The Week Ahead

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The week ahead of us 🔍

Upcoming Earnings: The pace of earnings is slowing down, but we still have some big names like Disney and Uber coming up.

• Monday: Vertex, Palantir, Realty Income, Simon Property Group, Loews, COTY, Lucid Group

• Tuesday: Disney, UBS, Transdigm, Arista, Datadog, EA, GlobalFoundries, Builders FirstSource, Celsius, Twilio, Rivian, Assurant, Match, Crocs, Reddit, ZoomInfo, Squarespace, Spirit Aerosystems

• Wednesday: Toyota, Uber, Anheuser-Busch, Airbnb, Arm, Shopify, The Trade Desk, HubSpot, Applovin, Liberty Media, TPG, Robinhood, Fox, Arm, Duolingo, Houlihan Lokey, New York Times, Starwood Property Trust, Topgolf,

• Thursday: Honda, Roblox, Warn Bros. Discovery, Hyatt, Unity, H&R Block, Nexstar, Planet Fitness, YETI, GoodRX

• Friday: Enbridge, AMC Networks

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Headlines 🔍

• Jobs on Friday came in worse than expected, with unemployment up from 3.8% to 3.9% and April job adds of 175k vs. 240k estimated. But this “bad news” actually drove an equity rally. Why? Well, because it shows maybe the Fed can navigate a soft landing where because unemployment rises slightly the Fed can loosen monetary policy. Additionally, this calms a bit of “overheating” fears and the worries that the Fed may even need to raise rates. And yes, these numbers doesn’t necessarily mean there’s going to be a soft landing, but given how most economic data is holding up okay, the market’s gut reaction is that these numbers build the case to lowering rates as soon as July, which will increase valuations. Whether this holds as a viable thesis this week is a TBD…but U.S. futures are up 18-20bps at the time of writing.

• Attached is a summary of Berkshire Hathaway’s Annual Meeting. Buffett spoke fondly about his former colleague, Charlie Munger, discussed his own mortality, and stated his confidence in Berkshire’s current succession plan. From an investment side, he trimmed his Apple stake by 13%, but still plans for Apple to be their largest position going forward. As of 1Q24, Berkshire is sitting on a record $189B in cash.

• Paramount shareholders are waiting to see if Apollo/Sony or Skydance will win the deal

• Altice and their restructuring advisor Moelis are evaluating how to address Altice’s $25B capital structure

• Hertz is dumping 30,000 EVs

• Retailer rue21 files for Chapter 33 (aka filing Chapter 11 bankruptcy for a third time)

• Peloton’s turnaround CEO is stepping down after 2 years at the helm. This was announced in conjunction with a 15% layoff. I would expect things to get worse from here as the business looks to rightsize and return some level of profitability. This business is just a fundamentally low TAM one that got way over its skis after strong 2020/2021 demand.

• Sam Altman says he’s willing to spend $50B on more AI models

• Boeing faces 10 more Whistleblowers

• Uniti shares tank after weak earnings and a dilutive merger with Windstream

• A report on Navigating private markets in 2024: opportunity knocks as change accelerates

• There were a couple of interesting threads on X about how ex-CEOs of stocks now down 90%+ were able to buy sick houses during 2020/2021. Here’s the threads below:

Transactions: M&A 💭 

Vattenfall Warme Berlin, operator of combined heat and power plant, has reached a definitive agreement to be acquired for $1.5B by the State of Berlin.

VAMED’s rehabilitation business unit has entered a definitive agreement to be acquired for $643.36M by PAI Partners. UBS advised on the sale.

Transcendia, manufacturer of plastic films, was acquired for $114.00M by Goldman Sachs Asset Management and Industrial Opportunity Partners. Guggenheim Partners advised on the sale.

Tirtir, manufacturer of beauty products, was acquired for $109.50M by Goodai Global.

Maiva Pharma, manufacturer of liquid sterile formulations, was acquired for $119.88M by Morgan Stanley Private Equity Asia and InvAscent. Avendus Capital advised on the sale.

LyondellBasell’s Te Ethylene Oxide and Derivatives Business Unit was acquired for $700.00M by INEOS Group. J.P. Morgan advised on the sale.

Envato, operator of an online marketplace, has reached a definitive agreement to be acquired for $245.00M by Shutterstock (NYS: SSTK). Drake Star advised on the sale.

ELITechGroup, manufacturer and distributor of in-vitro diagnostic equipment, was acquired for $932.88M by Bruker (NAS: BRKR).

Device42, developer of a discovery and dependency mapping platform, was acquired for $230.00M by Freshworks (NAS: FRSH).

Crans-Montana Tourism & Congress, operator of a ski resort, was acquired for $120.89M by Vail Resorts (NYS: MTN).

CHR. Hansen Holding and Novozymes’s global lactase enzymes business unit was acquired for $160.84M by Kerry Group (DUB: KRZ).

Bren-Tronics, manufacturer of portable power solutions, has reached a definitive agreement to be acquired for $208.00M by EnerSys (NYS: ENS).

 American Equity Investment Life Insurance, a financial services company, was acquired for $4.3M by Brookfield Reinsurance (TSE: BNRE). Ardea Partners advised on the sale.

Motional, developer of driverless technology, was acquired for $923.00M by Hyundai Motors Group.

Motion Recruitment Partners, provider of information technology staffing services, has reached a definitive agreement to be acquired for $485.00M by Kelly Services (NAS: KELYA). Robert W. Baird & Co advised on the sale.

Transactions: Private Placements 💭

Karius, operator of a clinical laboratory testing center, raised $100.00M of Series C venture funding led by Khosla Ventures, 5AM Ventures, and Gilde Healthcare.

Altruist, developer of a digital investment platform, raised $169.00M of Series E venture funding led by ICONIQ Growth at a pre-money valuation of $1.33B.

NephroPlus, operator of a dialysis center network, raised $103.00M of Series F venture funding led by IIFL Securities, Quadria Capital, and Bressemer Venture Partners.

Noteworthy Chart 🧭

Problems at Starbucks via CarbonFinance

Best of YouTube ⌚️

Stanford hosted Sam Altman to talk through The Possibilities of AI

Odds of the Week 🍒 

Kalshi traders are betting on 2 rate cuts this year, up from 1.3 on Thursday (prior to the Jobs numbers)

Meme Cleanser 😆 

Until next time!