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Payments Shake-Up: Win & Wipeout

💸 Global Payments bets big on Worldpay, FIS reshuffles, and markets react in typical fashion—one cheers, one dives.

Author

Ankit Sinha
April 21, 2025

Silver banana goes to…


In this issue of the peel:

  • 🪙 Gold shines as investors flee risk, with fund managers piling into the metal amid economic gloom.

  • ☂️ Fed walks a tightrope between inflation and politics, while Trump hints at giving Powell the boot.

  • 💸 Global Payments bets big on Worldpay, FIS reshuffles, and markets react in typical fashion—one cheers, one dives.

Market Snapshot

Banana Bits

The Daily Poll

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Zero-day options—market innovation or financial crack?

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Macro Monkey Says

Fed Treads Carefully Amid Inflation & Tariffs

On Friday, San Francisco Federal Reserve President Mary Daly emphasized a cautious approach to interest rate cuts, citing persistently high inflation and economic uncertainties. 

While open to potential rate reductions if inflation decreases or the labor market weakens, Daly highlighted that strong economic growth and elevated inflation risks might necessitate maintaining a tighter monetary policy longer than previously anticipated.

Concurrently, President Donald Trump expressed dissatisfaction with Federal Reserve Chair Jerome Powell over the current interest rate levels, suggesting he might consider removing Powell from his position. This development raises concerns about the Fed's independence and potential market implications.

The ongoing trade tensions, particularly the implementation of new tariffs, have added to the economic complexities. A Reuters poll indicated that aggressive U.S. tariff policies are expected to significantly slow the U.S. economy in 2025, with the probability of a recession in the next 12 months rising to 45%. 

These tariffs have eroded business sentiment and are projected to keep inflation above the Fed's 2% target through at least 2027.

12-month percentage change, Consumer Price Index

The Takeaway?

The Federal Reserve faces a challenging environment, balancing the need to control inflation with the pressures of political scrutiny and trade-related economic uncertainties. 

With inflation remaining stubbornly high and recession risks increasing due to tariff impacts, the path forward for monetary policy remains complex and fraught with challenges.​

Career Corner

Question

Most job descriptions have "must obtain Series 7 and 63 in 90 days". What happens if you don't? Does the company fire you?

Answer

Yes, typically you need to get licensed, and it will be a condition of employment. Depending on the role and org, it may be the SIE, S79, S7, or S63.

Head Mentor, WSO Academy

What's Ripe

Trump Media & Technology Group (DJT) 11.7%

  • Shares surged 11.65%, defying a $105 million short position disclosed by U.K. hedge fund Qube Research & Technologies. 

  • Trump Media, the owner of Truth Social, has requested an SEC investigation into potential market manipulation, adding fuel to the rally.

Fidelity National Information Services (FIS) 8.7% 

  • Fidelity National swiped right on some serious gains Thursday, jumping 8.65% to $74.58 a pop. Investors high-fived the news of its $13.5 billion fling with Global Payments’ Issuer Solutions biz. 

  • The fintech heavyweight’s bold M&A play is all about trimming the fat, tightening its fintech game, and giving shareholders something shiny to smile about.

What's Rotten

Novo Nordisk (NVO) 7.6%

  • NVO dipped to $58.08 amid concerns over the sustainability of its weight-loss drug sales. Investors are wary of increasing competition in the GLP-1 market, leading to a cautious outlook for the Danish pharmaceutical giant. 

  • This comes off the back of leading competitor Eli Lilly’s promising Phase 3 trial results for its new oral GLP-1 receptor agonist, Orforglipron. 

Humana (HUM) 7.4%

  • Humana's stock fell to $264.48 as the healthcare insurer braces for its upcoming earnings report. Analysts anticipate challenges due to rising medical costs and regulatory pressures, casting a shadow over the company's near-term prospects. 

  • This follows insurance giant UnitedHealth’s slashed 2025 profit forecasts amidst high medical costs from Medicare Advantage enrollees.  

Thought Banana

Global Payments Goes All-In on Worldpay

In a bold move to streamline its operations, Global Payments announced on Friday that it will acquire Worldpay for $24.25 billion. This three-way transaction involves private equity firm GTCR and Fidelity National Information Services (FIS). 

As part of the deal, Global Payments will divest its Issuer Solutions business to FIS for $13.5 billion, effectively transforming into a pure-play merchant solutions provider.​

The acquisition positions Global Payments to serve over 6 million customers, processing approximately 94 billion transactions and $3.7 trillion in annual volume across more than 175 countries. 

The company anticipates $600 million in cost synergies and at least $200 million in revenue synergies, with the deal expected to be accretive to earnings per share in the first year post-closure, slated for the first half of 2026.​

GTCR, which acquired a 55% stake in Worldpay in early 2024 at a valuation of $18.5 billion, stands to double its investment in just over a year. The private equity firm will receive 59% of its proceeds in cash and 41% in Global Payments stock, resulting in a 15% ownership stake in the combined entity. 

This swift turnaround is notable in a private equity landscape where the average holding period is nearly six years.​ Despite the strategic rationale, Global Payments' stock fell 17% following the announcement, reflecting investor concerns over the deal's size and integration risks. 

Conversely, FIS shares rose over 8%, buoyed by the acquisition of the Issuer Solutions business, which processes over 40 billion transactions annually and maintains partnerships with more than 170 financial institutions. 

FIS projects long-term revenue synergies exceeding $125 million annually and expects the acquisition to be accretive to adjusted earnings metrics within the first year.

The Takeaway?

Global Payments' acquisition of Worldpay marks a significant shift towards focusing solely on merchant solutions, while FIS strengthens its issuer services. GTCR's rapid and profitable exit underscores the potential for swift returns in strategic private equity investments. 

The market's mixed reaction highlights the challenges of large-scale integrations.

The Big Question: Will Global Payments’ $24B Worldpay bet pay off—or will integration headaches swallow those sweet synergy promises?

Banana Brain Teaser

Previous

X, Y, and Z each try independently to solve a problem. If their individual probabilities for success are 1/4, 1/2, and 5/8, respectively, what is the probability that X and Y, but not Z, will solve the problem?

Answer: 3/64

Today

If (1/x) - (1/(x+1)) = 1/(x+4), then x is?

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Happy Investing,
Chris, Vyom, Ankit & Patrick