What you Need to Know for April 29th

Welcome back.

We’ve got a massive couple days ahead, with the big tech giants all set to report imminently. Stocks had a sluggish day yesterday following reports that OpenAI isn’t hitting the revenue and user growth numbers they were expecting. We think that’s a little overblown and the more pressing risk is the Elon Musk vs. OpenAI showdown.

Elon took the stand yesterday and said he cofounded OpenAI to serve as a pro-humanity counter to Google. Musk has previously warned of a “Terminator outcome” if AI isn’t developed properly. Elon will return to the stand today.

Some exciting news - we’ve got a State of AI in Finance Report that’s dropping today! If you’re in Banking or the Buyside, make sure you join Buyside Hub to access the report’s findings.

Let’s get into it.

Here’s a look at the remaining earnings for this week.

• Wednesday: Alphabet, Microsoft, Amazon, Meta, Qualcomm, Equinix, General Dynamics, ADP, Yum! Brands, Ford, eBay, Chipotle, Carvana, UBS

• Thursday: Apple, Eli Lilly, Mastercard, Caterpillar, Merck, Royal Caribbean, Roblox, Rivian, Reddit, Roku, Wayfair, Hershey, Clorox, Valero Energy, Cigna, Bristol-Myers Squibb, Amgen

• Friday: Exxon Mobil, Chevron, Colgate, Ares, Estee Lauder, Moderna, Lazard, Dominion Energy

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

• Wednesday: Durable-goods orders (0.5%), Durable-goods minus transportation, Housing starts delayed report (1.35M), Building permits, Housing starts (1.38M), Building permits (1.39M), Advanced U.S. trade balance in goods, Advanced retail inventories, Advanced wholesale inventories, FOMC interest-rate decision, Fed Chair Powell press conference

• Thursday: Initial jobless claims (215,000), GDP Q1 (2.2%), Personal income (0.3%), Personal spending (0.9%), Employment cost index Q1 (0.9%), PCE index (0.7%), PCE y/y (3.5%), Core PCE index (0.3%), Core PCE y/y (3.2%), Employment cost index (0.9%), Chicago Business Barometer PMI (53.5), U.S. leading economic indicators (-0.1%)

• Friday: S&P final U.S. manufacturing PMI final (53.9), ISM manufacturing (53.0)

Earnings Corner 💸 

• Spotify $SPOT ( ▼ 12.43% ) revenue beat at €4.5B (+8% y/y), while EPS beat at €3.45 vs. €2.95, driven by higher premium subscriber revenue (+10% y/y) and margin expansion from price increases and cost discipline. Monthly active users rose to 761M and premium subscribers reached 293M, though ad-supported revenue declined, signaling some weakness in the ad business. Guidance disappointed as the company forecasted softer premium subscriber growth and lower operating income (€630M vs. €675M exp.), raising concerns that price hikes may be starting to weigh on demand. The company raised full-year guidance, signaling confidence in sustained momentum.

• Starbucks $SBUX ( ▼ 0.62% ) revenue beat at $9.5B (+9% y/y) and EPS beat at $0.50 vs. $0.43, driven by strong global comps (+6.2%) As traffic and and pricing lifted sales. Showing the “Back to Starbucks” turnaround is working, with improved store operations and customer experience driving more visits and increased spend per visit. Margins are still facing pressure from higher labor, coffee costs, and tariffs, but improved cost control and scale helped drive the earnings beat.

• Verizon $VZ ( ▲ 0.3% ) revenue missed slightly at $34.4B but EPS beat at $1.28 vs. $1.21, as improved profitability and cost control offset softer broadband adds. The company expected lower postpaid phone subscribers but added +55K, driven by lower churn and more disciplined promotions, marking its first positive 1Q in years, and raised full year EPS guidance.

• Visa $V ( ▼ 0.11% ) revenue beat at $11.23B (+17% y/y) and EPS beat at $3.31 vs. $3.10. Growth was driven by broad-based consumer spend strength, with payments volume (+9%), cross-border (+12%), and processed transactions (+9%) all showing solid momentum, alongside strength in higher-margin data processing and services. The company also backed this up with a $20B buyback and guided to low double digit revenue growth and low teens EPS growth, reinforcing confidence in sustained momentum.

• Booking $BKNG ( ▼ 2.33% ) beat on revenue ($5.53B vs. ~$5.52B) and EPS ($1.14 vs. $1.08), driven by strong U.S. travel demand and growth across flights, packages, and cross-selling (“connected trip”). Geopolitical pressure from the Middle East conflict drove cancellations and weaker March bookings, cutting growth by 2pts; the company lowered its full year outlook and expects continued pressure into Q2.

