What you Need to Know for March 19th

Welcome back,

The market tumbled yesterday after the Fed held rates at 3.50%-3.75%, reinforcing some worries that inflation is reaccelerating, especially after hot PPI #s (+0.7% m/m vs. est. of 0.3%). More pressingly though, the conflict in the middle east is ongoing and continuing to escalate. Iran’s intelligence minister was killed, with Iran vowing revenge and diplomatic prospects dimming. On Wednesday, Qatar said Iranian missiles extensively damaged Ras Laffan Industrial City, a key LNG export facility. ~20% of the world's supply moves through this facility.

According to the WSJ, President Trump doesn’t want any more strikes on Iranian energy sites following an Israeli attack on a vital Iranian gas field yesterday. Trump is also considering thousands more U.S. troops to reinforce operations in the Middle East.

For investors looking for some sort of “TACO”, you can’t really a “TACO” a war, so we remain cautious until there’s some level of de-escalation and a clear path towards sustained, lower oil prices.

Let’s get into it.

Earnings Corner 💸 

• $MU ( ▲ 0.01% ) Micron revenue nearly tripled y/y and beat at $23.86B vs. $20.07B, while EPS beat at $12.20 vs. $9.31 as AI driven demand for memory (especially tied to Nvidia chips) drove higher volumes while limited industry supply pushed pricing higher. Results were driven by high bandwidth memory tied to AI chips alongside strength in cloud and mobile, with Micron shifting production toward higher margin AI memory, tightening supply elsewhere and pushing margins higher. Guidance was well above expectations with revenue at $33.5B vs. $24.3B and EPS at $19.15 vs. $12.05, reflecting continued AI demand outpacing supply, while capex is set to ramp to meet demand.

• $LULU ( ▲ 3.84% )  Lululemon beat revenue expectations at $3.64B while missing on EPS as continued weakness in the Americas and margin pressure from tariffs and promotional activity weighed on profitability. Soft U.S. demand has driven declining comps and heavier discounting, while higher input costs and tariff headwinds further pressured margins, though international growth remains strong with early signs of improvement from new product initiatives. Guidance came in below expectations on both revenue and EPS.

• $DOCU ( ▲ 2.86% )  DocuSign beat on both revenue and EPS. Growth was supported by increasing adoption of its AI driven IAM platform, which is scaling quickly and becoming a larger contributor to ARR, alongside solid billings growth. Guidance came in above expectations.

• $DLTR ( ▼ 3.89% )  Dollar Tree revenue came in roughly in line, while EPS beat, driven by solid same store sales growth and improved free cash flow. Strength was supported by higher ticket sizes and continued execution on its multi price strategy, though traffic declined, pointing to weaker underlying demand, while cost pressures limit margins. Guidance came in below expectations as weak traffic and a pressured consumer point to softer demand.

• $M ( ▲ 4.73% )  Macy’s beat on revenue and EPS, driven by higher spend per customer and strength in higher-end segments like Bloomingdale’s, which offset weaker traffic. Results reflected a split consumer, with higher income demand holding up while lower income consumers remain pressured. Guidance came in below expectations as a pressured consumer and discretionary weakness point to softer demand.

On The Move 📈 📉

• Fannie and Freddie $FNMA ( ▼ 13.3% ) stock tumbled as investors decreased expectations for near-term privatization and recapitalization, sending shares to their lowest level in over a year.

• SoFi $SOFI ( ▼ 1.09% ) stock fell amid facing and challenging allegations from short seller Muddy Waters about irregularities and hidden debt.

• Six Flags $FUN ( ▼ 0.28% ) is facing activity pressure from Jana Partners, who is pushing the company to explore a sale and replace board chair.

• Gemini $GEMI ( ▼ 16.17% ) fell hard after Citi cut its price targets, saying the company is years away from profitability and is struggling to compete.

IPO News 📍 

• Swarmer, an AI drone software firm, surged 520% on its first day of trading after pricing shares at $5. This lifted its market cap above $380M despite just $310K in 2025 revenue.

