🍋 Cava 🤝 Chicago

Why Cava's new bet on the Midwest could be boom-or-bust, plus the latest on Apple earnings.

“Only when the tide goes out do you discover who's been swimming naked.” — Warren Buffett

Good Morning! Sony/Apollo made a $26 billion cash offer for Paramount. Barclays is cutting up to a few hundred underperforming investment bankers. Peloton stock has lost 98% value since pandemic highs and is now laying off 15% of its staff, with the company’s CEO also stepping down, too. Apple announced a $110 billion share buyback program and beat earnings, even as iPhone sales declined 10%. And investors are growing optimistic that the Fed is done hiking rates. 

If you haven’t already, make sure you are subscribed to our PE, VC & M&A newsletter Buysiders, and read this month’s edition, where we cover Bird’s 99% destruction in value.

SQUEEZ OF THE DAY

Cava 🤝 Chicago

Cava has become one of NYC investment bankers' go-to lunch spots. Known for being the 'Chipotle of Mediterranean' with its bowls and pitas, its share prices have almost doubled since its IPO last June. 

Cava was founded near Washington D.C. but the chain experienced exponential growth when its lunch options went viral in NYC. 

And now Cava is eyeing its next region to try and dominate - the Midwest. Cava had been eyeing the Midwest for almost a decade, but they finally pulled the trigger and opened the chain's first Chicago location last week.

Cava wants to open Chicago chains both in residential neighborhoods in the city close to the office district, as well as a few in the city's northern suburbs.

Takeaway: It's an interesting bet - the Midwest has experienced population declines since the pandemic. And Chicago especially is struggling to bounce back. Its office occupancy rates are hovering around 50% (Cava won't open any chains in the Loop for now) and many of its high-profile corporations have left like Citadel, Boeing, and Caterpillar. 

But Cava has become one of investors’ favorite picks since it IPO’d - and many compare it to Chipotle. So, if the Midwest expansion works out, it could be Cava’s next step to fast casual dominance.

WHAT ELSE TO READ

The Best PE, VC & M&A Newsletter

Buysiders is our deals newsletter to bring y’all the best insights on deals around Wall Street.

Every month, you get insider details on the month’s top 3 deals. For this month’s edition, we cover the following deals:

  1. Home Depot acquires SRS Distribution for $18Bn.

  2. BHP’s unsolicited offer to buy Anglo American for ~$39Bn.

  3. Bird Scooters emerges from bankruptcy as a shell of itself.

Read the full edition here and subscribe to the newsletter below.

HEADLINES

Top Reads

  • Sony and Apollo make $26B cash offer for Paramount (Axios)

  • Barclays will cut a few hundred investment banking underperformers (Reuters)

  • Peloton CEO steps down, 15% of staff laid off (CNBC)

  • Apple announces $110B share buyback and beats earnings, even as iPhone sales decline 10% (CNBC)

  • Legal lawsuit over Wall Street’s ‘Fearless Girl’ statue is settled (Reuters)

  • Jay Powell won’t give into the market’s biggest fear (YF)

  • Bored Ape Yacht Club’s NFTs have fallen 90% (CNBC)

  • Big Tech’s AI spending spree comes with a catch (YF

  • Why the olive oil industry is in unprecedented turmoil (CNBC)

  • Third Point’s Loeb adds big stake in Alphabet, says AI is nearly half its portfolio (CNBC)

CAPITAL PULSE

Markets Rundown

Stocks rallied ahead of the April jobs report because of optimism over inflation progress.

Movers & Shakers

  • (+) Carvana ($CVNA) +34% after the used car retailer posted its best quarter ever.

  • (+) Wayfair ($W) +16% after the furniture retailer cut losses by $100M.

  • (–) DoorDash ($DASH) -10% after the food delivery service lost more money than expected.

Private Dealmaking

  • Novartis bought Mariana Oncology, a radiopharmaceuticals developer, for $1.75 billion 

  • CoreWeave, a cloud computing platform, raised $1.1 billion

  • Carlisle bought MTL Holdings for $410 million

  • Hologic bought Endomagnetics, a cancer treatment  startup, for $310 million

  • Altruist, an investment advisor platform, raised $169 million

  • Transcarent, a healthcare navigation company, raised $126 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

The Demon Of Unrest

On November 6, 1860, Abraham Lincoln became the fluky victor in a tight race for president. The country was bitterly at odds; Southern extremists were moving ever closer to destroying the Union, with one state after another seceding and Lincoln powerless to stop them. Slavery fueled the conflict, but somehow the passions of North and South came to focus on a lonely federal fortress in Charleston Harbor: Fort Sumter.

Master storyteller Erik Larson offers a gripping account of the chaotic months between Lincoln’s election and the Confederacy’s shelling of Sumter—a period marked by tragic errors and miscommunications, enflamed egos and craven ambitions, personal tragedies and betrayals. Lincoln himself wrote that the trials of these five months were “so great that, could I have anticipated them, I would not have believed it possible to survive them.”

At the heart of this suspense-filled narrative are Major Robert Anderson, Sumter’s commander and a former slave owner sympathetic to the South but loyal to the Union; Edmund Ruffin, a vain and bloodthirsty radical who stirs secessionist ardor at every opportunity; and Mary Boykin Chesnut, wife of a prominent planter, conflicted over both marriage and slavery and seeing parallels between them.

In the middle of it all is the overwhelmed Lincoln, battling with his duplicitous secretary of state, William Seward, as he tries desperately to avert a war that he fears is inevitable—one that will eventually kill 750,000 Americans.

“The author of The Splendid and the Vile brings to life the pivotal five months between the election of Abraham Lincoln and the start of the Civil War—a simmering crisis that finally tore a deeply divided nation in two.”

DAILY VISUAL

US Labor Productivity

Source: Axios

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DAILY ACUMEN

Systems

In a world increasingly obsessed with quick results and final outcomes, James Clear's philosophy in "Atomic Habits" offers a refreshing shift. He argues that true success comes from disregarding fleeting goals and focusing instead on robust systems.

Imagine a basketball coach who, instead of fixating on winning the championship, concentrates solely on refining daily practice routines. Clear suggests that such a focus not only leads to success in sports but can be applied universally.

By embracing a systems-first approach, we move away from the traditional goal-centric mindset, which often leads to temporary triumphs and persistent frustrations.

This shift isn't just about improving productivity or performance—it's about cultivating a sustainable process that enhances our daily lives and long-term happiness.

By investing in the mechanisms of our actions, we set the stage for continual improvement and genuine, lasting achievements.

ENLIGHTENMENT

Short Squeez Picks

MEME-A-PALOOZA

Memes of the Day

 

 

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