What you Need to Know for April 10th

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Welcome back!

The stock market has rapidly rebounded as many investors have put the worst case scenario with the U.S. Iran War to bed. Is that wise? Not necessarily, but a lot of the posturing lately has indicated towards the U.S. being serious about de-escalation. It’s nice to enjoy this rebound, but we’re still quite a while off from the Strait of Hormuz returning to full volume, plus Israel seems less inclined to agree to a peace deal. The situation remains tense, but with recurring postponements and attempts to negotiate, we can hope the worst has passed.

Notably, Hedge funds closed shorts against US stocks at the fastest pace since March 2020 following the Tuesday evening ceasefire.

Let’s get into it.

Btw, we are running a State of AI in Finance Report with Buyside Hub - if you work on IB, PE, or Credit you can contribute here to access the report.

Earnings Corner 💸 

• Constellation $STZ ( ▲ 8.53% ) reported a beat on both revenue ($1.92B vs. $1.88B) and EPS ($1.90 vs. $1.72). Results were driven by strength in its core beer business, where higher-end brands like Modelo held up and helped offset weakness across the rest of the portfolio, as consumers pulled back and became more price-sensitive across alcohol categories. Margins improved y/y due to the higher profitability of the beer segment, but remain under pressure from elevated marketing spend and costs tied to new brewery investments. The company’s guidance came in below expectations, withdrawing its 2028 outlook entirely and citing limited visibility and consumer caution.

• Delta $DAL ( ▼ 0.37% ) reported a beat on both revenue and EPS, with revenue at $14.2B vs. $14.0B and EPS at $0.64 vs. $0.57. Results were driven by strong premium travel demand, with more customers buying higher priced seats, supporting pricing and profitability. The quarter was overshadowed by a sharp spike in fuel costs, with Delta expecting about a $2B increase in fuel expense, prompting the airline to cut capacity growth and raise fees to protect margins. Delta guided for the second quarter slightly below expectations and kept its full-year outlook unchanged. While higher fuel costs remain a headwind, the company expects its refinery to help offset around $300M of that pressure.

On The Move 📈 📉

• Brown-Forman $BF.B ( ▲ 12.89% ) , the maker of Jack Daniels, surged after spirits seller Sazerac approached the company about a potential deal.

• Cybersecurity stocks were down again, with $NET ( ▼ 8.62% ) , $CRWD ( ▼ 7.46% ) , $OKTA ( ▼ 10.89% ) , and $ZS ( ▼ 11.33% ) falling as Anthropic’s new agent platform, Claude Mthos, reignited cybersecurity fears.

• Amazon $AMZN ( ▲ 5.61% ) rose following CEO Andy Jassy’s optimistic 2025 letter to shareholders. CEO Andy Jassy said Amazon’s in-house silicon unit is on pace for a $20B+ annual run rate and could begin selling AI chips to third parties amid surging demands for Nvidia alternatives.

• CoreWeave $CRWV ( ▲ 3.49% ) climbed after they struck a $21B agreement to supply AI cloud capacity to Meta through 2032, bringing total contracts with the tech giant to $35B. It simultaneously moved to raise $3B of converts at 1.5-2% coupon and $1.25B of senior notes at 10% to fund its capital-intensive expansion.

IPO Roundup 📍 

• 7-Eleven’s owner will delay the planned IPO of its convenience-store business amid shaky market conditions. The move will provide Seven & i with more time to turn the business around and maximize valuation before pursuing an IPO later in the year.

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Today’s Headlines 📖🍿 

• Anthropic is reportedly planning on designing its own chip, although this is very early stages. This is much harder to do than how Google or Amazon have their own chips, so we don’t expect a major market reaction to this today.

  • Anthropic is scaring Bessent & Powell: Secretary Bessent and Chair Powell reportedly summoned Wall Street execs to an urgent meeting on how Anthropic’s new model could dramatically increase cyber risk.

  • Meanwhile, Palantir $PLTR ( ▼ 7.3% ) took a hit yesterday after The Big Short’s Michael Burry warned Claude could eat its lunch.

• Meta debuted Muse Spark AI model: Meta launched Muse Spark, a new in-house AI model led by Alexandr Wang that narrows the performance gap with OpenAI and Anthropic, powering Meta AI across its apps.

• Perplexity hits $450mm ARR after shifting towards agents: ARR grew 50% in just one month after the introduction of Perplexity Computer, its agentic system. The startup has moved to usage-based pricing and now serves over 100 million active users and tens of thousands of enterprise clients each month.

• Goldman backs AI “picks and shovels” as capex accelerates: Goldman Sachs Asset Management said AI infrastructure spending remains in early-to-mid cycle, with durable capex growth ahead and opportunities concentrated in semiconductors.

• Carlyle's flagship $7B private credit fund was hit with 15.7% redemption requests. Redemptions were capped at the industry standard of 5% and the Fund’s software exposure is roughly 12%.

• CVC is seeking co-investors to help bankroll its €10.9B takeover of Recordati, an Italian drugmaker. The current plan will require an equity infusion of €5.5B to €6B, and CVC has held initial discussions with several foreign investors about partnering on the deal.

