RIP iPod

Apple discontinued its last iPod model, US consumers are loading up on credit card debt, FIFA and EA didn't renew their licensing deal, Tom Brady will join Fox Sports after retirement, and Musk said he would reverse Trump's Twitter ban.

Litquidity Capital
May 11, 2022

Together with

Good Morning,

Apple discontinued its last iPod model, US consumers are loading up on credit card debt, FIFA and EA didn't renew their licensing deal, Tom Brady will join Fox Sports after retirement, and Musk said he would reverse Trump's Twitter ban.

If y'all are in NYC or the Hamptons over Memorial Day Weekend, the Litquidity team will be tagging along with Friday Beers as part of their Three Day Bender mini-tour. Tix to Saturday's show in the Schimanski nightclub in Brooklyn can be found here 🤝

For anyone that missed our earnings call with RCI Hospitality Holdings ($RICK) on Monday, I highly recommend reading through the transcript here. Hands down the most entertaining earnings call of the year.

Let's dive in.

Before The Bell

As of 5/10/2022 market close.

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

Markets

  • The Dow closed in the red for the fourth day in a row while the S&P 500 and Nasdaq inched out positive closes to stop their slides
    • Tech stocks led yesterday’s gains after the sector suffered heavy losses in recent weeks
  • Today we’ll be receiving April CPI data that is expected to come in slightly below March’s 8.5%, which could signal that inflation has peaked

Earnings

  • Peloton shares fell after wider-than-expected quarterly losses, a steep decline in sales, and high cash burn (CNBC)
  • SoFi reported narrower-than-expected losses, but shares fell after the company accidentally released results early (CNBC)
  • Roblox reported wider-than-expected losses driven by a drop in revenue per daily active user as kids return to school and have less time to spend online (CNBC)
  • Coinbase fell ~8% AH after a weaker-than-expected earnings report which showed a decline in users and revenue (CNBC)
  • Norwegian Cruise Line shares rose despite a wider-than-expected loss as the travel industry projects a strong Q2 amid a resurgence in travel (CIN)
  • What we’re watching today: Disney, Rivian, Beyond Meat, Bumble
  • Full calendar here

Headline Roundup

  • Americans put more on credit cards as inflation boosts costs, Fed data shows (BBG)
  • Boris Johnson warns he can’t shield Britons from cost-of-living crisis (BBG)
  • FIFA video game will be renamed after EA licensing deal ends (BBG)
  • Finland is just days away from applying for NATO membership (CNBC)
  • Apple discontinues the last iPod model (CNBC)
  • Household debt nears $16T despite rising rates and inflation (CNBC)
  • Tom Brady agrees to join Fox Sports as lead NFL game day analyst whenever his career ends (CNBC)
  • Elon Musk says he would reverse Twitter’s permanent ban on Trump (BBG)
  • BlackRock's star trader goes net short as hedge fund loss mounts (BBG)
  • Janet Yellen renews call for stablecoin regulation after TerraUSD stumble (WSJ)

A Message From Wondrium

It’s almost summer time, meaning the weather is getting warmer. Unfortunately, climate change over the last several decades has created a more permanent change in temperature. Thankfully, some of the world’s greatest minds are working to combat this problem.

Wondrium, a leader in educational media, has produced a fantastic documentary, Solving for Zero, along with a 10-part series, to highlight the science and people behind recent innovations across various industries that contribute the most to our carbon footprint.

How do we get to net zero by 2050? Join the race with Solving for Zero, inspired by Bill Gates’ bestseller, How to Avoid a Climate Disaster, and the 10-part series, Solving for Zero: The Search for Climate Innovation. Stream both on Wondrium.

Deal Flow

M&A / Investments

  • Warehouse owner Prologis offered to buy REIT Duke Realty in a potential $24B deal (BBG)
  • Pharmaceutical company Pfizer offered to buy migraine treatment maker Biohaven Pharmaceutical in a $11.6B deal. Pfizer offered $148.50 / share in cash, a ~79% premium to Monday's closing price of $83.14 (BBG)
  • DigitalBridge is nearing a deal for data-center operator Switch, which currently has a market cap of ~$7.4B (BBG)
  • Private lender Monroe Capital is exploring options, including the sale of a stake in itself (BBG)
  • Partners Group agreed to buy 2k+ US rental homes owned by Fortress in a $1B+ deal (BBG)
  • Plant-based protein drink maker Soylent is exploring strategic options including a sale (BBG)

