Meta Enters the AI Wars

Meta released a commercial version of its open-source AI, Yellen sees disinflation pressures working their way through the labor market, Taco Bell won its ‘Taco Tuesday’ trademark dispute, Morgan Stanley’s CEO predicts the bank will eventually hit $20T in AUM, and a US soldier is being held in North Korea after crossing the border.

Author

Litquidity Capital
July 19, 2023

Together with

Good Morning,

Meta released a commercial version of its open-source AI, Yellen sees disinflation pressures working their way through the labor market, Taco Bell won its ‘Taco Tuesday’ trademark dispute, Morgan Stanley’s CEO predicts the bank will eventually hit $20T in AUM, and a US soldier is being held in North Korea after crossing the border.

Let’s dive in.

Before The Bell

As of 7/18/2023 market close.

Markets

  • US stocks advanced yesterday boosted by strong bank earnings that benefited from increasing interest income

    • The Dow registered its seventh-straight green day, its longest streak since March 2021, and closed at its highest level since April 2022

  • Earnings season is off to a strong start as 84% of S&P 500 companies have exceeded analysts’ profit estimates so far

Earnings

  • Bank of America beat Q2 profit estimates as it earned more from customers' loan payments while IB and trading fared better than expected; their stock gained more than 4% (RT)

  • Morgan Stanley missed Q2 profit estimates as IBD revenues were flat and trading revenues were down YoY; wealth management revenue nonetheless rose 16% YoY and CEO Gorman gave an upbeat outlook; their stock gained 6.4% (YF)

  • Lockheed Martin beat Q2 estimates thanks to global geopolitical tensions and increased military spending; they also posted a record sales backlog of $158B (PRN)

  • What we're watching this week:

    • Today: Goldman Sachs, Tesla, Netflix, IBM, United Airlines

    • Thursday: Johnson & Johnson, TSMC, American Airlines, Capital One

    • Friday: American Express

  • Full calendar here

Headline Roundup

  • Retail sales rose for a third-straight month in June (WSJ)

  • Yellen sees disinflation pressures at work as hiring surge fades (BBG)

  • Only 1% of US homes have changed hands in 2023 (BBG)

  • Canada's inflation falls to a 27-month low, but underlying pressures persist (RT)

  • Wall Street sees glimmer of hope for investment-banking revival (BBG)

  • Meta opens AI model to commercial use, throwing nascent market into flux (RT)

  • Morgan Stanley predicts AUM will hit $20T (FT)

  • Taco Bell wins 'Taco Tuesday' trademark dispute with rival chain (RT)

  • Biden creates new anti-competition role on National Economic Council (RT)

  • GM can't build or deliver new vehicles fast enough, exec says (RT)

  • McKinsey partners with startup Cohere to help clients adopt generative AI (RT)

  • Microsoft closes at record high after revealing pricing for AI subscription (CNBC)

  • Johnson & Johnson sues Biden Administration over Medicare drug price negotiations (CNBC)

  • Millions of people cut from Medicaid even though many might still be eligible (CNBC)

  • Chipotle signs first-ever franchise partner to open locations in the Middle East (CNBC)

  • US soldier held in North Korea after crossing border (WSJ)

A Message From Sporttrade

Rory's Scottish Open win helped a bettor win over $52,000 on Sporttrade. Will YOU pick the winner this week at The Open?

Majors may be ending but the golf betting at Sporttrade always has the best prices and in-play bets.

If you're in NJ, try Sporttrade now and receive 7 days of commission-free betting and a $100 Money-Back first bet using code LIT!

Deal Flow

M&A / Investments

  • State oil giant Abu Dhabi National Oil Co increased its buyout offer for German chemical producer Covestro AG to ~$12.3B after Covestro rejected their previous $11B offer for being too low (RT)

  • US alternative investment manager Ares Management agreed to fully acquire Singapore PE firm Crescent Point Capital, which has $3.8B AUM (RT)

  • Energy drink maker Alani Nu is exploring a full or partial sale at a valuation of more than $3B (RT)

  • PE firm Thomas H. Lee Partners will acquire a majority stake in US fund administrator Standish Management in a $1.6B deal (RT)

  • Chinese PE firm Boyu Capital agreed to acquire Hong Kong-based medical device maker Quasar in a deal worth over $600M (BBG)

  • Colombian billionaire Jaime Gilinsky offered $587M for a 51% stake in Brazilian retailer GPA’s Colombian subsidiary Almacenes Exito (RT)

  • Blackstone Group is investing $150M into London-based hedge fund Astaris Capital Management (RT)

  • US pharma giant Pfizer and venture firm Flagship Pioneering, an incubator of biotech companies including Moderna, will invest $100M together to develop 10 new drugs across internal medicine, oncology, infectious diseases, and immunology (RT)

