Emerging from the COVID-19 crisis, companies may find they have more to worry about, says Brunswick Partner Charlie Koons.
The last 11 years in the public markets have witnessed the equivalent of a high tide at full moon reminiscent of the famous first scene of “Jaws.” Buoyed by high equity valuations and access to a low-interest-rate environment, it seemed perfectly safe to go in the water. Companies and investors have been enjoying themselves, less than mindful of lurking threats posed by wild market fluctuations and the activists who exploit them.
Over the last several weeks however, global markets have witnessed unprecedented drops in valuation with no real sense of where and when calm will return. The combination of the abrupt end of a bull market that many had viewed as overdue for a correction along with the overwhelming fear and uncertainty that has come with the global pandemic of Covid-19 has brought about the most turbulent market conditions since the 1930s.