On The Move 📈 📉

• Franklin Templeton $BEN ( ▲ 6.86% ) gained after taking in $12.4B for alternatives in Q1, beating estimates and putting the firm on track to surpass its annual fundraising target of $25B to $30B.

• Centene $CNC ( ▲ 13.95% ) jumped after posting strong results and raising full-year guidance, a sign of recovery for the health insurance sector.

• Coca-Cola $KO ( ▲ 3.86% ) rose following strong results, with the company’s focus on smaller beverage sizes paying off.

• United Parcel Service $UPS ( ▼ 3.97% ) slid after leaving guidance unchanged despite beating Q1 sales and profit expectations.

IPO Roundup 📍 

• Suja Life, an organic juice maker, is looking to raise $213mm in a U.S. IPO. The company is marketing shares for $21 to $24 each, with the top of that range giving the company a $927mm market value.

• Bill Ackman’s Pershing Square IPO is expected to raise $5B, the low end of the targeted fundraising range, with trading set to open today. The IPO was previously targeting as much as $10B.

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Today’s Headlines 📖🍿 

• The UAE to quit OPEC, shaking the oil cartel amid the Iran War: Abu Dhabi will exit OPEC and OPEC+, removing ~13% of the group’s production capacity as Middle East tensions and Hormuz disruptions deepen internal rifts and threaten the cartel’s ability to manage global oil markets.

• Data center debt slides on OpenAI miss: Bonds tied to AI infrastructure, including Oracle, SoftBank, and CoreWeave, widened after reports that OpenAI fell short of internal growth targets. This reignited fears that massive AI capex may not generate near-term returns, pressuring both investment-grade and high-yield markets.

  • Some investors argue the OpenAI report may be outdated, noting the recent transition toward Codex and evolving product mix over the past month.

  • Meanwhile, OpenAI and Microsoft once again changed their partnership, allowing OpenAI greater flexibility to collaborate with other cloud and AI infrastructure companies.

• Kone is nearing a $34B deal for rival TK Elevator, an Advent and Cinven backed elevator installation and maintenance giant. This combined entity would leapfrog competitor Otis and Schindler.

• BMO leads $1.8B financing for Honeywell spinoff sale: BMO Capital Markets is syndicating a $1B term loan and weighing an $800M bond or private placement to back Brady’s $1.4B purchase of Honeywell’s PSS unit.

• BofA forecasts record $190B+ of IG bond sales in May, the busiest month since Covid, driven by hyperscalers, AI data centers, and M&A financing.

• Blue Owl investors rejected Boaz Weinstein’s discounted tender offer, with less than 1% of shares tendered before the bid expired without extension.

  • Meanwhile, a Blue Owl indirect affiliate was sued over allegedly inflating fund values and charging excessive fees.

• Letterboxd is exploring a sale: The Canadian holding company Tiny, who in 2023 purchased a 60% stake at a $50mm valuation, is speaking to potential buyers about an exit.

• Alumni of Michael Milken’s family office, Silver Rock Capital Partners, have raised $4B for a distressed credit fund that will target dislocations in credit markets, aiming to lend where traditional banks are pulling back.

• Canada is launching a sovereign wealth fund, seeded with C$25 from the federal government, to provide financing for large infrastructure projects and domestic companies.

• Ares’ software valuations remain steady despite concerns, with ARCC’s balance sheet showing little strain from the industry’s liquidity issues. Software and services make up 22% of the fund’s portfolio, yet only a handful of loans were marked lower than their valuation in December.

• Starboard Value takes a stake in Flowserve, the $11B industrial equipment maker, and is pushing management to increase profitability, as Flowserve targets 20% operating margins by 2030.

• Pernod Ricard and Brown-Forman have ended talks, failing to agree on terms for a deal that would have merged the Jack Daniels maker with the Jameson maker.

M&A Transactions💭 

Seasons Hotels, operator of a hotel, has reached a definitive agreement to be acquired for $1.71B by Chalet Hotels (COM: 542399).

Mistral, manufacturer of defense and public safety systems, was acquired for $175.0M by Ondas (NAS: ONDS).

Organon (NYS: OGN), a global healthcare company, has reached a definitive agreement to be acquired for $3.653B by Sun Pharmaceutical Industries (NSE: SUNPHARMA). EV/EBITDA was 2.83x and EV/Revenue was 0.59x. Citigroup, Mitsubishi UFJ Financial Group, Morgan Stanley, Standard Chartered, and Goldman Sachs advised on the sale.

Xoma (NAS: XOMA), a biotechnology royalty aggregator, has reached a definitive agreement to be acquired for $594.054M by Ligand Pharmaceuticals (NAS: LGND). EV/EBITDA was 12.42x and EV/Revenue was 50.95x. Leerink Partners and H.C. Wainwright & Co. advised on the sale.

