What You Need To Know For April 17th

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Welcome back!

For anyone new joining us from Stock Market Rundown, you can expect our newsletters every Thursday morning and Sunday evening. We’ll debrief you on the latest markets commentary, summarize the latest earnings calls, the headlines you need to know, provide you with a very detailed M&A blotter, and share some memes at the end of our newsletter 😄 

Futures are slightly higher following the S&P 500 down -2.2% and the Nasdaq down -3.4% yesterday. We were initially having a decent week, but traded off due to Jay Powell’s economic warnings and because of trade restrictions placed on semiconductor providers.

Let’s get into it below.

Earnings Corner 📜 

Trending Up 📈 

Bank of America (BAC): Bank of America reported earnings that beat estimates, due to strong net interest income and trading revenue. Net interest income was $14.6B (vs. $14.56B expected), buoyed by low deposit costs and higher yielding investments. Like many of its competitors, Bank of America saw equity trading revenues spike 17%. The stock was up 1.3%

Staying Flat 📊

Goldman Sachs (GS): Goldman Sachs reported earnings that beat estimates on the back of strong equity trading income, even as other parts of the bank showed weakness. Revenue from equity trading was up 27% y/y to $4.19B – $540MM higher than expected. However, Goldman’s fixed income, investment banking, asset management, and platform solutions divisions all narrowly missed estimates. The stock was flat after Wednesday’s close

United Airlines (UAL): United reported earnings that beat estimates, but described the economy as “impossible to predict,” releasing a second, recession-case earnings outlook. For Q1, UAL booked a $387MM profit, versus a $124MM loss a year ago. International- and premium-cabin revenue rose in the quarter, but domestic coach sales fell. Mgmt. maintained its FY 2025 EPS outlook of $11.50-$13.50 but warned that in a recession, earnings will fall to $7-$9. The stock was flat after Wednesday’s close

Johnson & Johnson (JNJ): The drugmaker reported earnings that beat estimates, hiking its FY 2025 guidance, but still fell on the day. Mgmt. projected sales of $92B (vs. $91.3B previously) to reflect the impact of an acquisition. Johnson & Johnson maintained its earnings guidance of 6.2% growth, which the company noted reflects the impact of tariffs. The stock was flat after Wednesday’s close

Trending Down 📉 

Citigroup (C): Citigroup reported earnings that were up 21% y/y as its fixed income and equity trading divisions generated strong revenue. Fixed income trading revenue was up 8% y/y to $4.5B (vs. $4.33B expected), while equity trading brought in 23% more at $1.5B (vs. $1.4B expected). The stock was down 2.2%

Progressive (PGR): The insurance company reported mixed results, with an earnings miss but revenue beating estimates. The stock was down 0.4%

Autopilot Portfolio Update 🧑‍✈️ 

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Together With Ryse

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_{Past performance is not indicative of future results. Email may contain forward-looking statements. See US Offering for details. Informational purposes only.}

Today’s Headlines 🍿 

• Jay Powell is boxed in: The Fed Chair, in a speech to the Economic Club of Chicago, noted that the Fed is in wait-and-see mode, that there is no “Powell Put” in current market conditions, and that tariffs causing inflation and slow growth would create a “challenging scenario” for the Fed to manage.

  • Meanwhile, potential Fed Chair replacements will be interviewed in the Fall. Powell’s term is set to end in May 2026. Powell has continuously reiterated that the Fed will act as a non-political institution

• Nvidia volatility: The chipmaker announced an up to $500B investment over the next 4 years to manufacture its AI supercomputers in the United States for the first time. This includes Nvidia Blackwell chips in Arizona, and plans for manufacturing facilities in Texas.

  • However, Nvidia is being slapped with a $5.5B hit under a new U.S. policy where they cannot sell H20 chips to China. Jefferies estimates this may be a $10B hit to Nvidia sales

• Altman vs. Musk (again): OpenAI is working on an X-style social feed to integrate into ChatGPT. Developers at the artificial intelligence giant hope that their 500mm weekly users will “yeet” (their term for post) about how they’re using the model

  • Additionally, OpenAI is eying a $3B deal for Windsurf, an AI-assisted coding tool. This would be by far OpenAI’s biggest acquisition, but also draws questions as to why they need to do an acquisition…

• The Beijing Bulletin: China posted unexpectedly strong economic growth, with 1Q25 GDP up 5.4% y/y, likely due to pull-forward demand. On the trade front, the world’s second-largest economy unexpectedly appointed a new trade envoy to negotiate with the U.S. Trump’s up to 245% tariffs on the country. Additionally, Hong Kong is suspending package service to America in response to Trump’s tariffs.

