What You Need To Know For June 5th

Welcome back!

There's a standoff in the Senate over the Big, Beautiful Bill, so let’s get right into it.

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Earnings Corner 📜 

CrowdStrike (CRWD) $CRWD ( ▼ 5.77% )  : Revenue rose 20% y/y and met expectations; EPS beat by $0.08. 2Q revenue guidance missed as macro softness and last year’s Windows outage continued to weigh on demand. Full-year profit guide was raised, and a new $1B buyback was announced, but overall investors were left wanting for more. Additionally, the DOJ and SEC has sent inquiries regarding the firm’s accounting practices

Dollar General (DG) $DG ( ▼ 0.71% )  : Revenue beat and EPS beat by $0.30. Sales rose 5% y/y, driven by stronger traffic and trade-down momentum, with gains among higher-income shoppers. Same-store sales climbed 2.4%, and sales & earnings guidance was raised.

Dollar Tree (DLTR) $DLTR ( ▼ 8.38% )  : Revenue beat with 11% growth and EPS topped estimates. Same-store sales rose 5.4% on both ticket and traffic. Management warned Q2 profit could fall up to 50% on tariff pressure, but raised full-year EPS guidance with support from $500M+ in buybacks.

Thor Industries (THO) $THO ( ▲ 4.25% )  : Revenue beat estimates by 10.71% and rose 3.3% y/y; EPS also crushed expectations. Growth in both towable and motorized RV units, supported by higher prices and promotions, helped margins expand. Full-year guide was held steady.

Hewlett Packard Enterprise (HPE) $HPE ( ▲ 0.85% ) : Revenue rose 5.9% y/y and beat while EPS came in at $0.38 vs. $0.33 est. Growth in towable and motorized RVs, helped by pricing and mix, drove margin gains. European sales dipped, but cost controls held. Full-year guide was reaffirmed.

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More Headlines 🍿 

• Elon vents against the tax bill: Elon Musk has come out swinging against the Big, Beautiful Bill - calling it a disgusting abomination on Tuesday. He further stated that next November “we fire all politicians who betrayed the American people…” suggesting the richest man in the world could be dipping his toes back into political spending very soon. This has escalated further with Musk tweeting “Call your Senator, Call your Congressman, Bankrupting America is NOT ok!”

  • A Tipping Point is coming: The WSJ reported last night that President Trump is losing patience with Musk’s outbursts regarding the Bill. With Musk’s X page full of anti-deficit spending posts, we could see the relationship between the President and the richest man in the world completely fracture any hour now

• Trump has called for ‘Too Late’ Powell to lower rates after a weaker ADP jobs report

• Tariff Decision Day - Trump had asked for every country’s “best offer” on Tariffs by yesterday - while some tariffs with China have been delayed, we might be nearing a resolution with other nations fairly shortly

• Trump’s “Big Beautiful Bill” could limit AI regulation: Included among the various proposals on AI is a ban on any new state-led regulations of AI for a decade. The bill as is would also block the state-level enforcement of other AI regulation and oversight structures, sparking criticism from several Republicans in Congress

• Orlando’s big raise: Thoma Bravo raised over $34.4B across three funds, led by a hefty $24.3B in its flagship buyout fund, the largest raise since CVC’s $29.2B raise in 2023. Thoma Bravo’s raise is buoyed by their $30B in distributions back to investors since 2023

• Neuberger’s European PE head sees another muted year for PE exits, highlighting how activity has decelerated, and that PE investment harvesting rates of 25% has dropped to roughly 12%-13%

• Perplexity is pressuring Google: Apple is reportedly evaluating using Perplexity as a search engine alternative to Google within iPhones. Additionally, Perplexity is nearing an AI deal with Samsung - where Perplexity either becomes integrated into Galaxy S26 web browsers, with the potential to become the default browser

• Fed reports declining growth, high prices: New reports from the Fed’s Beige Book states that the economy has contracted over the past six weeks while tariff uncertainty remains high; prices are rising “at a moderate pace” and businesses are continuing to take it slow as tariffs start to push upward on costs. Demand for labor is decreasing, even with strong growth in applicants

• Wrexham is weighing a raise at an $475mm valuation: The newly promoted Championship side spearheaded by Ryan Reynolds and Rob McElhenney is looking for capital to compete in the Championship and fund a new 7,000 seat stand in its stadium. The Scottish club has dramatically “climbed up the pyramid” from the 5th division of English soccer to the 2nd since the actors acquired the team for 2mm pounds in 2021

