EY's Business Breakup

Delta is cutting some flights, Russia faces a debt test, Instacart slows its hiring, EY may split its audit and advisory businesses, Twitter has to pay a $150M fine, the FDA chief urges a baby formula stockpile, and Broadcom is acquiring VMware.

Litquidity Capital
May 27, 2022

Together with

Good Morning,

Happy Memorial Day Weekend to those who celebrate. 

Delta is cutting some flights, Russia faces a debt test, Instacart slows its hiring, EY may split its audit and advisory businesses, Twitter has to pay a $150M fine, the FDA chief urges a baby formula stockpile, and Broadcom is acquiring VMware.

A couple of house keeping items before we let y'all go on with your morning:

  • If you want some tunes for the long weekend, we've got you covered with Litquidity's "Hamptons Day Sauce" playlist on Spotify.
  • As we head into intern season next week, be sure to check out today's sponsor, Felix. They've got a pretty nice product that'll come in handy for interns and analysts.
  • Internship opportunities: we're looking for interns to help us out. More details in "The Hiring Block" section below!

Let's have an epic weekend 🤝

Before The Bell

As of 5/27/2022 market close.

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

Markets

  • Markets pushed higher yesterday with all three major averages closing in the green as they try to bounce back from their recent losing streaks
    • Strong retail earnings from names including Macy’s and Dollar Tree boosted market sentiment yesterday
  • Today we’ll be hearing personal income, consumer spending, and core personal consumption expenditures data

Earnings

  • Alibaba posted better-than-expected EPS numbers driven by Chinese lockdown spending but said it would not give FY forecast due to Covid-19 risks as it reported its slowest quarterly revenue growth since 2014 (RT)
  • Macy’s reported better-than-expected Q1 top- and bottom-line numbers as shoppers return to malls to refresh closets, buy luggage, and purchase luxury goods despite rising inflation (CNBC)
  • Dollar Tree and Dollar General shares jumped yesterday after posting beat-and-raise reports as consumers flock to lower prices during inflationary times (CNBC)
  • Manchester United reported revenue of $205.1M in Q1, up 29.2% YOY, but the football club posted a net loss of $37.2M, largely in line with last year (MANU)
  • What we’re watching today: Canopy Growth
  • Full calendar here

Headline Roundup

  • Russia faces biggest debt test yet as US payment ban clouds path (BBG)
  • Instacart to slow hiring to focus on profitability ahead of IPO (BBG)
  • Britons’ disposable income falling by most since 2008 (BBG)
  • Twitter to pay $150M privacy fine as Elon Musk deal looms (WSJ)
  • Twitter shareholders sue Elon Musk and Twitter over chaotic deal (CNBC)
  • US gun violence is notable outlier among rich nations (BBG)
  • US plans economic talks with Taiwan in latest challenge to China (BBG)
  • Delta is cutting flights to ‘relieve pressure’ on operations (BBG)
  • Account firm EY considers split of audit, advisory businesses (WSJ)
  • FDA chief urges US baby formula stockpile (WSJ)

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Deal Flow

M&A / Investments

  • Chipmaker Broadcom agreed to buy cloud-computing company VMware for ~$61B (BBG)
  • Emerson Electric is considering a sale of waste-disposal business Insinkerator that could fetch up to $3B (BBG)
  • Goldman Sachs’ PE arm agreed to buy a controlling stake in specialty pharmaceuticals company Norgine at a ~$1.9B valuation (BBG)
  • A consortium backed by the billionaire Issa Brothers and TDR Capital is considering dropping out of the bidding for Walgreens Boots Alliance international arm due to disagreements over price (BBG)
  • I Squared Capital Advisors offered to buy British bus and train operator FirstGroup for up to $1.5B (BBG)
  • Hipgnosis Song Management agreed to buy the rights to pop star Justin Timberlake’s song catalog in an $100M deal (BBG)
  • Crypto exchange Huobi Global agreed to buy LatAm-based exchange Bitex (TBC)

VC

  • Bloom, a revenue-based financing platform for e-commerce merchants, raised a $377M Series A led by Credo and Fortress (TC)
  • Customer support management platform Assembled raised a $51M Series B led by New Enterprise Associates (TC)
  • Redbud Brands, a startup building better-for-you consumer brands, raised $46M in funding led by Satori Capital (BW)
  • Solv, a healthcare startup, raised a $45M Series C led by Acrew Capital and Corner Ventures (PRN)
  • Data observability startup Manta raised a $35M Series B led by Forestay Capital (TC)
  • Gametime, a platform for last-minute tickets, raised $30M in funding led by Nimble Partners (PRN)
  • Indigov, a constituent service platform for public officials, raised a $25M Series B led by Tusk Venture Partners, 8VC, Wicklow Capital, and more (PRN)
  • Astroforge, an asteroid mining startup, raised a $13M seed round led by Initialized Capital (TC)
  • JUNO, a platform for digital engagement activities, raised a $10M Series A led by Insight Partners (PRN)
  • Bold Metrics, a startup converting body data to produce actionable insights, raised an $8M Series A led by Bessemer Venture Partners (PRN)
  • Friendly Apps, a “pre-product” startup building apps to improve well-being, raised $3M in seed funding led by BoxGroup, Weekend Fund, Shrug Capital, and more (TC)

IPO / Direct Listings / Issuances / Block Trades

  • Abdullah Al Othaim Investment Co. shelved plans for its potential $500M IPO of its malls business (BBG)

Fundraising

  • ViolaCredit, a fintech startup and alternative credit asset manager, raised a $700M fund to provide asset-based lending to fintech / proptech / insurtech startups (TC)
  • Matt Pincus, founder of SONGS Music Publishing, has raised $200M for his investment holding company, MUSIC, to invest in a variety of music enterprises (BBG)
  • Old Fashioned Research, a VC firm founded by Binance alumni Ling Zhang and Wayne Fu, raised a $100M crypto fund (TC)
  • Proptech-centric early-stage investment firm 1SharpeVentures raised a $90M fund (BW)

Crypto Corner

  • Terra governance system passes plan to burn 1.3B UST tokens (TBC)
  • US Fed’s Lael Brainard says digital dollar would take 5 years to launch and could coexist with stablecoins (CD)

Exec's Picks

  • Web3 has been one of the hottest topics in finance over the past year. Some investors love it, some hate it, and many are just trying to figure out what exactly it is. Earlier this week, Harlem Capital put together a comprehensive Web3 report breaking down what it is, why you should care, and why they are bullish. Check out their report here.
  • 🚨 GIVEAWAY: Parcl is hosting a $100,000 giveaway from May 23 to June 3 in partnership with the Suh Family Foundation. They are giving one individual $100,000 to go towards a downpayment on a house, plus a full year's worth of mortgage and tax payments. Click here to enter.

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. 

Internship Opportunity:

Meme Cleanser

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

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