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Illustration: Annelise Capossela/Axios

Those turbocharged stock gains are coming in handy. More frequently, companies are using their shares as the hot currency to snap up other firms.

Why it matters: There’s been an uptick in the number of stock M&A transactions during this year's deal frenzy, helped by soaring valuations. But cash still looms large — and the growth in stock deals may be fleeting amid market volatility.

What’s happening: Video conferencing giant Zoom just called off an all-stock deal with Five9 that was initially worth nearly $15 billion — what would have been one of the biggest tech combinations of the year (behind the Square-Afterpay deal, also all-stock). The cloud-based call center’s shareholders shot it down.

  • One possible factor is a shrinking premium. Zoom's stock — which soared to meteoric heights as a poster child of the “stay at home” trade — lost steam. It's down 28% since the deal was announced (Five9's stock is down about 11% in comparison).
  • Influential proxy advisers like ISS recommended Five9 shareholders reject the deal because “it exposes …[them] to a more volatile stock whose growth prospects have become less compelling as society inches towards a post-pandemic environment."

Zoom's (now dead) deal is part of a boom of that sort in the tech sector. Over 160 deals announced so far this year have included a stock consideration — the most since 2004, according to data provided to Axios by Refinitiv.

  • Tech stocks are the face of the stock market’s historic bounceback (and then some), giving those companies an even hotter-than-usual currency to do deals.
Data: Refinitiv; Chart: Thomas Oide/Axios

The big picture: About 6% of year-to-date U.S.-based deals at least partially involve stock, per Refinitiv — a sliver, but still the biggest share in a decade.

  • Those deals — where the acquirer is a public company — accounted for 41% of the total value, 2 percentage points higher than this time last year.

The bottom line: “Those who are using stock — their currency is highly valued. It’s allowed them to meet the pricing demands of those who are ready to sell,” Bill Doran, a deal attorney at Benesch, tells Axios.

Go deeper

Oct 12, 2021 - Economy & Business

Consumers have lots of cash, but less to buy this holiday season

Illustration: Sarah Grillo/Axios

After more than a year of pandemic-related abstinence, people are in a spending mood this holiday season. The problem is there's going to be less stuff to buy.

Why it matters: Global supply chain logjams have left many retailers with empty shelves. And the bottlenecks are getting worse, not better, Bloomberg reports.

4 mins ago - Technology

Race and technology in America

Illustration: Annelise Capossela/Axios

The technology industry is famously determined to change the world — but its efforts to diversify its workforce and remove bias from its products haven't changed nearly enough.

Biden: "Being a cop today is one hell of a lot harder than it's ever been"

President Biden speaks during the 40th Annual National Peace Officers Memorial Service at the U.S Capitolon Oct. 16. Photo: Brendan Smialowski/AFP via Getty Images

President Biden speaking at the U.S. Capitol on Saturday honored members of law enforcement who died in the line of duty in 2019 and 2021 and saluted those who are currently serving.

Driving the news: "We expect everything of you, and it's beyond the capacity of anyone to meet the total expectations. Being a cop today is one hell of a lot harder than it's ever been," Biden said.

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