for a second. I think every company fits into, and they have to determine, are they prepared to take advantage of the dislocation and the volatility by being on offense because it’s an opportunity for them to grow, get into other areas, buy weaker competitors, add products, or are they on the defensive side where they may have grown too much prior to the environment we’re in and they’ve got to get more fit, they got to shed assets to make sure they can get through it.

I don’t think you can be in the middle. I really do believe you have to be on one side or the other. But anyway, Grant, let me kick it over to you.

Grant Miller:

I think that we’re still really in the land of uncertainty. In that environment, what we’re talking to our clients about is to be in a ready stance. It’s what we tell clients all the time in all types of market environments, but today it’s particularly true. Where I think some of our clients may have been somewhat flatfooted, which is something that I wasn’t necessarily expecting, is that management teams may be ready, advisors and banks and lawyers may be ready, but I think it goes a little bit deeper. Particularly with regard to when stocks aren’t in good places and you need to go raise capital, boards need to be prepared for what things look like and where you really need to be able to go to. And there can be these windows of opportunity do emerge. So we’ve seen some windows of enthusiasm for new capital coming in and so you need to be ready to go do it.

So we saw, for example, half the biotech deals this year happened in Q3. There was one week we did 16, the market had 16 deals in one week. We hadn’t seen that in a year. And so being ready for those moments in time, if those opportunities emerge, you need to be able to drive through them really efficiently.

David Erickson:

So let’s switch gears to the IPO market because I guess we’ve had the quietest IPO market we’ve had since probably 2000. For those companies that are hopefully looking for that turn in the IPO market and hopefully looking to go public, let’s say in 2023, what are the characteristics when the IPO market does return, do you expect to see? Characteristics in terms of those types of companies?

Grant Miller:

Maybe I’ll start on this one. I think that the first thing that we are already seeing, and this really goes beyond just IPOs, but I think it will be particularly true when we do see IPOs come back, which is to try to lay down a carpet of success before you start to step on it, which means getting demand set up into the IPO. That can come from lots of sources. That can come from existings, which in the largest area of IPOs of the last few years have been biotech. So that is certainly more standard in that realm. That is from other private participants that want to stretch to IPOs, test the waters, et cetera. The first thing is, before we even get to the characteristic of the company, it’s a lot of process. And I do think when you’re in these situations, public or private, that is uncertain, process and execution actually really matters to be able to get things right.

From the perspective of what types of companies and opportunities that will be at the leading edge, I think about IPOs in two very, very broad categories. Relative IPOs and absolute IPOs. Relative ones are companies that you can make an easier analogy to something that’s already public and trading and have a sense of value. So one is a little more relative to the other. The others are absolute IPOs. This is where there was so much enthusiasm over the last couple years, up until about a year ago, where new ideas were dominating both the IPO market as well as SPAC mergers. And so in those absolute IPOs, and biotech fits into that category quite nicely also, those are going to be, I think, on the other side of the first wave of IPOs coming back because they won’t have what the market seeks. Predictability. No surprises, please. Hit the first quarter out of the gate.

All those types of characteristics I think we’ll need to lead us back to a healthy IPO market and then start to gain traction on some of what I call those more absolute IPOs or these more new idea type of opportunities.

David Erickson:

You’ve seen obviously for those companies that have gone through a merger with US spec and there’s been lots of them obviously in the last couple years, unfortunately like a lot of the IPOs, a lot of these companies are trading it two, three, four dollars. At the beginning of this year, I think there was estimated to be over a trillion dollars of dry powder available for investment in the private equity space. What’s happening there? Because I’m just surprised I guess that there hasn’t been some opportunities for, or at least some announcements of all, some capital deployment from the private equity space into these types of companies. How are you starting to see that emerge I guess.