• Private Credit Stake Stakes: Willow Tree Credit Partners, a New York-based firm managing $5B, and Bayview Asset Management, with $20B in AUM, are among the private credit firms reportedly looking to complete a minority stake sale

• Figma’s prepping to go public. The 13-year-old design software developer filed confidentially with the SEC. Although the process could take months or longer, the plans offer some hope for employees and investors after its $20B sale to Adobe failed in 2023

• High Yield Bond Market Dry Spell broken: Venture Global, an LNG exporter that recently went public, raised $2.5B in financing at a 7.25% yield for new plant project debt. This is the first transaction completed since Liberation Day volatility

• Ackman gets involved in Hertz: Hertz, the rental car retailer, jumped 56%+ after Ackman’s Pershing Square took a 4% stake in the struggling company

• Consumer spending beat in March: Retail sales increased 1.4% YoY, up from 1.2% estimated, the most since January 2023. The bump is largely attributed to accelerated motor vehicle purchases ahead of tariffs As a result of this fear-buying, car supply is falling from supply of 91 days at the beginning of March to 70 days this April

• Startup fundraising is back? American startups raised $91.5B in Q1, up 116% from last year and the highest since 2021 when the low interest-rate boom was in full force. According to Pitchbook, for the second quarter in a row, AI startups made up more than half of all funds raised

• Zuck’s version of The Art of Deal: The Meta CEO has spent the past week in hearings, attempting to settle the antitrust case brought by the Federal Trade Commission. The FTC is demanding at least $18B, far above the Facebook founder’s $450mm offer last month

• Harvard vs. Trump: Following Harvard’s rejection of the Trump Administration’s higher education demands, Trump announced $2.2B in funding cuts to the school. The IRS is also now reportedly planning to rescind Harvard’s tax-exempt status

• Trump tariffs threaten national security, experts warn: The Center for Strategic and International Studies warned that after the White House opened up a trade war, Beijing is restricting mineral exports necessary for defense, energy, and auto technologies. Rare earths are vital to a wide range of advanced defense capabilities and the US are hard pressed to get them elsewhere

• Elliott’s new activist position: The activist investor has built up a $1.5B stake in HP Enterprise. Though primarily a server designer, HPE also sells cloud services and software. Shares of the $20B firm have dropped 30% this year, failing to catch the AI wave

• Webull Bulls: The online trading platform soared 375% after it went public via SPAC on Monday. A competitor of Robinhood and E-Trade, the now $29.6B company picked up steam back in 2020 as people dropped their pandemic stimulus checks into the market

• Dimon Trims - JPMorgan Chase’s CEO recently sold about $31.5mm in stock. Last year, Dimon made his first sale since 2005, but he still owns $1.5B of the firm; most of which remains in a family trust

• More Deel Spy Drama. Deel’s CEO is in Dubai, making it hard for Rippling to serve him. This development comes following the allegations that Deel hired a spy to spy on their B2B rival, Rippling

• Recruit for Investment Banking: High Yield Harry and a group of Investment Bankers put together a 248 page for those recruiting for Investment Banking - sign up for free here to learn more about our decks.

M&A Transactions💭 

WEAVE, provider of infrastructure services, a 49% stake in the company was acquired by Nippon Telegraph and Telephone East for $238.0M.

The Ring ad Sea Operation of SKF was acquired for $215.0M by CARCO.

Si Flex, manufacturer of flexible printed circuit boards, has entered into a definitive agreement to be acquired for $294.28M by Cyrus Venture Investment. EV/EBITDA was 3.36x and EV/Revenue was 0.63x.

R.J. O’Brien & Associates, provider of future brokerage and clearing services, reached a definitive agreement to be acquired for $900.0M by StoneX Group (NAS: SNEX). Broadhaven Capital Partners advised on the sale.

OSTTRA Group, a developer of trade processing and workflow software, has entered into a definitive agreement to be acquired for $5.0B by Kohlberg Kravis Roberts. Barclays and Citigroup advised on the sale.

G2 Secure Staff, provider of professional aviation services, reached a definitive agreement to be acquired for $305.0M by Menzies Aviation (LON: MNZS).

Esure Group, operator of an insurance company, has reached a definitive agreement to be acquired for $1.67B by Ageas UK. EV/Revenue was 1.4x. Fenchurch Advisory advised on the sale.