VC

  • Online wholesale marketplace Faire raised a $416M Series G extension at a $12.59B valuation led by YC, Sequoia, and others (TC)
  • Cloud-native email security platform Abnormal Security raised a $210M Series C at a $4B valuation led by Insight Partners (BW)
  • Payments infrastructure startup Paddle raised a $200M equity / debt Series D at a $1.4B valuation led by KKR (PRN)
  • Crypto exchange KuCoin raised a $150M pre-Series B at a $10B valuation led by Jump Crypto (TC)
  • MOMA Therapeutics, a biopharmaceutical company focused on the molecular machines behind human disease, raised a $150M Series B led by Goldman Sachs Asset Management (BW)
  • Stord, a cloud supply chain startup, raised a $120M Series D extension at a $1.3B valuation led by Franklin Templeton (PRN)
  • Digital asset trading platform Talos raised a $105M Series B at a $1.25B valuation led by General Atlantic (PRN)
  • Norwegian e-paper tablet maker reMarkable raised a round at a $1B valuation led by multiple international (not Norwegian) investors (TC)
  • Contract lifecycle management startup SirionLabs raised an $85M Series D led by Partners Group (TC)
  • Supabase, an open-source alternative to services like Google’s Firebase, raised an $80M Series B led by Felicis Ventures (TC)
  • Construction robotics startup Dusty Robotics raised a $45M Series B led by Scale Venture Partners (BW)
  • Osmind, a startup helping clinicians and researchers develop mental health treatments, raised a $40M Series B led by DFJ Growth (BW)
  • Ness, a startup building credit cards to reduce wellcare costs, raised a $15.5M seed round led by Will Ventures (PRN)
  • OtterTune, a database automation and optimization platform, raised a $12M Series A led by Intel Capital and Race Capital (PRN)
  • Crypto-focused payments processing startup Paper raised $9.3M: a $2M angel investment and $7.3M seed round led by Electric Capital and Initialized Capital (TC)
  • AboveBoard, a marketplace helping employers find diverse candidates, raised a $6M seed round led by True (TC)
  • Prismpop, a new social shopping platform, raised $5M in seed funding led by Female Founders Fund (PRN)

IPO / Direct Listings / Issuances / Block Trades

  • Brookfield Asset Management plans to spin off its asset-management business into its own publicly-traded company (BBG)
  • KE Holdings, a Chinese online property platform backed by SoftBank, listed in Hong Kong without raising funds as it expands its investor base amid a risk of being kicked out of the US market (BBG)

SPAC

  • Sleep apnea device maker ProSomnus agreed to merge with Lakeshore Acquisition I Corp in a $168M deal (BBG)
  • Getaround, a car-sharing marketplace that functions as an Airbnb for vehicles, agreed to merge with InterPrivate II Acquisition Corp in a ~$1.2B deal (BBG)

Debt

  • Apollo Global Management is in talks to lead a $1B+ preferred financing for Elon Musk's Twitter buyout, with potential participation by Sixth Street Partners. Morgan Stanley is arranging the financing (BBG)

Fundraising

  • Republic Capital, the venture arm of private investment platform Republic, is in talks to raise $700M for two crypto-focused funds (TC)

Crypto Corner

  • FTX US opens Chicago HQ, will sponsor supplement income pilot (DC)
  • Dapper Labs unveils $725M ecosystem fund for flow blockchain (TBC)
  • Luna Foundation Guard seeks more than $1B to shore up UST stablecoin (TBC)

Exec's Picks

  • This robot = 3X revenue. That’s why top fast food brand, White Castle, is expanding these bots to 100 of their standalone locations. But it doesn’t stop there. Miso Robotics recently rolled out a new pilot with Jack in the Box. Invest before Miso is cooking your next meal.
  • With Terra's algorithmic stablecoin UST losing its peg over the weekend, stablecoins have been front and center among market experts and the crypto community. CoinFLEX's cofounder Sudhu Arumugam wrote a quick take explaining the difference between their interest-bearing stablecoin flexUSD, and how it differs from TerraUSD (UST). Great short read here.

Big Swinging Decks Podcast

Big Swinging Decks is back with a new episode: Case Studies & EBITDA Adjustments: Stories from the Bullpen!

This week, Lit & Mark give you their best and worst memories from their days in the bullpen. From blacking out at holiday parties to crashing U-Hauls, tune into the funniest episode yet on Spotify, Apple, and YouTube 🤝 

As always, BSD is presented by CoinFLEX.US, creators of the world's first interest-bearing stablecoin. Be sure to check them out and start earning yield while you sleep.

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.

Meme Cleanser

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

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