The Microbiology Business of Thermo Fisher Scientific entered into a definitive agreement to be acquired by Astorg through a $1.75B LBO. EV/Revenue was 1.67x. Perella Weinberg Partners and Wells Fargo advised on the sale.

Republic Wire, manufacturer of aluminum and copper wire, has reached a definitive agreement to be acquired for $797.0M by Nexans (PAR: NEX).

RE/MAX Holdings (NYS: RMAX), a franchisor of real estate brokerage services, has reached a definitive agreement to be acquired for $1.326B by The Real Brokerages (NAS: REAX). EV/EBITDA was 18.01x and EV/Revenue was 4.55x. J.P. Morgan advised on the sale.

ORIX (TKS: 8591), a diversified financial services company, has entered into a definitive agreement to be acquired for $2.3B by Daiwa Securities Group. EV/Net Income was 0.73x and EV/Revenue was 0.17x.

Olam Agri, supplier of food, was acquired for $1.8B by Saudi Agricultural and Livestock Investment. The transaction values the company at $4.04B. The transaction was supported by $250.0M of debt financing. EV/EBIT was 8.79x and EV/Revenue was 0.08x. Citigroup, HSBC Holdings, and Rothschild & Co advised on the sale.

iC Consult, provider of identity security, has entered into a definitive agreement to be acquired for EUR 425.0M by Bridgepoint Group. Lincoln International advised on the sale.

Apollo Global Management entered into a definitive agreement to acquire The Automotive Interiors Business of FORVIA through a EUR 1.4B LBO. EV/Revenue was 0.3x. Evercore Group advised on the sale.

Cleco Corporate Holdings, provider of electricity generation and energy services, has entered into a definitive agreement to be acquired for $6.0B by Stonepeak Partners and Bernhard Capital Partners. EV/EBITDA was 10.28x and EV/Revenue was 4.51x. Goldman Sachs and Moelis & Company advised on the sale.

CADV Ventures, provider of advanced AI-assisted technical support and digital engagement solutions, has reached a definitive agreement to acquire Miluna Acquisition (NAS: MMTX) through a $300.0M reverse merger.

Arc Resources (TSE: ARX), a natural gas and condensate-focused producer, has reached a definitive agreement to be acquired for $16.437B by Shell (LON: SHEL). EV/EBIDTA was 6.86x and EV/Revenue was 3.48x. RBC Capital Markets advised on the sale.

Amicus Therapeutics (NAS: FOLD), a biotechnology company, has reached a definitive agreement to be acquired for $5.243B by BioMarin Pharmaceutical (NAS: BMRN). EV/EBITDA was 97.36x and EV/Revenue was 7.75x. Centerview Partners, Equiniti Group, Innisfree M&A, Goldman Sachs, and Morgan Stanley advised on the sale.

Grant Thornton Australia has entered into a definitive agreement to be acquired by Grant Thornton. EV/Revenue was 2.96x. Greenhill & Company advised on the sale.

Concord Music, operator of an independent music and theatrical rights company, has reached a definitive agreement to be acquired for $7.0BB by BMG Rights Management. J.P. Morgan advised on the sale.

Arcellx (NAS: ACLX), a clinical stage biotechnology company, was acquired for $7.8B by Gilead (NAS: GILD). The consideration includes one non-transferable contingent value right that entitles the holder to receive an additional $5 [er CVR upon achievement of cumulative global net sales of anitocel of at least $6.0B from launch through year-end 2029. EV/Revenue was 350.0x.

Private Placement Transactions💭 

Genosis AI Healthcare, developer of AI-powered preventive healthcare, has reached a definitive agreement to receive 5.0B won of development capital from JG Group Corporation.

Sereact, developer of AI-based robotics, raised $110.0M of Series B venture funding led by Headline.

Quantum Art, developer of quantum computing system technology, raised $100.0M of venture funding led by Bedford Ridge Capital.

Ineffable Intelligence, operator of an intelligent AI lab, raised $1.1B of seed funding led by LightSpeed and Sequoia Capital at a pre-money valuation of $4.0B.

Citibox, developer of smart mailboxes, raised EUR 100.0M of venture funding through a combination of debt and equity. The Equity portion of EUR 70.0M was led by Ithaka.

True Anomaly, developer of space-focused AI, raised $650.0M of Series D venture funding led by Riot Ventures and Eclipse Capital at a pre-money valuation of $1.2B.

Coultreon Biopharma, developer of precision medicines, raised $125.0M of Series A venture funding led by Sofinnova Investments, Forbion, and Novo Holdings.

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Odds of the Day 🍒 

Polymarket traders are pricing in a 60% chance of the Blockade of the Strait of Hormuz being lifted by May 31.

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