The Week Ahead Of Us 🔍

Welcome back! Futures are up slightly, while Oil is off a touch.

It’s great having you all back. I cannot stress enough how amped up the team is for 2026 and how we’re zoned in on providing a materially better experience than the other roundup styled newsletters. We love executing for you all.

The year is starting with a bang, with Venezuelan President Maduro captured by US forces yesterday. The near-term impact may be limited, currently Venezuela products 800k barrels of oil a day, <1% of global oil production, but sits on the world’s largest proven reserves. President Trump has said “We’re going to get the oil flowing the way it should be”. Currently, Chevron is the only U.S. company operating in the country, but there’s going to need to be significant investment to improve infrastructure in the country.

Wall Street is already considering investment opportunities: Signum chairman Charles Myers is planning a trip to Venezuela with officials from top hedge funds and asset managers to meet with the country’s new leadership. Myers expects the country to provide $500B to $750B in opportunities for foreign investors over the next five years.

Switching to Software and AI, the market was open Friday and some enterprise software names got rattled, particularly related to recent Claude Code innovations. Some of the big ones we saw that were off more than 3% included $BILL ( ▼ 7.3% )  $DOCU ( ▼ 5.19% )  $INTU ( ▼ 4.98% )  $ADBE ( ▼ 4.77% )  $HUBS ( ▼ 4.75% )  $TTAN ( ▼ 4.61% )  $TEAM ( ▼ 4.55% )  $CRM ( ▼ 4.26% )  $WDAY ( ▼ 4.19% )  $NOW ( ▼ 3.75% )  $ZM ( ▼ 3.44% )  $PAYX ( ▼ 3.19% ) . When I look at this list, I see a basket of stocks that the Market has identified as being more susceptible to AI risk.

There’s a lot of 2026 investment themes we could talk about. While some form of an AI crash seems inevitable, and as we think LLMs have some limitations, we’re overall quite bullish on 2026 due to AI advancement (particularly this Claude advancement), lower rates, and the expectation of higher M&A activity. But we expect to see a tale of two cities in Software. A lot of the predictability and moats that many of us in the public and private markets thought Software companies had appear to be eroding. While “vibe-coded” apps have limitations, many are starting to question the true defensibility of software companies that can be displaced by AI.

We’re going to have a WSR Investing Club Piece drop over the coming days, and with it, will be one last window to get our lowest rate offer. The <$7, 7 month offer was extremely popular so we are offering it over a 3 day period for one last time.

You have until Wednesday to upgrade and get it.

Here’s a look at earnings this week.

• Wednesday: Jefferies Financial, Constellation Brands, Albertsons

• Thursday: RPM International, Tilray Brands, Commercial Metals Company, Acuity, TD SYNNEX

Here’s a look at economic data this week (estimates are in quotations).

• Monday: ISM manufacturing index (48.3%), Auto sales

• Tuesday: S&P final U.S. services PMI

• Wednesday: ADP employment (45,000), ISM services index (52.1%), Job openings, U.S. factory orders (-1.2%)

• Thursday: Initial jobless claims, U.S. trade deficit, U.S. productivity (4.7%), U.S. U.S. consumer credit ($12.4B)

• Friday: U.S. employment report (54,000), U.S. unemployment rate (4.7%), U.S. hourly wages (0.3%), U.S. hourly wages y/y, U.S. housing starts (1.33 million units), UMich consumer sentiment (53.5)

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Today’s Headlines 🍿 

• Saks is nearing bankruptcy and a $1B DIP: Saks is progressing towards bankruptcy after missing an $100mm interest payment due December 30th. Talks are focused on at least $750mm of new money and roll-up of existing debt. CEO Marc Metrick stepped down amidst the turmoil, with executive chair Richard Baker set to take over.

• Meta’s latest expensive AI bet: Meta agreed to acquire Manus, a Singapore-based general-purpose AI agent platform that launched just 10 months ago and rapidly surpassed $100mm in ARR. This deal comes as Meta accelerates efforts to integrate more autonomous AI across its consumer and business products; and to close the gap with OpenAI and Google. Manus, which relocated from China to Singapore earlier this year, will continue selling subscriptions independently, and Meta said there will be no continuing Chinese ownership interests following the transaction.

• LeCun’s Meta Fallout: Former Chief AI Scientist Yann LeCun continues to doubt Meta after leaving the company about a month ago. LeCun is not a believer in Alexandr Wang, the Scale AI cofounder who now heads Meta’s Superintelligence labs. Wang and Meta have focused in on LLM development, but LeCun says “LLMs basically are a dead end when it comes to superintelligence” and that a different approach is needed to unlock the true power of AI. LeCun recently launched a new startup focused on Advanced Machine Intelligence, the approach he argues is better suited than LLMs.

