What you Need to Know for April 17th

Welcome back!

The returns in the stock market this week have been remarkable, as ceasefire related sentiment remains positive and Jobless claims released yesterday were down slightly vs. estimates and m/m. Of course, the Strait of Hormuz remains effectively gridlocked. President Trump last night said the “the war in Iran is going along swimmingly” and that the fact “should be ending pretty soon”. We will let you know Sunday night if sentiment changes.

Separately, we hope you’re all enjoying our move to 3x/week so far! Our goal is to get you jampacked with info and we personally love the 3x/week cadence. Let’s get into it.

Earnings Corner 💸 

• Morgan Stanley & Bank of America $MS ( ▼ 2.24% )  $BAC ( ▼ 1.49% ) MS and Bofa beat on top and bottom line, with MS reporting revenue of $20.58B and $3.43 vs $3.00 EPS, and Bank of America posting revenue of $30.43B and $1.11 vs $1.01 EPS. Results were driven by higher trading revenue across both banks, as elevated market volatility boosted activity in equities and fixed income. Investment banking and wealth management also supported growth on stronger deal activity and higher asset values, while Bank of America saw additional strength in net interest income from loan growth and repricing. The quarter reinforces that trading and market activity remain key earnings drivers for banks in volatile environments. Bank of America also raised its net interest income growth outlook, while Morgan Stanley offered no major guidance changes.

• Taiwan Semiconductor Manufacturing $TSM ( ▼ 3.13% ) Beat on revenue ($35B vs. $34.8B) and EPS ($3.49 vs. $3.40–$3.45). Revenue was driven by strong AI demand for advanced chips from customers like Nvidia and Apple, while EPS rose 58% y/y as a higher mix of advanced chips (3nm/5nm) lifted margins. Demand continues to outpace supply, keeping capacity tight and supporting a multi-year growth cycle. Management raised full-year guidance and guided to strong 2Q sales ($39–$40B), reinforcing that momentum.

• Netflix $NFLX ( ▲ 0.07% ) Beat on revenue ($12.25B vs. $12.18B) and EPS ($1.23 vs. $0.76). Revenue was driven by higher subscription revenue from price increases and growth in the ad supported tier. Stronger operating income and a $2.8B termination fee tied to the cancelled Warner Bros. Discovery deal boosted EPS. However, the company guided 2Q below expectations, and flagged near-term margin pressure from heavier content spending, while maintaining full year guidance, so the stock will open lower today (-9.6% at time of writing).

• Pepsi $PEP ( ▲ 2.28% ) Top and bottom line beat with revenue at $19.44B vs. $18.94B and EPS at $1.61 vs. $1.55. Results were supported by higher sales and improved operating leverage as volumes recovered. Growth was driven by a rebound in North America snacks, where price cuts on brands like Doritos and Lay’s helped volumes turn positive for the first time in over two years, alongside contributions from acquisitions and international strength. The company kept full year guidance unchanged, while flagging a more uncertain macro backdrop tied to rising input and energy costs.

• Charles Schwab $SCHW ( ▼ 7.63% ) Revenue slightly missed at $6.5B while EPS beat at $1.43. Results were driven by strong trading activity and client engagement, with higher volumes and asset flows supporting growth. Revenue per trade declined as clients traded smaller positions, limiting upside from elevated activity. Management expects a seasonal dip in client cash balances in 2Q and plans to update full year guidance in July.

On The Move 📈 📉

• Him & Hers Health $HIMS ( ▲ 11.12% ) stock surged following RFK Jr. and the FDA signaling looser regulations on peptides.

• Allbirds $BIRD ( ▼ 35.79% ) stock initially jumped after the struggling sustainable footwear brand announced a pivot to AI computing infrastructure, rebranded as NewBird AI. That cooled off a bit yesterday.

• Advanced Micro Devices $AMD ( ▲ 7.8% ) closed at an all-time high as demand for server and data center chips continues to grow.

• Oracle $ORCL ( ▲ 5.02% ) rose after expanding its multicloud partnership with AWS, creating a connection between Oracle Cloud Infrastructure and AWS data centers.

• Abbott $ABT ( ▼ 6.0% ) fell after poor earnings guidance driven by negative impacts from its $23B acquisition of Exact Sciences.

