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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

The revival of retail deals

Illustration: Aïda Amer/Axios

Before the pandemic, the retail sector was more known for bankruptcies than for blockbuster M&A deals or high-profile leveraged buyouts.

  • Not anymore: 2021’s global retail M&A volume reached $227 billion as of Dec. 16, a year-over-year increase of 59%. That nearly keeps up with the broader increase of about 64% across all industries, according to data provided by Refinitiv.
Updated 8 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: Pfizer and Moderna boosters overwhelmingly prevent Omicron hospitalizations, CDC finds — Omicron pushes COVID deaths toward 2,000 per day — The pandemic-proof health care giant.
  2. Vaccines: The case for Operation Warp Speed 2.0 — Starbucks drops worker vaccine or test requirement after SCOTUS ruling — Kids' COVID vaccination rates are particularly low in rural America.
  3. Politics: Biden concedes U.S. should have done more testing — Arizona says it "will not be intimidated" by Biden on anti-mask school policies — Federal judge blocks Biden's vaccine mandate for federal workers.
  4. World: American Airlines flight to London forced to turn around over mask dispute — WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older — Austria approves COVID vaccine mandate for adults.
  5. Variant tracker

Arizona governor sues Biden administration over COVID funds tied to mandates

A teacher prepares a hallway barrier to help students maintain social distancing at John B. Wright Elementary School in Tucson, Arizona, on Aug. 14, 2020. Photo: Cheney Orr/Bloomberg via Getty Images

Arizona Gov. Doug Ducey (R) filed a lawsuit Friday against the Biden administration for ordering the state to stop allocating federal COVID relief funds to schools that don't comply with public health recommendations such as masking, the Arizona Republic reports.

Why it matters: The Treasury Department said last week that the state would have to pay back the money if Ducey does not redesignate the $173 million programs to ensure they don't "undermine efforts to stop the spread of COVID-19."

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