00:00a big story in the merger space, or I guess we didn't get the merger that we were looking for
00:07in Capri, if you are long in this stock. So Capri, of course, is the owner of Michael Kors handbags
00:13and other accessories in the fashion space. It had agreed to a deal with Tapestry,
00:21and then the antitrust department came in and blocked the deal. And now you have Capri shares
00:27getting absolutely crushed down. 47% was down even more. Meanwhile, Tapestry shares are trading
00:33higher. So it's one of those things where the company that would be doing the acquiring is
00:38trading higher. And I wonder if the executives over at Tapestry are like, oh, thank you. The
00:42market likes it that we're not doing this deal. So either way, you're seeing Capri ticker CPRI
00:48shares get absolutely hammered this morning, while Tapestry shares are on the upswing.
00:53Ah, that was just a shocking move last night. You can bring up the chart. It happened so
01:01violently and so quickly. I could not believe how hard they hit it. Because you think about
01:06like where was Capri before the merger talks? Where was the stock? I think, like what price?
01:12It actually was higher. It was actually at-
01:16Do you know when they first announced it?
01:1830.
01:20The stock was 30.
01:21Yeah.
01:23I wonder though, you have that spike up. Like how long has this been going on?
01:26I don't know. I don't know.
01:28I wonder if it was like first rumored back when it was like 22, 23. But it's almost safe to say-
01:33It hasn't been that low for-
01:35Four years.
01:37Yeah. It's almost safe to say, well, it is safe to say it. This is much lower than it was before
01:42there was ever a merger even on the table. And obviously the merger is gone here now.
01:46They've officially blocked it. So it looks like there's no hopes for it's going to come back.
01:51But I mean, this is just this DOJ and antitrust division is so aggressive. I mean,
01:59CNBC may have said it best. They're like, they're handbags. I'm like, they're selling
02:04handbags for the most part. I mean, you can't merge a handbag company. You can't merge iRobot.
02:12You can't merge anything apparently. I mean, this division, if you're sitting as a risker,
02:19you've got to put serious, serious risk. When you're calculating these things in your formula,
02:25you better be calculating how aggressive the DOJ is here. Because you can't like,
02:30if you're sitting there on a cash deal for 55, you can't be paying 54 for it because they kill.
02:36Like they just come out, they don't know what deal they're going to kill next. And if you think
02:39US Steel has a chance in hell, I mean, they don't merge a freaking handbags. There's no way
02:45they're letting US Steel go over and it's back up to 39. It's trading down 50 cents on this
02:51deservedly. I think it should be down more on this because I'll tell you how aggressive
02:56this DOJ antitrust division is. I'll play devil's advocate just for a little bit.
03:03And I'm not saying that for sure they should have blocked this deal or not because I agree
03:08it's handbags who really cares. But Tapestry owns Coach, Kate Spade, Stuart Weitzman.
03:17Capri owns Michael Kors, Versace, Jimmy Choo. At what point is it too many brands for one
03:29conglomerate to hold in one space? I mean, these are just the biggest ones. It's like
03:33six major handbag brands too much for one company to own is 10 too much. What is the limit there?
03:39So if this deal went through and all of a sudden Tapestry held a 60% market share of the handbag
03:47industry, maybe there is an argument to me that it's too much. Also, the only other thing I'll
03:52say is I remember when this headline hit a couple months ago when the guy who runs Capri was in a
03:59courtroom talking with the FTC trying to get the deal done. He said as an excuse, he's like,
04:05it's hard in the Taylor Swift era to sell handbags. I don't really know what that means,
04:10why Taylor Swift would make it harder to sell your product. But he didn't sound like he had
04:15a really good argument for why this deal needed to happen to keep Capri afloat. Because again,
04:22he was talking about Taylor Swift making it harder to sell purses. I don't really understand that.
04:29I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know.
