Free Fallin'

Markets got clapped yesterday with tech stocks in free fall, Elon secured more equity funding for Twitter, large-cap Chinese companies are facing delisting in the US, and Fiji seized a Russian superyacht.

Litquidity Capital
May 06, 2022

Together with

Good Morning,

Markets got clapped yesterday with tech stocks in free fall, Elon secured more equity funding for Twitter, large-cap Chinese companies are facing delisting in the US, and Fiji seized a Russian superyacht. 

Layoffs are starting to hit tech startups, and we want to help those affected get hired again as quickly as possible. If you're at a startup that's hiring, enter code "hiremode" on our job board and you can post your job listing for free 🤝 

Lastly, we're excited to announce that one of Lit's angel investments Hedge, is opening up an investment opportunity to the public this morning through a Republic campaign. See more info (and disclaimers) below. If you want to rip a check, you can visit their campaign page here starting at 7am EST today.

Let's dive in.

Before The Bell

As of 5/5/2022 market close.

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

Markets

  • Stocks pulled back hard yesterday, completely erasing Wednesday's rally to deliver one of the worst days since 2020
    • The Nasdaq closed down 5%, registering its biggest one-day decline since June 2020
    • 90%+ of S&P 500 companies closed in the red yesterday
    • E-commerce stocks were a source of weakness following some disappointing quarterly reports from Etsy, eBay, and Shopify
    • An ETF tracking newly public companies lost ~7.6% and an index of non-profitable tech firms lost ~11%
  • The 10Y Treasury also surged back above 3%, with rising rates putting more pressure on tech stocks
  • Bitcoin also dipped ~9% and is sitting near ~$36k, the broader crypto market similarly sold off

Earnings

  • Shopify fell 15%+ to start the day after weaker-than-expected Q1 results, the company also announced the acquisition of Deliverr (CNBC)
  • Shell reported its highest quarterly profit since ‘08 amid soaring commodity prices and a dividend increase of ~4% (CNBC)
  • Block missed on revenue and EPS estimates, but the stock edged up as analysts looked at the Afterpay acquisition as a bright spot (IBD)
  • Zillow beat estimates for Q1 revenue and profit, but investors were wary of the report amid recent unpredictable housing market trends (GW)
  • Lucid announced 360 vehicle deliveries in Q1, a current customer reservations number of 30K, plans to increase their FY production volume, and plans to raise prices for new vehicle orders as the company battles supply chain and logistics challenges (YHOO)
  • DoorDash posted better-than-expected Q1 results and revenue growth of 35% YoY as consumer demand for takeout holds even as indoor dining resumes (BBG)
  • What we’re watching today: DraftKings, Under Armour, Cinemark
  • Full calendar here

Headline Roundup

  • Elon Musk secures $7.1B in new financing for Twitter from VCs, crypto exchanges, and billionaires (BBG)
  • Goldman Sachs and JPMorgan weigh covering abortion travel amid uproar from Supreme Court draft leak to overturn Roe v. Wade (BBG)
  • JD.com, Pinduoduo added to Chinese companies facing delisting in US (BBG)
  • J&J sues drug benefit middleman over use of drug-cost assistance program (WSJ)
  • Shell takes $3.9B charge related to Russia exit (WSJ)
  • Regulators propose first major revamp to fair housing rules since 1995 (CNBC)
  • Fiji seizes $300M superyacht belonging to Russia oligarch Suleiman Kerimov (CNBC)
  • The EU and Switzerland are banning provision of services to Russian-linked trusts, a favored investment vehicle for wealthy Russians (BBG)
  • Walgreens reaches $683M opioid settlement with Florida (CNBC)
  • Boeing to move HQ to DC area from Chicago (BBG)
  • Sweden, Finland win US security aid pledge on road to NATO (BBG)
  • Meta says it will now pay creators for original content in Facebook Reels (TC)
  • Colombian inflation jumps more than expected to 21-year high (BBG)

A Message From Here

A New Way to Invest in Travel

Airbnbs are expensive. You want to go to the beach, but it’s $300 a night for a 1BR apartment. The slope-side ski cabin in Colorado is $800 a night.

Now imagine how much money you could make if you invested in these properties instead.

Thanks to Here, you can! And you can get started for as little as $100.

Here is the first platform to offer fractionalized ownership of premiere vacation properties around the country. You no longer need hundreds of thousands of dollars to enter the real estate market either, Here has lowered the barriers to entry for the everyday investor.

The best part? Here handles everything from property inspections to upkeep, and you get a pro-rata claim on cash flow.

