The Rate Hike Hat Trick

J Pow is planning a rate hike hat trick next year, with projections released on Wednesday indicating three hikes in 2022, two in 2023, and two more in 2024. The Fed will also begin reducing the pace of its asset purchases in January. Time to slowly wean the markets off free money.

By Litquidity Capital Dec 16, 2021

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Good morning,

J Pow is planning a rate hike hat trick next year, with projections released on Wednesday indicating three hikes in 2022, two in 2023, and two more in 2024. The Fed will also begin reducing the pace of its asset purchases in January. Time to slowly wean the markets off free money. 

On other notes:

  • We've got a giveaway for y'all early next week to close out the year (we've got some gift ideas in mind but open to hearing some suggestions from the crowd)
  • We're closing on our first SPV in the coming days. LitVentures is in business folks. Many more to come in the new year. If you want to get access to deal flow, pls answer this survey below.
  • If you're an event driven trader, check out today's sponsor, KEDM. They're a great and incredibly detailed source of information.

Let's dive in.

Before The Bell

As of 12/15/2021 market close.

To see the LitCap Yolo Fund's portfolio holdings, download the Iris Social Stock app here and give Litquidity a follow. If you want to learn more about crypto trading strategies and the world of DeFi, check out our Foot Guns newsletter.

Markets

  • Stocks stayed in the red yesterday but bounced back thanks to J Pow’s press conference, with all three major US averages closing in the green
    • Markets were dragged up by defensive sectors like utilities and healthcare,  which still shows some concern about the economy’s future path
    • The Fed will begin reducing the pace of its bond buybacks in January, purchasing $60B in bonds each month instead of $90B
  • Stay tuned for US housing starts jobless claims this morning at 8:30am ET

Earnings

  • What we’re watching today: Adobe, Accenture, FedEx, Rivian
  • Full calendar here

Headline Roundup

  • Fed officials project three rate hikes in 2022 and three in 2023 (WSJ)
  • Several colleges including Princeton and Cornell shift exams online due to omicron (WSJ)
  • Derek Chauvin pleads guilty to violating George Floyd’s civil rights (WSJ)
  • Dems unlikely to pass Biden’s social spending plan this year (CNBC)
  • UK records highest number of daily Covid cases on Wednesday (CNBC)
  • Apple temporarily shuts down three stores due to rising covid rates (CNBC)
  • NASA’s superfast spacecraft entered the sun’s atmosphere for the first time ever, coming within 8.1M miles of the surface (WSJ)
  • Anchorage to close $7.4B hedge fund as Ulrich ends (BBG)
  • Tishman Speyer buys warehouses in latest pivot outside New York (BBG)
  • Cineworld plunges, Cineplex soars $1B court ruling over deal (BBG)
  • Fed officials project three interest rate rises in 2022 and accelerate stimulus wind-down (WSJ)
  • US retail sales slow with holiday shoppers facing inflation, shortages (WSJ)

A Message From KEDM

Don’t wait for stocks to go up…find stocks with a catalyst. Hedge fund manager, Kuppy (@hkuppy) and his team of analysts, track 1,000s of Special Situations in the markets searching for actionable ideas for their hedge fund and followers at the newsletter, KEDM.

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Some of the events they track:

  • IPO unlocks (know ahead of time when insiders are about to sell)
  • CEO Turnover (new CEO came into Gamestop 12 months before the stock mooned!)
  • Insider Buying (take a look at the chart of DXLG…insiders/CEO all bought their shares <1)
  • Spin-offs (when 1 company splits into 2, value can be created)

Student discounts available, just reach out with a “.edu” email.

Deal Flow

M&A

  • Australia’s competition regulator approved Woodside Petroleum’s agreed $28B merger with BHP Group’s petroleum arm (RT)
  • Abu Dhabi Investment Authority agreed to buy a stake in UK insurance broker Ardonagh at a $7.5B valuation (BBG)
  • Semiconductor materials supplier Entegris agreed to buy smaller rival CMC Materials in a $6.5B deal (RT)
  • Car rental company Localiza’s purchase of rival Unidas was approved by the Brazilian antitrust regulator, creating a $9B company (BBG)
  • Embracer Group agreed to buy French board game publisher Asmodee in a $3.1B deal (Embracer)
  • Sony agreed to acquire Bruce Springsteen's publishing catalog for $500M (RS)
  • Fortress Investment Group agreed to buy Punch Pubs & Co., one of the UK’s largest pub companies (BBG)
  • Airline group IAG is set to cancel its takeover of Air Europa after European regulators indicated they would not allow it to go through without further concessions (RT)
  • KKR is nearing a deal to buy a 10% stake in Shriram Capital’s general insurance unit for ~$237M (BBG)
  • Italian lender BPER Banca offered to buy troubled Banca Carige for a token price on the condition that the move doesn’t harm its capital and boost its earnings (BBG)

