The Week Ahead - Feb 17th

Together With

Welcome back!

A quick programming note. As you know, this is a 100% free newsletter, with monetization coming from advertisements. To further support the growth of the newsletter (and salaries of the writers), we could use your help with a survey. Please view the survey here. This survey focuses on audience demographics so we can convey to advertisers how smart our readers are.

Anyways, let’s get into it.

The Week Ahead Of Us 🔍

Futures are little changed from Friday, with limited events on the calendar for this abbreviated week.

Here’s a look at earnings this week.

• Tuesday: Arista Networks, Medtronic, Cadence Design Systems

• Wednesday: Analog Devices, Carvana

• Thursday: Walmart, Alibaba, Booking Holdings, Mercado Libre, Block, Rivian, Shake Shack, Cheniere

• Friday: Constellation Energy

Here’s a look at economic data this week.

• Wednesday: Housing starts (1.4MM), Building permits (1.46MM)

• Thursday: Initial jobless claims (215K), U.S. leading economic indicators (0.0%)

• Friday: S&P flash U.S. services PMI (52.6), S&P flash U.S. manufacturing PMI (50.7), Consumer sentiment (67.8), Existing home sales (4.13MM)

A Message from Ramp

Your portfolio companies are done wasting time and money on manual expenses, out-of-policy spending, and outdated tech stacks.

It's time to introduce them to Ramp.

A modern finance platform that saves teams time and money through:

• Corporate Cards

• Expense Management

• Accounts Payable

• Travel

• Procurement

All powered by automation. All under one roof.

Offer your portfolio finance leaders 20x higher lines of credit, customizable spend controls, and streamlined workflows to make their lives, and your lives easier. 

Earnings Corner 📜 

Trending Up 📈 

Airbnb (ABNB) reported earnings that beat estimates, with revenue of $2.58B up 12% y/y (vs. $2.42B expected) and EPS of $0.73 (vs. $0.58 expected). Guests booked 111MM nights and experiences, up 12% y/y and beating estimates of 108.7MM. This traffic drove gross bookings of $17.6B (vs. $17.2B projected). In Q1, mgmt. expects revenue of $2.23B-$2.27B (vs. $2.3B expected). The stock was up 14.45% at Friday’s close

DraftKings (DKNG) reported earnings that beat estimates, with revenue of $1.38B up 13% y/y (vs. $1.39B) and EPS of $0.14 (vs. $0.04 expected). Monthly unique players rose 36% to 4.8MM. Mgmt. raised its 2025 revenue forecast to $6.3B-$6.6B (vs. $6.2B-$6.6B previously). The stock was up 15.2%

John Deere (DE) reported mixed results, with EPS beating estimates, but revenue missed. Sales fell 35% y/y, as weak profits and high interest rates have discouraged farmers from upgrading or replacing equipment. Mgmt. also cautioned regarding the impact of tariffs on operations, as retaliatory measures from Canada, Mexico, and China could hurt American agricultural exports. The tractor manufacturer is also highly dependent on steel markets, which Trump has targeted with a potential 25% tariff. Excluding the impact of tariffs, mgmt. expects agricultural sales to fall 15-20% in 2025. The stock was up 1.1%

GE HealthCare (GEHC) reported earnings that beat estimates and released an outlook above analysts’ expectations. The stock was up 7.5%

Fannie Mae (FNMA) reported mixed results, with EPS in line with expectations, but revenue falling short. The stock was up 5.4%

Trending Down 📉 

Applied Materials (AMAT) reported earnings that beat estimates, with revenue of $7.17B up 7% y/y (vs. $7.15B expected) and EPS of $2.38 (est. of $2.28). Mgmt. was optimistic about continued technological investment from customers but expressed caution about looming export controls. Q2 sales projections disappointed analysts, as mgmt. projected revenue of $7.1B (vs. $7.21B expected). The stock was down 8.2% at Friday’s close