The rest of the IPO and financing markets are at a bit of a standstill due to the market volatility.

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Today’s Headlines 📖🍿 

• Fed holds rates steady, flags slower inflation progress: The Fed kept its benchmark rate unchanged at 3.5%-3.75% and signals a possible cut in 2026. Powell acknowledged inflation is easing “not as much as we had hoped”, warned of risks from oil and tariffs, and said the Fed is “not on a preset course” as markets slide on stagflation concerns.

• Qualtrics stays hung: A JPM-led group of banks has halted a $5.3B syndication of Qualtrics debt after fears of AI disruption spooked investors. Qualtrics’ $1.5B in existing debt is now trading at 86 cents on the dollar, showcasing how rapid AI worries have hit the name.

• OpenAI is in talks for $10B joint venture with PE firms including TPG, Brookfield, and Bain. The investors would commit about $4B toward the venture, which OpenAI described as “building a deployment arm” for its technology to bolster the adoption of its AI software.

  • Additionally, Anthropic is in similar talks with PE firms, including Blackstone, about forming a joint venture to sell its Claude software to businesses.

• Orlando Bravo has confidence in his software portfolio, arguing that deep sector expertise will separate winners and losers as AI disrupts the industry. Bravo says the firm has “been living in the details of the space” rather than taking broad exposure, and that “everybody’s extremely comfortable.”

• Blackstone backs $1.3B pharma merger financing: Blackstone Credit & Insurance is leading a $1.3B financing to support the merger of Paratek Pharmaceuticals and Radius Health, forming a scaled specialty pharma platform expected to generate nearly $1B in annual revenue in 2026.

• JPMorgan pushes for $2B debt sale for Janus buyout: The bank is marketing a $2B leveraged loan to finance Trian and General Catalyst’s buyout of Janus Henderson.

• DayOne Data Centers is looking to boost its existing loan to $7B, up from $3.4B, to expand its AI operations in Malaysia. The deal would be the largest borrowing for the sector by any firm in Asia.

• Wes Edens reached a deal with creditors to restructure New Fortress Energy Inc, cutting the company’s debt by 90%. The transaction will split the LNG provider into two companies, with creditors exchanging their existing $5.7B of debt into debt and equity of the newly created public entity, named New NFE.

• Banks weigh hybrid bond sale to fund Nexstar’s $6B Tegna Deal: Lenders led by Bank of America are exploring an investment-grade secured bond offering alongside high-yield debt and a $2.75B leveraged loan to finance Nexstar’s acquisition of Tegna, aiming to lower borrowing costs amid unstable credit markets.

• Blank Street pivots to a larger cafe model: The venture-backed chain is leaving its tiny, to-go format for larger, seating-heavy stores aimed at being a Gen Z hangout spot, marking a strategic shift as growth slows and competition intensifies.

• Union Pacific-Norfolk Southern rail deal faces regulatory headwinds: The Surface Transportation Board has requested additional documentation on competition and expansion impacts before the $72B merger can be refiled.

• Kirkland tops $10B revenue mark with record partner pay: Kirkland & Ellis became the first law firm to surpass $10B in annual revenue, with equity partners earning a record average of $11.1M in 2025.

• Low valuations for MLB teams are an opportunity for PE firms, who are able to take up to a 15% stake in teams.

• Unilever is weighing separating its food business to focus on its beauty, personal care, and wellbeing brands. The Hellmann’s mayonnaise maker is considering either spinning off the entire food business or keeping some brands while separating the rest.

• Bob Iger is officially out and Disney has a new CEO, with Josh D’Amaro stepping into the role. D’Amaro was previously the chairman of Disney Experiences, and will now look to embrace technology to drive engagement and growth across the company.

M&A Transactions💭 

Perpetual Wealth Management Group, operator of corporate trust and wealth management business, has reached a definitive agreement to be acquired for AUD 550.0M by Bain Capital. EV/Revenue was 2.56x.

A Portfolio of 900 MW Natural Gas-Fueled Turbines was acquired by Solaris Energy Infrastructure through an estimated $620.0M LBO. The transaction was supported by $300.0M of debt financing.

