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a16z is hoarding Nvidia chips to win AI VC deals, Costco will raise membership fees for the first time since 2017, Bill Hwang was convicted of fraud, and NYC paid $4M to McKinsey for a study on trash cans.

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Let’s dive in.

Before The Bell

As of 07/10/2024 market close.

Markets

  • Megacap tech stocks continued to power US markets higher ahead of a crucial CPI report

    • The S&P closed for a sixth-straight ATH for its longest such streak since 2021

    • The S&P also logged its longest rally since November 

  • Traders are pricing in a 46% chance of two Fed rate cuts by year-end

Earnings

  • What we're watching this week:  

    • Today: Delta, PepsiCo

    • Friday: JPMorgan, Wells Fargo, Citigroup

  • Full calendar here

Headline Roundup

  • Archegos founder Bill Hwang was convicted of fraud (FT)

  • J Pow said political calendar will not affect Fed rate decisions (RT)

  • PIMCO thinks credit yields are failing to compensate for risks (BBG)

  • Top ECB official warned of systemic risks from shadow banking (FT)

  • New Zealand held rates at 5.5% (RT)

  • Saudi Arabia threatened to sell French debt if G7 seized Russian assets (BBG)

  • Investors continue to pour in European ETFs despite election jitters (FT)

  • Asia leads as EM portfolios see eighth-straight month of inflows (RT)

  • $4T muni market is facing pressure as federal aid sunsets (BBG)

  • CRE exposure is stifling buybacks at US regional banks (RT)

  • a16z is hoarding Nvidia chips in effort to win AI VC deals (TI)

  • Spotify is aiming to be a social app (TC)

  • Microsoft and Apple dropped OpenAI board observer seats (FT)

  • Costco will hike membership fees for first time in seven years (RT)

  • Toyota joined group of automakers building US EV network (RT)

  • UK is expected to lose the most millionaires by 2028 (FT)

  • Microsoft will pay $22M to settle EU cloud antitrust complaint (RT)

  • NBA finalized a $76B broadcasting deal with ESPN, Amazon and NBC (NYT)

  • Fed fined Citigroup $136M for failing to address data issues (RT)

  • Intuit will cut and rehire 1.8k workers in AI pivot (WSJ)

  • 46% of Gen Z are relying on parents for financial support (RT)

  • A NYC penthouse sold for $135M in the priciest deal since 2022 (BBG)

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Deal Flow

M&A / Investments

  • Alphabet shelved plans to acquire $25B-listed marketing software firm HubSpot (BBG) 

  • First Abu Dhabi Bank is among potential suitors for a ~$5B, 51% stake in India's Yes Bank (BBG) 

  • Honeywell will acquire Air Products' LNG process technology and equipment business for $1.8B cash (RT) 

  • Swiss grocery retailer Migros is seeking to sell its cosmetics unit Mibelle and travel platform Hotelplan, which could fetch a combined $1B (BBG) 

  • Yokohama Rubber is in advanced talks to buy Goodyear's OTR tire business for over $1B (BBG)

  • UK housebuilder Crest Nicholson may recommend a sweetened $925M takeover offer from rival Bellway (FT) 

  • AMD will acquire Finnish AI startup Silo AI for $665M cash (FT) 

  • Canada’s CPP will acquire a 20% stake in business SaaS firm Team.blue from PE firm Hg for ~$600M (BBG) 

  • Credit Agricole is in advanced talks to acquire Societe Generale's German consumer-finance unit Hanseatic Bank, which could fetch a ~$650M valuation (BBG) 

VC

  • Hebbia, a GenAI model to search large documents and respond to large questions, raised a $130M Series B at a ~$700M valuation led by a16z (TC)

  • Hayden AI, a vision AI platform for smart cities, raised a $90M Series C led by The Rise Fund (BW)

  • X-Bow Systems, a producer of advanced manufactured SRMs and hypersonics technologies, raised a $70M+ Series B led by Razor's Edge (PRN)

  • Cloud-aware data infrastructure startup Volumez raised a $20M Series A led by KDT (PRN)

  • Mantle, a metal 3D printing tech for precision tooling, raised a $20M Series C led by Schooner Capital (BW)

  • AIRS Medical, a startup using AI to improve MRI scans, raised a $20M Series C led by BSK Investment and Shinyoung Securities (PRN)

  • Cytactic, a cyber crisis readiness and management platform, raised a $16M seed round led by Evolution Equity Partners (BW)

  • Nagish, an AI startup making communication accessible for deaf individuals, raised a $16M round led by Canaan Partners (FN)

  • Shalion, a big data platform for brands and CPGs, raised a $5.5M round led by Seaya Ventures (FN)

  • Lekko, a startup for developers to build software via dynamic configuration, raised a $4.5M seed round led by Addition and LUX Capital (FN)

IPO / Direct Listings / Issuances / Block Trades

  • Saudi Aramco raised $12.35B from its secondary offering (BBG) 

  • Ares-backed German landlord Peach Property Group is considering a capital raise to address a $325M bond maturing next year (BBG) 

  • Hong Kong conglomerate CK Hutchison is reviewing a potential spinoff and IPO of its European telecom unit (RT) 

  • Moove Lubricants, a CVC-backed unit of Brazil conglomerate Cosan, confidentially filed for a US IPO (BBG) 

  • Angola plans to IPO a 34% stake in seized Standard Bank de Angola (BBG)  

Debt

  • Saudi Aramco drew $31B worth of orders for its $6B dollar bond offering (BBG) 

  • PMB RxBenefits is seeking to raise ~$1B from direct lenders to refinance debt (BBG) 

  • Vietnamese EV maker VinFast is seeking a $250M bank loan to fund an Indonesia plant (BBG) 

Bankruptcy / Restructuring / Distressed

  • A judge ruled Silver Point Capital and PIMCO wrongly stripped collateral rights from lenders JPMorgan, BlackRock and King Street via a $250M rescue financing for Platinum Equity-backed aerospace parts supplier Incora (BBG)

  • A consortium led by business tycoon Mike Jatania is nearing a deal to buy UK cosmetics retailer The Body Shop out of administration (BBG) 

  • Canadian electric snowmobile maker Taiga Motors filed for creditor protection (BBG)

Fundraising

  • French insurer AXA's investment arm AXA IM raised $2.5B to invest in bank risk transfer trades (RT) 

  • VC Index Ventures raised $2.3B for two news funds, a $1.5B growth fund and an $800M VC fund (BW) 

  • Private markets firm H.I.G. Capital closed its third Europe realty fund at ~$1.3B (BW)

  • PGIM is raising $500M for its first Australian real estate debt fund (BBG) 

  • VC Benchmark raised $425M for its latest fund (AX) 

Crypto Corner

  • BitMEX pleaded guilty to charges over anti-money-laundering failures (WSJ)

Exec’s Picks

  • Check out the 95-slide long deck that McKinsey billed NYC $4M for…all to explain why trash bins are indeed effective.

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