Good Morning! BofA is no longer working with Chicago on the sale of debt owed to the city from fines and fees. Eli Lilly is buying psychedelics maker AtaiBeckley for $2.8 billion as experimental treatments gain traction. And Apollo plans to put as much as $20 billion to work financing projects in Mexico.

Nvidia-backed Fireworks hit a $17.5 billion valuation as companies chase cheaper AI models. Wall Street's profit boom has Europe ripping up its banking rulebook. And Trump Media launched an API to give paying customers real-time access to market-moving Truth Social posts.

Plus: Why IPOs of tiny foreign companies have vanished in the US, and 7 fitness habits of highly effective CEOs.

Get access to early-stage investment opportunities with Alumni Ventures. See their current deals.

SQUEEZ OF THE DAY

Connecticut Gets a Water LBO

Dozens of wealthy Connecticut towns are about to learn an important lesson: public ownership can still feel a lot like a leveraged buyout when the debt service shows up in your water bill.

Aquarion is Connecticut's largest water utility, serving about 59 towns (much of Fairfield County) that Eversource had owned and wanted out of. Now a public authority is selling $2.4 billion of bonds to buy it. It is the biggest bond sale in the state's history, and the buyer is technically public, but customers are looking at roughly 60% rate increases over the next decade.

This is not Apollo buying a water company and squeezing customers; it is the South-Central Connecticut Regional Water Authority, which spun up a new affiliated authority to absorb Aquarion and serve towns like Greenwich, Stamford, Darien and Westport, then used a giant debt raise to finance the deal. Connecticut's hedge fund suburbs did not get bought out by private equity; they got bought out by municipal finance, and somehow the bill still went up.

Aquarion argues the deal helps customers over time because a public authority can borrow through tax-exempt bonds, avoid corporate income taxes and stop paying shareholder returns. It also says the system needs serious investment: pipe replacements, treatment plant upgrades and compliance with new rules around forever chemicals.

But the customer version is simpler: my water company changed hands, PURA no longer sets the rates the way it used to, and now my bill is going up. The new board of municipal officials is responsible for approving rates high enough to cover costs and bond payments. S&P viewed the board's willingness to raise rates as a credit positive, exactly the kind of sentence bondholders love and homeowners in Darien do not.

Takeaway: Connecticut just invented the public-sector version of an LBO. A water utility needed capital, Eversource wanted out, a new authority borrowed billions to buy it, and ratepayers are now staring at a decade of hikes to help make the math work. The pitch is long-term savings and better infrastructure, but the reality is that even when the buyer is public, leverage still has to be paid back by someone. In this case, that someone has a sprinkler system in Fairfield County.

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HEADLINES

Top Reads

• Bank of America exits Chicago plan to sell overdue parking debt (BB)

• Eli Lilly to buy psychedelics maker AtaiBeckley for $2.8 billion (CNBC)

• Apollo bets on Mexico with $20 billion target for private credit (BB)

• Nvidia-backed Fireworks hits $17.5 billion valuation as companies pursue cheaper AI models (CNBC)

• Wall Street's profit boom has Europe ripping up its banking rulebook (CNBC)

• Truth Social to license its data to Wall Street (Axios)

• Why IPOs of tiny foreign companies have vanished in US (BB)

• Netflix revenue, profit grow despite concerns about keeping subscribers hooked (WSJ)

• Vital Signals announces $399 Signal Ring that gives blood pressure readings (BB)

• Evicting Wall Street from the housing market will be messy (WSJ)

• Trump promoted companies on Truth Social days after buying their stocks (CNN)

• Hedge funds turn to smaller, independent firms for trade ideas (BB)

• Uber agrees to buy Delivery Hero in $14.8 billion deal to expand global food delivery business (Yahoo Finance)

• Nvidia reveals new AI model and expands Japan's physical AI ecosystem (CNBC)

• TSMC to invest additional $100 billion in Arizona after second-quarter profit soars 77% (CNBC)

CAPITAL PULSE

Markets Rundown

Market Update

• U.S. equities closed modestly lower, with the Nasdaq underperforming the S&P 500 and Dow as technology stocks continued to consolidate.

• South Korea's KOSPI fell more than 6%, pressured by weakness in semiconductor shares.

• WTI crude oil declined to around $79 per barrel, while the 10-year Treasury yield edged higher to 4.56%.

• Market leadership continues to broaden, with strength rotating beyond technology into other sectors.