Grant Miller:

Well, I guess I’ll maybe well take a step back and just talk about performance in general first, because I think, David, that’s as part of your question. If you look at the last year or so, deal performance is something we track pretty carefully has been negative really across the board. Existing public company follow-ons have been down over 50% from a year ago. I mean that’s a big number. That’s not super surprising with the S&P being off over 20%. And then the companies that we’re doing deals for are more high volatile in general. IPOs have been down then of course, which are very much linked to [inaudible 00:09:08], which are new company really formations and coming out of the gate. And so I look at them very similarly as, and I think we as a firm look at them as a class IPOs and these specs and I think they’re similar.

And it goes back to what we were just talking about, which is that many of those companies were on the leading edge of new and really exciting opportunities in technology, in industrials, in areas that kind of combine the two. And so there are interests that we are seeing building in some of those companies that have stocks that have really been beaten up, although the interest is still weighted towards those that have more predictability in their business and their business cycles. And so what we’re seeing first is folks that are looking at pipe transactions, going to these companies that are more highly negotiated that may be able to get some security basis in those transactions to have some backstop in terms of value to move forward.

David Erickson:

And Grant, by pipes you’re talking about for existing public companies not to facilitate a DSPAC situation, correct?

Grant Miller:

Yeah, that’s an important characteristic. In fact now that you mentioned it, one of the healthier parts of the [inaudible 00:10:27] that we saw in some of the combinations that we’re seeing now that are closing, getting announced in closing lack that common stock pipe, which really in my estimation was really part of that healthy IPO like dynamic. And so we do need to get back to it. And so the rebuilding of some of these situations where they have low stock prices is to go back to basics, which is to find a clearing price for common stock to that investors to really want to come in and build those. And unfortunately there were so many so fast that many of those situations are not well covered by the street and so they’re harder to find those interesting situations. And by the street, I mean many dispatch were sponsored by banks that don’t have research for those companies or the capacity in banking.

And so what we’ve done is we’ve tried to both partner with the companies that we did work with as well as really look at some of what we think are the best of those classic companies and really almost re IPO them and really use that as an opportunity to onboard new clients. Since by the way, we’re not doing a lot of that with IPOs because that market is dormant.

Larry Wieseneck:

I think David, what Grant just said, actually that goes back to some earlier conversations we had in the series around the challenges for small cap companies in general. Again, whether it’s a DSPAC business or whether it’s an IPO that’s down 70% because of the challenges in the market right now. Those companies suffer from not enough support. They’re often at a point where until they get enough sponsorship, they’re trading in the low to mid hundred millions of dollars and that is a challenging place to be in the US public market. And so I like you embedded in your question, anticipate that we will see though a number of those businesses be very interesting to private equity for take privates or for mergers with other public companies to get more scale.

So I do think that we’re in an environment right now where like anything in a storm, you want to tie the boats together. I think that you’re going to see a lot of these situations where subscale businesses decide to get to larger scale, whether it be go private and have the growth managed there or whether it be by merging with other public companies.

David Erickson:

I think I was just about to talk about scale, I think you’d hit the nail in the head. What we’re seeing is scale is so important right now. Boards are absolutely hyper focused on it and frankly, what does scale really mean, particularly for companies that are not profitable yet? How big you need to be, how much capital you really need. And from the investor side, what we’re seeing is it’s used to be, “Oh, are you okay if we have 24 months of capital at hand?” That answer is really no longer sufficient. What we’re seeing is, “Give me a business plan, let me make sure I understand that we’re giving you capital through significant proof of concept inflection points,” for a lot of these businesses that are high growth. And that has been of course a market change to where we were just a year ago.

Larry Wieseneck:

And Grant, I’ll just give maybe the analog. Grant went through the message for the high opportunity, high growth potential names. The flip side is for the cash flowing businesses in a difficult environment, inflation concerns et cetera, scale means margin. And so the look for scale is both on the aspirational side and on the cash flowing side when you’re in an environment where margins are under pressure and so it’s playing out across the universe.

