What You Need To Know For August 14th

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Welcome back!

Hope you’re enjoying the bull market rally and a beautiful summer. We hope you’re able to unwind a bit. Let’s get right into it.

Earnings Corner 📈 📉

CAVA $CAVA ( ▼ 16.63% ) Miss on sales, Beat on EPS. Saw store traffic slow and cut its sales growth forecast. We’ve seen a broad slowdown in fast casual, with Chipotle and Sweetgreen also struggling as late. Management lowered its full-year outlook to 4–6% from 6–8% but kept profit margin and EBITDA guidance intact. Also announced an investment in Hyphen, to speed up digital orders.

CoreWeave $CRWV ( ▼ 20.83% ) Beat on sales (up 200% y/y) but missed on EPS. Shares fell after a poor earnings outlook, as rapid datacenter expansion pressured margins. The company flagged strong demand and new power contracts but faces financing risks, supply constraints, and rising debt costs. Management said its pending Core Scientific acquisition would give it more power and infrastructure to meet demand faster.

Circle $CRCL ( ▼ 6.16% ) Beat on sales and adjusted EBITDA, but missed on EPS due to large IPO-related charges. Circle raised its FY guide, driven by strong USDC stablecoin growth up 90% y/y and momentum from new U.S. stablecoin legislation. They also announced Arc, a new blockchain for payments, FX, and capital markets.

On Holding $ONON ( ▼ 3.25% ) Posted a 6% beat on revenue (up 32% y/y) but missed on EPS, reporting a net loss on FX headwinds. Strong demand and targeted July price hikes offset Vietnamese tariffs, with wholesale and DTC sales beating expectations. Management raised full year revenue and gross margin guidance.

Wendys $WEN ( ▲ 2.97% ) Missed on revenue, but beat on EPS. U.S. same-store sales fell 3.6% and overall comps declined 2.9%. Weak U.S. traffic and an overload of promotions hurt results, partly offset by 8.7% international sales growth. Management cut full year outlook and lowered EPS guidance

 Cisco $CSCO ( ▼ 1.37% ) Beat both revenue and EPS expectations. AI demand drove networking product orders into double digits, with AI infrastructure orders in FY25 more than doubling Cisco’s initial target. Quarter one revenue guidance and the full year 2026 EPS outlook were both slightly above estimates, but shares slipped after hours on cautious sentiment.

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Today’s Headlines 🍿 

• Trump is evaluating 11 candidates for Fed Chair: While Kevin Hassett and Kevin Warsh remain under consideration, the list includes former and current Fed Governors, as well as market strategists such as Jefferies’s David Zervos and BlackRock’s Rick Rieder

• CPI comes in light: Consumer prices rose 0.2% during July and 2.7% on an annual basis, slightly below expectations of 2.8%. Core CPI was also a touch below expectations, increasing 0.3% for the month and 3.0% y/y. Tariff-sensitive goods posted mixed results, with furniture increasing 0.7% while apparel (up 0.1%) and core commodities (up 0.2%) remained in check

• The BLS has a new head: Trump announced he will nominate E.J. Antoni, chief economist at the conservative Heritage Foundation, to be commissioner of the BLS. Trump says the new hire will ensure the numbers “are honest and accurate” after claiming last month’s jobs report was “rigged” to make him look bad

• Apple’s AI comeback: The company has a slate of new AI devices set to launch in the coming years. A tabletop robot companion - described as an iPad on a moveable human arm - is rumored to be the centerpiece of their AI strategy

• Amazon is rolling out same-day delivery of fresh foods, with plans to offer the service in 2.3k towns by year’s end. Delivery would be free on orders over $25 for Prime members

• Perplexity “bids” for Google Chrome: The AI startup submitted an unsolicited bid of $34.5B for Chrome - a number much higher than the company’s own valuation of about $18B. Several investors and large VC firms have agreed to back the deal in full. This comes after Google lost an antitrust suit that may force them to divest the browser

• Catastrophe Bonds are on the rise: Our friend Bullish Securities put out a great piece on how the rise in natural disasters is creating a large increase in catastrophe bond issuance - sub here to read the piece

