How GOP Tax Bill Will Affect Activists; Microsoft Partners in the Cloud -- ICYMI

Much deal activity of late that has helped investors reap gains (Buffalo Wild Wings (BWW)  and Procter & Gamble Co. (PG)  , ring bells) has been, at least in large part, due to the involvement of activist investors.

But if the GOP has its way with tax reform, the insurgent investor community, highlighted by big shots like Bill Ackman, Carl Icahn and David Einhorn, among a host of others, may be in danger of losing some of its sway or at least its profits.

At issue in the battle over taxes is the way carried interest -- the profits received by many hedge funds, private equity managers, and venture capitalists -- is treated as capital gains with a top basic rate of 23.8% as opposed to the top ordinary income rate of 39.6%. The current proposal would move to limit the carried-interest tax break by increasing the length of time assets would need to be held to qualify for the break, from one year to three years.

All this is good news for top buyout shop managers like billionaire private equity mogul and Blackstone Group LP (BX)  co-founder Stephen Schwarzman, who was chairman of President Donald Trump's strategic and policy forum until it was disbanded in August. Schwarzman and his PE brethren are used to holding investments for extended periods. The news however, would complicate things for activist funds who need the ability to "cut and run" if an investment starts to go south, according to experts.

Fresh off a Cyber Monday and the first weekend of the holiday shopping season, all the talk has been about Amazon.com Inc.'s (AMZN) continued dominance in the world of e-commerce. But amid its dominance in one arena, it is beginning to see competition in another.

Microsoft Inc. (MSFT)  is furthering its partnership with German enterprise software company SAP SE (SAP)  . As part of the deal, the companies will cross-promote each other's products internally, while encouraging joint customers to run SAP software on Microsoft Azure, its hybrid cloud computing service.

The partnership could help increase Microsoft's growing share of the cloud computing market, while potentially slowing Amazon's lead in the space. Microsoft has been securing more tie-ups with cloud software providers to cross promote its services, in the hopes that it could attract joint customers to its platform, instead of rivals like Amazon, Alibaba (BABA) or Alphabet Inc.'s (GOOGL)  Google.

I should also note that today, Jim Cramer's Action Alerts PLUS charitable trust initiated a position in Microsoft, so stay tuned for more of their research and subscribe!

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Photo of the day: Bringing the crew back together again

Forget about ETFs, the S&P, AWS, the GOP and those other popular acronyms from 2017, remember the good 'ol days of GTL? Well, GTL (Gym, Tan, Laundry) and other colorful acronyms from 2009 made famous on reality television show "Jersey Shore" are making a comeback as MTV is bringing the cast back together. The reboot for one of MTV's most popular shows of the last decade comes as its parent company Viacom (VIAB)  , continues to see declining fees from cable-TV operators to carry its networks. Revenue at Viacom's Media Networks group (which included MTV, VH1 and Comedy Central, among others) rose 3% to $2.55 billion in the third quarter with the bulk of the gains coming from non-U.S. markets. Will Snooki, JWOWW, The Situation, Pauly D. and the rest of the Jersey Shore cast be enough to help jumpstart the Viacom behemoth? Probably not, but it should be entertaining nonetheless. Time to go: 'Cabs are here.'

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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.

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