Welcome back.
Rates are on the move higher. Mortgage rates are north of 7% and with the Fed likely to keep hiking, an uncertain path in the Iran war, plus Scott Bessent losing control of the narrative, we’ve seen a modest drawdown in the equity markets. Frankly though, the S&P is -1.4% off its highs - is this a dip for ants? We are early in the rate pain trade if this pressure holds.
What is on fire though, is Meta, as Muse is taking the market by storm. People are sending their agents out to go and do their busy work for them. But I think we need to talk about what happens when you’re on the receiving end of an aggressive, determined AI agent.
Your Agent lacks some of the context and politeness that you as a human may have. It is results-driven, and it will go to the end of the earth to complete your task. But your agent is talking to a real human and making demanding requests to them. This viral post really sums it up:
Imagine if your AI agent suddenly starts sending out last minute requests to your wedding planner? You gotta feel for people like Lauren in this situation. It feels disrespectful of her time and efforts; so you should really be careful on how you set loose an Agent. Agents running wild for the sake of optimization were designed to reduce friction, but it might actually create more. Until everyone has their own agent to filter out noise from other agents, then people are just bombarding busy work on their fellow man.
Let’s get into it.
Today’s Jobs:
Ares is hiring an Infrastructure Equity Associate (NY)
Barings is hiring in its RE Debt Analyst Program (NY)
Oaktree is hiring a Business Transformation VP (LA)
Guggenheim is hiring for various Experienced Analyst roles (NY, Chicago)
Blackstone is hiring a PE Valuation & Analytics Associate (Miami)
Earnings Corner 💸
Costo $COST ( ▼ 0.91% ) beat on the top and bottom lines, with revenue of $95.7B vs. $94.9B and EPS of $6.75 vs. $6.54. Results were driven by higher shopper traffic, strong same store sales and continued digital growth, with adjusted comps up 6.7% and digitally enabled sales up nearly 20% as members continued spending across core categories and Costco expanded delivery access through Uber Eats, DoorDash and Instacart. Membership growth and a $0.15/share tariff-refund benefit also supported earnings. The company reinvested part of the tariff refunds into lower prices, helping reinforce its value proposition, though membership fee revenue of $1.5B missed the $1.8B estimate as membership revenue growth slowed for a third straight quarter.
Cracker Barrel $CBRL ( ▲ 9.09% ) beat on the top and bottom lines, with revenue of $849.3M vs. $834.6M and EPS of $0.99. Revenue still fell 2.2% YoY as restaurant comps declined 2.1%, but improving traffic trends, better guest metrics and modest retail growth helped results come in ahead, while stronger cost control and roughly $9.1M of net tariff refunds boosted profitability. Mgmt. guided FY27 revenue slightly below consensus at the midpoint, but EBITDA above expectations, as the company focuses on better food quality, guest experience and cost control.
Manchester United $MANU ( ▲ 2.2% ) beat on the top and bottom lines, with revenue of $208.7M vs. $192.2M and EPS coming in at a smaller loss than expected. Results were driven by stronger broadcasting revenue and lower wage costs, as the club’s third place Premier League finish boosted prize money while cost cuts improved operating performance despite missing European competition.
On The Move 📈 📉
Oracle $ORCL ( ▼ 3.47% ) and Blue Owl $OWL ( ▼ 3.65% ) fell after Oracle sent a force majeure notice to a Blue Owl unit developing Project Jupiter, a massive New Mexico data center that has faced local opposition and regulatory setbacks.
Devon Energy $DVN ( ▲ 1.79% ) gained after activist Toms Capital urged the company to explore a sale, arguing its post-Coterra portfolio is too complex and leaves the stock trading at ~4.5× 2027 EBITDA, at least one multiple point below peers.
MGM Resorts $MGM ( ▼ 10.99% ) sank after Barry Diller’s People Incorporated walked away from his buyout offer while holding onto his 27% stake. However…now MGM wants to buy People…? (WSJ)
GoDaddy $GDDY ( ▲ 4.6% ) climbed after Norton maker Gen Digital reportedly made an early-stage takeover offer for the web domain provider.