Coinbase (COIN) reported earnings that beat estimates, with revenue of $2.27B up 104% (vs. $1.88B expected) and EPS of $4.68 (vs. $1.81 expected). Trading volumes were up 185% y/y to $439B, as crypto markets surged in the wake of Trump’s election. Mgmt. is working to diversify revenue away from trading (currently 68.5% of sales) and offer more services, including stablecoins, staking, and custody. The stock was down 8%

Palo Alto Networks (PANW) reported earnings that beat estimates, but guidance from the cybersecurity firm underwhelmed analysts. The stock was down 1.2%

The Main Story 🔍

Jamie Dimon’s rant on working remotely: In a leaked recording, a rant during a townhall led by JP Morgan CEO Jamie Dimon has sparked controversy, with a fiery speech by Dimon about why remote work and hybrid work doesn’t work.

He dismissed employee concerns against the policy, laughing off a petition against the March 2025 return to office. Dimon views in person work as crucial for collaboration, mentorship, and innovation. Dimon also felt that remote colleagues weren’t being respectful of their peers. Meanwhile, JP Morgan has a new $3B headquarters they’re looking to break in. However, several employees and professionals have spoken against the move. Execution has been chaotic thus far, as the London office ended up not having enough desk space for everyone.

The man who asked Jamie Dimon about the policy at a Columbus town hall, was told to clear out his desk by his boss, but later was told to return to work, per The New York Post. JP Morgan officially stated that the employee remains in good standing.

A Fault in your Marks, how Zips, a bankrupt car wash company exposes the faults in Private Credit:

Bloomberg had a great piece on how private credit firms had poorly thought out marks on Zips, a car wash rollup that later defaulted. The $654mm private loan was valued at 93-95 cents on the dollar in September 2024, but filed for bankruptcy in early February.

The lender group included Capital Southwest, HPS, Main Street Capital, Onex, and PennantPark. After the Chapter 11 filing, lenders took over the business, obtained a $30mm DIP loan, and reduced the debt load by 40%.

More Headlines 🍿 

• Meta is investing in AI-powered humanoids that complete human tasks. A new team within the Reality Labs unit is being formed to conduct the work. The hardware division will first focus on building robots for household chores

• CBS and YouTube TV are in a dispute leading into March Madness. The streaming service shared that negotiations failed to lead to a content renewal for the Paramount Channels which broadcast the flagship NCAA basketball tournament and The Masters

• The rise of Torsten Slok: Over the past few years, Apollo’s Torsten Slok was able to successfully predict the U.S. would avoid a recession while many others went the opposite way. The Chief Economist of Apollo also called for the Fed not making any rate cuts in 2024. While the Fed did cut, Slok was far ahead of the curve, while the rest of the market was calling for 5-8 rate cuts back in early 2024

• Nuveen is looking into selling a minority stake in its $78B private credit arm. This includes the asset manager, Churchill, which has rapidly grown following the boom in private credit

• DC Jobless filings spike. The week after Trump and Elon’s launched mass layoffs via their DOGE mandate, jobless filings in D.C. spiked 36%. Since the inauguration, almost 4,000 workers have filed for unemployment

• In-person work has doubled over the past year, according to McKinsey. Employees working “mostly in person” has doubled from 34% to 68% over the past year:

• A slow start to the year for restaurants. Executives at chains including Chipotle, Wendy’s, McDonalds warned that Q1 sales will be weakened by cautious consumer spending and natural disasters. Leadership is optimistic for the second half of 2025

• Ilya Sutskever’s AI startup SSI targets over $1B in funding at a $30B valuation. The Company, founded by the OpenAI co-founder who previously tried to oust Sam Altman over disagreement regarding AI safety, has yet to unveil any technology or products

• X debt is now selling at par. Banks were holding the loans at substantial discounts in 2024, but now strong investor demand for leveraged loans is driving up prices