David Erickson:

All right, so we’ve talked a bit about the equity markets, we’re going to talk a little bit more about that later, but let’s flip gears or switch gears, excuse me, in terms of… because the debt markets have obviously gone through a lot of changes in the last couple of months as well. I mean, I guess we talked in June and since that point the Feds raised twice if not three times if I’m not mistaken. Where is the debt market today? What types of deals are you seeing in the middle market sponsor back market?

Grant Miller:

So maybe I’ll just start with a little bit of background before we answering the specific question, which is the syndicated markets except for a brief period in August really have been shut. And so the expectation is when they come back, which of course they will, most folks do think that federates will be around four by the end of the year that we’re going to be looking at [inaudible 00:15:10] loan rates of [inaudible 00:15:13] plus 500 and so we’re going to be looking at eight, nine percent type paper. And so that’s challenging. You couple that with what’s happening at the banks. Q2, the large banks wrote off about one and a half billion dollars of commitments they had that’s I think anticipated not be so dissimilar for Q3 and could be upwards of 40 billion dollars of paper that they’re still trying to figure out what to do with. And so there’s still a pretty big disconnect and it does trickle down to more of the middle market.

And really where I’m going with this is the private lenders, this is a little bit of what they’ve been waiting for in a large extent in terms of being able to take advantage of dislocated markets. They have been very active. Aries for example, had the most, one of their busiest quarters ever, they deployed nearly 15 billion of capital. Now they do have the option of interesting secondary options. And so it’s not just on the primary and trying to figure out what deals to back, but that is really where… I think we’ve been talking about this for a three quarters, coming into their sweet spot, which is their rates are higher and the sponsors that actually do deals are going to have more equity in them and so they’re going to have a little bit of a better profile. And so all of that for those lenders actually has a pretty good backdrop to be able to look. It’s certainly tighter and not easy.

And so what we’ve seen that in our business and looking at the middle market sponsor activity is that we’ve had many more folks come to us looking for a debt advisory service to actually help sort a lot of that through and try to figure out where to go and how to actually put something together. Even just last week we had a couple situations where we had some banks start to tail off and we had to come in and really look for solutions in the private debt markets to be able to help supplement those deals. But it doesn’t mean that they can’t get done. In fact, if sponsors have confidence in some of their deals, we’ll even make those financings attractive for those lenders.

David Erickson:

You talked a little bit about the private debt markets. Let’s bridge on that theme a little bit because again, back in June I was surprised at the types of conversations you were having across the board, whether it be debt or equity on the private side. Why don’t you give an update of some of the types of transactions… and again, I recognize the market’s been pretty volatile over the last few weeks, last couple of months obviously. Give an update for some of the types of transactions that have been done that you’ve seen recently. And what do you expect to see in the near term?

Grant Miller:

Well, so just to finish off that those comments are really more on the sponsor side and middle market sponsor side. I think that’s what we’re seeing and expect to see more of. And just to round out on the non inequity pieces, there is still… well, tech has been not a great place to be in the private markets recently. In the lending perspective, there’s certainly are lots of funds are looking for AR lending opportunities and so that still is there and those can be way more interesting for companies, particularly if they’re looking at raising more capital and trying to stay away from equity, that’s an opportunity. Similarly, we’re seeing a lot of that happening in healthcare as well where that’s been one of our busiest areas. And so some of our more established companies that actually have products or will have products soon are doing product based debt financing, what we call synthetic royalty transactions instead of going to the equity markets.

And a lot of people like to talk about that’s not dilutive and non-dilutive capital. I think when you raise capital it’s going to be dilutive to something. You’re just trying to find the most efficient piece that you’re diluting either piece of the other product or otherwise. And so that’s really what we’re seeing a lot of. And then in the private equity placement area, we have never seen so many [inaudible 00:19:31]. It doesn’t mean that all that’s going to get done because what we need to see come through, although it’s been certainly the busiest areas for us or in areas like in mobility in particular where there’s been a lot of activity we’ve showed a lot in and in software. But for those private equity deals that are more straight series C type, series D, there is some valuation reset that we still need to see come through.

