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Rolling in the Deep
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Good Morning,
AI stocks nosedived yesterday as China's DeepSeek AI outperformed ChatGPT after being built in just two months and with $6M.
Big Tech is gonna have a hard time justifying their CapEx spend…
IR folks, it's time to stop wasting hours on briefs, letters, and DDQ responses for your routine LP meetings. Let BlueFlame handle the heavy lifting while you focus on relationships. See you how you can elevate your IR capabilities with BlueFlame today.
Let's dive in.
Before The Bell

As of 1/27/2025 market close.
Markets
US stocks plunged yesterday on the back of Big Tech after China's DeepSeek AI raised concerns of overspending in AI
S&P and Nasdaq had its worst day in six weeks
Nvidia lost a record $600B in market cap after a 17% drop, losing its crown of world's most valuable company
US yields fell to YTD lows
Oil dropped a two-week low
Coffee swung after hitting an ATH on Trump tariff threats
Bitcoin dropped to an eleven-day low
We'll receive the Fed and ECB's rate decisions tomorrow and on Thursday respectively
Earnings
AT&T beat Q4 earnings and subscriber growth estimates thanks to strong demand for its bundled plans (RT)
What we're watching this week:
Today: Starbucks, Boeing, Lockheed Martin, RTX, Royal Caribbean
Wednesday: Tesla, Meta, Microsoft, ASML, IBM, T-Mobile
Thursday: Apple, Intel, Visa, UPS, Mastercard, Blackstone, Southwest
Friday: Brookfield, ExxonMobil, Chevron
Full calendar here
Prediction Markets
Headline Roundup
Trump says DeepSeek a 'wake-up call' for US industries (RT)
Big Tech faces heat as DeepSeek sows doubts on CapEx spending (RT)
Hedge funds were pausing US AI bets as DeepSeek emerged (RT)
Nvidia says DeepSeek advances prove need for more of its chips (RT)
Scott Bessent was confirmed as Treasury secretary (CNBC)
Blackstone sees M&A activity boosting CLO sales in 2025 (BBG)
Fund managers remain bullish on outlook for US high-yield bonds (FT)
Global investors unfazed by PBOC's warnings on Chinese bonds (FT)
UK banks clash with BoE over rules on loss-absorbing debt (FT)
UK-listed companies divert cash from dividends to buybacks (FT)
Activist Ancora pushes US Steel to drop Nippon merger and oust CEO (WSJ)
Wall Street asks SEC to extend timeline for Treasury market overhaul (RT)
Citigroup is overhauling its private bank (BRN)
Canada's AIMCo fired 19 including DEI role (BBG)
Chairman of Swiss private bank Julius Baer will step down (RT)
CEO, chairman of distressed China developer Vanke unexpectedly quit (RT)
Hong Kong property distress is catching up with banks (BBG)
Archegos ex-CFO Halligan was sentenced to eight years (RT)
Top bucket performers are being exempt from RTO (WSJ)
Millennial wealth quadrupled from 2019 (CNBC)
A Message from BlueFlame
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Deal Flow
M&A / Investments
Swiss group SGS and Bureau Veritas of France ended merger talks to create a $31.5B testing and certifications firm
Emerson Electric agreed to buy the remaining 43% stake it doesn't already own in industrial software company Aspen Technology for $7.2B cash
Italian utility Enel and KKR are among potential bidders for Canada's PSP and OTPP-owned Cubico Sustainable Investments, which may be worth $6B, including debt
Abu Dhabi's PureHealth will acquire a 60% stake in Greek hospital chain Hellenic Healthcare from owner CVC for $2.3B
Alabama-based Diversified Energy Company agreed to acquire Texas-based energy producer Maverick Natural Resources from EIG Partners for $1.3B
Sage Therapeutics rejected Biogen's $469M cash takeover offer
Discovery Silver agreed to acquire gold miner Newmont's Porcupine gold mine in Ontario for $425M
India's UltraTech Cement is in talks to acquire German firm Heidelberg's 69% stake in its HeidelbergCement India unit that was last valued at $391M
Oilfield services firm Atlas Energy Solution will acquire Moser Energy Systems in a $220M cash-and-stock deal
Bain-backed Indian wealth manager 360 One WAM will acquire one of India's oldest brokers Batlivala & Karani Securities for $205M
Australian metals miner Fortescue offered to buy peer Red Hawk Mining for $160M cash
Hong Kong's Blue Pool Capital acquired a 12% stake in Golden Goose
Estée Lauder is reviewing its portfolio of beauty brands, which could lead to potential divestitures
VC
esVolta, a startup developing utility-scale battery energy storage projects, raised a $243M preferred equity round from Captona
UK-based cloud accounting software platform iplicit raised a $30.5M round from One Peak
Humanity Protocol, a decentralized identity startup, raised a $20M round at a $1.1B valuation led by Pantera Capital and Jump Crypto
Token Security, a cybersecurity platform for machine identities, raised a $20M Series A led by Notable Capital
Optable, an identity management and collaboration platform for advertising, raised a $20M Series A led by TELUS Global Ventures
Metafuels, a Swiss-based tech for sustainable aviation fuel compatible with existing aircrafts, raised $9M in funding led by Celsius Industries
BOW, a UK universal robotics software company, raised a $4.9M seed round led by Northern Gritstone
Mobility Mojo, an Irish startup building an accessibility analysis platform, raised a $4.5M round from Gresham House Ventures
AI-powered business verification startup Arva AI raised a $3M seed round led by Gradient Ventures
IPO / Direct Listings / Issuances / Block Trades
Pork producer Smithfield Foods is likely to price its US IPO below a marketed range
GV-backed obesity drug developer Metsera is seeking to raise $292M at a $1.8B valuation in a US IPO
Drug developer Maze Therapeutics is seeking to raise $133M at a $728M valuation in a US IPO
Johnson & Johnson-backed medical device firm HistoSonics is weighing an IPO
SPAC
World Media and Entertainment Universal will merge with Black Spade Acquisition II Co in a $488M deal
Chinese tire manufacturer Tianji Tire Global will merge with Embrace Change Acquisition Corp. in a $450M deal
Drug delivery company Gadfin will merge with Israel Acquisitions Corp. in a $200M deal
Debt
Hedge funds Diameter and Darsana snapped up a major chunk of $1B of debt tied to Elon Musk's LBO of Twitter, boosted by a ~$6B stake in startup xAI
Bankruptcy / Restructuring / Distressed
Hong Kong gym chain Physical Beauty & Fitness received a liquidation order
Fundraising
Deutsche Bank's asset management unit DWS is struggling to raise capital for a ~$1B private credit fund
Manulife Investment Management closed its forest climate fund at $480M
Crypto Sum Snapshot
Crypto exchange KuCoin pleaded guilty and will pay $300M in US crypto case
MicroStrategy bought Bitcoin for a twelfth-straight week and unveiled plans for a perpetual preferred stock sale to finance additional purchases
Check out our Crypto Sum newsletter for the full stories on everything crypto!
Exec’s Picks
Stratechery dropped their latest FAQ answering all the questions we have about DeepSeek AI.
Daniel W. Drezner published an interesting take citing one major unideal consequence of America's bullying power in trade.
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