• Oil prices may decline, as Russia and Ukraine peace talks are set to kick off

• Diamondback is in talks to acquire Double Eagle. Diamondback, a $47B O&G company, has driven a wave of M&A in the Permian Basin (the largest American Oil field). After purchasing Endeavor for $26B last year, the TX headquartered energy company is doubling down on the Permian with Double Eagle

• LesserEvil, a healthy popcorn brand, is in talks to sell at a valuation of $1B. This is a healthy valuation (69x ev/ebitda) given 2023 financials of $100mm of revenue and $14.4mm of EBITDA

• Saks Fifth Avenue is warning vendors that they have to wait to receive payments. Following the merger of Saks and Neiman Marcus, the WSJ reported that past-due payments aren’t coming until July

• NYC Singles pay an average of $20,100 extra to live alone, according to research from StreetEasy

• Aramco’s getting in on AI. The venture arm of the Saudi state-owned petrol giant invested in a cloud startup Telefonica SA. The kingdom is working to diversify away from oil and position itself as a next-gen tech hub

• As egg prices surge, demand for vegan substitutes are on the rise. Chefs and consumers are increasingly turning turning to, “Just Egg” (akin to Beyond Meat), firm tofu, flax, and apple sauce

• Southwest Airlines will cut 15% of corporate jobs (1,750 people) in a cost-saving push

• A Delta plane from Minneapolis crashed upon landing at Toronto Pearson International Airport, flipping, and injuring at least 15 people

• The NYSE is launching an exchange in Texas. NYSE Chicago will “reincorporate in Texas and be renamed NYSE Texas.” The move comes after a wave of relocations (including by Tesla and SpaceX) to the Lone Star State. Today, Texas represents $3.7T of the NYSE’s listings

• Jeff Bezos’s Blue Origin cut 10% of its workforce. Although CEO Dave Limp shared that the company had “hit all its recent milestones,” he noted they had also become “bloated”

• Morgan Stanley CEO, Ted Pick, has had his comp rise to $34mm. Just one year into the job, Pick earned $3mm less than former chief James Gorman did in 2023 but 36% more than in his previous role. JPMorgan’s Dimon and Goldman’s Solomon earned $39mm each, while BofA’s Moynihan raked in $35mm. U.S. banks continue to pay huge premiums to European ones — in 2023 UBS CEO Ermotti earned $16mm, more than any other peer on the continent

M&A Transactions💭 

Vermont Information Processing, developer of technology software, has entered into a definitive agreement to be acquired for $1.0B by Warburg Pincus.

SBB Serbia, provider of digital television and broadband services, has reach a definitive agreement to be acquired for $854.97M by Emirates Telecommunications Group Company.

Retail Opportunity Investments (NAS: ROIC), a self-managed real estate investment trust, was acquired for $5.54B by Blackstone (NYS: BX). EV/EBITDA was 22.45x and EV/Revenue was 16.46x. J.P. Morgan advised on the sale.

N Brown Group, an apparel, footwear, and homeware retailer, was acquired for $236.12M by Falcon 24 Topco. EV/EBITDA was 4.96x and EV/Revenue was 0.35x. Rothschild & Co advised on the sale.

Klinko Karya Imaji (IDK: KLIN), engaged in the production and trading of environmentally friendly cleaning equipment, was acquired for $280.28M by PT Samico Capital Utama Mulia.

HX Expeditions, operator of an expedition cruise services company, was acquired for $145.09M by Arini Capital Management.

Ayana Renewable Power, operator of an energy generation company, reached a definitive agreement to be acquired for $2.3B by ONGC NTPC Green. Standard Chartered advised on the sale.

89 Energy III, operator of an exploration and production company, has reached a definitive agreement to be acquired for $850.0M by Devon Energy (NYS: DVN).

Zuora, provides cloud-based software, was acquired for $1.7B by Silverlake and GIC Partners. EV/Revenue was 3.75x. Qatalyst Partners advised on the sale.

