Welcome back! |
After a whirlwind of a couple days re: Trump tariffs, we saw "a "TACO" on tariffs, albeit I'm not sure I want to call it a TACO given it seems like President Trump accomplished a framework of what he wanted with Greenland. $SPY ( ▲ 1.15% ) and $QQQ ( ▲ 1.35% ) recovered as a result of the de-escalation, while a bunch of finance leaders gave their hot takes at Davos. |
More on that in today's piece, let's get right into it. |
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Earnings Corner 📈 📉 |
Earnings kicked off this week and Netflix the big story this week. |
$NFLX ( ▼ 2.18% ) Top and bottom line beat with revenue of $12.05B topping estimates and EPS of $0.56 edging past forecasts, driven by subscriber growth to 325M and strong engagement in Netflix owned content. Shares fell as management flagged higher content spending in 2026, paused share buybacks, and guided to a slower growth profile, reflecting heavier investment and deal related costs tied to its pending Warner Bros. Discovery acquisition. Netflix had to recently pivot to a 100% cash offer for $WBD ( ▲ 1.03% ) . Remarkably, Netflix is now down -36% from all time highs! |
$MMM ( ▼ 0.15% ) Fell after management struck a cautious tone on 2026, citing uneven demand, continued consumer softness, and tariff headwinds despite solid execution in its industrial businesses this quarter. |
$DHI ( ▲ 3.21% ) Delivered a solid beat as incentives propped up volumes despite affordability pressure, but management flagged incentives will remain elevated in 2026, potentially pressuring margins further. As we've seen mortgage rates, have been sticky high, with the 30-year currently at 6.05%. |
$UAL ( ▲ 2.2% ) Beat with record revenue and revenue-per-seat, lifting shares as strong premium demand and brand loyalty reinforced confidence in earnings power. Premium seat demand remained strong, supporting margins despite softness in the main cabin. |
$JNJ ( ▼ 0.09% ) Beat expectations and guidance was raised, driven by innovative medicines growth and medical device demand. But shares fell due to renewed talc litigation risk and competitive pressure in electrophysiology, which offset the improved outlook. |
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Today's Headlines 🍿 |
Greenland agreement: Trump says he reached a framework for a Greenland deal with NATO, stating that "they're going to be involved in the Golden Dome, and they're going to be involved in mineral rights." The U.S. will reportedly have sovereignty over small pockets of Greenland where they can establish military bases. Trump then scrapped the tariffs that he'd threatened to impose on Denmark and other European countries. Thoma Bravo eyes software buyout wave: Private equity giant Thoma Bravo is preparing for a possible wave of large software takeovers, arguing that AI-driven fears have pushed valuations too far. With software stocks down materially in recent weeks and larger names like Salesforce and Adobe off 12%, PE capital may step in just as public markets recoil from AI uncertainty. Dalio on the U.S. debt: Bridgewater's Ray Dalio called the $9 trillion of U.S. debt owned by foreign countries an "enormous vulnerability" and says that it might "become unpopular to buy or hold U.S. debt." While there might not be many alternatives, global unease has already led to Denmark's largest pension plan selling $100mm in treasuries and PIMCO's CIO announcing a need to diversify from U.S. assets.
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In Other News 📖 🍿 |
BlackRock CEO Larry Fink warns that AI is accelerating income inequality, with gains flowing to model, data, and infrastructure owners rather than wage earners. Morgan Stanley CEO Ted Pick says corporate balance sheets are in "excellent" shape and dealmaking momentum is strong, citing a 47% Q4 jump in investment-banking fees and robust demand for financing tied to the AI buildout. Citadel CEO Ken Griffin says that AI won't eliminate 50% of entry-level jobs, and that the notion is only "hype" stemming from industry leaders trying to justify billions in data center spending. Canada warned that it can't be dependent on the U.S. anymore, with Prime Minister Carney calling out a "rupture" in world order. President Trump threatened 200% tariffs on French wine and champagne after France refused to join his proposed "Board of Peace" for Gaza. Elon Musk reignited a public spat with Ryanair Holdings CEO Michael O'Leary, floating the idea of buying the airline amid a spat over in-flight wifi Tesla shares rose 2.7% after Lemonade announced a 50% insurance discount when Full Self-Driving is engaged, signaling that AV car insurance may be lower than traditional car insurance. Blue Origin, Jeff Bezos' space company, announced plans for TeraWave, a 5,408 satellite communications network launching in 2027, direct competition with SpaceX's Starlink and targeting AI data centers, governments, and enterprises. Creditors sue Telesat Canada, claiming that the satellite operator breached lending terms by transferring a network of LEO satellites outside its collateral package. Wells Fargo & Co. is relocating its wealth management division to West Palm Beach, moving 100 senior executives by year-end to be closer to high-net-worth clients. Tracelight rolled out its Pro AI Excel agent, an add-in that assists with modeling and other manual spreadsheet-building tasks. KKR may beat its $20B target for its latest U.S. buyout fund, potentially hitting the hard cap of $22B and exceeding the $19B raised for the previous fund. AEA Private Debt group leads a junior debt investment to support the recapitalization of Tanex Aerospace, a portfolio company of NTC. Josh Harris' 26North surpasses $4B target for its debut PE fund. Harris cofounded Apollo Global Management and owns several pro sports teams. PGIM is expanding into private credit secondaries, aiming to deploy $1B in the next two years. Buyout firm Hg is seeking a $3B loan to help finance its acquisition of OneStream. The firm is in discussions with private credit lenders, including Goldman and Blue Owl, for an annual recurring-revenue loan. Berkshire is weighing selling its $KHC ( ▼ 5.72% ) stake as the company prepares to split. Berkshire owns a 27.5% stake that's worth about $7.3B. Fed Governor Lisa Cook's job appears to be safe after Supreme Court justices challenged the Trump administration's lawyers and said that firing her would "shatter" Fed independence. Japan's export growth was 5.1% in December, below expectations of 6.1%, as shipments to the U.S. fell by 11.1%.