Some of those large private equity folks and venture folks were pretty aggressive with evaluations and they’re likely to have to hold onto assets for longer because both the IPM markets aren’t there as well as strategic takeouts aren’t as active. And so you still see some of that yet to come.

David Erickson:

The monetization market for private equity obviously is slowed just like every other market. So they’re clearly in a different situation than we were six, nine months ago. So we haven’t talked about M&A yet other than we talked a little bit about scale type transactions earlier. Are there areas out there that you’re seeing more active conversations? What types of transactions are you seeing in the pipeline?

Larry Wieseneck:

Maybe the best way to attack this is to separate out what we’re seeing in the public market activity from the private market. And so I do think that there’s-

David Erickson:

Just to clarify, Larry, we’re talking public to public and private to private or kind of-

Larry Wieseneck:

I guess what I’m saying is what we’re seeing in the activity with private equity acquirers versus what we’re seeing when it’s a public company doing the acquiring. In the public market, I alluded to the themes earlier. There’s a significant amount of attention being given to do, “I have the right set of assets for moving forward the next two, three, five years?” So that leads to what I would refer to as fit and focus type of transactions. Companies either spinning off assets or divisions, potentially swapping assets. So going through multiple steps of getting out of certain areas and getting bigger in others. So you’ll see some of the active larger public companies that could do five or six deals over the next two years as they sell off divisions that aren’t core and then build up in places where it is core.

But it’s all about making sure that in that situation, this is my comment before, they want to be on the offense around making sure as they come out the other side of what is an anticipated recession, I think by most of these companies that they really have the right portfolio for the opportunity set. I think that the flip side of that in the public market are those, I’ll refer to them as almost if you would’ve thought about in the debt market years ago, fallen angels, investment grade companies that became non-investment grade. Here, this would be businesses that are not being valued properly by the public market. They’re looking at either selling to larger public companies or going private. And that’s where I think you asked the question earlier. I think we’re going to see a bunch of that coming forward over the next six months.

In the meantime, that’s kind of what we see as the backlog in the future. What’s getting done now, we see still enormous amount of private market activity in the middle market of companies that are, I’ll call them aspirational cash flow companies. They’ve got good cash flows, they might even be seeing some weakness coming into their numbers because of what’s happening with inflation, et cetera. But they’re in areas where there’s a long term secular trend assisting them. That could be anything involved with the near shoring of core activities from a… You can think of it as national security or just national interest. But when you think about what’s happening with core areas of our economy that pre pandemic, we relied on the global chain, that chain’s coming closer. So if you’re a part of that, you’re naturally seeing a active bid that goes into five, 10 years out. Those kind of companies, they’ve got to think about, “Do I grow? How do I grow?”

If the business is there, logistics, anything around, again, supply chain delivery, core industrials, family owned businesses there are saying, “I probably don’t have the capital to invest to keep growing first sale to private equity.” If it’s already owned by private equity, either that private equity firm is looking to buy other assets to add to it or it’s going to sell from private firm one to private firm two, we’re seeing a lot of that. Another thing is anything that touches the ESG sleeve has long term trends in its favor and we’re seeing a lot of activity there. I mean we’re seeing activity both in the M&A side and in the capitalizing side on every kind of alternative energy including nuclear fusion and things that five years ago we never would’ve thought would be discussed.

But what’s going on in Europe, what’s happened here locally, the move away from hydrocarbons is changing things. And then the last piece I’d say is hydrocarbons still for the first time in a long time are back in terms of interest because I do think the activity the last two years, the events in Ukraine have reminded people that energy transition is not like ripping a band-aid off. It’s a 20 to 40 year endeavor that we’re going through. So we’re still going to need to be able to access hydrocarbons, but now we’re seeing discussion of cleaner approach to it and carbon capture and things like that. And so there are still whole areas of the economy where there’s a lot of interest in M&A activity in both the private and the public space.