  • Softbank Group invested $65M into British AI insurtech company Tractable (RT)

  • Online supermarket and technology group Ocado Group, which was reported to have possible buyout interest from Amazon, is not pursuing takeover offers (RT)

VC

  • Cybersecurity startup Netcraft raised a $100M round led by Spectrum Equity (TC)

  • PVcase, a Lithuanian solar project design software startup, raised a $100M round led by Highland Europe, Energize, and Elephant (FN)

  • Aphea.Bio, an integrated microbial product development company, raised a $78.6M Series C led by Innovation Industries (FN)

  • Hammerspace, a startup allowing companies to access and manage data, raised a $56M round led by Prosperity7 Ventures (TC)

  • Futureverse, a startup building tech for the AI metaverse, raised a $54M Series A led by 10T Holdings (FN)

  • VitalConnect, a remote and in-hospital wearable biosensor technology company, raised a $30M Series F led by Revelation Partners (BW)

  • Dental supply startup Torch Dental raised a $28M round led by Health Velocity Capital (FN)

  • Optalysys, a startup developing photonic processing tech, raised a $27.4M Series A led by Lingotto, imec.xpand, and Northern Gritstone (FN)

  • Isometric, a startup building a registry and science platform focused on carbon removal, raised a $25M seed round from Lowercarbon Capital and Plural (TC)

  • Wing Cloud, a startup building a unified programming language for cloud infrastructure, raised a $20M seed round led by Battery Ventures, Grove Ventures, and StageOne Ventures (BW)

  • Cognaize, a startup building a better LLM for the finance sector, raised an $18M round led by Argonautic Ventures (TC)

  • Arrive Recommerce, a startup enabling returns-to-recommerce for brands and retailers, raised a $16M Series A led by Javelin Venture Partners (FN)

  • Anduin, a private market fintech startup, raised a $15.6M Series B led by 8VC (BW)

  • Spline, a startup providing a no-code design platform to create 3D assets, raised a $15M seed round led by Gradient Ventures (FN)

  • Prenatal care startup Sonio raised a $14M Series A led by Cross Border Impact Ventures, European Innovation Council, and more (FN)

  • Shopify brand analytics startup Polar Analytics raised a $9M Series A led by Point Nine (TC)

  • Prospective, an interactive analytics and data visualization tool for large and streaming datasets, raised a $6M seed round led by Point72 Ventures (BW)

  • Bureau, a fraud and identity platform, raised a $4.5M Series A led by GMO VenturePartners (FN)

  • Huq, a London-based mobility intelligence company, raised a $5.2M round led by 24 Haymarket (FN)

  • Developer-focused email platform Resend raised a $3M seed round from Y Combinator, SV Angel, and others (TC)

  • Offsite, a marketplace and tech-enabled services provider for remote and hybrid companies, raised a $3M seed round from Forum Ventures, Automattic, and more (FN)

IPO / Direct Listings / Issuances / Block Trades

  • Self-driving tech firm Aurora Innovation plans to sell $600M worth of shares in a private placement (RT)

  • Adtech firm Aleph Group, which was last valued at $2B by CVC Capital Partners in 2021, withdrew its IPO plans citing ‘public interest and the protection of investors’ (RT)

Debt

  • Abu Dhabi renewable energy company Masdar will raise $750M from a debut sale of green bonds (RT)

  • Saudi Arabian food and beverage company Almarai will raise $750M through a sale of sukuk (Sharia-compliant bonds) (RT)

  • Telegram raised $210M via bond sales (TC)

  • Car parts retailer AutoZone hired BofA Securities, JPMorgan, U.S Bancorp. and Wells Fargo for a corporate bond offering (MW)

Bankruptcy / Restructuring

  • Dutch e-bike producer VanMoof has been declared bankrupt (RT)

Fundraising

  • Polychain raised $200M for a fourth crypto VC fund (FRT)

  • VC firm CoinFund raised $158M to back crypto startups (BBG)

Crypto Corner

  • Binance’s market share has dropped from 90% at the start of the 2023 to 73% in mid-July (BBG)

  • Presidential hopeful Ron DeSantis promised to ban central bank digital currencies if elected (CD)

Exec’s Picks

Litney Partners - Financial Recruiting 💼💼

If you're currently a junior investment banker looking to break into the buy side, considering lateraling to another investment bank, or have recently been impacted by widespread layoffs, it's time you check out Litney Partners, a partnership between Litquidity and Whitney Partners (the oldest purely financial services executive search and consulting firm).

We aim to place strong candidates at leading private equity, hedge fund, venture capital, growth equity, and credit funds, as well as investment banks.

To get started, simply head over to the Litney website and create your profile by dropping your resume / filling out the form:

Meme Cleanser

Join the conversation

or to participate.