GRAIL $GRAL ( ▲ 15.38% ) surged after an FDA advisory panel backed its Galleri multi-cancer early detection test, a key step toward full FDA approval.
Akamai $AKAM ( ▼ 6.78% ) rose in after-hours trading after signing an $11.6B, seven-year cloud agreement with Anthropic, which could expand to about $20B. Anthropic also received warrants for up to ~5% of Akamai’s stock.
Everpure $P ( ▲ 11.15% ) jumped to a 52-week high after issuing preliminary FY28 guidance for $7.0-$7.3B in revenue and non-GAAP operating income of $1.7-$1.9B, nearly double its FY27 target.
IPO Roundup 📍
DeepSeek has passed a $1B annualized revenue run rate as it prepares for a Shanghai IPO in 2027. The AI lab aims to close a ~$7.5B raise at a ~$75B valuation by the end of October.
SB Energy plans to start marketing its IPO once the SEC finishes reviewing its filing. The company amended its S-1 to show Nvidia’s $3B investment more prominently and isn’t expected to list before mid-to-late October.
Rightway is weighing an IPO within the next four years after a $155M Series E valued the pharmacy benefit manager at $1.75B. The company covers ~3M people and counts 45 Fortune 500 companies as clients.
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Today’s Headlines 📖🍿
Meta Connect Rundown: The Meta team highlighted their latest gadgets, as well as updates on what’s going on with Muse
Meta launched Meta VR Glasses, a $1,299 headset that offloads its processor, battery, and other computing components into an external pocket-clip pack, cutting the device’s weight to 1/6 of Apple’s Vision Pro for 1/3 the price. Meta Glasses now serve as FDA-cleared hearing aids as well.
Muse Spark 1.3 brings frontier-level reasoning to complex coding and agentic workflows. Meanwhile, Muse Code is out of beta, and Meta Model API is now generally available globally. You can now “talk” to Muse as well.
The ARM share of mortgage applications jumped to 9.8%, with borrowers preferring riskier loans to capture lower rates, as mortgage rates jumped over 7%. Refinance applications fell 3% weekly and are down 62% YoY to their lowest level since February 2025.
30-year fixed mortgage rates hit 7%, its highest since January 2025, up from 6.3% a year earlier, as the Iran war’s fallout on energy prices and Treasury yields squeeze an already weak housing market.
Oaktree’s Howard Marks says Treasury buybacks only improve the interest-rate picture “cosmetically.” He says U.S. long-term bond yields are reflecting the fundamentals, including a total lack of fiscal discipline.
Blackstone is developing a hybrid CLO blending broadly syndicated loans with private credit, allowing managers to shift allocations between the two asset classes to capture higher private credit spreads while tapping the syndicated market’s greater liquidity.
Fortress-backed railroad Brightline is preparing to file for Chapter 11 bankruptcy, targeting a restructuring of $1.1Bn in corporate debt while excluding its operating unit.
BlackRock developed three model portfolios that Ondo Finance is tokenizing for blockchain trading, launching Thursday alongside four other tokenized portfolios.
Darktrace CEO Ed Jennings says AI agents are the new “insider threat.” Darktrace is launching tools that track shadow AI, agent identities, and agent behavior.
Deep Dives:
Carlyle’s AlpInvest says today’s private credit uncertainty is creating opportunities for credit secondary buyers. Returns increasingly come from disciplined selection rather than simply owning the asset class.
J.P. Morgan says payment security now extends across the full payment stack. As AI helps attackers scale impersonation and credential theft, what matters is how well every layer holds together when something goes wrong.
Carlyle’s Jason Thomas says AI’s biggest players might want regulation. Frontier labs face upfront costs that have been increasing at a 3x-to-5x annual rate, which he says sounds precisely like the “ruinous competition” that spurs businesses to demand public intervention.
Letterboxd is seeing takeover interest from A24, Sony, and the New York Times. Seller Tiny values the platform at around $300M, up from $60M when it bought its 60% stake four years ago.
