🍋 Deal of the Century

Inside UBS' $29B record profit, plus the 3D Apple Watch, and why Anguilla is the new AI hotspot.

Together With

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“In the business world, the rearview mirror is always clearer than the windshield.” — Warren Buffett

 

Good Morning and Happy Friday! The tropical island Anguilla is poised to rake millions this year from selling .ai domain registrations to startups. Meanwhile, the PCE price index, the Fed’s preferred inflation measure, nudged higher in July. And Americans are spending more rapidly than their earnings can catch up.

Apple is testing out 3D printing for the next generation of Apple Watches. And a new study found that just a single dose of a magic mushroom psilocybin can ease depression, potentially becoming a cost-effective alternative for treating mental health disorders.

SQUEEZ OF THE DAY

Deal of the Century

UBS announced their Q2 earnings yesterday - and they smashed the quarterly banking record when they raked in a $29 billion profit.

The reason for the eye-popping profit? An accounting maneuver recognizing “badwill” - the difference in value between Credit Suisse’s balance sheet and the $3.6 billion UBS forked over to acquire the struggling lender.

And some even think UBS execs are lowballing estimates. And the bank’s record-breaking profit confirms there are no lurking monsters in Credit Suisse's financial closet. Investors had a feeling things were in good shape when UBS gave up its loss-protection agreement with the Swiss government.

The other major announcement in earnings? Swiss regulators will let UBS keep Credit Suisse’s domestic bank, which is a cash cow.

But as UBS absorbs its formal rival, it’ll cut two-thirds of Credit Suisse's investment bank and shift away from riskier bets.

Takeaway: The UBS-Credit Suisse acquisition is looking like an absolute heist. And while the $29 billion profit can be explained as a special situation, UBS is on the up - especially if they’re able to keep most, if not all, of Credit Suisse. Deal of the century.

CAPITAL PULSE

Markets Rundown

Stocks closed mixed as inflation data muddies optimism.

Movers & Shakers

  • (+) Canopy Growth ($CGC) +26% after the HHS called for easing cannabis restrictions.

  • (+) Okta ($OKTA) +5% after a Q2 earnings beat.

  • (–) Chewy ($CHWY) -12% after the pet food company says customers are growing more cautious.

Private Dealmaking

  • Trustar Capital bought Moritex, an optics components provider, for $275 million

  • AI21 Labs, a generative AI systems developer, raised $155 million 

  • Otto, a veterinary clinic customer engagement platform, raised $43 million

  • General Fusion, a nuclear fusion developer, raised $25 million

  • Fulcrum, a provider of cloud software for manufacturers, raised $18 million

  • Gitai, a robotic satellite developer, raised $15 million

Get access to private deal flow here.

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HEADLINES

Top Reads

  • Hectic private equity recruitment process leaves firms looking for alternatives (WSJ)

  • Goldman used to be a dream, now it’s just a bank (BB)

  • Corporate profits are down from last year’s heights (Axios)

  • Why Salesforce’s mega deals still matter after earnings (YF)

  • A big private equity deal sparks a rare worker strike in Japan (Axios)

  • Revenge travelers are feeling ripped off as costs bite (BB)

  • Why the Swift, Beyoncé, Barbie wind-down may hurt the US economy this fall (YF)

  • Private jet market heads for a smooth landing (BB)

  • Citadel’s extreme math champ (Axios)

BOOK OF THE DAY

Random Acts of Medicine

As a University of Chicago–trained economist and Harvard medical school professor and doctor, Anupam Jena is uniquely equipped to answer these questions. And as a critical care doctor at Massachusetts General who researches health care policy, Christopher Worsham confronts their impact on the hospital’s sickest patients. In this singular work of science and medicine, Jena and Worsham show us how medicine really works, and its effect on all of us.

Relying on ingeniously devised natural experiments—random events that unknowingly turn us into experimental subjects—Jena and Worsham do more than offer readers colorful stories. They help us see the way our health is shaped by forces invisible to the untrained eye. Is there ever a good time to have a heart attack? Do you choose the veteran doctor or the rookie?  Do you really need the surgery your doctor recommends?

These questions are rife with significance; their impact can be life changing. Addressing them in a style that’s both animated and enlightening, Random Acts of Medicine empowers you to see past the white coat and find out what really makes medicine work—and how it could work better.

“This groundbreaking book reveals the hidden side of medicine and how unexpected—but predictable—events can profoundly affect our health.”

ENLIGHTENMENT

Short Squeez Picks

  • 3 strategies to communicate with precision

  • The life events most likely to change your personality

  • Chanel is opening a diner in Brooklyn

  • How to balance showcasing confidence and humility

  • 3 tips to make a meaningful career shift

DAILY VISUAL

Corporate Profits are Way Down, Yet Investors Remain Untroubled

Annual change in US corporate profits

Source: Axios

BUYSIDE INVESTING

OneFund is Increasing Access to PE and VC Investing

OneFund is revolutionizing the buyside space, helping more individuals access and learn about top-tier private equity and venture capital funds.

Despite outperforming public markets over the last 25 years, access to top-tier PE and VC funds remains locked behind high investment minimums and complexity. OneFund is changing this.

Click here to request to join, learn about PE and VC, or book a call with the founding team (plus they have a fantastic newsletter!)*.

DAILY ACUMEN

Let’s Play

It seems we've been underestimating the value of play, not just for children but also for adults. Recent research, spearheaded by experts like Kathy Hirsh-Pasek, reveals that play is more than mere child's play—it's an essential component for mental health, creativity, and social engagement. This isn't merely a whimsical notion; it's backed by hard science, spanning neuroscience to evolutionary biology.

Interestingly, the pandemic appears to have acted as a catalyst, forcing a reconsideration of the work-play balance. A striking number of adults—nearly 50 million—have quit their jobs post-pandemic, and there's been a surge in "adult play," from jigsaw puzzles to video games. Even cities are incorporating "playful learning landscapes" in public spaces to foster this important activity.

The benefits of play are wide-ranging and include the release of neurochemicals like dopamine and oxytocin, which elevate mood and facilitate learning. Notably, this isn't just about individual wellness. Play is a social activity that can counteract the pervasive loneliness and isolation that many have experienced recently.

The emphasis on relentless work at the expense of play appears to be shifting. It's a trend supported by scientific evidence and one that promises benefits for our well-being, creativity, and communal life.

MEME-A-PALOOZA

Memes of the Day

 

 

*This should not be construed as, nor is it intended to be, an offer to sell or solicitation of an offer to buy any securities, or participate in any investment, or as any form of advice. OneFund is not a registered investment adviser or registered broker-dealer and does not provide investment recommendations or advice of any kind.

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