• American Eagle Outfitters $AEO ( ▼ 1.29% ) stock surged after the company announced a new advertising campaign featuring influencer partnerships, including one with Sydney Sweeney.

IPO Roundup 📍 

• Madison Air $MAIR ( ▲ 17.59% ) shares surged 18% in its debut to $31.75, well above the marketed range of $25 to $27, giving the company a market value of $15.5B. The offering raised $2.23B, making it the largest U.S. industrial sector IPO since UPS in 1999.

• Obesity treatment firm Kailera Therapeutics raised $625mm in an upsized IPO. The offering was double-digits oversubscribed, and gives the company a market value of about $2B.

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Today’s Headlines 📖🍿 

• Israel and Lebanon ceasefire: Leaders have agreed to a 10-day ceasefire after meeting in Washington. Trump said he believes an agreement will be struck to “take care of” Hezbollah, and added that he will be inviting Israeli Prime Minister Benjamin Netanyahu and President Joseph Aoun of Lebanon to the White House for further peace talks.

• Mythos to the government: The White House is working to make a version of Anthropic’s new Mythos model available to federal agencies amid concerns that it could drastically increase cybersecurity risk. The Treasury Department is one agency that has been seeking access to the tool, and would use it to uncover its own software flaws.

• Apollo smack talks competitors: CEO Marc Rowan called out other private credit firms, saying that “if you discovered eight weeks ago that enterprise software was vulnerable to AI, you kinda weren’t doing your job.” Rowan also went after lenders who can’t meet redemptions, saying “if you can’t, as a first lien credit manager, meet 5% redemptions per quarter, I’ll say it frankly: You’re an idiot.”

• LIV Golf faces potential shutdown: Saudi Arabia’s Public Investment Fund is considering pulling funding from the breakaway league after years of losses. This casts its future in doubt amid reported ~$600M losses in 2024 and weak US viewership compared to the PGA Tour.

• Kirkland offers $80M to poach Wachtell restructuring head: Kirkland & Ellis is set to hire Wachtell’s Joshua Feltman with a guaranteed $80M, three-year package as it rebuilds its distressed debt and liability-management bench following David Nemecek’s departure.

• Cloud Software reported healthy results after releasing earnings figures ahead of schedule to calm fears of AI disruption. The company, backed by Vista and Elliott, ended Q1 with $3B in cash and a $1B undrawn revolving credit facility. Sales and adjusted EBITDA are expected to decline y/y.

• Abu Dhabi’s EIIC is buying a minority stake in Joe & the Juice at a valuation of $1.8B. General Atlantic will retain a majority stake as the chain looks to reach a goal of 1,000 stores by 2028.

• QVC Group, the television shopping network, filed for bankruptcy yesterday. Platforms like TikTok Shop and other shopping creators have stolen market share from what once was a powerful brand network.

• BNP Paribas is planning an SRT tied to €1B of commercial real estate loans as prospects for commercial real estate have dimmed following war in the Middle East. The transfer would cover ~6% of the portfolio.

• SantaCon founder charged with wire fraud: Federal prosecutors arrested SantaCon president Stefan Pildes, alleging he diverted hundreds of thousands in charitable proceeds for personal use, including luxury travel and real estate, while donating only a small fraction of the $2.7M raised.

M&A Transactions💭 

DustPhotonics, developer of a silicon photonics technology, has reached a definitive agreement to be acquired for $1.3B by Credo Technology Group (NAS: CRDO).

Avanos Medical (NYS: AVNS), a medical technology company, has entered into a definitive agreement to be acquired for $1.29B by American Industrial Partners. EV/Revenue was 1.84x. J.P. Morgan and UBS Group advised on the sale.

Red Falcon Group, operator of a coal mining company, has reached a definitive agreement to be acquired for $2.4B by Yancoal Australia (ASX: YAL).

Mynaric (STU: M0Y), operates in the communications equipment business sector, was acquired for $155.3M by Rocket Labs (NAS: RKLB). Candlewood Partners advised on the sale.

KOI, developer of a suspicious IDE extension analysis platform, was acquired for $300.0M by Palo Alto Networks (NAS: PANW).

CrossBridge Bio, developer of a biotechnology platform, has reached a definitive agreement to be acquired for $300.0M by Eli Lilly (NYS: LLY).