Inflation

• June PPI inflation slowed to 5.5% year over year, down from 6.0% in May, while monthly PPI declined 0.3%.

• Core PPI increased 0.2%, below expectations, reinforcing this week's softer CPI report.

• Markets continue to price in no change at the July Fed meeting, with expectations for September remaining mixed.

Earnings

• Second-quarter earnings season is underway, with J.P. Morgan, Citigroup, and Goldman Sachs all reporting results above expectations.

• S&P 500 earnings growth is now expected to reach roughly 23% year over year, up from about 14% at the start of the quarter.

• Alphabet and Tesla report next week, followed by Meta, Microsoft, Amazon, and Apple, with investors focused on AI-related capital spending and returns on those investments.

Movers & Shakers

• (+) ManpowerGroup ($MAN) +32% after returning to profitability in Q2, beating earnings estimates, and issuing Q3 EPS guidance above expectations.

• (+) Abbott ($ABT) +11% because the company beat Q2 earnings expectations and raised its full-year 2026 adjusted EPS guidance.

• (–) Sweetgreen ($SG) -7% after after concerns over the cyclosporiasis outbreak, a parasitic intestinal infection spread through contaminated raw produce.

Prediction Markets

• The World Cup is this Sunday at 3pm EDT. Spain are favorites to win with 58.6% odds.

• Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

• Uber announced plans to acquire Delivery Hero for $14.8 billion

• ABB agreed to acquire Rotork, a manufacturer of electric actuators, for $5.5 billion

• Eli Lilly agreed to buy AtaiBeckley, a psychedelic treatment developer, for up to $3.8 billion

• Fireworks, a custom training company, raised $1.5 billion

• Walden Robotics, a general-purpose robotics company, raised $300 million

• Astro Mechanica, a developer of turboelectric supersonic jet engines, plans to raise $250 million

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

BOOK OF THE DAY

Wrong Number

Description:
A timely guide from Aaron Brown on navigating a world flooded with misleading statistics, flawed analyses, and data taken out of context. Drawing on decades of experience in quantitative finance and risk management, the book explains how numbers can be manipulated to persuade, confuse, or deceive. It equips readers with practical tools to evaluate evidence, recognize statistical traps, and make better decisions by separating meaningful insights from quantitative noise.

Book Length: 320 pages
Release Date: September 2, 2025

Ideal For:
Investors, business leaders, analysts, and anyone looking to improve data literacy, critical thinking, and decision-making in an increasingly data-driven world.

Numbers reveal the truth only when you first understand how easily they can be used to hide it.

DAILY VISUAL

Cover Ratios for Hyperscaler Bonds Declining

PRESENTED BY MOSAIC

Bain: "PE Is Sitting on 32,000 Unsold Companies"

Bain's new Global PE Report put out a huge number: private equity is holding 32,000 unsold companies worth $3.8 trillion. After years of waiting, the exit window appears to be opening. 

Medline's listing was the largest PE-backed IPO in history, corporate buyers are back, and Bain's survey of GPs indicates a belief in that momentum carrying through 2026. But buyers are still selective, and the deals getting done are the ones where the seller can back up the price.

PE firms are getting exit-ready in Mosaic, where a new Football Field tab adds a DCF, public comps, and precedent transactions to any completed LBO in one click, and the redesigned Deals View keeps models, metrics, and documents in one place for the whole team.

See why firms are turning to Mosaic for modeling.

DAILY ACUMEN

Delayed Feedback

Expertise only develops where feedback is fast and clear. A surgeon knows within hours. A chess player knows within moves. Those fields produce genuine mastery, because reality corrects the practitioner constantly and mercilessly.

Now consider the fields where the feedback loop runs for years. Hiring. Strategy. Long-horizon investing. Parenting. By the time the outcome arrives, so many other variables have entered the picture that the lesson is unreadable, and the practitioner has usually forgotten what they were actually thinking at the time. These fields produce enormous confidence and almost no calibration.

The implication is uncomfortable for anyone whose career sits in the second category. Your intuition is not being trained by experience the way you believe it is. The only real defense is to write down your reasoning before you know the answer, so that when the answer eventually arrives, there is something honest to check it against.

ENLIGHTENMENT

Short Squeez Picks

• 7 fitness habits of highly-effective CEOs

• How to deescalate your heightened emotions at work

• 6 habits of emotionally intelligent leaders

• A non-billionaire’s guide to the Hamptons

• A simple evening routine for better sleep

MEME-A-PALOOZA

Memes of the Day

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