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Good Morning,

Credit Suisse shares tanked after the bank posted a $7.9B loss, German inflation slowed to 9.2%, Bank of America is preparing for a US debt default, Yellen wants China to move faster on developing country debt restructuring, FCC approved Amazon's satellite broadband plan, Adidas will post its first loss in 31 years after the Yeezy debacle, and PayPal's CEO is stepping down at the end of the year.

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Let's dive in.

Before The Bell

Markets

• US stocks fell yesterday as investors digested the week's corporate earnings and took positions on the Fed's rate policy path

  • The Nasdaq lost 1% led by Alphabet's 4.4% drop after its AI bot Bard's blunder

• The pan-European Stoxx 600 rose 0.66% to a one-year high

• The dollar index fell 0.42%

Earnings

• Credit Suisse fell 15.3% after posting a $7.9B annual loss, its biggest since the financial crisis, and warned of an unprofitable 2023 on slumping IBD revenues (FT)

• PepsiCo beat Q4 EPS and revenue estimates as higher prices offset its 2% drop in volume; the beverage company also announced it will stop raising prices (CNBC)

• PayPal beat Q4 EPS estimates and forecast FY profit above estimates but warned of pressure on discretionary spending (RT)

• Full calendar here

Headline Roundup

• Germany inflation slowed to 9.2%, a five-month low, in January (FT)

• Bank of America is preparing for a US debt default (FRB)

• India found lithium deposits in its country for first time (RT)

• Norway's $1.3T wealth fund won't back firms who fail on climate (RT)

• Janet Yellen pressured China to move faster on developing country debt restructurings (RT)

• Trafigura will take a $577M charge after nickel shipments it purchased didn't contain nickel (FT)

• MSCI is probing free float designation of some Adani securities (RT)

• Exxon will merge some smaller units as part of $9B/year cost cutting drive (RT)

• FCC approved Amazon’s satellite broadband plan over SpaceX’s objections (ARS)

• Adidas is set to post its first loss in 31 years on its tainted Yeezys stock (FT)

• Microsoft killed its "industrial metaverse" team after 4 months (TI)

• PayPal CEO Dan Schulman will depart at end of 2023 (CNBC)

• Yahoo will cut over 20% of its staff or ~1.6k employees (TC)

• GitHub will cut 10% of its staff and reduce office space (FRT)

• GoDaddy will cut 8% of its staff or ~530 employees (TS)

• GitLab will cut 7% of its staff (TC)

• Fortescue Metals will cut up to 1k jobs (RT)

• Uber surges further ahead of rival Lyft in ride-share race (FT)

• 50% of Americans say they are financially worse off now than last year (AX)

• Meta restored Donald Trump's access to Facebook and Instagram (RT)

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Deal Flow

M&A / Investments

• Shares of Japanese conglomerate Toshiba dropped as much as 3.6% after a group led by Japan Industrial Partners submitted a final offer of $15.2B for the firm; Toshiba had a market value of ~$15.3B as of Wednesday’s close (BBG)

• Medical device maker Globus Medical agreed to buy smaller competitor NuVasive in a $3B+ deal (BBG)

• Thailand telecom group Advanced Info Service is considering options for its tower business, including a stake sale, which could be valued at $2-$3B in a deal (BBG)

• A unit of energy and commodities company Vitol agreed to buy a 74% stake in South Africa fuel-station chain Engen from Petroliam Nasional; financial details weren’t disclosed but the stake was expected to draw bids of ~$2B (BBG)

• Investment firm Francisco Partners agreed to buy data firm Sumo Logic in a $1.7B deal (RT)

• Energy company Duke Energy will take a $1.3B impairment loss on the sale of its commercial renewable business (BBG)

• Consumer packaged goods company Post agreed to buy a portfolio of pet-food brands, including Rachel Ray Nutrish and Kibbles ‘n Bits, from food company JM Smucker for $1.2B (BBG)

• Mortgage data vendor Black Knight put its $400M Empower loan origination software business up for sale to overcome antitrust concerns over its $13.1B proposed acquisition by financial exchanges firm Intercontinental Exchange (RT)

• South Korean media group Hybe agreed to buy Atlanta-based music label Quality Control, which manages artists such as Lil Baby and Migos, for $248.7M (BBG)

• Credit Suisse agreed to buy investment banking boutique The Klein Group in a $210M deal as part of plan to bring in veteran Michael Klein to lead the spinoff of its First Boston unit (BBG)

• Norway's sovereign wealth fund sold its stakes in three Adani Group companies worth ~$200M (RT)

• Berkshire Hathaway sold $139M of shares in Chinese EV maker BYD, cutting their stake to 11.87% (RT)

• British billionaire Jim Ratcliffe hired JPMorgan and Goldman Sachs to advise him on a bid for English soccer team Manchester United FC (BBG)

• Walt Disney could explore a sale of streaming platform Hulu, which it owns 2/3rds of (WSJ)