Grant Miller:

Maybe the only I would add that we’re seeing that really crosses into more of the capital markets realm is, and it goes back to the comment Larry made about scale. There are a number of conversations that we’re helping to facilitate that are looking at creating a scale situation from two or more existing companies and then being able to finance that together is a lot more attractive. So that’s a little bit of a triple [inaudible 00:25:48], but that is a lot of the conversation.

David Erickson:

Three management dreams, three boards.

Grant Miller:

But we have seen a lot of interest starting to see that, “Okay, that’s the way that’s going to get done.” And I think that area in particular where we’re seeing that traction is in the area that we call future health. And so a lot of the tools and diagnostics in med tech and healthcare technology opportunities. And those are really interesting situations. Little bit less so, there’s been a lot of talk for example, and biotech and therapeutics in those areas. That is harder for sure.

Larry Wieseneck:

Grant, I think you bring up an interesting point. You talked about pipes earlier. This is where the growth of pipes as a strategic tool has really, I think, taken off over the last five to 10 years such that we’re historically, say 20 years ago we would’ve thought of a pipe as someone needs capital, often there would be a potentially negative taint attached to it. Now the pipe conversation on the equity side is no different than the private conversation around arranging debt for an M&A deal. So when you can have those private side conversations bring people over the wall, you have the ability to consider the whole package such that a company that might be private could merge with a public company in ostensibly, what do you want to call it? Reverse merger or just a merger? It depends on who ‘the larger player is,’. But they can have the conversation with equity and debt investors to make sure that they can finance the new company.

That kind of cornucopia between private discussions from the capital markets with strategic M&A, we’re seeing an increased interest in, and I would say one of the things fueling it is companies that thought about doing a spec learned about reverse mergers through that understood the process and now realize they could probably today do something similar, get public and actually bring with it additional cash if they come together with an existing company that’s public already. So we expect to see more of that in the months to come. A lot of activity there.

David Erickson:

We’ve talked about really the pullback in all markets across the board just given what’s been going on economically and Russia, Ukraine and all the macro other issues that we have out there right now. But it also feels like just by this conversation it feels like there’s a lot of things on the horizon that could impact activity, whether that be the balance of the year or maybe the next few months beyond that, in early 23. How are you advising companies to plan for that possibility? And I think Grant, you were saying earlier, be ready, be nimble, what else should companies be thinking about today, tomorrow, next week?

Larry Wieseneck:

I would just say that even for those who are playing offense… I used the term before, you either have to be on the offense or defense, make sure you know who you are. Even for those playing offense, plan for your worst case scenario, meaning you need to presume that whatever your best laid plans are, they’re not going to happen. So what would you do in that scenario? And that means be prepared to take price concessions if needed to get something done. Understand that you’re no longer in a position where you can dictate to the market because there’s such a strong bid, you have to accept Mr Market and the message that Mr Market is giving you. But if you go into it that way, I think you can certainly navigate these waters, but you have to understand that. And that’s where Grant’s point about management teams I think are further along on this than some of the boards.

And so a lot of our work on this in terms of advising companies is really working with the boards to understand don’t begin something you’re not willing to finish. And that means if something would’ve been down 10%, it might be down 20% to get it done now. But if you need to get a financing done or you need to buy a certain asset, whatever it is, you have to be more flexible. I think flexibility number one piece.

Grant Miller:

I think a hundred percent true. And the other piece is just particularly in the equity side and still the busiest part of the market is biotech. What we’ve been seeing there is percentage of the mark caps being sold increasing dramatically. And so the companies are maybe only two thirds the size they were from our cap perspective this time last year, typically you’re seeing deals of 15 to 20% of dilution. We’re seeing 30 to 40% dilution on average. These are larger deals for smaller companies to get through. And that is, I think, ties really well, the analytical data from what Larry is saying.

Larry Wieseneck:

I know we’re nervous about the time, so I’m just going to finish with the last question that I’ve pointed to, I guess again in recent podcasts, which is despite all this doom and gloom in the markets there’s obviously quite a few bright spots out there. What is one or two that you guys have either observed in recent months or as you look forward as to where you think there’s going to be some opportunity?