Zilla Security, operator of a SaaS security management platform, was acquired for $165.0M by CyberArk Software (NAS: CYBR).

Kurt Geiger, retailer of footwear and accessories, has reached a definitive agreement to be acquired for $357.49M by Steve Madden (NAS: SHOO). EV/Revenue was 0.7x. Bank of America advised on the sale.

Intevac (NAS: IVAC), designs and develops high-productivity, thin-film processing systems, reached a definitive agreement to be acquired for $114.968M by Seagate Technology (NAS: STX). EV/Revenue 1.8x. Houlihan Lokey advised on the sale.

Innovid, a software platform, was acquired for $525.0M by Flashtalking. EV/EBITDA was 202.39x and EV/Revenue was 3.46x. Deutsche Bank advised on the sale.

Highway Industries, manufacturer of comprehensive range of precision machined automotive and non-automotive components, was acquired for $400.0M by The Carlyle Group. Singhi Advisors advised on the sale.

SilverCrest Metals (TSE: SIL), involves in the exploration, development, and extraction of silver and other precisions metals, was acquired for $720.03M by Coeur Mining (NYS: CDE). EV/EBITDA was 7.06x and EV/Revenue was 4.11x. BMO Capital Markets and Goldman Sachs advised on the sale.

Praana Group reached a definitive agreement to acquire The Glass Reinforcements Business Unit of Owens Corning (NYS: OC) for $755.0M. EV/Revenue was 0.69x. Morgan Stanley advised on the sale.

Hello Bangkok LED, provider of outdoor advertising services, reached a definitive agreement to be acquired for $117.79M by Plan B Media.

Asia Dragon Trust, an investment trust, was acquired for $673.55M by Asia Trust (LON: IAT). EV/Net Income was 8.93x and EV/Revenue was 7.07x.

Private Placement Transactions💭 

Harvey, developer of legal technology platform, raised $300.0M of Series D venture funding led by Sequoia Capital at a pre-money valuation of $2.7B.

Harrison.ai, developer of an AI based healthcare platform, raised $111.8M of Series C venture funding led by Horizons Ventures and Aware Super.

Abcuro, developer of immunomodulatory therapeutics, raised $200.0M through a combination of Series C-1 and Series C-2 venture funding led by New Enterprise Associates at a pre-money valuation of $500.0M.

Revving, developer of cash flow management software, raised $132.36M of venture funding through a combination of equity and debt from undisclosed investors.

Prenuvo, developer of a whole-body magnetic resonance imaging scan technology, raised $120.0M of Series B venture funding led by Felicis, Left Lane Capital, and Forerunner Ventures.

K2 Space, developer of aerospace hardware products, raised $110.0M of Series B venture funding led by Altimeter Capital Management and Lightspeed Venture Partners.

Eudia, developer of an augmented intelligence legal platform, raised $105.0M of Series A venture funding led by General Catalyst.

Apptronik, operator of robotics company, raised $350.0M of Series A venture funding led by B Capital and Capital Factory.

She, provider of career coaching services, raised $113.3M of Series C venture funding led by Marui Group and Moon Creative Lab.

Odds of the Day 🍒 

Kalshi traders are pricing in a 50% chance of Gemini being named the top-ranked LLM of the month.

New Traders on Kalshi receive a $20 bonus of trading credit when depositing $100+ with the code “HYH”.

Noteworthy Chart 🧭

Meme Cleanser 😆 

Finance Merch Referrals ☕️ 

Until next time!

Housekeeping Items:

Our Weekly Poll:

Finance Jobs: Looking for a job in Finance? Join Buyside Hub to access the Job Board for free.

Recruit for Private Equity: Check out Peak Frameworks through us, the Private Equity Course that has placed thousands of students into elite private equity shops.

Join beehiiv: Looking to start your own newsletter? Join beehiiv through us and you’ll get 30 days free and 3 months of a 20% discount.

Obviously, none of this constitutes financial or investment advice.