• Goldman’s Jan Hatzius was under fire, with the President seemingly mad about his report that consumers will eventually eat 2/3 of tariff costs

• Tariff Revenue isn’t helping the Deficit: Tariffs brought in nearly $28B in July, however this is relatively insignificant relative to recently increased deficit spending. The monthly budget deficit came in at $291B, 10% higher y/y

• U.S. alcohol consumption has dropped to its lowest level since Gallup began tracking in 1939, with just 54% of adults saying they drink, down from 62% in 2023. Regular drinking also declined, with average weekly intake falling to 2.8 drinks

• Leveraged Loans are pricing as low as S+150: IG rated United Rentals priced at S+150 a rock bottom low spread for leveraged loan issues, with 10 companies repricing at S+175 in July and August

• Private Credit PIK usage is at a 4 year high: Investments with some sort of payment-in-kind feature jumped to 11.4% this quarter, per Lincoln International

• Continuation Vehicles are worrying LPs: PE is increasingly turning towards continuation vehicles to maintain ownership in portfolio companies they’re unable to sell. Nearly 20% of all PE “exits” are now in the form of these types of funds

• KKR’s big private credit deal: KKR is leading a $3B debt package to refinance Flexera Software debt. The Thoma Bravo backed company will see S+475 pricing on its $2B TL

• Consolidation in Broadcasting: Following reports that Nexstar is in discussions to acquire Tegna, Sinclair was quick to announce that they are exploring a strategic review of their broadcast business. Deals are moving fast in the rapidly shrinking space - Gray is acquiring 10 stations from Allen Media for $171mm.

• Bullish’s hot IPO: The Crypto exchange had a hot day one. Bullish initially priced their IPO at $37, above the expected range and at a market value of $5.4B, before jumping 84% to close at $68. This gives the company a ~$10B market cap - although shares have continued to climb after hours

• Motive picks JPM for their IPO: The Fleet management startup, last valued ~$3B has picked JP Morgan to lead its IPO

• StubHub revives IPO for fall debut after initially pausing the offering during the April stock market slide. The company had nearly $400mm of revenue in Q1

• Kodak warns it might not survive, sending shares tanking. The company announced it had “substantial doubts” that it can cover its debt payments as profits continue to decline

• Sonali Basak has left Bloomberg and is joining iCapital as their Chief Investment Strategist, marking both the end of an era and a win for the emerging fintech company

• Francisco Partners is exploring a sale of BeyondTrust Software, a cybersecurity company with ~$500mm ARR

• Claire’s is placing its UK and Ireland stores in insolvency, after failing to find a buyer for the bankrupt business

M&A Transactions💭 

International Money Express (NAS: IMXI), a processor of money transfer services, has reached a definitive agreement to be acquired for $656.864M by Western Union (NYS: WU). EV/EBITDA was 6.49x and EV/Revenue was 1.02x. Financial Technology Partners and Lazard Freres advised on the sale.

WideOpenWest (NYS: WOW), a cable operator and broadband service, provider, has entered into a definitive agreement to be acquired for $941.51M by Crestview Partners and DigitalBridge Group. EV/EBITDA was 7.04x and EV/Revenue was 2.51x. Centerview Partners and Goldman Sachs advised on the sale.

MeridianLink (NYS: MLNK), a cloud-based software solution, has entered into a definitive agreement to be acquired for $2.0B by Centerbridge Partners. EV/EBITDA was 21.85x and EV/Revenue was 4.64x.

KabaFusion, provider of specialty pharmaceutical home infusion services, has reached a definitive agreement to be acquired for $2.2B by Nautic Partners.

Exaion, operator of an information technology company, has reached a definitive agreement to be acquired for $168.0M by Mara (NAS: MARA) and EDF Pulse Ventures. Stifel Financial advised on the sale.

EG Italia, operator of convenience retail, foodservices, and fuel station and part of EG Group, was acquired for EUR 425.0M by PAD Multienergy, Vega Carburanti, Toil, G.I.A.P., and Dilella Invest. Bank of America advised on the sale.

