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

  • How exciting :/

  • Trade your predictions on a range of events legally, only on Kalshi. Get a $20 bonus when you deposit $100 with code LIT on signup!

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

Transform Your Investor Relations Work with BlueFlame AI 

Say goodbye to hours spent preparing LP meeting briefs, drafting quarterly letters, and managing DDQs. Our AI-powered solution integrates with your existing systems to automate time-consuming tasks while maintaining the personal touch that makes your investor relationships special. 

Imagine walking into every LP meeting fully prepared with comprehensive briefing materials automatically compiled from your emails, CRM, and market data. Let BlueFlame handle the heavy lifting of quarterly investor letters, DDQ responses, and CRM updates, while your team focuses on what matters most – building and nurturing investor relationships. 

Ready to elevate your IR team's capabilities? Contact us today for a personalized demo.

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

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We aim to place strong candidates across private equity, hedge funds, venture capital, growth equity, credit, and investment banking.

We're currently seeking talent for some incredible roles. Head over to Litney Partners to drop your resume / create your profile and we'd love to get in touch!

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