SBF Bought the Dip

What an eventful week in the financial markets. Sam Bankman-Fried took a 7.6% stake in Robinhood, SoftBank lost $20B on tech bets, the US has a baby formula shortage, Twitter froze hiring, Powell reiterated half-point rate hikes this summer, and Ethereum gas fees keep climbing.

Litquidity Capital
May 13, 2022

Together with

Good Morning,

Happy Friday the 13th!

What an eventful week in the financial markets. Sam Bankman-Fried took a 7.6% stake in Robinhood, SoftBank lost $20B on tech bets, the US has a baby formula shortage, Twitter froze hiring, Powell reiterated half-point rate hikes this summer, and Ethereum gas fees keep climbing.

🎟️ Quick reminder that Friday Beers & Litquidity are co-hosting a three day bender this Memorial Day Weekend. If y'all are in NYC on Saturday, come kick it at Schimanski and meet the teams. Tix available here

Let's get after it today and have a great weekend 🤝 

Let's dive in.

Before The Bell

As of 5/12/2022 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 S&P 500 and Dow edged up from their intraday lows but still closed in the red, while the Nasdaq ended the day with a gain of less than 0.1%
    • The S&P 500, Dow, and Nasdaq are now down 18%, 20%, and 29%, respectively, from their ATHs
    • Stocks continue to struggle as the Fed attempts to contain inflation by raising rates
  • Jerome Powell reaffirmed the Fed is likely to raise rates by 50 bps at each of its next two meetings and isn't "actively considering" a 75 bps move
  • Today we’ll receive insight into April’s import prices and an early look at May consumer confidence

Earnings

  • Affirm posted better-than-expected Q3 results as they continue to scale their network, with active consumers increasing 137% YoY (YHOO)
  • Full calendar here

Headline Roundup

  • SoftBank’s Son pays price for tech bets with $20B loss (BBG)
  • Private lenders step in to salvage struggling public bond deals (FT)
  • Top Abu Dhabi wealth fund closes Latin America equities team (BBG)
  • Wholesale inflation rose 11% in April as producer prices keep accelerating (CNBC)
  • Inspectors saw bacteria risk at Abbott baby formula factory last year (BBG)
  • Powell reiterates half-point hikes are likely in June and July (BBG)
  • Ukraine aid delayed after GOP Senator Rand Paul objects to vote (BBG)
  • Pfizer turns to unusual deal structure to buy Biohaven drugs (BBG)
  • Twitter to freeze hiring, rescind offers ahead of Musk deal (BBG)
  • Redbox stock is worth about 45 cents; it’s trading over $2 (BBG)
  • US to boost baby formula imports to ease nationwide shortage after Abbott Nutrition recall (CNBC)
  • US licenses key Covid vaccine technology to WHO so other countries can develop shots (CNBC)

A Message From Rows

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Deal Flow

M&A / Investments

  • State conglomerate China Resources is in early talks to take Sihuan Pharmaceuticals private in a potential $3B deal (RT)
  • The owners of agricultural chemicals company Stoller are exploring a sale at a potential $1.5B valuation (BBG)
  • Carlyle is near a deal to buy Chinese packaging firm HCP for ~$1B (BBG)
  • Sam Bankman-Fried (founder and CEO of FTX) purchased 7.6% of Robinhood; the stake was worth $479M at market close yesterday (TBC)
  • CGI Merchant Group of Miami agreed to buy the long-term lease of the Trump International Hotel in DC for ~$375M (BBG)

VC

  • Brazilian fintech infrastructure company Dock raised $110M at a $1.5B valuation in a growth funding round led by Lightrock and Silver Lake Waterman (TC)
  • AI-powered fintech platform Tifin raised a $109M Series D at an $842M valuation, with new investors Franklin Templeton and Motive Partners joining (TC)
  • SkySpecs, which uses drones and AI to monitor wind turbines, raised an $80M Series D led by Goldman Sachs (TC)
  • Customer service automation platform Tidio raised a $25M Series B led by PeakSpan Capital (TC)
  • Credit building startup Altro raised an $18M Series A led by Pendulum (TC)
  • AI-based factory analytics assistant maker Synergies raised a $12M Series A led by NGP Capital (TC)
  • Customer service automation startup Lang raised a $10.5M Series A led by Nava Ventures (TC)

SPAC

  • Battery maker Amprius Technologies agreed to merge with Kensington Capital Acquisition Corp IV at a $939M valuation (RT)

Debt

  • Intercontinental Exchange sold $8B in bonds to help finance its purchase of Black Knight (BBG)
  • Elon Musk is in talks to raise enough equity and preferred financing for his proposed Twitter buyout to eliminate the need for any margin loan linked to his Tesla shares. Morgan Stanley has begun soliciting interest from potential investors for as much as $6B in preferred equity financing (BBG)

Crypto Corner

  • Ethereum gas price soars as traders head for the stablecoin exits (DC)
  • LUNA, UST issuer Terra restarts blockchain after brief shutdown (CD)
  • Tether, the world's biggest stablecoin, sank to as low as 95 cents on some crypto exchanges (CNBC)
  • New York man arrested, charged with fraud for alleged role in $59M crypto pyramid scheme (CD)

Exec's Picks

  • Twitter made waves today when it was announced that CEO Parag Agrawal had fired a couple of the company's top execs and froze hiring. The Verge's Alex Heath provided a transcript of Agrawal's memo to the Twitter team here.
  • Markets have been volatile in 2022, with plenty of stocks and cryptocurrencies dropping by more than 80%. Jack Raines wrote about the issue of price anchoring 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 40+ 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.

Meme Cleanser

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

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