Grant Miller:

I’m going to maybe make talk about it from the bio perspective a little bit, which is for a long time, deals were not working, meaning investors weren’t making money. And when that happens, it’s hard to break that cycle, hard to get folks interested if they’re going to find a place to make negative alpha, that’s not the game, that has started to really change. And so when we saw these spikes of activity, we saw deals start to really work again. And so finding the right level, finding the right amount of capital, making it safe to come into deals. And that has started the cycle of more investment. That was some of August, a lot of September, little bit jitter in October, so we’re not all the way through it. The other piece that we’ve seen on the desk very specifically is that our at the market programs are ATMs, lots of block activity, real investors taking very large positions and companies through them. And for the first time-

David Erickson:

Grant, why don’t you talk a little bit about the ATM?

Grant Miller:

Sure.

David Erickson:

What’s been going on there?

Grant Miller:

Yeah, so this has been area of real growth for us and across the street. We have over a hundred programs right now. It’s very quite standard for companies once they’re now shelf eligible, if they’re still in a losing position to be able to have access to capital if they need it through an ATM. Many of our clients don’t use them and that can be the advice that we give. However, having that access when these moments come up are critical. And so we’ve seen many of our companies raise a quarter of capital just to get through an inflection point so they have a better opportunity to do a larger deal later. We’ve had one of our most active quarters and selling off those programs and some of our largest blocks and in particular is the bright side of what we’re seeing well-heeled, not only investors coming in and bidding us for those programs. We haven’t seen that in quite some time. If you think about some optimism like smartest kids in the block are starting to really take a lot of those opportunities.

David Erickson:

How about you, besides the Jets? What’s your bright spot?

Larry Wieseneck:

Exactly. We could talk about… That’ll be our next podcast can be about the playoff hopes for the New York football teams. No, I think one that is a seminal moment and probably doesn’t have anything to do with tomorrow or the next day, but I think will be looked back at three years, five years from now as a really important item that occurred in just the last week was Elon Musk basically agreeing to stand by his definitive agreement to purchase Twitter. I think that from a governance standpoint, a contract law standpoint, an investor standpoint, being able to rely on contracts is critical for the markets to function. That’s true of the capital markets, it’s true of M&A.

This was as high profile as it gets. It was someone who often has found a way to do things his way and realizing that you sign a contract you have to actually follow through, I think will end up being very, very positive. Because in a way where if the inverse were true, if you were able to have walked away from a definitive agreement, it would’ve called into question the underpinnings of not just the M&A market, but therefore were shareholders look for in protections when they are investing in companies. So I think it’s a real positive for the markets. With that, I think it’s time to bring the conversation to close. David, once again, thank you so much for your preparation and for peppering us with questions. Grant, thanks for joining David and I today. I really enjoy having these conversations periodically and hopefully for the listener it’s informative. And we look forward to the next time when we can talk about not just our forward look on the markets, but also the picture in the football world. And Grant, we’ll always love to hear your view on the Yankee playoff opportunities.

Grant Miller:

We have two bosses, sports guys and one New York Parade sports guy on this. And so it’s very focused on Northeast. I am surprised that the Patriots are one game behind the Jets at this point. I don’t know when the last time this happened, Larry. I will make a side wager with you however. The next time we’re going to have this will likely be in the middle of the playoffs or something like that. Who’s going to be ahead in the AFC East? Will it be the Patriots or the Jets? I’m sticking with my third string quarterback and the Patriots.

Larry Wieseneck:

Listen, hope springs eternal when you’re a Jets fan, so we’ll take that bet and we’ll come back in… Probably is not the most informed bet, but I’m willing to play with my heart. Thank you everyone for participating and look forward to next time.

Speaker 1:

Thanks for joining us. Stay tuned for the next episode of Cowen Insights.

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