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Dave Portnoy bought back 100% of Barstool from Penn, WeWork is a going concern, Wall Street bankers got fined big time for illegal texts, ESPN is launching a sportsbook with Penn, Zoom wants employees back in office, Tesla’s CFO made a fortune, and some savings accounts have higher interest rates than millions of mortgages.

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Let’s dive in.

Before The Bell

Markets

• US stocks slumped yesterday as investors reacted to a Fitch downgrade of small and mid-sized US banks

• International markets fell across the board as well, with Hong Kong’s HSI sliding 1.8%, Italy’s FTSE MIB dropping 2.1%, and Germany’s DAX falling 1.1%

• Oil prices rose 1.1% to $82.80 bbl on US economic growth outlook

Earnings

• UPS beat Q2 earnings estimates but missed on Q2 revenue and lowered full-year sales guidance due to lower volumes (BRRN)

• AMC beat Q2 estimates on top and bottom lines as it posted its first profit and highest quarterly attendance since 2019, but nonetheless warned of liquidity challenges (MW)

• Eli Lilly stock rocketed ~15% after beating Q2 revenue and earnings estimates and increasing its 2023 guidance; new data from competitor Novo Nordisk’s weight loss drug was also promising for Eli Lilly’s obesity drug (BRRN)

• Rivian reported better than expected Q2 sales and adjusted losses and increased its 2023 expected vehicles built to 52,000 (CNBC)

• Twilio rose 8% after beating Q2 revenue and earnings expectations and raising its full-year profit outlook (BBG)

• What we're watching this week:

  • Today: Disney, Honda, The Trade Desk, Roblox, Novo Nordisk, Sony

  • Thursday: Alibaba, Brookfield, Ralph Lauren

  • Friday: Soho House, Spectrum Brands

• Full calendar here

Headline Roundup

• Wall Street Whatsapp, texting fines exceed $2.5B (BBG)

• US bank shares drop as Moody’s cuts ratings, warns on risks (BBG)

• Chinese economy falls into deflation for first time since February 2021 (FT)

• Chinese exports suffer worst fall since Covid (FT)

• Rates on savings accounts are higher than millions of mortgages (BBG)

• US oil output to hit record this year, helping counter Saudi cuts (BBG)

• US set to limit scope of China investment ban with revenue rule (BBG)

• S&P drops ESG scores from debt ratings amid scrutiny (FT)

• Over half of M&A dealmakers have canceled deals on ESG due diligence findings (ESG)

• Investors pull huge sums from expensive investment funds (FT)

• Glencore profits halve as commodity prices retreat (FT)

• ESPN launches sportsbook in partnership with Penn Entertainment (CNBC)

• Elon Musk’s X aims to win back advertisers with new brand safety technology deal (CNBC)

• Zoom and other remote-work champions call employees back to the office (WSJ)

• Tesla CFO Kirkhorn exits with $590M fortune (BBG)

• Goldman Sachs’ John Rogers steps down as chief of staff (FT)

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Deal Flow

M&A / Investments

• Italy is in talks with KKR to possibly join its $25B bid for Telecom Italia's landline grid (RT)

• TV and satellite company Dish Network will acquire satellite operator Echostar in a ~$4B all-stock deal (BBG)

• Adani Enterprises is exploring a sale of its $2.7B, 44% stake in Mumbai-listed consumer-staple joint venture with Wilmar International, Adani Wilmar (BBG)

• PE firms Lone Star Funds and Platinum Equity to acquire DuPont de Nemours’ Delrin resins unit, which could be worth ~$2B (BBG)

• Carlyle Group purchased a minority stake in engineering outsourcing firm Quest Global at a $2B valuation (RT)

• PE firm GTCR will buy home and small business security firm ADT’s commercial security, fire and life safety unit for $1.6B (RT)

• Advent International acquired a majority stake in Zimmerman from Style Capital in a deal that values the Australian fashion brand at ~$1B (BBG)

• Investment firms Castlelake and Neuberger Berman Group will buy $700M worth of personal loans from fintech consumer lender Oportun Financial (BBG)