BankFinancial (NASS: BFIN), a full-service, national bank providing banking, financial planning, and fiduciary services, has reached a definitive agreement to be acquired for $175.26M by First Financial Bank (NAS: FFBC). EV/Net Income was 89.83x and EV/Revenue was 3.32x. Keefe, Bruyette & Woods advised on the sale.

Solaris Health, operator of a healthcare platform, has reached a definitive agreement to be acquired for $1.9B by Cardinal Health (NYS: CAH). The transaction values the company at $2.5B. Centerview Partners advised on the sale.

Ecolab (NYS: ECL) reached a definitive agreement to acquire The Electronic Division of Ovivo for CAS 2.4B. EV/Revenue was 4.88x.

Geost, manufacturer of optical collection systems, was acquired for $325.0M by Rocket Lab (NAS: RKLB). EV/Revenue was 3.25x. Robert W. Baird & Co. advised on the sale.

DMC Power, designer and manufacturer of proprietary connector technology systems, has reached a definitive agreement to be acquired for $825.0M by Hubbell (NYS: HUBB). Harris Williams and Lincoln International advised on the sale.

DC Co, provider of professionally built and operated data center infrastructure, has entered into a definitive agreement to be acquired for NZD 584.0M by Pacific Equity Partners. EV/EBITDA was 20.27x. Jarden Group advised on the sale.

Hanesbrands (NYS: HBI), manufactures basic and athletic apparel under brands, has reached a definitive agreement to be acquired for $4.862B by Gildan Activewear (TSE: GIL). EV/EBITDA was 10.81x and EV/Revenue was 1.39x. Evercore Group, Morgan Stanley, and Goldman Sachs advised on the sale.

Bedrock Production, operator of an energy production company, has reached a definitive agreement to be acquired for $370.0M by BKV (NYS: BKV).

Assura Group, a healthcare facility REIT, was acquired for GBP 1.79B by Primary Health Properties. EV/EBITDA was 9.14x. Barclays, Lazard, and Stifel Financial advised on the sale.

Seshaasai Technologies, provider of technology-driven machinery, was acquired for $1.2B by ValueQuest Investment Advisors and Tata AIG.

Kelvion, manufacturer of industrial heat exchangers, has entered into a definitive agreement to be acquired for EUR 2.0B by Apollo Asset Management. Guggenheim Partners and Morgan Stanley advised on the sale.

HSO Group, provider of enterprise business services, has entered into a definitive agreement to be acquired for $1.0B by Bain Capital and Mr. Peter J. ter Maaten.

CareNet (TKS: 2150), a marketing company, has entered into a definitive agreement to be acquired for $320.0M by EQT. EV/EBITDA was 18.5x and EV/Revenue was 4.07x.

Private Placement Transactions💭 

OpenAI and Sam Altman to invest $250M in Merge Labs - a Neuralink rival - at an $850M valuation.

Aira, developer of clean energy systems, raised EUR 150.0M of venture funding from Altor Equity Partners, Kinnevik, and Kallskar.

Laurel, developer of an advanced timekeeping software platform, raised $100.0M of venture funding through a combination of debt and equity at a pre-money valuation of $426.07M. $83.93M of Series C was led by GV and IVP. $16.06M of loan was provided by undisclosed lenders.

Sirius AI, developer of an AI for document understanding, raised $235.0M of venture funding led by Temasek Holdings.

Apreo Health, developer of investigational medical devices designed to treat severe emphysema, raised $130.0M of Series B venture funding led by Bain Capital Life Sciences at a pre-money valuation of $53.0M.

Proefo, developer of a data-driven financial management platform, raised EUR 210.0M of venture funding from JIC and other undisclosed investors.

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Odds of the Day 🍒 

Kalshi traders are pricing in a 30% chance of Chris Waller becoming in the new Fed Chair. The race is completely open though! *New Traders on Kalshi receive a $20 bonus of trading credit when depositing $100+ with the code “HYH”.

Noteworthy Chart 🧭

Private-equity backed IPOs are struggling - with 5 of 7 recent deals trading an average of ~16% below its offer price, a stark comparison to non-PE companies up an average of +19% above where it priced.

Meme Cleanser 😆 

Until next time!

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