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Good Morning,

US has a growing bank problem, bank profits dropped by half due to bank failure costs, leveraged Nvidia bets are at record highs, SMBs are optimistic despite debt burdens, Canadian bank execs missed bonus targets, and Ray Dalio wants Taylor Swift for President.

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Let’s dive in.

Before The Bell

Markets

• US stocks rallied to fresh all-time highs thanks to hopes over easing inflation

• Europe's Stoxx 600 rose 1% after the ECB left rates unchanged but lowered its inflation forecast

• US 10Y yields slid to its lowest in about a month, before steadying

Earnings

• Costco shares fell ~4% after missing Q2 revenue estimates on weak discretionary spending, though it posted YoY sales growth and strong gains in e-commerce (CNBC) 

• Broadcom beat Q1 revenue estimates on AI-driven demand, but kept its FY sales guidance unchanged (RT)

• Kroger shares jumped ~10% after forecasting stronger-than-expected FY profit thanks to customer resilience (BBG) 

• Full calendar here

Headline Roundup

• Number of weak US banks jump by 18% to 52 (FT)

• US bank profits dropped 44% in Q4 on bank failure-related costs (RT)

• Rich countries set for record $15.8T of debt sales (FT)

• Asian PE firms use controversial route to exit investments (FT)

• Goldman expects US share buybacks to top $1T in 2025 (RT)

• ECB signals June rate cut and lowers inflation forecast (FT)

• China intensifies push to ‘Delete America’ from its technology (WSJ)

• Leveraged 2x Nvidia ETF sees record inflows (RT)

• NYCB lost 7% of deposits in the past month, slashes dividend to 1¢ (CNBC)

• BMO, CIBC and Scotiabank execs missed bonus targets in rocky 2023 (BBG)

• ECB is actively monitoring CRE as main risk to financial stability (BBG)

• Small US firms remain optimistic even with high debt burdens (BBG)

• BIS cracks down on big banks gaming capital requirements (RT)

• Biotech VCs see room for growth in obesity drug market (WSJ)

• Moody's places NYCB on 'review for upgrade' (RT)

• Chemours execs improperly shifted cash flows to boost pay (WSJ)

• Ray Dalio wants Taylor Swift for President (YH)

• Netflix to stream Mike Tyson vs. Jake Paul (WSJ)

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Deal Flow

M&A / Investments

• Saudi Arabia’s PIF took on an 8%, ~$164B stake in Aramco (RT)

• Mondi agreed to buy DS Smith for $6.5B to create one of the world’s largest makers of packaging (BBG) 

• PE firms including Carlyle Group, CVC, and KKR have shown preliminary interest in a potential takeover of Hong-Kong listed luggage-maker Samsonite International, which has a $5.4B market cap (BBG) 

• UK bank Nationwide Building Society agreed to acquire UK banking/financial services company Virgin Money for $3.7B (FT) 

• Boston Scientific’s proposed $3.7B acquisition of medical device maker Axonics will likely face US FTC scrutiny (BBG) 

• Spanish utility Iberdrola offered ~$2.5B to buy all remaining shares it doesn’t already own in US subsidiary Avangrid (BBG) 

• Warner Music Group plans to make a bid for Believe that values the French digital music company at $1.8B, topping an earlier takeover bid from a consortium (RT) 

• Investment firm GQG Partners acquired a 0.8% stake in Indian telecom Bharti Airtel from Singapore Telecommunications for $711M (RT) 

• Hong Kong film production company Orange Sky Golden Harvest Entertainment is considering selling its movie theaters in Singapore and Taiwan for over $400M (BBG) 

• Spanish pharmaceutical company Rovi is exploring the sale of its third-party manufacturing business that it uses to make Covid vaccines (RT)

• Non-bank bidders are interested in NYCB’s loans (RT)

VC

• Rakuten Medical, a biotech company developing cell-targeting therapies, raised a $119M Series E led by Hikma Pharmaceuticals (PRN)

• Zama, a startup building homomorphic encryption tech, raised a $73M Series A led by Multicoin Capital and Protocol Labs (TC)

• Todyl, a security and networking company, raised a $50M Series B led by Base10 Partners (BW)

• Defense Unicorns, a software startup providing open source software and AI capabilities for National Security systems, raised a $35M Series A led by Sapphire Ventures and Ansa Capital (BW)