• Car maker Volvo is in advanced talks with mining companies over potential stakes in lithium mining or processing operations (WSJ)

VC

• Arrcus, a hyperscale networking startup focused on core, edge, and multi-cloud network infrastructure, raised a $50M Series D led by Prosperity7 Ventures (BW)

• Danish neobank Lunar raised a $38M round from the ‘vast majority of existing shareholders’ (TC)

• Coincover, a digital asset protection startup, raised a $30M round led by Foundation Capital (TC)

• Tioga Cardiovascular, a cardiovascular startup focused on structural heart valve replacement, raised a $30M Series C led by Cormorant Asset Management (PRN)

• Prokarium, a biopharmaceutical startup focused on oncology microbial immunotherapy, raised a $30M round led by Flerie Invest (BW)

• Egyptian healthtech startup Yodawy raised a $16M Series B led by Global Ventures (TC)

• Marker Learning, a provider of remote learning and attention disability services, raised a $15M Series A led by a16z (BW)

• Follow, the first community-centric investment platform joining selected finance-focused influencers called ‘Leaders' and individual investors, launched this week with $9M in funding from Atomic, Uncork Capital, and Vera Equity (BW)

• Reshape Bio, an integrated hardware / software platform digitizing microbiology experiments, raised an $8.1M seed round led by ACME Capital (BW)

• Email security startup Sendmarc raised a $7M Series A led by Atlantica Ventures (TC)

• Regie.ai, a generative AI SaaS platform streamlining enterprise organizations’ content creation workflows, raised a $6M Series A extension from Khosla Ventures (PRN)

• Blobr, a “Shopify for APIs,” raised a $5.4M round led by 10x Founders (TC)

• VAULT, a startup building an open and decentralized network for purchasing, playing, and sharing music, raised a $4M Series A led by Placeholder VC (BW)

• Engineering analytics startup Hatica raised a $3.7M round led by Sequoia India and Southeast Asia’s Surge (TC)

IPO / Direct Listings / Issuances / Block Trades

• Solar tech firm Nextracker raised $638M in US's largest IPO since October (AX)

• Chinese sensor maker Hesai Technology raised $190M at a $2.4B market value in a Nasdaq IPO on Wednesday (FT)

SPAC

• Weight loss device maker Allurion Technologies is close to a merger with Compute Health Acquisition Corp. in a potential ~$500M deal (BBG)

• UK-listed IT company Noventiq agreed to merge with Corner Growth Acquisition Corp for a US listing (RT)

Debt

• Japan Industrial Partners-led $15.2B buyout offer for Japanese conglomerate Toshiba is backed by $10.6B in loans (RT)

• BlackRock-led investors in Saudi Aramco's gas pipeline network are set to raise $4.5B from a bond sale to refinance a $13.4B loan that backed their stake purchase (RT)

• Redwood Materials received a $2B US Department of Energy loan to begin domestic production of critical EV battery components (AX)

• Airline Virgin Australia is considering taking on new debt in order to hand cash to owner Bain Capital ahead of its prospective IPO (BBG)

Bankruptcy / Restructuring

• Bitcoin ATM operator Coin Cloud filed for Chapter 11 bankruptcy protection with estimated $100M-$500M in liabilities (CD)

Fundraising

• Europe-based PE firm Triton Partners is seeking to raise $5.9B for its Triton Fund VI to continue investing in small and mid-caps (PEI)

• Kainos Capital, a PE firm focused on the food, consumer products and services sectors, raised a $1B third fund (BW)

• Alibaba and PIF-backed eWTP Arabia is close to raising $1B to back tech start-ups in Asia and the Middle East (BBG)

• Seven Seven Six, the VC fund launched by Reddit co-founder Alexis Ohanian, is planning to raise $776M for two new funds (TI)

• New York-based VC firm RRE Ventures announced its Fund VIII, with a $250M fundraising target (BW)

• Utah-based VC firm Kickstart raised $230M for a new fund to invest in startups based in Colorado, Utah, New Mexico and Arizona (BJ)

• Earth & Beyond Ventures raised $70M to invest in Israeli space and deep tech startups (CT)

Crypto Corner

• Crypto exchange Kraken will shutter its US crypto staking platform and pay $30M to settle with the SEC over sale of unregistered securities (CNBC)

• Coinbase shares slid 14%+ amid SEC's crypto staking action against rival Kraken (CNBC)

• US crypto staking crackdown seen as a 'huge gift' for DeFi platforms (BBG)

• Tether generated $700M of profit in the December quarter (CNBC)

• A US judge extended SBF's bail restrictions over contacting current/former FTX employees (FT)

• Stablecoin issuer Paxos is being investigated by New York's regulator (CD)

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• Financial Times published a wild piece describing Sam Bankman-Fried's final hours at FTX.

• Gil Dibner, founder & managing partner at Angular Ventures, explained how a massive unwind could play out in the venture capital market in this twitter thread.

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