VC

  • Crypto collective PleasrDAO received an investment from a16z Crypto (TC)
  • Wells Fargo-backed venture and growth equity firm Norwest Venture Partners closed its sixteenth fund at $3B (TC)
  • Low-code software startup Airtable raised a $735M Series F at an $11B valuation led by XN (CNBC)
  • Crypto startup Anchorage raised a $350M Series D at a $3B+ valuation led by KKR (TC)
  • Corporate food startup EzCater raised a $100M Series A at a $1.6B valuation in a round led by SoftBank Vision Fund 2 (BBG)
  • AvantStay, a platform for renting out high-end vacation homes, raised a $160M Series B led by Tarsadia Investments and 3L Capital (TC)
  • Innovaccer, a startup building a platform to help healthcare organizations better use their data, raised a $150M Series E at a $3.2B valuation led by Mubadala Capital (TC)
  • API security startup Noname Security raised a $135M Series C at a $1B+ valuation led by Georgian and Lightspeed (TC)
  • Brazilian consumer credit startup Open Co raised a $115M round led by SoftBank Latin America Fund (TC)
  • Indian fintech startup Uni raised a $70M Series A led by General Catalyst (TC)
  • Forethought, a startup looking to implement AI in customer service, raised a $65M Series C led by Steadfast Capital (TC)
  • Seattle-based space startup STOKE raised a $65M Series A led by Breakthrough Energy Ventures (Payload)
  • Cequence, an API security startup, raised a $60M Series C led by Menlo Ventures (TC)
  • UK-based full-stack payments infrastructure startup Ramp raised a $52.7M Series A led by Balderton Capital (TC)
  • Papaya, a startup building a mobile app to help customers pay bills, raised a $50M Series B led by Bessemer Venture Partners (TC)
  • AI startup Signal AI raised a $50M Series D led by Highland Europe (TC)
  • Online pool marketplace Swimply raised a $40M round led by Mayfield (TC)
  • Israeli rail cybersecurity startup Cylus raised a $30M Series B led by Ibex Investors (TC)
  • Hong Kong accelerator Brinc raised a $30M Series B led by Animoca (TC)
  • HEIR, a fan engagement app platform built on Solana and co-founded by NBA legend Michael Jordan and his son, raised a $10M seed round led by Thrive Capital (Decrypt)
  • At-home ovulation testing platform Proov raised a $9.7M Series A led by Hambrecht Ducera Growth (TC)
  • Israeli SaaS security startup Atmosec raised a $6M seed round led by Battery Ventures and Gilot Capital Partners (TC)
  • Nigerian online learning platform Edukoya raised a $3.5M pre-seed round led by Target Global (TC)

IPO / Direct Listings / Issuances / Block Trades

  • State Bank of India and Amundi Asset Management seek to raise $1B in a listing of a 10% stake in their Indian mutual fund JV, SBI Funds Management (BBG)
  • Software company Samsara rose 7.4% in its trading debut to raise $805M in an IPO priced at the top end of the marketed range (BBG)
  • French telecom billionaire Patrick Drahi is weighing an IPO of auction house Sotheby’s two years after he bought it (BBG)
  • LADbible parent LBG Media shares rose after their London trading debut at a $477M valuation (BBG)
  • Social content aggregation site Reddit confidentially filed for an IPO (PRN)

SPAC

  • Data intelligence platform Near is in talks to merge with KludeIn I Acquisition Corp. in a potential $1.0-1.2B deal (BBG)
  • Plant-based packaging-maker Footprint agreed to merge with Gores Holding VIII in a $1.6B deal (CNBC)

Debt 

  • Oaktree Capital Management and investment affiliates of billionaire Steve Ballmer have committed $315M in additional financing to green fintech company Aspiration ahead of its SPAC merger with InterPrivate III Financial Partners (BBG)

Exec's Picks

  • Invest in tech-powered pharmacy. NowRx uses proprietary software and robotics to enable free same-day medication delivery. After achieving $13.4M in revenue in 2020—up 89% annually—they are on track to achieve $22M in annual revenue in 2021. Get in on the growth and invest in NowRx right here.
  • We just dropped some coffee mugs in collaboration w/ Pelosi Capital Management. Check em out here.

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 100+ 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.

If you're looking to hire candidates and want to post a job, all you have to do is hit "+ Hire Talent" on the top right of the job board. If you want the role to be featured on Exec Sum, check out our "Featured" and "Premium" tiers.

To Candidates: We've also partnered up with Portal Jobs for a more hands-on approach to matching talent with relevant jobs. Fill out the form here and we'll get to work on placing you in a relevant gig 🤝

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