Ackman Is Getting Antsy

Ackman wants the Fed to get aggressive with rate hikes, China Covid cases continue to climb, McDonald's is poised to retain its board seats in its proxy fight with Icahn, more baby formula is headed to the US, and Lyft is the latest company to pause hiring.

Litquidity Capital
May 25, 2022

Together with

Good Morning,

Ackman wants the Fed to get aggressive with rate hikes, China Covid cases continue to climb, George Soros thinks civilization is done, WeWork's Adam Neumann is back, more baby formula is headed to the US, and Lyft is the latest company to pause hiring.

We are shocked and saddened to hear about the shooting at the Texas elementary school yesterday. Our thoughts and prayers and with the families impacted by this tragedy.

Let's dive in.

Before The Bell

As of 5/24/2022 market close.

If you want to learn more about crypto trading strategies and the world of DeFi, check out our Foot Guns newsletter.

Markets

  • The tech-heavy Nasdaq fell ~2.4% yesterday, led downward by Snap after the social media platform dropped 40% due to dim forward guidance
    • Social media stocks lost more than $135B in market value
  • Meanwhile, the S&P 500 fell 0.8% and the Dow closed just in the green up 0.2%
  • The retail sector also continued to take hits following weak earnings and outlooks from Target and Walmart last week and Abercrombie & Fitch yesterday

Earnings

  • Best Buy reported lower-than-expected EPS results and cut its FY outlook, citing softer demand that doesn’t appear to be letting up (CNBC)
  • Nordstrom posted a beat-and-raise report, citing momentum in the business as shoppers visited the company’s stores to refresh their closets post-pandemic (CNBC)
  • Abercrombie & Fitch shares fell 29% yesterday after reporting an unexpected Q1 loss with freight and product costs weighing on sales (CNBC)
  • What we’re watching today: Nvidia, Snowflake
  • Full calendar here

Headline Roundup

  • Fifteen slain, mostly kids, in mass Texas school shooting (BBG)
  • Ackman doubles down on call for aggressive rate Fed rate hikes (BBG)
  • George Soros warns 'civilization may not survive' Putin's war (BBG)
  • Beijing records more Covid cases; Tianjin locks down city center (BBG)
  • McDonald’s poised to retain both seats in proxy fight with Icahn (WSJ)
  • Biden to sign executive order promoting police accountability (WSJ)
  • Millions of imported infant formula cans headed for the US, FDA says (BBG)
  • Suspect in NYC subway slaying of Goldman employee surrenders (BBG)
  • Elon Musk drops out of $200B club again as Tesla tumbles (BBG)
  • Lyft to pause some hiring and trim budgets, citing economic slowdown (WSJ)
  • Shipping bottlenecks hit port of New York and New Jersey (WSJ)

A Message From Kalshi

All Markets Are Crashing … Except Event Markets 

Cryptocurrencies, ETFs, and stocks are all down as the country gears for the effects of high inflation, interest rates, and the global supply chain slowdown. Nowadays being down 15% means you’re doing well for yourself, and it seems like there’s no way to make consistent profits.

Luckily, Event Contracts are the best uncorrelated asset for trading directly on world events. Traders buy “Yes” or “No” shares predicting whether events will happen, and as the event becomes more or less likely, the value appreciates. Buying “Yes” on May inflation being higher than 0.6% will give 110% returns if correct. 

Kalshi, the first regulated exchange for trading events, created Event Contracts so that you can directly control your profits. The first 500 clicks get priority access.

Deal Flow

M&A / Investments

  • EQT is considering the sale of a minority stake in Nordic fiber network operator GlobalConnect in a potential $7.5B+ deal (BBG)
  • Fresh-food maker Bolthouse Farms agreed to acquire Starbucks's cold-pressed juice brand Evolution Fresh (WSJ)
  • Citigroup is weighing a deal to buy Deutsche Bank’s Mexican operations to sidestep a lengthier approval process for a new license (BBG)
  • Shares of fast-food chain Wendy’s surged ~15% AH after its largest shareholder, Trian Partner, revealed that it is exploring a potential deal with the company (CNBC)
  • Brazilian lubricant distributor Moove agreed to buy PetroChoice Lubricants, the largest US lubricant distributor, for $479M (RT)
  • Candle Media agreed to buy Spanish-language production company Exile Content Studio (RT)

