May 4th - The Week Ahead

The Week Ahead Of Us 🔍

Welcome back!

Futures have been steadily declining over the past hour, with the Nasadaq and S&P 500 off roughly 60bps. However, we’re coming off another strong week of earnings and potential tariff de-escalation. Oil has dipped <$56 due to OPEC+ agreeing to further increase output. Here’s a look at earnings this week.

We have our eye in particular on Mattel, the toy manufacturer behind iconic brands like Barbie. With toy makers in the eye of the storm with China tariffs, we should be getting a lot of good color from management on Monday.

• Monday: Palantir, Ares, Ford, Mattel

• Tuesday: AMD, Ferrari, Brookfield, Transdigm, Zoetis, Marriott, EA, Datadog, Super Micro Computer, Archer-Daniels-Midland, Rivian

• Wednesday: Novo Nordisk, Uber, Disney, Arm, Applovin, DoorDash, Flutter, Carvana, Zillow

• Thursday: Shopify, Anheuser-Busch, Monster Beverage, Cheniere, Coinbase, Cloudflare, HubSpot, Restaurant Brands International, Warner Bros Discovery, Expedia, DraftKings, Paramount

Here’s a look at economic data this week.

• Monday: April PMI (est. of 51) and April ISM Services (est. of 50.4%)

• Wednesday: FOMC Meeting (expectation that rates are held steady)

• Thursday: Initial jobless claims (est. of 230k, prior was 241k)

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Earnings Corner 📜 

Trending Up 📈 

Mastercard (MA): Mastercard posted a solid beat. Revenue rose 17% y/y to $7.25B, and EPS of $3.73 beat expectations. Growth was fueled by a 15% rise in cross-border volume and an increased demand for value-added services. Mastercard was up 2% on Friday.

Airbnb (ABNB): Airbnb posted a mixed quarter, but was up slightly on Friday. Revenue rose 6% y/y to $2.27B, but net income fell 42% y/y as costs outpaced revenue. The company noted a shift in Canadians traveling significantly less to America and opting towards Mexico, France, Brazil, and Japan instead.

Duolingo (DUOL): Duolingo crushed expectations, surging 21% on Friday. Revenue rose 38% y/y to $230.7M and EPS hit $0.72. DAUs surged 49% to 46.6M as AI-led product enhancements continued to drive engagement.

MicroStrategy (MSTR): Posted a $5.8B unrealized Bitcoin loss but raised its 2025 BTC yield target from 15% to 25%. Shares were up 3.3% on Friday.

Trending Down 📉 

Amazon (AMZN): Amazon had a nice 1Q report, but the projected operating profit next quarter of $13B–$17.5B was a miss vs. consensus of $17.8B. Revenue came in at $155.67B, and EPS was $1.59, both above expectations, led by 19% y/y growth in ad revenue. Shares fell slightly on weak 2Q guidance.

Apple (AAPL): Apple had a great quarter but traded down slightly. Revenue hit 95.4B vs. 94.66B with EPS at $1.65. iPhone, iPad, and Mac revenues all beat estimates, while Services revenue of $26.65B came in just shy of expectations. Gross margin held steady at 47.1%. Apple expects tariffs to add $900M to costs next quarter and warned visibility beyond June remains limited. CEO Tim Cook said about half of U.S.-bound iPhones are now sourced from India, and other products largely from Vietnam, as the company shifts away from China exposure. Apple announced a $100B share repurchase and a 4% dividend hike, but were shares were still down 3.7% on Friday.

Block (XYZ): Block had a brutal miss, with shares down 20% on Friday after weak numbers and a disappointing guide. The Street has been quickly downgrading the name, with Analysts worried about stagnant Cash App user growth. Management lowered the FY24 gross profit growth outlook from the high teens to mid-teens and flagged a step-up in SBC and platform costs.

McDonald’s (MCD): U.S. same-store sales fell 3.6% y/y — the steepest drop since 2020 — as inflation pressured consumers. Management is focused on value offerings and store expansion. Shares were down -0.6% on Friday.