• Quantum infrastructure company Maybell Quantum raised a $25M Series A led by Cerberus Capital Management (FN)

• Cayosoft, a unified solution enabling organizations to manage, monitor, and recover Microsoft platforms, received a $22.5M investment from Centana Growth Partners (VC)

• Reach Security, a startup using a company’s existing security tools to fight cyber threats, raised a $20M round led by Ballistic Ventures (TC)

• Neural Propulsion Systems (NPS), a software platform offering ultra-resolution imaging radar to support automotive vision sensing, raised a $17.5M Series B led by Cota Capital (PRN)

• Efficient Computer, a startup building a more energy efficient computer processor, raised a $16M seed round led by Eclipse (PRN)

• Nirvana Labs, a startup building infrastructure for web3 entities to slash cloud costs, raised a $10M seed round led by RW3 Ventures (VC)

• Wobble Genomics, a startup providing a novel approach to RNA sequencing, raised an $11.8M round led by Mercia Ventures and BGF (FN)

• Brevian, a no-code enterprise platform for building AI agents, raised a $9M seed round led by Felicis Ventures (TC)

• Fijoya, a personalized platform for employer-sponsored health and wellness services, raised an $8.3M seed round led by Team8 (BW)

• Nextron, a Brazilian climate tech startup, raised a $5.3M Series A led by Vox Capital and Copel Ventures (FN)

• Cosmology, a startup building a tech suite that enables developers to build Web3 apps in the Cosmos ecosystem, raised a $5M seed round led by Galileo and Lemniscap (PRN)

• Vescent, a startup building quantum hardware, raised a $5M seed round led by Corporate Fuel (BW)

• Glimpse, a startup providing battery quality monitoring solutions for battery producers and electric mobility companies, raised a $4M seed round led by Ibex Mobility and Flybridge Capital Partners (FN)

• Altro, a startup building a credit-building platform, raised a $4M round from Tinashe, Quavo, Chris Paul, and more (FN)

• Sostengo, a Salvadoran insurtech startup, raised a $3.8M seed round from PeopleFund (FN)

• Blockchain infrastructure startup Firewall raised a $3.7M pre-seed round co-led by North Island Ventures, Breyer Capital, and Hack VC (FN)

• StackOne, a provider of an embedded IPaaS, raised a $3.6M seed round led by Episode1 (FN)

• Enzzo, a startup focused on accelerating new hardware product development, raised a $3M seed round led by Unlock Venture Partners (FN)

• PeakMetrics, a startup providing a narrative intelligence platform, raised a $3M seed round led by York IE (VC)

IPO / Direct Listings / Issuances / Block Trades

• Harry's, a maker of razors and other grooming products last valued at $1.7B in 2021, confidentially filed for a US IPO (RT) 

• Abu Dhabi sovereign wealth fund ADQ picked advisers including Citigroup, HSBC, and First Abu Dhabi Bank for a potential IPO of Etihad Airways (BBG) 

Debt

• PE firm HGGC raised a $1.5B debt package for font designer Monotype from direct lenders including Blue Owl, Antares, and Oaktree and plans to use almost half to pay itself a dividend (BBG) 

Bankruptcy / Restructuring

• Charge Enterprises, a builder of EV charging stations, filed for bankruptcy to implement a restructuring plan that will hand control to senior lender Arena Investors (BBG) 

Fundraising

• Healthcare investment firm Rubicon Founders raised $1.2B for its Rubicon Fund II (WSJ) 

• Pantera Capital, a $5.2B crypto-focused asset manager, is seeking to raise money for its Pantera Solana Fund to buy up to $250M worth of discounted SOL tokens from the FTX estate (BBG) 

Crypto Corner

• Terraform Labs’ Do Kwon will be extradited to South Korea instead of the US (BBG)

• FTX settled with BlockFi for up to $874M over disputes stemming from their collapses (RT) 

• SEC defers decision on spot Bitcoin ETF options trading (BBG)

Exec’s Picks

• Financial Times covered how consulting firm Alvarez & Marsal, who advised on Lehman Brothers’ liquidation, is dealing with China’s Evergrande.

• Gilad Edelman wrote an interesting piece for The Atlantic on ‘why crypto just won’t die.’

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