VC

  • Anduril, a startup combining robotics, AI, and cybersecurity to build defense systems, is reportedly raising a $1.2B Series E at a $7B valuation (TC)
  • Identity protection startup Semperis raised a $200M Series C led by KKR (BW)
  • Onsite power generation provider Mainspring Energy raised a $150M Series E led by Lightrock (PRN)
  • Nowports, a digital freight forwarder in LatAm, raised a $150M Series C at a $1.1B valuation led by SoftBank Latin America Fund (TC)
  • Fireworks, a livestreaming commerce company, raised a $150M Series B at a $750M valuation led by SoftBank Vision Fund 2 (TC)
  • Cribl, a startup building an observability pipeline system, raised a $150M Series D led by Tiger Global (TC)
  • Data observability software startup Monte Carlo raised a $135M Series D at a $1.6B valuation led by IVP (TC)
  • Adam Neumann’s web 3.0 climate technology startup Flowcarbon raised a $70M round led by a16z crypto (BW)
  • Rivery, a SaaS startup providing an ‘ELT’ stack, raised a $30M round led by Tiger Global (PRN)
  • Tidelift, a provider of solutions managing open source software supply chain health and security, raised a $27M Series C led by Dorilton Ventures (BW)
  • E-commerce warehouse robotics startup Nomagic raised a $22M round led by Khosla Ventures and Berlin’s Almaz Capital (TC)
  • Special education assessment and tutoring startup Parallel Learning raised a $20M Series A led by Tiger Global (TC)
  • Corporate mental health startup moka.care raised a $16M Series A led by Left Lane Capital (TC)
  • Ecommerce chatbot startup Zowie raised a $14M Series A led by Tiger Global (PRN)
  • AI-powered plagiarism detection platform Copyleaks raised a $6M Series A led by JAL Ventures (BW)
  • Doppel, a startup building a real-time cross-chain monitoring service for detecting NFT fraud, raised a $5M seed round led by FTX Ventures (PRN)
  • Moves, an all-in-one banking app exclusively for gig workers, raised a $5M seed round led by OMERS Ventures (BW)
  • Singularity Energy, a SaaS platform helping decarbonize the grid, raised a $4.5M seed round led by Spero Ventures and Energy Impact Partners (TC)
  • Fyxt, a cloud-based operations platform for commercial real estate, raised a $4M Series A led by RET Ventures (BW)
  • Altan Insights, an alternative asset intelligence platform, raised a $4M seed round led by Slow Ventures (BW)
  • South African edtech startup FoondaMate raised a $2M seed round led by LocalGlobe (TC)

IPO / Direct Listings / Issuances / Block Trades

  • Indian hospitality startup Oyo Hotels is shelving plans for an IPO in 2022 after a market downturn that would hurt its valuation (BBG)

Fundraising

  • Pantheon, a private market investor, raised $2.4B for Pantheon Senior Debt II, a fund focused on senior private debt secondary investment opportunities (BW)
  • B2B software growth equity fund Updata Partners closed a $1.5B Fund VII (PRN)
  • KKR raised $1.1B for its first credit fund focused on APAC investments (BBG)
  • Tyree & D'Angelo Partners closed a $350M Fund III focused on lower middle market private equity investments (BW)
  • Crane Venture Partners, a London-based VC firm, raised $140M for its second fund (PRN)

Crypto Corner

  • Seth Green created a TV show around his Bored Ape NFT, then someone stole it (TBC)
  • Coinbase becomes first bitcoin company among Fortune 500 (DC)
  • Miami Mayor Suarez tells Davos he still takes salary in Bitcoin (BBG)
  • FTX CEO, SBF, said he could spend $100M+ during US elections in 2024 (TBC)

Exec's Picks

  • From Covid, to lockdowns, to wild moves in financial markets, the last two years have been nuts. Earlier this week, Jack Raines wrote a great piece breaking down our return to reality. Check out his latest here.

Big Swinging Decks Podcast

🚨 BIG SWINGING DECKS IS BACK 🚨

This week, Lit and Mark chat about the current state of crypto with Mark and Leslie Lamb of CoinFLEX.US. The duo talk about:

  • What actually went on with the $40B+ Terra / Luna collapse
  • Differences between algorithmic and fiat-backed stablecoins
  • Current trends in the crypto market, given the recent selloff

As always, catch the latest episode of our Big Swinging Decks podcast, presented by CoinFLEX.US, on SpotifyApple, and YouTube 🤝 

Click here to check out CoinFLEX.US and start earning yield.

The Hiring Block

If you're looking to break into finance, lateral, or move out, check out our job board on Pallet, where we curate highly relevant roles for you. We've got 40+ jobs spanning IB, S&T, VC, tech, private equity, DeFi, crypto, CorpDev and more. We sift through all the noise on LinkedIn, Indeed, Monster, etc. so you don't have to.

Meme Cleanser

Catch the latest episode of our Big Swinging Decks podcast, presented by CoinFLEX.US, on SpotifyApple, and YouTube 🤝 

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