Key Themes 🪙 

Chevron (CVX) & ExxonMobil (XOM): Chevron and ExxonMobil are being impacted by decreasing oil prices. Chevron's 1Q earnings fell 36% y/y to $3.5B as refining and upstream results weakened. Buybacks will slow in 2Q. Exxon's earnings dropped 6.2% y/y to $7.7B, and the company reaffirmed plans for $18B in long-term cost cuts. Both E&Ps ended Friday up slightly.

Apollo and KKR are continuing to grow their AUM base, and are rapidly growing the amount of capital they can deploy: (APO): Apollo missed on EPS, but underlying trends remain solid. Revenue climbed 16.6% y/y to $978M as the firm originated $56B in assets and continued expanding its capital deployment capacity. While costs rose, management emphasized long-term momentum across its origination and asset management engine. (KKR): KKR reported a strong quarter. Fee-related EPS rose 22% and $31B in new capital was raised. KKR now has $116B in dry powder to deploy, positioning it for opportunistic activity amid market volatility. KKR ended up +2%, while APO was down -1.8% on Friday.

The Main Story 🔍

Warren Buffett is retiring:

Warren Buffett, the legendary, 94-year-old investor is going out on top - retiring at year-end and getting replaced by his long-time disciple Greg Abel. Ending his 60-year tenure as CEO of Berkshire Hathaway, Abel will now have full-decision making authority.

Berkshire currently is at the top of its game, with a whopping $347B+ in cash on hand. Some investors have speculated that once Buffett leaves, there may be a push to break up Berkshire into some sort of sum-of-the-parts strategy. My Money is on Ackman taking a look at some point (100% serious).

Buffett on tariffs: Buffett said tariffs shouldn’t be used as a weapon, and that we should be worried about angering 7.5 Billion people…

More Headlines 🍿 

• Job growth remains strong: American employers added 177k jobs in April and the unemployment rate held at 4.2%, assuaging some concerns that President Trump’s trade war would disrupt employment

• Steep Medicaid Cuts: As part of the tax-cut bill that Republicans are working on in Congress, there may be deep cuts to Medicaid, which covers, 83mm low-income individuals. This may be up to $880B in cuts over the next decade, and focus on implementing work requirements for able-bodied adults

• Chinese Exporters are dodging tariffs: The Financial Times reported that Chinese exporters are “washing” products by shipping them via a 3rd country to conceal the true origin of the products. These include Vietnam and Mexico, with Vietnam in particular seeing a large surge in exports over the past few weeks

• Shein’s London IPO has officially stalled given tariff worries. The online fast-fashion giant dropped two public relations firms backing its push to go public. High tariffs on Chinese products introduced by U.S. President Donald Trump, combined with the elimination of a duty exemption for low-value e-commerce shipments, are putting pressure on Shein's business model

  • The IPO Comeback isn’t over yet: eToro could be going public as soon as this week. The Israel-based Robinhood competitor submitted a filing to the SEC in late March but put its listing plans on hold due to stock market volatility linked to tariffs

• Claire’s, an Elliott backed retailer, is electing to pay interest in PIK notes. Given tariff worries, the tween girl jewelry and ear-piercing store is moving towards PIK, away from cash interest. Claire’s $500mm 1L TL due in 12/26 debt trades <80, and is owned by a lender group led by Elliott following a 2018 bankruptcy.

• Welcome to X-Town: Elon Musk’s SpaceX has successfully turned its Boca Chica site in Texas into the newly incorporated city of Starbase, gaining local governance powers while sparking concerns about corporate control and displacement of longtime residents

• Tariffs boost a few domestic manufacturers: Trump’s new levies, especially the 145% duty on Chinese imports, are boosting demand for some U.S.-made goods and benefiting smaller manufacturers, though rising input costs and uncertainty over the tariffs’ longevity are limiting long-term investment

• “Thunderbolts*” debuts at #1: Disney’s latest installment in the Marvel Universe grossed $76mm in its opening weekend, securing the top spot in the North American box office. Aside from last year's $1.34B hit Deadpool & Wolverine—a rare R-rated success in the genre—superhero movies have largely failed to recapture the peak they reached six years ago with Avengers: Endgame, which earned a staggering $2.8B worldwide

