Together with

Good Morning,

Fitch downgraded the US from AAA to AA+, fund managers are struggling to attract new capital, Uber is finally generating profits, Apple is headed for its largest Q3 revenue drop in years, China wants banks to delay dollar buying, AMD is planning an AI chip debut, and Meta offered to seek consent for personalized ads in Europe.

Do you want to stay on top of the latest news in venture capital, private equity, or M&A? Today’s sponsor, Axios Pro, has the best exclusive stories and trend analyses across these sectors.

Let’s dive in.

Before The Bell

Markets

• US stocks inched lower yesterday as investors digested further corporate earnings and fresh economic data

  • Investors were also spooked by Fitch downgrading the US’s long-term rating from AAA to AA+

• Oil prices rose to their highest level since April, extending a summer rally fueled by OPEC+ supply cuts, before pulling back to close below yesterday’s price

Earnings

• Uber missed Q2 expectations but achieved their first operating profit and quarterly FCF greater than $1B; their stock dropped 5% (CNBC)

• Pfizer beat Q2 earnings but posted revenue that fell short of estimates due to a plunge in Covid product sales; the company is prepared to cut costs if Covid-related revenue continues to disappoint this year (CNBC)

• Starbucks beat Q2 estimates after China’s same-store sales skyrocketed 46% in the quarter and domestic same-store sales grew by 7% (CNBC)

• What we're watching this week:

  • Today: CVS, Shopify, PayPal, Kraft Heinz

  • Thursday: Apple, Amazon, AB InBev

  • Friday: Dominion Energy, Nikola

• Full calendar here

Headline Roundup

• Fitch downgraded US long-term rating to AA+ from AAA (CNBC)

• US job openings fell to their lowest level since April 2021 (BBG)

• Foreign purchases of US homes slump to an all-time low (WSJ)

• Risk premiums on US blue-chip corporate bonds dropped to the lowest level in over a year (BBG)

• China’s overseas investment in metals/mining set to hit record (FT)

• US asset managers are showing waning interest in climate-focused investing (RT)

• Uber is finally making money after years of losses (WSJ)

• Apple heads for largest Q3 revenue drop since 2016 as iPhone sales slow (RT)

• Wells Fargo expects to pay $1.8B to help refill FDIC fund (RT)

• Tupperware stock surged 800% in two weeks in latest meme-stock rally (BBG)

• BP raised dividend despite 70% profit drop (FT)

• AMD plans AI chip debut by year-end (RT)

• Meta offers to seek consent for highly personalized ads in Europe (WSJ)

• Molson Coors capitalizes on Bud Light backlash with record sales (FT)

• Meta starts blocking news in Canada over law on paying publishers (RT)

• Donald Trump was indicted on federal criminal charges (NYT)

A Message From Axios Pro

Negative market forces are one thing, but an unexpected US policy change could impact your business significantly more.

Why it matters: In this report, the Axios Pro newsroom profiles key policymakers across the United States' most critical economic sectors to help you anticipate policy outcomes this year. You'll gain a better understanding of key staffers, how you can expect them to influence legislation and how to prepare.

The bottom line: If your work touches tech, energy or health care, we'll help you stay ahead of every new policy shaping your industry today.

Download the report today, free.

Deal Flow

M&A / Investments

• Canadian oil producer Strathcona Resources will go public by acquiring smaller rival Pipestone Energy Corp in an all-stock deal, creating a $6.5B combined entity (RT)

• Czech billionaire Daniel Kretinsky’s PE firm EP Equity Investment is in talks to buy European multinational IT firm Atos's Tech Foundations business in a $2.2B deal (BBG)

• Abu Dhabi’s Emirates Telecommunications Group agreed to buy a controlling stake in PPF Telecom Group’s Bulgarian, Hungarian, Slovakian, and Serbian assets for $2.4B (BBG)

• One Rock Capital Partners will acquire global packaging manufacturer Constantia Flexibles from European investment firm Wendel, paying Wendel $1.2B for their stake (GNW)

• Vista Equity Partners is offering to invest $1B in preferred equity into portfolio company Finastra Group Holdings for multi-billion dollar refinancing (BBG)

• National Bank of Canada will buy collapsed Silicon Valley Bank’s $752M Canadian commercial loan portfolio (RT)

• India's Ambuja Cements reached a deal to acquire a majority stake in operations of cement manufacturing company Sanghi Industries at an estimated $729M EV, although transaction terms have not been announced (RT)

• HomeStreet Bank, a $172M market cap Seattle bank that lost two-thirds of its market value this year, is exploring options including a potential sale (BBG)

• Israeli financial services company Rapyd will acquire a stake in Prosus’ emerging-markets fintech company PayU (BBG)