• South Africa’s antitrust regulator urged South Africa to block South African mobile operator Vodacom Group’s $696M deal to buy a stake in Remgro’s fiber business (BBG)

• Allegro Microsystems, a leader in power and sensing semiconductor technology, will acquire advanced tunnel sensor leader Crocus Technology for $420M cash (PRNW)

• Microfinancing institution Svatantra Microfin acquired Navi Group’s microfinancing unit Chaitanya India for ~$179M (TC)

• South Korea’s SK Bioscience will acquire a 7% stake in vaccine maker Novavax (RT)

• Dave Portnoy is buying back 100% of Barstool Sports from Penn Gaming for an undisclosed price (AX)

• British sportswear retailer JD Sports will acquire the remaining 40% stake in Polish retailer Marketing Investment Group from minority shareholders (RT)

VC

• Verdagy, a startup building electrolyzer tech for industrial markets, raised a $73M Series B led by Temasek and Shell Ventures (FN)

• Inrix, a provider of transportation analytics and connected car services, raised $70M in financing from Morgan Stanley Investment Management (FN)

• Customer data platform Simon Data raised a $54M Series D led by Macquarie Capital (BW)

• Tractian, an industrial IoT and enterprise asset management software startup, raised a $45M Series B led by General Catalyst (BW)

• Autonomous security solutions startup Horizon3.ai raised a $40M Series C led by Craft Ventures (BW)

• School-based mental health provider Daybreak Health raised a $13M Series B led by Union Square Ventures (BW)

• Identity security and access governance startup ConductorOne raised a $12M Series A extension led by Felicis (FN)

• Puffer Finance, a blockchain infrastructure company, raised a $5.5M seed round led by Lemniscap and Lightspeed Faction (FN)

• Cloud infrastructure remediation platform Gomboc.ai raised a $5M seed round led by Glilot Capital and Hetz Ventures (BW)

IPO / Direct Listings / Issuances / Block Trades

• Amazon, Apple and Samsung Electronics plan to invest in Softbank-owned chip designer Arm’s potential ~$10B IPO (RT)

• French-Israeli billionaire Patrick Drahi plans to raise ~$3.3B in equity to slash debt at his French multimedia giant Altice (RT)

• Indian ecommerce startup Meesho plans to IPO in the next 12-18 months after it posted its first-ever profit (RT)

Debt

• ConocoPhillips is selling $2.7B worth of investment grade bonds to help fund its acquisition of the remaining interest in the Surmont oil-sands field (BBG)

Bankruptcy / Restructuring

• The sale of bankrupt trucking company Yellow Corp's assets could likely surpass the company's $1.4B in secured debt (RT)

• Country Garden, China’s largest privately owned property developer, did not pay two coupon bonds worth $23M on August 6, confirming its suspected repayment troubles (RT)

• Jet chartering company Wheels Up is seeking new financing from investors as its cash dwindles (BBG)

• WeWork raised concerns about its ability to stay in business; its shares tanked over 25% (RT)

Fundraising

• New Zealand and Blackrock plan to launch a $1.2B climate infrastructure fund to invest in solar, wind, green hydrogen and battery storage technology (RT)

• Secondaries firm Willowridge Partners raised $900M for Amberbrook IX to invest in stakes mature private capital funds (WSJ)

• Asset manager GLP Capital Partners raised $556M for renewable energy investments in China (RT)

Crypto Corner

• US Fed clarifies process for banks to transact in stablecoins (RT)

• Germany's financial regulator Bafin is investigating Sam Altman’s crypto Worldcoin project (RT)

• Crypto exchange Huobi Global received $200M of crypto onto its platform from crypto entrepreneur Justin Sun (BBG)

• Former FTX exec Ryan Salame is negotiating a plea deal with prosecutors (RT)

Exec’s Picks

• This WSJ piece explains how hiring difficulties in Asian factories are threatening the era of ultra-cheap goods in the west.

• Weight loss drug Wegovy appears to protect heart health as well.

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