Equals Group, a part of the financial service sector, was acquired for $366.18M by Railsr, J.C. Flowers & Co., and TowerBrook Capital Partners. EV/EBITDA was 15.29x and EV/Revenue was 2.18x. Canaccord Genuity, Lazard, and Perivan advised on the sale.

David Evans & Associates, provider of consulting engineering services, was acquired for $300.0M by AtkinsRealis (TS: ATRL). EV/Revenue was 1.56x. AEC Advisors advised on the sale.

Artisan Design Group, provider of flooring procurement, installation, and project management services, has reached a definitive agreement to be acquired for $1.325B by Lowe’s Companies (NYS: LOW). EV/Revenue was 0.74x. RBC Capital Markets and Goldman Sachs advised on the sale.

Altera, developer of programmable logic solutions, has entered into a definitive agreement to be acquired for $4.46B by Silver Lake. The Transaction values the company at an estimated $8.75B. EV/Revenue was 5.68x. J.P. Morgan, Morgan Stanley, and Goldman Sachs advised on the sale.

Paycor, payroll and human capital management solutions, was officially acquired for $4.1B by Paychex (NAS: PAYX). EV/EBITDA was 35.68x and EV/Revenue was 5.86x. Goldman Sachs advised on the sale.

G2 Secure Staff, provider of professional aviation services, has reached a definitive agreement to be acquired for $305.0M by Menzies Aviation (LON: MNZS).

TI Automotive, engaged in providing automotive fluid storage, carrying, and delivery systems, was acquired for $1.97B by ABC Technologies. EV/EBITDA was 10.39x and EV/Revenue was 0.54x. Citigroup, J.P. Morgan, Lazard, Peel Hunt, Scotiabank, TD Securities, and Goldman Sachs advised on the sale.

PeopleStrong, provider of human resource technology, was acquired for $151.19M by The Goldman Sachs Group (NYS: GS). IndigoEdge advised on the sale.

iCAD (NAS: ICAD), a medical technology company, has reached a definitive agreement to be acquired for $102.996M by RadNet (NAS: RDNT). EV/Revenue was 5.25x. Piper Sandler advised on the sale.

Datagroup (FRA: D6H), a Germany-based company that operates in the IT infrastructures, distribution, and provision of IT services space, has reached a definitive agreement to be acquired for $508.32M by Kohlberg Kravis Roberts. EV/EBITDA was 5.85x and EV/Revenue was 0.86x.

Cedar Park Regional Medical Center, operator of a medical center, has reached a definitive agreement to be acquired for $460.0M by Ascension Health.

Supercent, developer of a mobile game platform, was acquired for $123.27M by MC Partners. The transactions values the company at $136.97M. EV/Net Income was 2.08x and EV/Revenue was 1.09x.

Private Placement Transactions💭 

Science, developer of an implantable brain-machine interface, raised $103.6M of venture funding in the form of a convertible promissory notes in a deal led by Khosla Ventures.

Safe Superintelligence, operator of an AI research lab, raised $2.0B of venture funding led by Greenoaks Capital Partners at a pre-money valuation of $30.0B.

Skyrenu, developer of direct air capture technology, raised $130.0M of venture funding from CarbonFix and other undisclosed investors.

Mainspring, manufacturer of linear power generators, raised $258.0M of Series F venture funding led by General Catalyst.

Urban Standard Capital and GCM Grosvenor formed a $135.0M joint venture to provide loans and financial services related to real estate.

Kavak, operator of a car trading platform, raised $527.0M of venture funding through a combination of debt and equity at a pre-money valuation of $1.67B. $127.0M of equity was received from General Atlantic and SoftBank Latin Fund. $400.0M of debt was provided by HSBC Holdings and The Goldman Sachs Group.

Caban, developer of energy storage systems, raised $122.68M of venture funding led by Ember Infrastructure Management.

Charts of the Day 🧭

1Q25 Deal Flow:

While San Fran dominates US VC deal flow, Austin has surprisingly emerged as a bit of a hub this past quarter:

Americans don’t actually want to work at factories:

U.S. Money Managers are historically bearish

Odds of the Day 🍒 

Kalshi traders are pricing in a 25% chance of the EU actually getting hit with tariffs prior to 3Q25.

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

Meme of the Day 😆 

Until next time!

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Investment advice provided by Autopilot Advisers, LLC (“Autopilot”), an SEC-registered investment adviser. Past performance does not guarantee future results. Investing carries risks, including loss of principal. As always be smart out there.