Starbucks plans to close 250 underperforming North American cafes, its second closure under CEO Brian Niccol, taking $300MM in restructuring charges as part of a broader goal to cut $2Bn in costs by FY2028.
MLB raised its private equity ownership limit for teams to 20%, up from 15%. The change brings baseball in line with the NBA, NHL, and MLS.
WhiteHorse Capital led a new first lien credit facility for Searchlight Capital’s take-private of KORE Wireless. WhiteHorse initially provided financing to Kore in November 2023, which was refinanced as part of this transaction.
Morgan Stanley’s Ellen Zentner says AI’s next wave may reward the companies using it most effectively. About 25% of S&P 500 companies cited at least one quantifiable AI impact as of July 2026, up from 15% in Q3 2025.
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M&A Transactions💭
Theravance Biopharma, a biopharmaceutical company, was acquired for $929.0M by Zymeworks (NAS: ZYME). EV/EBIDTA was 19.37x and EV/Revenue was 8.91x. Evercore Group and Lazard advised on the sale.
Sandals Resorts International, operator of adults-only all-inclusive resorts, has reached a definitive agreement to sell a 50% stake for $3.0B by Royal Caribbean Cruises (NYS: RCL). Bank of America and PJT Partners advised on the sale.
Interplex, manufacturer of interconnect and mechanical products, was acquired for $900.0M by BizLink Group (TAI: 3665). EV/Revenue was 2.3x. J.P. Morgan advised on the sale.
The Chilean Containerboard and Corrugated Business of Empresas CMPC (SGO: CMPC) has reached a definitive agreement to be acquired for $420.0M by Smurfit WestRock (NYS: SW). J.P. Morgan advised on the sale.
Shelly Group (XBUL: SLYG), engaged in the acquisition, management, evaluation, and scale of participations in Bulgarian & foreign companies, has reached a definitive agreement to be acquired for EUR 1.2B by SE 2026 A, a subsidiary of Schneider Electric (PAR: SU). EV/EBITDA was 34.31x and EV/Revenue was 7.68x. J.P. Morgan advised on the sale.
MyCar Tyre and Auto, distributor of vehicle tires, was acquired for AUD 350.0M by Continental (ETR: CON). Moelis & Company advised on the sale.
Domo (NAS: DOMO), provides a cloud-based platform, was acquired for $400.0M by Progress Software (NAS: PRGS). EV/Revenue was 1.27x. Jefferies advised on the sale.
Private Placement Transactions💭
Blue Origin Enterprises, developer of space technology, raised $10.0B of venture funding at a pre-money valuation of $130B.
TEKEVER, developer of AI-centric unmanned aerial systems, raised $580.0M of Series D venture funding led by Baillie Gifford at a pre-money valuation of $5.82B.
Numeral, developer of an online sales tax filing platform, raised $100.0M of Series C venture funding led by Insight Partners.
Hubble Network, manufacturer of aviation and aerospace-related communication components, raised $200.0M of Series C venture funding in a deal led by Smith Point Capital at a pre-money valuation of $1.3B.
Enveda, developer of a drug discovery platform, raised $311.0M of Series E venture funding led by Catalio Capital.
Blue Sail Bosheng, manufacturer of medical equipment, raised CNY 700.0M of Series B+ venture funding from undisclosed investors at a pre-money valuation of CNY 4.0B.
Basecamp Research, developer of an AI platform, raised $140.0M of Series C venture funding led by S32.
Aerospacelab, developer of satellite systems, raised EUR 150.0M of Series C venture funding from undisclosed investors.
Precision Neuroscience, developer of a brain-computer interface device technology, raised $250.0M of Series D venture funding led by Pershing Square.
Island, developer of an enterprise browser, raised $400.0M of Series F venture funding led by Evolution Equity Partners at a pre-money valuation of $6.0B.
Noteworthy Chart 🧭
Midlevel private equity professionals are leaving the industry due delayed exits and carry accruing to the top professionals instead.
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