• Digesting the Groq deal: Nvidia has agreed to a $20B cash licensing deal with the chip startup, preventing the GPU maker from growing into a serious competitor. The deal is Nvidia’s largest purchase ever, and will give the giant access to Groq’s specialized interference-chip technology. Groq’s CEO and other executives will be leaving the company to help Nvidia scale and advance the technology. The remaining portion of Groq is set to be sold off, with bids for the AI-interference platform expected to top $1B.

• Howard Marks warns of debt-fueled AI bubble risks: Oaktree co-founder Howard Marks said the AI boom is becoming more fragile as companies turn to debt and off-balance-sheet structures to finance massive data-center investments. He highlighted private credit and SPVs as key vulnerabilities that could amplify losses if AI demand drops, noting McKinsey estimates AI infrastructure spending could reach $7tn over the next five years to meet demand. Marks warned equity investors may be left with little residual value once debt obligations are paid.

• ~20% of PE exits in 2025 were continuation fund deals, as buyout firms increasingly sold assets to newer vehicles they manage amid a tough exit environment. Industry participants estimate continuation volume could reach $100-$107bn this year, up from $70bn in 2024, as firms struggle to secure attractive valuations from third-party buyers or IPO markets. While the structure provides liquidity and preserves upside, it has also prompted investor scrutiny over valuation transparency and potential conflicts of interest.

• Silver Point takes control of Onset’s claims against First Brands: Silver Point Capital acquired a controlling interest in the bankruptcy claims held by Onset Financial and its funding partners against First Brands Group, handing the firm control over a significant portion of claims tied to the auto-parts supplier’s restructuring. Terms were not disclosed.

• Private equity firms now account for over 50% of IVF cycles in the US, with 32% of clinics affiliated with PE firms, up sharply from 4% in 2013, according to a new study published in JAMA. Researchers note the model may bring capital to fund costly IVF equipment and expansion, but warn evidence from other healthcare sectors suggests risks of higher costs and declining quality, prompting calls for further scrutiny.

In Other News 📖 

• Private Equity recruiting sounds like it will start imminently - access PE recruiting resources here.

• Recruit for Investment Banking: 2027 Summer Analyst recruiting is kicking off - sign up for free here to get a teaser for a 248 page Investment Banking recruiting deck.

• US jobless claims fell by 16k to 199k last week, one of the lowest readings this year and below estimates of 220k, though the data was distorted by holiday-related volatility. Economists say weak hiring trends still point to labor-market fragility in 2026.

• Wealth tax worries: Tech Billionaires such as Larry Page and Peter Thiel have begun scouting locations in Austin, Texas and Miami following floated wealth taxes.

• Brooklyn Mirage has been sold following its bankruptcy sale, with Dubai-owned Pacha set to take over the nightlife venue.

• Warner Bros. Discovery plans to reject Paramount’s $108bn hostile bid, even after Larry Ellison agreed to personally backstop $40.4bn of equity financing.

• Cantor Fitzgerald has acquired two strategies and an alternative platform from UBS’s O’Connor unit after the firm sought to revise the deal following losses tied to First Brands Group’s bankruptcy, where O’Connor held a $116.1m claim.

• Nike shares rose around 4% after insiders bought stock, with CEO Elliot Hill adding $1m worth of shares as the retailer capped off a tough year with the stock down 15% in 2025.

• Coinstar is set to repay over $750m of debt as part of its surprise sale to Arctic Slope Regional Corp., removing restructuring risk for bondholders after creditors agreed to a debt workout in 2023.

• PHL Variable Insurance Co is heading towards liquidation, as the PE-owned life insurer is in worse shape than many previously thought.

• New Mountain is seeking $500mm of BDC assets, a move that could draw a lot of eyes on what private credit liquidity actually looks like. The portfolio New Mountain is trying to transact includes some PIK assets.

• CVC is nearing an external investment in its Global Sport Group division as it looks to continue buying stakes in leagues and governing bodies.

M&A Transactions💭 

Tescan Group, manufacturer of electron microscopes, has reached a definitive agreement to be acquired for $678.0M by Shimadzu (TKS: 7701).

ReNew Sun Bright, operator of a 300 megawatt solar power asset, was acquired for SGD 246.0M by Sembcorp Industries (SES: U96).

LMB Dans & Motors, manufacturer of fans and electric motors, was acquired for EUR 367.0M by Loar Holdings (NYS: LOAR). Alama Partners advised on the sale.

Flushing Financial (NAS: FFIC), operates a bank holding company, has reached a definitive agreement to be acquired for $579.0M by OceanFirst Financial (NAS: OCFC). EV/Revenue was 3.21x. Piper Sandler advised on the sale.

Encora, operator of a digital engineering company, has reached a definitive agreement to be acquired for $2.4B by Coforge (BOM: 532541). The consideration includes equity value of $1.89B, paid in the form of equity shares through preferential allotment by Coforge, and a bridge loan or Qualified Institutional Placement (QIP) of up to $550.0M to retire the term loan in Encora. EV/Revenue was 4.65x.

Aviom India Housing Finance, provider of housing loans, was acquired for $9.775B by Unity Small Finance Bank.