Societa Trattamento Acque, provider of liquid waste treatment and disposal plant services, was acquired by Hera (MIL: HER) for EUR 138.0M. EV/Revenue was 5.73x. Rothschild & Co advised on the sale.

ReSound, developer of digital hearing aids, has reached a definitive agreement to be acquired for DKK 17.0B by Amplifon (MIL: AMP).

Quipt Home Medical, a provider of durable medical equipment, was acquired for $260.0M by Kingswood Capital Management and Forager Capital Management. EV/EBITDA was 5.17x and EV/Revenue was 0.98x. Truist Securities advised on the sale.

Inflection Point Acquisition IV, a blank check company, was acquired by Merlin Labs through a reverse merger for $800.0M, resulting in the combined entity trading on NASDAQ under the ticker symbol MRLN. EV/Net Income was 133.15x. Cantor Fitzgerald, Cohen & Company, Newbridge Securities, and TD Cowen advised on the sale.

GNQ Insilico, operator of a healthcare company, has reached a definitive agreement to acquire IB Acquisition (NAS: IBAC) through a $500.0M reverse merger, resulting in the combined entity trading on the NYSE under the ticker IBAC.

ESAero, manufacturer of unmanned aerial systems and urban air mobility, was acquired for $200.0M by AeroVironment (NAS: AVAV).

Care.com, developer of an online platform, was acquired for $320.0M by Pacific Avenue Capital Partners. J.P. Morgan advised on the sale.

Confluent, operates in the data streaming platform category, was acquired for $11.947B by International Business Machines (NYS: IBM). EV/Revenue was 10.24x. Morgan Stanley advised on the sale.

BVNK, developer of an enterprise-grade payments, has reached a definitive agreement to be acquired $1.8B by MasterCard (NYS: MA).

SBI Savings Bank, operator of a banking institution, has entered into a definitive agreement to be acquired for KRW 300.0M by Kyobo Life Insurance. EV/Net Income was 14.21x.

Enviropacific Services, provider petrochemical and engineered environment services, was acquired for $200.0M Veolia Environnement. EV/Revenue was 0.82x.

TheGuarantors, operator of a rental coverage platform, has entered into a definitive agreement to be acquired by Warburg Pincus.

Ferrero Group acquired Bold Snacks, a leading Brazilian protein snack company.

Audax Private Equity buys property manager AKAM from Nautic.

Private Placement Transactions💭 

Humans&, developer of an AI system, raised $500.0M through a combination of Seed-1, Seed-2, and Seed-3 and convertible debt led by SV Angel and Georges Harik at a pre-money valuation of $4.0B.

Frore Systems, developer of thermal management chips, raised $143.0M of Series D venture funding led by MVP Ventures at a pre-money valuation of $1.5B.

D-Robotics, manufacturer of the humanoid robot, raised $120.0M of Series B+ venture funding from Beijing Automotive Group Industrial Investment, DiDi Global, and Dragon Capital.

Beast Industries, operator of a creator-led content-to-commerce platform, raised $225.0M of venture funding led by BitMine Immersion Technologies.

Upvest, developer of an investment API designed to empower financial institutions, raised $125.0M of Series D venture funding led by Tencent Holdings and Sapphire Ventures.

Shokhin Airlines, operator of an airline company, raised $200.0M of venture from CFC Fund.

Kindley Re, provider of life and annuity reinsurance services, raised $250.0M of venture funding from undisclosed investors.

Imperative Care, operator of commercial-stage medical technology company, raised $100.0M of venture funding in the form of convertible debt led by Elevage Medical Technologies and Perceptive Advisors.

Advantage Navigation, developer of navigation and positioning systems, raised AUD 158.0M of Series C venture funding led by Airtree Ventures.

XBOW, developer of an AI security software, raised $120.0M of venture funding led by DFJ Growth at a pre-money valuation of $880.0M.

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Odds of the Day 🍒 

Polymarket traders are pricing in a 20% chance of Duke winning March Madness, and a 20% chance of Michigan winning March Madness.

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