• Illinois lawmakers approve a tax increase on sports bets, adding a tax of $0.25 per wager that increases to $0.50 per wager after the first 20mm bets. DraftKings and Fanduel parent Flutter Entertainment dropped earlier this week, before starting to recover yesterday

• Yale’s PE dump: Yale is finalizing a deal to sell up to $2.5B of its PE and VC stakes, a major repositioning of its $41B endowment. With Ivy League universities under pressure, and a question regarding returns and marks in private portfolios, this is a stark sale from the notable endowment

• Columbia could lose accreditation: Trump Administration officials are making the case that the University violated antidiscrimination laws after its handling of pro-Palestinian protests last year, stating that the school violated the Civil Rights Act through its indifference and failure to protect Jewish students on campus

• Neuralink has competition: Paradomics, a competitor to Musk’s AI brain startup, completed its first human implant procedure, demonstrating that its brain-computer interface system can be safely implanted as it prepares for clinical trials later this year

• Meta is pushing into a 20-year agreement with Constellation Energy, a nuclear power company that would presumably supply Meta with cheap energy in its AI push. The agreement is set to begin in 2027

• Meta wants to fully automate ad creation with AI by the end of 2026 - brands would upload an image and budget and then Meta AI would handle the rest

• Growth is back at Wells Fargo: Federal regulators voted to remove the restrictions that were placed on the bank nearly a decade ago after its fake accounts scandal, citing “the substantial progress the bank has made in addressing its deficiencies.” Assets are no longer capped at around $2 trillion, paving the way for the firm to pursue more growth

• Trump’s Bitcoin ETF is on the way: NYSE Arca has submitted a proposed rule change to the SEC to list and trade Trump’s Truth Social Bitcoin ETF. The fund is designed to track the spot price performance of BTC in a way that is accessible to everyday investors

• Reddit is suing Anthropic, the Amazon backed AI startup, for allegedly scraping user data without Reddit’s permission

• Tesla sales plummet in the UK: The company saw new car sales drop more than 45% YoY in the UK and 67% in France in the wake of Elon’s involvement with DOGE and the federal government

• Bank of Canada keeps rates steady: The bank left its main interest rate unchanged at 2.75% as inflation heats up, stating that the economy has merely softened, not deteriorated. Officials warn that another rate cut could be needed if U.S. trade policy continues to stall growth

• IPO Latest:

  • The Chime IPO is coming in light - with the mid-range of valuation coming in around ~9.1B, significantly lower than its $25B private markets valuation

  • Circle Internet Group’s IPO was more than 25x oversubscribed, with the stablecoin issuer pricing at a $31 a share - well above the $27-$28 a share it was looking for. Circle was looking to raise $986mm - this pricing values the company at $6.8B The company will trade on the NYSE under ticker CRCL

• High Yield Latest:

  • EchoStar announced it will miss another interest payment

  • Wellness Pet Company, a Clearlake Capital, backed borrower, secured $100mm in new ‘29 financing through lenders swapping debt around 70-80 cents on the dollar for new first-out and second-out debt or cash (BBG)

  • Jefferies and UBS are shopping $1B in debt for Bain Capital’s acquisition of Wingstop franchisee, Sizzling Platter. Price talk for the $505mm 1L TL and $400mm Secured notes are S+425-450 and mid 8% range respectively (BBG)

  • Byron Allen is trying to sell 28 broadcast TV stations in order to delever Allen Media

  • DentalPro, an Italian dental clinic platform, is receiving new private debt from Deutsche Bank and Diameter Capital Partners (BBG)

  • David Zaslav of Warner Bros Discovery has had his $52mm pay compensation rejected by 60% of shareholders, although this is non-binding, symbolic gesture meant to voice dissatisfaction of the job Zaslav is doing

M&A Transactions💭 

Roark Capital acquired Dave’s Hot Chicken for an estimated $1.0B. EV/Revenue was roughly 1.62x. Northpoint Capital Advisers advised on the sale.

Yuefeng Environmental Protection, operation an management of waste-to-energy plants, was acquired for HKD 11.1B by Grandblue Environment (600323). EV/EBITDA was 4.57x and EV/Revenue was 2.85x.

The First of Long Island (NAS: FLIC), a holding company that provides financial services, was acquired for $284.0M by ConnectOne Bancorp (NAS: CNOB). EV/Net Income was 17.32x and EV/Revenue was 3.31x. Keefe, Bruyette & Woods and Stifel Financial advised on the sale.