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M&A Transactions💭 |
Shionogi & Co. (TKS: 4507) has reached a definitive agreement to acquired 11.7% of ViiV Healthcare, developer of human immunodeficiency virus-focused pharmaceuticals, for $2.125B. |
UGL Transport, provider of integrated transport infrastructure, was acquired by Sojitz (TKS: 2768) for EUR 560.0M. EV/Revenue was 0.6x. |
Centiel, manufacturer of uninterruptible power supply systems, has reached a definitive agreement to be acquired for CHF 125.0M by HT5. EV/Revenue was 2.84x. |
RAPT Therapeutics (NAS: RAPT), a clinical-stage immunology-based biopharmaceutical company, has reached a definitive agreement to be acquired for $2.203B by GSK (LON: GSK). J.P. Morgan advised on the sale. |
Quinnox, provider of digital and technology services, has reached a definitive agreement to be acquired for $290.0M by ASGN (NYS: ASGN). EV/Revenue was 2.9x. |
Quantum Circuits, manufacturer of quantum computers, was acquired for $550.0M by D-Wade Quantum (NYS: QBTS). Needham advised on the sale. |
NetBrain Technologies, developer of network automation technologies, was acquired for $750.0M by Blackstone. |
Fletcher Construction Company, provider of construction services and a subsidiary of Fletcher Building (NZE: FBU), has reached a definitive agreement to be acquired for $315.6M by Vinci (PAR: DG). EV/Revenue was 0.44x. |
The 180-Bed Crestwood Medical Center In Huntsville of Community Health Systems has reached a definitive agreement to be acquired for $450.0M by Huntsville Hospital. Leerink Partners advised on the sale. |
Chaarat ZAAV CJSC, operator of gold projects, has reached a definitive agreement to be acquired for $162.0M by SilverCorp Metals (TSE: SVM). |
Australian Strategic Materials (ASX: ASM), engaged in the business of producing and mining specialty metal and oxides, has reached a definitive agreement to be acquired for $299.0M by Energy Fuels (TSE: EFR). MA Financial and Moelis & Company advised on the sale. |
Nathan's Famous (NAS: NATH), owner of fast food franchises, has reached a definitive agreement to be acquired for $471.005M by Smithfield Foods (NAS: SFD). EV/EBITDA was 13.67x and EV/Revenue was 3.04x. Jefferies advised on the sale. |
Integrity Orthopaedics, developer of a rotator cuff repair device, was acquired for $450.0M by Smith & Nephew (LON: SN). |
Private Placement Transactions💭 |
Gilmour Space Technologies, provider of space launch services, raised $217.0M of venture funding led by Hostplus Superannuation Fund and National Reconstruction Fund Corporation at a pre-money valuation of $783.0M. |
Zipline, provider of an automated drone delivery services, raised an estimated $600.0M of venture funding from Rwanda Social Security Board, Baillie Gifford, and Valor Equity Partners at a pre-money valuation of $7.0B. |
Preply, operator of an online tutoring service company, raised $101.5M of venture funding led by WestCap. |
Pipeline, developer of a B2B music and media industry platform, raised $200.0M of venture funding from Jamen Capital. |
Pennylane, developer of a digital accounting platform, raised EUR 175.0M of Series E venture funding led by TCV and Blackstone at a pre-money valuation of EUR 3.43B. |
Humans&, developer of an AI system, raised $480.0M of venture funding led by SV Angel and Georges Harik at a pre-money valuation of $4.0B. |
Baseten, developer of machine learning infrastructure, raised $300.0M of venture funding led by CapitalG and IVP at a pre-money valuation of $4.7B. |
Upscale AI, developer of an AI networking company, raised $200.0M of Series A venture funding led by Premji Invest, Xora Innovation, and Tiger Global Management. |
Swissto12, manufacturer of satellite radio components, raised an estimated EUR 100.0M of venture funding from EGS Beteligungen and European Space Agency. |
Duetti, operator of a music licensing platform, raised $200.0M of Series C venture funding through a combination of debt and equity. The equity portion of $50.0M was raised from The Raine Group. The debt portion of $150.0M was provided by undisclosed lenders. |
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Odds of the Day 🍒 |
Polymarket traders are now pricing in a 16% chance of the U.S. acquiring Greenland. |
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