In partnership with Carousel | | The Week Ahead Of Us 🔍 | Welcome back! | Markets Note: S&P and Nasdaq futures are up 0.43% and 0.48% respectively going into a big Tech earnings week. Late last week, Tech rallied, led by Tesla's strong earnings report, but the broader market was dragged a bit by banks underperforming. Outside of tech earnings, we may be in a bit of a "wait and see" mode here in the U.S. until we get a sense of who the next President is. | Here's a look at earnings this week. | Tuesday: Alphabet, Visa, Advanced Micro Devices, McDonald's, Pfizer, Stryker, Chubb, Mondelez International, PayPal, Chipotle, Super Micro Computer Wednesday: Microsoft, Meta, Eli Lilly, AbbVie, Caterpillar, Amgen, Booking Holdings, Automatic Data Processing Thursday: Apple, Amazon, Mastercard, Merck, Linde, Uber, Comcast, Eaton, ConocoPhillips, Bristol-Myers Squibb, Regeneron, Intel, Altria Friday: Exxon Mobil, Chevron
| Here's a look at economic data this week. We have a big week ahead as 3% 3Q24 GDP growth is expected, but an October unemployment rate of 4.1% is expected. | Tuesday: October Consumer Confidence, September Job Openings, and The S&P Case-Shiller home price index Wednesday: ADP Employment, GDP Thursday: Personal income growth, personal spending growth, the PCE Index, Core PCE, pending home sales, and initial jobless claims Friday: US unemployment, US hourly wages growth, October Manufacturing PMI, ISM manufacturing, October auto sales
| | A Message from Carousel | It's time for a professional AI toolkit for PowerPoint. | Introducing Carousel, the Y-Combinator backed PowerPoint & Excel solution that helps investment bankers, investors, & consultants prepare materials faster & with fewer errors. | | Carousel is a PowerPoint plugin carrying a suite of tools designed to help junior professionals save time while putting together decks. | You want to be a top bucket analyst right? You want to move faster to win a deal right? Well it's time to level your deck building process. | | | Earnings Corner 📜 | Trending Up 📈 | KKR (KKR) reported earnings that beat estimates, with revenue of $1.96B up 24.4% y/y (vs. $1.75B expected) and EPS of $1.38 (vs. $1.20 expected). The firm saw AUM rise 18% y/y to $624B, driving a 58% increase in adjusted net income. Over Q3, KKR raised $24B in new capital, while deploying $24B in investments (vs. $9B a year ago). The stock was up 1% at Friday's close | Capital One (COF) reported earnings that beat estimates, with credit card and auto loans showing strong growth and mgmt. noting that they expect the acquisition of Discover Financial to close in early 2025, pending regulatory approval. The stock was up 5% at Friday's close | Northrop Grumman (NOC) reported earnings that beat estimates, with the defense contractor accumulating a record backlog of $85B. The stock was up 0.6% at Friday's close | UPS (UPS) reported earnings that beat estimates, with revenue and profit growth driving the stock up 5% at Friday's close | Trending Down 📉 | Capri ($CPRI): Lina Khan and FTC successfully led the blocking of the Tapestry-Capri merger. After the FTC brought the case against the potential $8.5B merger forward to the courts, the Judge ruling on it decided on a temporary injunction on the transaction. The Judge was swayed by the case that Michael Kors products would increase and that combined market share would be the 59%-83% range, far above the typical ~30% market share threshold. Capri ($CPRI) was down a brutal -49% following the results. This crushed a lot of "merger arbitrage" investors who were hiding out in Capri Holdings shares. Tapestry owns the Coach and Kate Spade brands, while Capri owns the Versace, Jimmy Choo, and Michael Kors brands. This was a notable victory for Khan, who has angered a lot of deal makers with her regular appeals. | Some larger democratic donors take issue with Khan, with Mark Cuban noting that "she's done more harm than good", while democratic leaders like AOC are adamantly defending her. Should Vice President Harris get elected, she's going to have to decide whether to keep Khan or not | Colgate-Palmolive (CL) reported earnings that beat estimates, but the company missed on revenue, as mgmt. predicted challenging market conditions. The stock was down 4% at Friday's close | Honeywell (HON) reported earnings that beat estimates but missed on revenue, with industrial automation sales falling by 5%. The stock was down 5.6% at Friday's close | Union Pacific (UNP) reported earnings that missed estimates, with higher fuel surcharges and a weaker revenue mix driving the stock down 4.8% at Friday's close | | Noteworthy Chart 🧭 | We had to move up our Chart of the day for this story! MBA Applications are on the rise - spelling a potentially weak labor market for 20-something year olds. MBA program applications are up 12% y/y, with in-person MBA program applications up 32% y/y! While this is good for business schools, this generally means a slower economy where people are worried about the job market and feel like they need more education to get ahead. There was similar trend higher in 2008, so this correlation might signal labor market sluggishness in future job numbers. | | | More Headlines 🍿 | Keurig Dr. Pepper is entering the energy drink market, acquiring Ghost for a total of $990mm. The deal involves an initial cash investment for a 60% stake in GHOST, with plans to purchase the remaining 40% by 2028. KDP will also invest $250 million starting mid-2025 to transition Ghost's distribution into its direct network. This acquisition, expected to finalize in late 2024 or early 2025, marks the Company's first big deal since the initial merger of Keurig and Dr. Pepper Ingram Micro, an info tech company, had a solid IPO debut - a win for Platinum Equity and for the return of the IPO market. They raised $409mm in the IPO at a $6B valuation, pricing shares at $22 and rising by 12% on the first day of trading Frontier, a telecommunications company, has been arguing with shareholders who think their $20B sale price to Verizon is too low. In early September, Frontier agreed