Techpoint, a semiconductor company, was acquired for $390.0M by Asmedia Technology (TAI: 5269). EV/EBITDA was 19.33x and EV/Revenue was 5.53x. Greenhill & Company and Mizuho Securities advised on the sale.

TANN Group, manufacturer of tipping paper, was acquired for EUR 360.0M by Mayr-Melnhof Karton (WBO: MMK).

SMAAX, operator of an influential media-tech firm, was acquired for $150.0M by Equippp Social Impact Technologies (BOM: 590057).

Sitio Royalties (NYS: STR), a pure-play mineral and royalty company, has reached a definitive agreement to be acquired for $4.1B by Viper Energy Partners (NAS: VNOM). EV/EBITDA was 7.65x and EV/Revenue was 6.44x. J.P. Morgan advised on the sale.

Rimi Baltic, operator of a supermarket chain, was acquired for EUR 1.3B by Salling Group. EV/Revenue was 0.71x. J.P. Morgan advised on the sale.

Multifonds, operator of an investment software, was acquired for $400.0M by Montagu Private Equity. EV/EBITDA was 14.79x and EV/Revenue was 6.49x. Rothschild & Co and Goldman Sachs advised on the sale.

Hutchison 3G, provider of telecommunication and internet services and a subsidiary of CK Hutchison (HKG: 00001), was acquired for GBP 1.5B by Vodafone Group (LON: VOD). Moelis & Company advised on the sale.

Helly Hansen, manufacturer of sailing and performance ski apparel, was acquired for $900.0M by Kontoor Brands (NYS: KTB). Goldman Sachs advised on the sale.

H&E Rentals, an integrated equipment services company, was acquired for $5.3B by Herc Holdings (NYS: HRI). EV/EBITDA was 8.41x and EV/Revenue was 3.62x. Bank of America advised on the sale.

Echo Lake Foods, distributor and wholesaler of frozen foods, was acquired for $258.0M by Cal-Maine Foods (NAS: CALM). EV/Revenue was 1.08x.

Crunchy Data, developer of an enterprise data management platform, has reached a definitive agreement to be acquired for $250.0M by Snowflake (NYS: SNOW).

Bitstamp, operator of an online trading marketplace, was acquired for $200.0M by Robinhood (NAS: HOOD).

Artisan Design Group, provider of flooring procurement, installation, and project management services, was acquired for $1.325B by Lowe’s Companies (NYS: LOW). EV/Revenue was 0.74x. RBC Capital Markets, Robert W. Baird & Co., and Goldman Sachs advised on the sale.

OfferFit, developer of an AI-based self-learning decision engine, was acquired for $325.0M by Braze (NAS: BRZE). Atlas Technology Group advised on the sale.

Multiven, provider of cyber-defense and software maintenance services, was acquired for $2.2B by PhotonAI.

Donlin Gold, operator of a gold mining project, was acquired for $1.0B by Novagold Resources (TSE: NG) and Paulson Advisers.

Concremat Prefabricacao e Obras Gerais, manufacturer of prefabricated concrete solutions, was acquired for EUR 100.0M by Molins (MAS: CMO). EV/Revenue was 2.0x.

Chef Boyardee, producer of packaged food items, was acquired for $600.0M by Hometown Food Company.

AZA Finance, developer of a cross-border payment platform, has reached a definitive agreement to be acquired for EUR 150.0M by DLocal (NAS: DLO).

Scottsdale Properties, operator of building and leasehold properties, has reached a definitive agreement to be acquired for SGD 834.22M by IOI Properties Group (KLS: 5249).

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Private Placement Transactions💭 

Grammarly, developer of writing assistance technology, raised $1.15B of venture funding led by General Catalyst.

Vascular Perfusion Solutions, developer of medical devices designed to preserve and resuscitate vascularized organs, raised $147.02M of venture funding from undisclosed investors.

Udaan, developer of a network-centric B2B e-commerce software, raised $114.0M of Series G venture funding led by Lightspeed Venture Partners and M&G at a pre-money valuation of $1.69B.

TAE Technologies, developer of a commercial power management tool, raised $150.0M of venture funding from Chevron Technology Ventures, New Enterprise Associates, and AJI Capital.

Scalable Capital, operator of a wealth management platform, raised EUR 155.0M of venture funding led by Sofina and Noteus Partners.

Impulse Space, manufacturer of aviation and aerospace components, raised $300.0M of Series C venture funding led by Linse Capital.

Odds of the Day 🍒 

Recession Odds are Crashing Down

Kalshi traders are pricing in a 28% chance of a recession

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Noteworthy Chart 🧭

Meme Cleanser 😆 

Until next time!

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