• Investment firm MFN Partners has accumulated a 42% stake in troubled trucker Yellow (WSJ)

VC

• Fintech-as-a-service startup Rapyd raised a $700M round at an $8.75B valuation led by Fidelity, Dragoneer, General Catalyst, and Target Global (TC)

• Nile, which offers enterprise networks as a service, raised a $175M Series C led by March Capital and Sanabil Investments (TC)

• Neon, a multi-cloud Postgres provider, raised a $46M Series B led by Menlo Ventures (FN)

• Plant-based seafood brand Konscious Foods raised a $26M seed round led by Protein Industries Canada, Zynik Capital, and Walter Group (BW)

• Aulos Bioscience, an immuno-oncology company, raised a $20M Series A extension from Apple Tree Partners (BW)

• Socket, a startup providing a dependency management platform for JavaScript / Python, raised a $20M Series A led by a16z (FN)

• GoTab, a hospitality commerce platform, raised an $18M Series A led by Truist Ventures (FN)

• Akkio, a startup providing generative analytics and machine learning for businesses, raised a $15M Series A led by Bain Capital Ventures and Pandome (BW)

• Converge Insurance, a provider of cyber risk management and underwriting solutions, raised a $15M Series A led by Forgepoint Capital (FN)

• Stackless Data, a startup using AI to provide businesses with a data solution, raised a seed round at a $14M pre-money valuation led by Singularity Capital (FN)

• Silk Security, a provider of a sustainable cyber risk resolution platform, raised a $12.5M seed round led by Insight Partners and Hetz Ventures (FN)

• Source, a B2B marketplace for commercial construction products, raised an $8.5M Series A led by M13 (FN)

IPO / Direct Listings / Issuances / Block Trades

• Aston Martin Lagonda Global Holdings raised $277M through a sale of new shares as it looks to pay down high-interest debt (BBG)

SPAC

• Business acquirer CorpAcq will merge with Churchill Capital Corp. VII in a $1.6B deal (MW)

Debt

• Private credit lenders led by Blue Owl and Sixth Street agreed to provide $2.7B in debt financing to support TPG and Francisco Partners’ buyout of software firm New Relic (BBG)

• Private credit firm HPS Investment Partners will provide a $1.7B loan package to help fund the buyout of Constantia Flexibles (BBG)

• Landlord Vivion Investments asked investors to swap $1.5B of existing 2024 and 2025 bonds for new, longer-dated securities expiring in four years (BBG)

• CenterPoint Energy will issue $900M worth of three-year convertibles, snapping the longest convertible-bond drought in seven years (BBG)

Bankruptcy / Restructuring

• Creditors led by Apollo Global Management are nearing a deal to provide cash to troubled trucker Yellow during a coming bankruptcy (BBG)

Fundraising

• Whitehorse Liquidity Partners raised $5.3B for its Whitehorse Liquidity Partners V vehicle dedicated to making preferred-equity investments (WSJ)

• NATO officially closed its first NATO Innovation Fund at $1.1B to back startups focused on technologies that are ‘responsible and led by fundamental principles: safety, freedom, and human empowerment’ (TC)

• Reed Jobs, the son of Steve Jobs, raised $200M for his VC firm Yosemite’s debut fund to invest in new cancer treatments (TC)

• VC Tuesday Capital raised $31M for its fifth seed-stage fund (TC)

Crypto Corner

• Bankrupt crypto exchange FTX could hand over stakes in a rebooted exchange to customers owed $9B in missing deposits (WSJ)

• Terraform Labs and founder Do Kwon must face fraud charges from the SEC (RT)

• Japanese investment bank Nomura’s crypto arm won an operating license in Dubai (RT)

• A federal judge split with a previous judge’s Ripple ruling and allowed the SEC’s lawsuit against Terraform Labs to proceed (BBG)

Exec’s Picks

• Herb Greenberg discussed the love affair between meme stock traders and bankrupt companies.

• Sam Peltzman published a detailed paper on the demographics of happiness in America from the 1970s to now.

Litney Partners - Financial Recruiting 💼

If you're currently a junior investment banker looking to break into the buy side, considering lateraling to another investment bank, or have recently been impacted by widespread layoffs, it's time you check out Litney Partners, a partnership between Litquidity and Whitney Partners (the oldest purely financial services executive search and consulting firm).

We aim to place strong candidates at leading private equity, hedge fund, venture capital, growth equity, and credit funds, as well as investment banks.

To get started, simply head over to the Litney website and create your profile by dropping your resume / filling out the form:

Meme Cleanser

Advertise with us // Visit our merch store // Invest alongside Lit Ventures // Book a call with Lit // Launch your own newsletter