to sell itself to Verizon (who previously owned the company). The $38.50 per share sale price is a 37% premium from lower prior trading levels, but Glendon Capital, the 2nd largest shareholder is challenging the deal. Frontier put out a deck saying why shareholders should approve the deal on November 13th. Boeing is exploring a sale of its space division. This would make sense as new CEO Kelly Ortberg looks to streamline the Company's focus and divest the struggling division. You may recently remember that the astronauts Boeing sent up to space earlier this year got stranded and are now being rescued later next year by Elon Musk's SpaceX. Delta is suing CrowdStrike after the widespread IT outage last year caused over $500mm in losses for the airline and resulted in 7,000 cancelled flights. Delta said in a statement that "CrowdStrike caused a global catastrophe because it cut corners, took shortcuts, and circumvented the very testing and certification processes it advertised, for its own benefit and profit…if CrowdStrike had tested the Faulty Update on even one computer before deployment, the computer would have crashed." Southwest Airlines officially settled its proxy fight with hedge fund activist Elliott. Southwest will appoint six new directors to its board, including five backed by Elliott and one former Chevron executive. Additionally, Executive Chairman Gary Kelly will retire earlier than planned. OpenAI disbanded another AI safety team, with its head of 'the 'AGI Readiness" team resigning The NYSE will extend trading to 22/hours a day on the Arca Exchange. This extension is designed to enhance market accessibility and provide investors with more flexibility in their trading activities. An Oaktree-backed bank is under court administration over mafia-linked loans. Banca Progetto, a Milan lender has allegedly provided state-guaranteed loans to organized crime linked businesses. Milane investigators said the bank has breached anti-money laundering regulations for years. Last month, Oaktree sold its controlling stake to Centerbridge. President Trump appeared on Joe Rogan's podcast, standing by his idea to end income taxes and replace them with tariffs instead. However, some experts say this would cause a $3 trillion deficit over a decade The Washington Post is the latest newspaper, following the LA Times, that are being denied from making a presidential endorsement of Vice President Kamala Harris this election cycle. While both newspapers have billionaire owners (Bezos owns the Post), the rationale assumed is that the owners want their newspapers to be neutral and not pick a side Billionaire Investor Mark Cuban says he has 'no interest' in a White House cabinet position as he campaigns for Kamala Harris
| | M&A Transactions💭 | Sona BLW Precision Forgings (BOM: 543300) reached a definitive agreement to acquire The Railway Equipment Division Business of Escorts Kubota (BOM: 500495) for $190.74M. | Addison Lee, operator of an online platform intended for booking passenger transportation, has reached a definitive agreement to be acquired for $354.58M by ComfortDelGro (SES: C52). Jefferies advised on the sale. | QSC, manufacturer of audio products, reached a definitive agreement to be acquired for $1.215B by Acuity Brands (NYS: AYI). EV/Revenue was 2.27x. Bank of America, J.P. Morgan, and Morgan Stanley advised on the sale. | NSL (SES: N02), an investment holding company, was acquired for $175.0M by YTL (KLS: 4677). EV/Revenue was 1.16x. | Lightsource BP Renewable Energy Investments, developer and operator of photo-voltaic plants, was acquired for $322.0M by BP (LON: BP). The transaction values the company at $641.0M. Barclays advised on the sale. | Keywords Studios, provides technical services to the video game industry, was acquired for $2.76B by BPEA EQT, CPP Investments, and Temasek Holdings. The deal values the company at $3.79B. EV/EBITDA was 48.22x and EV/Revenue was 4.34x. Deutsche Numis and Robert Warshaw advised on the sale. | Gouda Refractories, manufacturer of refractory linings, was acquired for $158.62M by Shinagawa Refractories Company (TKS: 5351). | Ghost, producer of nutrition-based food products, was acquired for $990.0M by Keurig Dr Pepper (NAS: KDP). Morgan Stanley advised on the sale. | Effectiv, developer of a fraud prevention platform, has reached a definitive agreement to be acquired for $136.0M by Socure. | PetIQ, a manufacturer and distributor of health and wellness products, was acquired for $1.5B by Bansk Group. EV/EBITDA was 16.66x and EV/Revenue was 1.32x. Jefferies advised on the sale. | Osisko Mining, a precious metal mining company, was acquired for $1.58B by Gold Fields (JSE: GFI). Canaccord Genuity, Fort Capital Partners, and Maxit Capital advised on the sale. | Hyundai Cosmo, operator of the petrochemical plant, reached a definitive agreement to be acquired for $107.68M by HD Hyundai OCI. | Private Placement Transactions💭 | Zero Motorcycles, manufacturer of electric-powered motorcycles, raised $100.18M of venture funding led by undisclosed investors. | Vinted, operator of an online marketplace platform, raised $373.73M of venture funding led by TPG at a pre-money valuation of $5.12B. | Aura Aero, manufacturer of aircrafts, raised $104.42M of Grant Funding from The European Union. | Waymo, developer of a self-driving technology, raised $5.6B of Series C venture funding led by Alphabet. | Pacific Fusion, developer of magnetic fusion system, raised $900.0M of venture funding led by General Catalyst. | | Meme Cleanser 😆 | | sophie @netcapgirl | |
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| | | | 6:04 PM • Oct 27, 2024 | | | | 247 Likes 13 Retweets | 8 Replies |
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| | High Yield Harry @HighyieldHarry | |
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My official endorsement: | | | | 4:51 PM • Oct 25, 2024 | | | | 250 Likes 8 Retweets | 6 Replies |
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| Finance Merch Referrals ☕️ | | Until next time! |
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