Deal Flow

M&A / Investments

  • MaxLinear, a maker of chips for broadband communications, agreed to buy Taiwanese semiconductor firm Silicon Motion in a $3.8B deal (BBG)
  • Medicaid insurer Centene agreed to sell pharmacy businesses Magellan Rx and PanterRx Rare to Prime Therapeutics and a group of PE buyers, respectively, in a combined $2.8B divestment deal (BBG)
  • Shopify agreed to buy logistics firm Deliverr for $2.1B (RT)
  • Caesars Entertainment is seeking a buyer for its Flamingo Casino in Las Vegas at a price of $1B+ (BBG)
  • Qantas Airways agreed to buy the rest of Australian charter flight company Alliance Aviation at a $553M valuation (BBG)
  • Fitness company Peloton is exploring a sale of a sizable majority stake in an effort to shore up business (WSJ)

VC

  • Singapore-based crypto trading platform Amber Group is in discussions to raise new funding at a $10B valuation (BBG)
  • Medical ‘one-stop shop’ startup Alan raised a $193M Series E led by Teachers’ Venture Growth (TC
  • Design materials marketplace Material Bank raised $175M at an almost $1.9B valuation in an equity funding round led by Brookfield Asset Management (BBG)
  • Canadian digital bank Neo Financial raised $145.2M at a $784.8M+ valuation in a round led by Valar Ventures (TC)
  • Walnut, a startup bringing buy now, pay later to healthcare, raised a $110M Series A with $10M in equity financing led by Gradient Ventures and $100M in debt financing led by ClearHaven Capital (TC)
  • Digital care platform Sidekick Health raised a $55M Series B led by Novator Ventures (TC
  • NFT marketplace Zora raised a $50M funding round at a $600M valuation led by Haun Ventures (TBC)
  • Clinical testing infrastructure startup Curebase raised a $40M Series B led by Industry Ventures (TC)

IPO / Direct Listings / Issuances / Block Trades

  • Eye-care company Bausch + Lomb priced its IPO at $18 per share, below the targeted range of $21 to $24. At the IPO price, the company has an implied market cap of ~$6.3B (WSJ)
  • Industrial fasteners maker Vescovini is planning a Milan IPO at a potential $2B valuation (BBG)
  • Vista Outdoor, the owner of the brand Camelbak, plans to separate its outdoor and sporting products segments into two publicly traded companies (BBG)

Debt

  • Banks led by Goldman Sachs launched an $896M high-yield bond to back CVC Capital Partners’ investment in Spain’s national football league LaLiga (BBG)

Fundraising

  • Unusual Ventures just closed a $485M fund; promises hands-on help for founders (TC)

Crypto Corner

  • Yuga Labs refunds gas fees for failed transactions during Bored Ape Otherdeed mint (DC)
  • Gucci to begin accepting Bitcoin in some stores (DC)
  • Coinbase's NFT marketplace gains less than 150 users in first day open to the public (DC)

Exec's Picks

  • On Monday after market close, Litquidity Media will be facilitating the first-ever Twitter Spaces live earnings call for none other than RCI Hospitality Holdings $RICK. You can catch Litquidity's Mark Moran, RCI's CEO Eric Langan, and the rest of their management team here!
  • Hedge is a collaborative trading platform where you can make a hedge fund with your friends by pooling money & investing together. They're launching an investment opportunity available to the public through a Republic campaign. They recently raised an 8x-oversubscribed seed round, with participation from Lit and a Lit-managed SPV, and they're now excited to be able to extend this opportunity to the broader Litquidity community. You'll be able to make a reservation when the campaign goes live On Republic starting at 7am EST by visiting their campaign page available here. See important disclosures below.

Testing the Waters Disclosure (for Hedge Republic Campaign)

With regard to communications by an issuer on the Site to gauge interest in a potential securities offering pursuant to the Regulation CF exemption from the registration requirements of theSecurities Act, including opportunities to “reserve” securities as indications of interest in the potential offering, please note that pursuant to Regulation Crowdfunding Rule 206 (i) that no money or other consideration is being solicited thereby, and if sent in response, will not be accepted, (ii) no offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is filed and only through a registered intermediary’s platform, (iii) any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance is given after the Form C is filed, and (iv) an indication of interest is non-binding and involves no obligation or commitment of any kind.

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. 

Layoffs are starting to hit tech startups, and we want to help those affected get hired again as quickly as possible. If you are a startup that's hiring, enter code "hiremode" on our job board and you can post your job listing for free (code good for the next 7 days) 🤝

Meme Cleanser

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

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