• Space defense startup True Anomaly has raised a $260mm Series C to expand its workforce and production capabilities as it develops military-grade orbital systems for the U.S. government. The company’s technology could play a key role in Donald Trump’s proposed "Golden Dome" defense initiative, modeled after Israel’s Iron Dome

• Florida’s housing market is cooling rapidly, with home prices posting their steepest drop in over 13 years as high costs and stricter condo regulations strain affordability and dampen demand

• Private Credit Discounts: Oaktree’s Co-CEO startled the investing world by revealing that private credit sales start in the 90 cent range, but can go as low at 50 cents on the dollar.

• Apollo is ramping up credit investing amid the Liberation Day chaos: Apollo raised $8.5B for its Accord+ strategy, growing its hybrid credit business to ~$40B AUM 

• Third Point is taking a stake in U.S. Steel. Dan Loeb’s hedge fund is making a merger arbitrage play, hoping that Japanese Nippon Steel’s acquisition of its American rival will succeed

• Retailers fight back against tariffs: Retailers are launching pre-tariff promotions and urging early purchases to brace for rising costs and potential demand drops, using humor to soften the political tension surrounding Trump’s escalating trade war

• Trump would extend the TikTok deadline if needed: The President confirmed he would extend the deadline to divest the U.S. unit of TikTok if no deal is reached by June 19th

• Public broadcasting vs. Trump: The CEOs of NPR and PBS plan to challenge President Trump’s executive order cutting federal funding, warning it would severely impact local journalism and children’s programming, especially in rural areas

• Make America Healthy Again goes on the Appstore: Food-scanning apps like Yuka are reshaping consumer behavior and pressuring food companies to reformulate products, as millions of users rely on them to evaluate ingredients and make healthier choices

• How thousands of falling LEO Satellites are putting our atmosphere at risk: Bloomberg reported on the risks we face as low-orbit satellites fall from the Earth. While it’s still too early to tell, black carbon remaining in the atmosphere could potentially set back ozone repair progress

• Don’t forget your Real ID: Starting May 7th, you need a Real ID to fly in the U.S. - this means you need a Star at the top of your driver’s license. Alternatively, you can use your Passport. Expect to hear stories of people being stopped from flying starting Wednesday…

• GTA VI has been delayed again, this time to May 2026, vs. prior expectations of Fall 2025

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M&A Transactions💭 

CARE Hospitals, operator of a chain of multi-specialty hospitals, acquired Aster DM Healthcare through a reverse merger. Aster DM Healthcare shareholders will hold 57.3% and CARE Hospitals shareholders will hold 42.7% of the merged entity.

CACESA tech & logitics, provider of cargo logistics, was acquired for $119.04M by CTT-Correios de Portugal. Lazard advised on the sale.

Berry Global (NER: BP0), a supplier of plastic packaging products, was acquired for $24.706B by Amcor (NYS: AMCR). EV/EBITDA was 12.48x and EV/Revenue was 2.2x. Wells Fargo and Lazard advised on the sale.

William Penn Bancorp, an independent community financial service provider, was acquired for $127.0M by Mid Penn Bancorp (NAS: MPB). EV/Revenue was 6.64x. Piper Sandler advised on the sale.

Tenaz Energy Netherlands, operator of oil and gas exploration company and a subsidiary of Nederlandse Aardolie Maatschappij, was acquired for $246.0M by Tenaz Energy (TSE: TNZ). Jefferies advised on the sale.

Teleos Ag Solutions, distributor of soil treatment products, was acquired for $121.0M by Trical.

Parkmead, operator of a holding company catering to the extraction of crude petroleum sector and a subsidiary of The Parkmead Group (LON: PMG), was acquired for $175.5M by Serica Energy (LON: SQZ). Cavendish Financial and Gneiss Energy advised on the sale.

Notified, developer of cloud media monitoring and measurement tools, was acquired for $534.5M by Equiniti Group. RBC Capital Markets advised on the sale.

NinjaTrader, developer of a financial trading software, was acquired for $1.5B by Kraken. Jefferies advised on the sale.