Halda Therapeutics, developer of a drug discovery platform, was acquired for $3.05B by Johnson & Johnson (NYS: JNJ). Centerview Partners advised on the sale.

The Three Salmon Farming Business in Norway and Canada of Grieg Seafood (OSL: GSF) was acquired by Cermaq Group for NOK 10.2B.

DigitalBridge Group (NYS: DBRG), a developer of alternative asset manager, has reached a definitive agreement to be acquired for $3.284B by SoftBank Group (TKS: 9984). EV/EBITDA was 773.97x and EV/Revenue was 38.14x.

Tasy, developer of a healthcare management platform and a business unit of Philips North America, was acquired by Bionexo for EUR 161.0M. EV/Revenue was 3.55x. J.P. Morgan advised on the sale.

Playa Hotels & Resorts, owner, operator, and developer of all-inclusive resorts, was acquired for $2.0B by Tortuga Resorts. The transaction involves $143.0M of contingent payout if certain operating thresholds are met. BDT & MSD Partners advised on the sale.

ON24 (NYS: ONTF), provides a cloud-based intelligent engagement platform, has entered into a definitive agreement to be acquired for $400.0M by Cvent. EV/Revenue was 2.83x. Goldman Sachs advised on the sale.

WideOpenWest, a cable operator and broadband service, was acquired for $955.33M by Crestview Partners and DigitalBridge Group. EV/EBITDA was 7.06x and EV/Revenue was 2.61x. Centerview Partners advised on the sale.

Stellant Systems, manufacturer of electron devices, has reached a definitive agreement to be acquired for $960.0M by TransDigm Group (NYS: TDG). EV/Revenue was 3.2x. Harris Williams advised on the sale.

The Essential Home Business Unit of Reckitt Benckiser Group was acquired for $4.8B by Advent International. Morgan Stanley, Robey Warshaw, and Goldman Sachs advised on the sale.

The Warehouse Automation Business of Matthew International was acquired by Duravant for $232.1M. EV/Revenue was 3.22x. J.P. Morgan advised on the sale.

MarkMonitor, provider of brand protection services, was acquired for $450.0M by Com Laude. RBC Capital Markets advised on the sale.

Hall of Fame Resort & Entertainment, a sports and entertainment company, was acquired for $328.128M by Industrial Realty Group. The transaction values the company at an estimated $421.488M. EV/Revenue was 24.64x. Wedbush Securities advised on the sale.

Ayesa, provider of information technology consulting services, has reached a definitive agreement to be acquired for EUR 480.0M by Teknei Information Technology, Indar Kartera, and Basque Government. EV/EBIDTA was 10.06x and EV/Revenue was 0.88x. Houlihan Lokey advised on the sale.

AI Khalejiah, provider of airport and travel hospitality services, has reached a definitive agreement to be acquired for $440.864M by Catrion (SAU: 6004).

Ask Sage, developer of a generative AI platform, was acquired for $250.0M by BigBear.ai Holdings (NYS: BBAI).

Private Placement Transactions💭 

Highnote, developer of unified virtual payment platform, raised $109.0M of Series B, Series B-1, and Series B-2 venture funding led by Adams Street Partners.

Quantum Systems, developer of commercial unmanned aerial systems, raised EUR 200.0M of venture funding led by Deutsche Telekom, T. Capital, and Balderton Capital at a pre-money valuation of EUR 2.8B.

Erebor, operator of a crypto friendly bank, raised $350.0M of Seed Funding led by Lux Capital at a pre-money valuation of $4.0B.

Bluepoint, provider of acceleration and investment services, raised $10.0B of venture funding led by Z Venture Capital and InBody.

DPTechnology, developer of a micro-scale industrial design platform, raised over CNY 800.0M of Series C venture funding led by Fortune Capital.

DeepBlue Auto, manufacturer of new energy vehicles, raised CNY 6.12B of Series C venture funding led by Changan Automobile.

Weineng Battery, manufacturer of battery products, raised CNY 1.0B of Series C venture funding from undisclosed investors.

Aipuqiang, manufacturer of proton therapy systems, raised nearly CNY 1.0B of Series B venture funding led by China Taiping Insurance Holdings, New Alliance Capital, Cenova Capital, Shanghai Science & Technology Venture Capital, and Fortera Capital.

Applecart, developer of a social graph platform, raised $100.0M of venture funding from undisclosed investors.

Hadrian, developer of an autonomous manufacturing platform, raised $260.0M of venture funding through a combination of debt and equity at a pre-money valuation of $640.66M. $161.34M of Series C was led by Founders Fund and Lux Capital. A $98.66M loan was provided from undisclosed lenders.

Databricks, developer of a data analytics platform, raised $4.08B of Series L venture funding led by Insight Partners, J.P. Morgan Growth Equity Partners, and Fidelity Management & Research Company.

Noteworthy Chart 🧭

Alphabet was the best Mag 7 stock for 2025:

Meme Cleanser 😆 

Until next time!

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