What You Need To Know For August 29th

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Welcome Back! We’ve got some really interesting stories for you today, so let’s dive in!

The Main Stories 🔍

Your Favorite NFL Team May Be Letting Private Equity In: On Tuesday, NFL Owners approved allowing Private Equity funds to take up to 10% stakes in NFL teams. This is an important step in the NFL since it opens up the buyer pool, allows owners to get some liquidity, and helps with financing for ventures such as building new stadiums. There was a pre-approved list of eligible PE funds, with Blackstone, Carlyle, CVC, Ares, Sixth Street, Arctos Partners, Dynasty Equity, and Ludis (founded by former Jets RB Curtis Martin) all allowed to participate. These funds plan to commit $12B of capital (inclusive of leverage) over time.

Nvidia Earnings: Nvidia earnings were a topline and bottom-line beat - but as of now shares are down roughly -7% after hours. Everything changes on a dime with Nvidia, so it’s hard to say until we hit 4pm today whether this means anything. Revenue of $30B was a +$1.3B beat and their Revenue guide of $32.5B (plus or minus 2%) was a nice $0.8B beat, but maybe below where some more optimistic analysts had them.

Nvidia also has a millionaire problem - now that a lot of their employees are very rich, but dealing with the insane work culture, it’s unclear if they’re going to be able to hang around to a lot of their employees once they’re done with major vesting milestones.

Super Micro Controversy: Yesterday, Super Micro Computer announced that it would be delaying it’s June 30, 2024 10-K filing. The day before, Super Micro had caught the attention of well known short seller, Hindenburg Research, who disclosed a short position and called out alleged accounting manipulation.

Super Micro ended the day down -19%. While Super Micro is a much smaller player in the Semi ecosystem, this (plus if Nvidia shares cool) could lead to Semi stocks giving up some of their record gains.

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More Headlines 🍿 

• OpenAI is looking to raise new financing at a $100+ Billion valuation. The ChatGPT maker is reportedly looking to raise “several billion dollars”

• John Foley, the founder of Peloton laid out a pretty damning picture about the rise and downfall of the former work from home darling. Forced to downsize houses twice, Foley went from being a billionaire to now being worth $225 million, and now sees himself at the beginning of an “underdog story”

• The podcast bubble continues, with Jason and Travis Kelce getting a $100mm 3-year deal from Amazon. The company’s Wondery Audio network signed a similar deal with comedian Dax Shephard in July and comes just weeks after Alex Cooper’s $125 million mega-contract with Sirius XM

• UBS Wealth Management raised recession odds from 20 to 25%. Although the firm maintained its soft landing base case, analysts are cautious about sustained consumer spending, a primary growth driver

• Despite UBS concern, consumer confidence hit a six-month high fueled by improving views on the economy and inflation. Even with falling labor market optimism, the prospect of September rate cuts may boost sentiment and spending

• Two Sigma’s Co-CEOs have resigned following years of fighting, handing leadership of the $60B hedge fund to two new Co-CEOs

• Barclays had over 200 MDs quit after the most recent bonus cycle. Bonuses at Barclays this year were notoriously terrible, with earnings hit hard by the hung X debt

• Berkshire Hathaway has officially joined the $1 Trillion club! Warren Buffett’s holdco is the first non-tech company worth at least $1T

• Salesforce earnings were good, as the company saw strong cloud demand. However, their CFO will be stepping down

• Chewy shares rose 11% on the day following solid earnings where consumers are spending more on pets, there is some promise around Chewy’s vet clinics, margins improved, and guidance was around consensus

• Klarna thinks they can cut down their 3.8k workforce to 2k once they implement AI. After cutting down from 5k employees last year, CEO Sebastian Siemiatowski noted that the embrace of efficiency would allow him to raise the salaries of those who hold onto their jobs

• Bud Light just released their first ad in collaboration with Shane Gillis and it was pretty funny. Anheuser-Busch is still trying to build back goodwill after some customers launched a devastating boycott in response to the beer brand’s partnership with transgender comedian Dylan Mulvaney last year

• The Paramount saga may finally be ending, with Edgar Bronfman exiting the bidding process. This gives Skydance on track to close their acquisition of Paramount in 1H25

• Hims & Hers (HIMS) shares fell after Eli & Lilly (LLY) announced a potential competing product. Cutting the price of popular weight-loss drug Zepbound by ~50%, LLY is looking to better compete with lower-cost online native alternatives like HIMS

• Zyn will be expanding its factory in Kentucky. A month after announcing a new $600mm Colorado facility, parent Phillip Morris announced that it is investing $232mm in Ownesboro, KY to reduce supply chain constraints and meet accelerating demand

• Elon is testing a videoconferencing tool on X in hopes of competing with enterprise offerings like Microsoft Teams and Zoom. With the ultimate goal of building the super app, Musk’s move comes after a commitment to compete with LinkedIn & Paypal

M&A Transactions💭 

Givex (TSE: GIVX), a cloud-based, omnichannel technology platform, has reached a definitive agreement to be acquired for $145.51M by Shift4 Payments (NYS: FOUR). Canaccord Genuity advised on the sale.