Kronos Bio (NAS: KRON), a clinical-stage biopharmaceutical company, has reached a definitive agreement to be acquired by Concentra (NYS: CON). Concentra will acquire Kronos Bio for $0.57 per share in cash plus a non-tradeable contingent value right (CVR). The CVR includes rights to receive: 50% of net proceeds from KB-9558 and KB-7898 dispositions within 2 years post-closing, 100% of proceeds from KB-0742, Ianraplenib and entospletinib dispositions pre-closing, and various percentages of cost savings over three years. The tender will commence by May 15, 2025, requiring at least majority shareholder approval and $40.0M min cash at closing. Approximately 27% of shareholders, including officers and directors, have already agreed to tender their shares. Leerink Partners advised on the sale.

Frndly TV, developer of a television streaming application, reached a definitive agreement to be acquired for $185.0M by Roku (NAS: ROKU).

Eppo, developer of an experimentation and feature management platform, has reached a definitive agreement to be acquired for $220.0M by Datadog (NAS: DDOG).

The Authentication Unit of De La Rue (LON: DLAR) was acquired for $392.92M by Crane NXT (NYS: CXT). Brunswick Group and Deutsche Numis advised on the sale.

Compania Minera Kolpa, operator of a metal mining company, was acquired for $145.0M by Endeavour Silver (NYS: EXK).

Chef Boyardee, producer of packaging food items, has entered into a definitive agreement to be acquired for $500.0M by Hometown Food Company.

BlueHalo, manufacturer of advanced engineering products, was acquired for $4.1B by AeroVironment (NAS: AVAV). EV/Revenue was 4.56x. J.P. Morgan advised on the sale.

Beacon Platform, developer of a cloud-native platform, was acquired for $560.0M by Clearwater Analytics Holding (NYS: CWAN). EV/Revenue was 12.73x. Broadhaven Capital Partners advised on the sale.

Bank of Idaho (PINX: BOID), is a single-tier holding bank, was acquired for $321.041M by Glacier Bancorp (NYS: GBCI). MJC Partners advised on the sale.

The Electrical Products Group, a subsidiary of Avail Infrastructure Solutions, was acquired by nVent Electric (NYS: NVT) for $975.0M. Greenhill & Company advised on the sale.

Aspen Manufacturing, manufacturer of independent evaporator coil and air handlers, was acquired for $313.5M by CSW Industrials (NAS: CSWI). EV/EBITDA was 11.0x and EV/Revenue was 2.56x.

ARC Excess & Surplus, provider of professional liability services, was acquired for $500.0M by TIH. Insurance Advisory Partners advised on the sale.

Western Melbourne Group, provider of sport-oriented real estate services, has reached a definitive agreement to be acquired for $100.0M by KAM Melbourne. The transaction values the company at $153.85M.

Sparebanker Sor, a financial institution engaged in banking, was acquired for $373.0M by Sparebanken Vest (OSL: SVEG). EV/Net Income was 2.2x and EV/Revenue was 1.08x.

Melbourne International RoRo & Auto Terminal, operator of car and roro terminal intended for automotive, rolling equipment, and breakbulk industry, was acquired for $208.62M by Australian Amalgamated Terminals. Bank of America advised on the sale.

Havfram, provider of subsea services, was acquired for $1.01B by DEME (BRU: DEME).

Private Placement Transactions💭 

Pathos, developer of drug discovery platform, raised $283.0M of venture funding from undisclosed investors.

CHAOS, operator of a global technology company, raised $275.0M of Series C venture funding led by Accel and New Enterprise Associates.

Odds of the Day 🍒 

Bitcoin is back on the rise - and Kalshi traders are pricing in a 27% chance of Bitcoin hitting $150k before 2026.

*New Traders on Kalshi receive a $20 bonus of trading credit when depositing $100+ with the code “HYH”.

Noteworthy Charts 🧭

Products highly exposed to tariffs on China:

Zyn’s rapid rise:

Finance Merch Referrals ☕️ 

Refer your friends or colleagues to The Wall Street Rollup. 🤝 👇️ 

Meme Cleanser 😆 

Until next time!

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