• BofA and Citi have sold down a bridge loan backing Paramount’s takeover of Warner Bros, with eight different banks buying a piece of the $49B debt. Deutsche and Wells Fargo are among the new lenders. Paramount plans to later refinance the bridge with a mix of IG and junk debt.

• Private markets brace for $330B software debt wall: More than $330B of software-linked high-yield and leveraged loan debt matures through 2028, with 2021-vintage loans trading around $83 and “bad PIK” usage rising to 6.4%, signaling mounting stress in private credit.

• EQT is weighing a bid for AA in a deal valued at ~£5B. TowerBrook, Warburg Pincus, and Stonepeak currently own the breakdown recovery business and have appointed JPMorgan and Rothschild to explore a sale.

• The Justice Department is investigating the NFL for anticompetitive practices related to its TV contracts, which require consumers to pay several different subscription costs to watch the games.

• American Airlines is raising checked bag fees, joining other airlines as jet fuel prices have surged in recent weeks.

• The 2026 Masters is underway, with Sam Burns and defending champion Rory McIlroy as clubhouse leaders after round one.

• Anthony Pompliano’s ProCap Financial launched ProCap Insights, an AI-powered service that will generate research reports for individual investors. The new business will utilize AI agents to scan markets, analyze trends, and uncover insights to draft “well-written” reports for investors.

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M&A Transactions💭 

Yomeishu Seizo (TKS: 2540), a beverage business, was acquired for JPY 28.029B by Reno. Mita Securities and Mitsubishi UFJ Morgan Stanley Securities advised on the sale.

Team Services Group, provider of household employment and home care services, was acquired for $3.0B by General Atlantic.

Intuitive Investments Group (LON: IIG), an investment company, has reached a definitive agreement to be acquired for GBP 600.0M by Acceler8 Ventures (LON: AC8). Strand Hanson and Zeus Capital advised on the sale.

Blackline Safety (TSE: BLN), a connected safety monitoring technology company, has entered into a definitive agreement to be acquired for $850.0M by Francisco Partners. EV/Revenue was 7.81x.

ATM Gaming, developer of party board games, was acquired for EUR 180.0M by Asmodee (STO: ASMDEE B).

Assertio Holdings (NAS: ASRT), a pharmaceutical company, has reached a definitive agreement to be acquired for $155.605M by Garda Therapeutics. EV/Revenue was 1.31x. Moelis & Company advised on the sale.

Air Lease, an aircraft leasing company, was acquired by Sumitomo, SMBC Aviation Capital, Apollo Global Management, Brookfield Asset Management, Citigroup, and The Goldman Sachs Group for $27.58B. EV/EBITDA was 10.42x and EV/Revenue was 9.15x. J.P. Morgan advised on the sale.

Whitestone REIT (NYS: WSR), a real estate investment trust, has reached a definitive agreement to be acquired for $1.61B by Ares Management (NYS; ARES). EV/EBITDA was 13.4x and EV/Revenue was 9.99x. Bank of America advised on the sale.

Sealed Air, provider of packaging solutions, was acquired for $10.47B by Clayton and Dubilier & Rice. EV/EBITDA was 11.15x and EV/Revenue was 1.85x. Evercore Group advised on the sale. 

Hasten Biopharmaceuticals, distributor of pharmaceutical products, has reached a definitive agreement to be acquired for $250.0M by Everest Medicines (HKG: 01952). EV/Revenue was 3.04x.

Brex, developer of a corporate finance platform, was acquired for $5.15B by Capital One Financial (NYS: COF). EV/Revenue was 7.36x. Centerview Partners and DelMorgan & Co. advised on the sale.

Private Placement Transactions💭 

Starfish Space, developer of autonomous satellite servicing vehicles, raised $111.69M of Series B venture funding led by Point72 Ventures, Shield Capital, and Activate Capital Partners at a pre-money valuation of $345.21M.

Sidewinder Therapeutics, operator of a precision biologics development company, raised $137.0M of Series B venture funding led by Novartis Ventures Fund and Frazier Healthcare Partners.

KreditBee, operator of an online micro-lending platform, raised $280.0M of Series E venture funding, led by Hornbill Capital, Dragon Fund, and Motilal Oswal Real Estate Investment Advisors at a pre-money valuation of $1.22B.

D-Robotics, manufacturer of the humaniod robot, raised $150.0M of Series B2 Venture funding led by Prosperity7 Ventures, and Envision.

Spacety, developer of commercial micro satellites, raised CNY 1.3B of venture funding from Huarong Securities Investment, Liangxi Science and Technology Innovation Phase II Fund, Zhiangzhou Turing Capital, and Puhua Capital.

SiFive, developer of customized and open-source-enabled semiconductors, raised $400.0M of venture funding led by Atreides Management at a pre-money valuation of $3.25B.

Chapter Medicare, provider of digital advisory and health care plan services, raised $100.0M of Series E venture funding led by Generation Investment Management.

Odds of the Day 🍒 

Polymarket traders are pricing in a 25% chance of Rory Mcllroy winning the Masters

Noteworthy Chart 🧭

Software LBOs have been at least 40% of US PE deal activity over the past decade. That’s why so many PE investors going pencils down on new Software deals can be so disruptive for activity.

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