Southern Taiwan Science Park, provider of public sector industrial development and administrative services, has reached a definitive agreement to be acquired for TWD 14.85B by ASE Group (TAI: 3711).

The Loan Portfolio of Sammaan Capital was acquired by Asset Reconstruction Company for INR 24.0B.

Nilfisk, manufactures and produces cleaning equipment, was acquired for EUR 508.0M by Freudenberg. EV/EBITDA was 18.04x and EV/Revenue was 0.52x. Carnegie Investment Bank and Guggenheim Partners advised on the sale.

Megger Group, manufacturer of electric test equipment, has reached a definitive agreement to be acquired for $2.35B by ESCO Technologies (NYS: ESE). Rothschild & Co advised on the sale.

Efficient IP, developer of network automation tools, was acquired for EUR 200.0M by Francisco Partners.

Daiichi Sankyo Healthcare, manufacturer of healthcare products, has reached a definitive agreement to be acquired for JPY 246.5B by Suntory.

Eurobio Scientific (PAR: ALERS) has reached a definitive agreement to acquire The Lab Products Business Unit of CareDx (NAS: CDNA) for $170.0M.

Aegon UK, provider of financial services, has entered into a definitive agreement to be acquired for GBP 2.0B by Phoenix Stakeholder Pension Scheme. J.P. Morgan advised on the sale.

35Pharma, operator of a biopharmaceutical company, was acquired for $950.0M by GSK (LON: GSK). J.P. Morgan and Centerview Partners advised on the sale.

Animalcare Group (LON: ANCR), active in the healthcare division in the UK, has entered into a definitive agreement to be acquired for $235.2M by Charterhouse Capital Partners.

First Capital REIT (TSE: FCR.UN), a developer, owner and operator of grocery-anchored, open-air centres, has reached a definitive agreement to be acquired for CAD 9.17B by Choice Properties (TSE: CHP.UN) and KingSett Capital. EV/EBITDA was 20.83x and EV/Revenue was 12.69x. RBC Capital Markets and National Bank Capital Markets advised on the sale.

Coeo Inkasso, a provider of debt collection services, was acquired for EUR 354.3M by doValue (MIL: DOV).

Private Placement Transactions💭 

Sygaldry, developer of a quantum superintelligence infrastructure platform, raised $139.03M of Series A venture funding in a deal led by Breakthrough Energy at a pre-money valuation of $408.97M.

Pengxi Semiconductor, manufacturer of semiconductors, raised over CNY 1.0B of Series A+ venture funding from Wangsu, China Fortune-Tech Capital, and Shanghai Huadeng Hi-Tech Private Equity Fund Management.

Glydways, developer of autonomous electric public transportation systems, raised $170.0M of Series C venture funding led by Suzuki Motor Corp., ACS Gruppe, and Khosla Ventures at a pre-money valuation of $532.69M.

Upstage, developer of a large language model platform, raised KRW 180.0B of Series C venture funding led by Saje Partners.

Terremoto Biosciences, developer of a drug development platform, raised $108.0M of Series C venture funding from BeOne Medicines, Cormorant Asset Management, and OrbiMed.

Plata Card, developer of a financial platform, raised $405.0M of Series C venture funding led by Bicycle Capital at a pre-money valuation of $4.6B.

Beeline Medicines, provider of medical billing and revenue cycle management services, raised $300.0M of Series A venture funding from Bain Capital.

Aliste, developer of an energy monitoring platform, raised $300.0M through a combination of equity and debt in a deal led by Big Global Investments.

Slash, operator of an online banking platform, raised $100.0M of Series C venture funding led by Ribbit Capital, Khosla Ventures, and Goodwater at a valuation of $1.4B.

K1x, operator of a fintech company, raised $175.0M of venture funding led by Sumeru Equity Partners.

Resolve AI, developer of a software engineering support platform, raised $165.0M of Series A venture funding led by Salesforce Ventures, Lightspeed Venture Partners, and DST Global at a pre-money valuation of $1.34B.

TARS, developer of intelligent robots, raised over $455.0M of Series Pre-A venture funding led by Meituan, HSG, and GL Ventures.

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Odds of the Day 🍒 

Could Jay Powell stick around as Chair longer than expected?

Polymarket traders are pricing in a 69% chance of Powell being out as Chair by May 31.

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