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Good Morning,

Goldman had its worse EPS miss in a decade, 3AC and CoinFLEX's founders think they can save crypto, PWC resigned as Chinese developer Evergrande's auditor, Sequoia lowered its fees for two new funds, LVMH surpassed a €400B market cap, and Microsoft will cut thousands of jobs.

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Let's dive in.

Before The Bell

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

Markets

• US stocks traded within a narrow range to end relatively flat as investors digested mixed bank earnings from Goldman Sachs and Morgan Stanley 

  • The Dow snapped a 4-day win streak weighed lower by Goldman's 6.4% decline

  • The Nasdaq notched its seventh-straight gain

• London's FTSE 100 is trading near record highs 

• Bitcoin recovered all its losses since FTX collapsed

Earnings

• Goldman Sachs posted its worst EPS miss in a decade on free-falling IBD and asset management revenue, losses in its consumer business, and poor cost management; their stock dropped 6.4% yesterday (CNBC)

• Morgan Stanley topped Q4 estimates on record wealth management revenue and a strong trading business, but profit nonetheless fell due to lower deal-making; their stock rose ~6% (CNBC)

• What we're watching this week: 

  • Today: Charles Schwab

  • Thursday: Netflix, Procter & Gamble

• Full calendar here

Headline Roundup

• China's GDP grew 2.9% in Q4 and 3% in 2022 (CNBC)

• China's property investment fell 10% YoY in 2022 for first decline on record (RT)

• Canadian inflation slowed to 6.3% in December (RT)

• The Fed directed the six biggest US banks to disclose how they are preparing for climate change risks (CNBC)

• Investors seek to pull $20B from core real estate funds (BBG)

• Microsoft will cut thousands of jobs across divisions (RT)

• PwC resigned as China Evergrande's auditor over disagreements in 2021 (FT)

• Sequoia lowered fees in its two recently-launched venture funds (RT)

• Big Four accountants were probed in Spain over reports of long work hours (FT)

• Luxury goods giant LVMH surpassed a €400B market cap (RT)

• Twitter is eyeing content sponsorship deals with over 36 media companies this year (AX)

• Microsoft will expand access to ChatGPT amid OpenAI investment rumors (RT) 

• A Tesla engineer testified that their 2016 self-driving video was staged (RT)

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Deal Flow

M&A / Investments

• US industrial and software firm Emerson Electric made a hostile $6.9B bid for automated testing equipment maker National Instruments after it rebuffed earlier approaches (RT)

• Used car retailer Carvana adopted a poison pill and agreed to sell up to $4B of auto loans (RT)

• China General Nuclear Power’s planned $2B sale of its European renewable energy arm is stalling after offers fell short of expectations (BBG)

• German rail operator Deutsche Bahn is considering reviving a sale of its Arriva transport business at a potential ~$1.1-$2.2B valuation (BBG)

• US insurer Liberty Mutual is exploring a sale of its Latin American businesses that could fetch ~$1B (BBG)

• KKR agreed to buy financial services provider S&P Global’s engineering solutions business for $975M (RT)

• Liquor company Diageo agreed to buy Don Papa Rum, a high-end dark rum from the Philippines, in a ~$473M deal. Diageo will pay €260M up front followed by a potential €178M more over the next five years, subject to performance (WSJ)

• Meme stock investor Ryan Cohen built stake worth 'hundreds of millions of dollars' in China's Alibaba (RT)

• Chemicals giant INEOS formally entered the bidding process to buy soccer club Manchester United (RT)

• German airline Lufthansa is close to making an offer for Italy’s ITA Airways in a deal that will likely include a pathway to 100% ownership (BBG)

• Nigerian lender Access Bank’s plan to buy a controlling stake in Kenya’s Sidian Bank collapsed after the companies failed to complete the transaction before a deadline (BBG)

VC

• IASO Bio, a cell therapy company, raised a $75M Series C-1 led by Shanghai Guoxin Investment & Development, Efung Capital, and others (PRN)

• Sublime Systems, a startup decarbonizing cement production, raised a $40M Series A led by Lowercarbon Capital (BW)

• Enterprise AI startup Mad Street Den raised a $30M Series C led by Avatar Growth Capital (PRN)

• African gaming startup Carry1st raised a $27M Series B led by Bitkraft Ventures and a16z (TC)

• QR code management platform Beaconstac raised a $25M Series A led by Telescope Partners (TC)

• Founders of 3AC and crypto exchange CoinFLEX are looking to raise $25M to start a new crypto exchange called GTX (TB)

• P2P lending platform PeopleFund raised a $20M Series C extension led by Bain Capital (TC)

• Conversational intelligence company Authenticx raised a $20M Series B led by Blue Heron Capital (PRN)

• Evigence, a startup providing freshness data to optimize food quality, raised an $18M Series B led by Cleveland Avenue (BW)

• CloseFactor, a startup automating repetitive sales processes, raised a $15.2M Series A led by Vertex Ventures (TC)

• Amberflo.io, a startup helping companies transition to usage-based pricing, raised a $15M Series A led by Norwest Venture Partners (BW)

• Low-code embedded analytics platform Cumul.io raised a $10.8M Series A led by Hi Inov-Dentressangle (TC)

• Rive, a real-time animation software startup, raised a $10M Series A led by Two Sigma Ventures (PRN)

• Web3 fashion startup Syky raised a $9.5M Series A led by Seven Seven Six (TC)

• Male fertility platform Posterity Health raised a $7.5M round led by Distributed Ventures (BW)

• Membrion, a ceramic desalination membrane startup allowing for the recovery of water from harsh environments, raised a $7M Series B led by PureTerra Ventures (BW)

• Canary, an emergency relief fund solution, raised $2.85M in funding from Capital One Ventures and others (PRN)

IPO / Direct Listings / Issuances / Block Trades

• Accounting giant EY expects favorable market conditions by late-2023 / early-2024 to list its consulting unit and a part of its tax business if their split is approved (RT)

Fundraising

• Boston-based growth equity firm WestView Partners raised a $1B fifth fund (BW)

• Switzerland-based Bellevue Asset Management is seeking between $200M-$300M for its inaugural secondaries vehicle Bellevue Global Private Equity Fund (SI)

• Real estate fund manager Alidade Capital raised a $250M fifth fund (PRN)

• Greybull raised $140M in funding across its evergreen fund and a new closed-end fund (BW)

Crypto Corner

• Su Zhu and Kyle Davies, the founders of collapsed crypto hedge fund Three Arrows Capital (the same 3AC that caused the entire crypto industry to implode) and Mark Lamb and Sudhu Arumugam, the founders of bankrupt crypto exchange CoinFLEX, are looking to raise $25M for a new crypto exchange called... GTX. Financial Times shared the pitch deck here.

• Crypto conglomerate DCG suspends dividends amid distress at Genesis unit (CD)

• $415M of FTX's ~$5.5B recoverable crypto assets were 'hacked' at the time (CNBC)

• A US Trustee opposed FTX's bid for court approval to hire law firm Sullivan & Cromwell (RT)

• Crypto-focused bank Silvergate Capital reported a $1B net loss in Q4 (RT)

Appropriate time to recirculate this t-shirt...

Exec's Picks

• The Verge published a scathing piece on Elon's "extremely hardcore" tenure at Twitter thus far.

• Ryan Cohen took an activist stake in Alibaba and is pushing for more buybacks, The Wall Street Journal published an exclusive covering Cohen's latest investment.

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