🍋 Private Equity's Food Fiasco

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Good Morning! The PC industry is grappling with excess inventory and a lack of demand, and Apple’s year-over-year MacBook shipments fell by over 40%. Chipotle’s launching new franchises that will use all-electric equipment.

NYC hotel workers scored huge raises, and union members will make 35% more. Front-desk workers and housekeepers will now make about $27 per hour.

Bitcoin surged to $30k for the first time in almost a year. The amount of office space available for rent in the U.S. hit a record high. And the FBI says you shouldn’t use public phone charging stations because hackers are using the USB ports to load malware.

Our Wall Street Brews Drop just hit the floor like a sack of cash. We've rounded up the Top 12 quotes Overheard on Wall Street and slapped them onto mugs so tastefully crafted, you'd think they were designed by Gordon Gekko himself. Explore the full collection here or shop for individual mugs.

1. Story of the Day: Private Equity's Food Fiasco

The once-promising investment landscape for food companies has taken a sharp turn, leaving private equity investors with a bitter aftertaste.

The private equity industry has historically invested about $5-10 billion into the food and beverage industry, but 2021 shattered all records. In a bellwether year, private equity funds gobbled up 786 food and beverage companies worth $32 billion in total value.

Fund managers thought that staple goods like food would rake in consistent profits no matter how the economy fared. But the food industry has been hit hard by a triple threat of higher labor costs, supply-chain disruptions, and surging inflation.

As a result, food manufacturers are struggling to generate enough cash to cover the mountain of debt piled on them by private equity investors. And to make things worse, private equity portfolio companies often borrow ‘floating loans,’ which means interest rates move with the Fed’s rate hikes.

Consumers and investors alike are feeling the heat as food prices continue to soar. Food prices jumped by 10% in 2022 alone, and the pressure is mounting for even more price hikes.

Takeaway: Private equity investors are finding the food industry is less recession-proof than they previously thought. The Fed’s rate-raising campaign impacts every aspect of the economy, especially the food companies that are levered tf up. As private equity food portfolio companies struggle to pay back loans, consumers can expect rising food prices at supermarkets…

2. Markets Rundown

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Stocks edged lower but all eyes are on Wednesday’s CPI data.

Movers & Shakers

• (+) Weight Watchers ($WW) +59% after the company’s stock was upgraded by Goldman, will push into the obesity medicine market.

• (+) CarMax ($KMX) +10% after the used car company's earnings exceeded analyst expectations.

• (–) Moderna ($MRNA) -3% after the pharmaceutical company announced it will delay its flu vaccine rollout.

Private Dealmaking

• Brookfield Infrastructure will buy Data4, a data center operator, for $3.8 billion

• KKR bought a 30% stake in communications consultancy FGS Global for $428 million

• Kite, a brand acquisition and investment platform, raised $200 million

• Gigstream, a broadband provider, raised $59 million

• Soft Space, a payments platform, raised $31.5 million

• Fivecast, an open-source intelligence software developer, raised $20 million

Wall Street Brews Drop ☕

Hey there, coffee connoisseurs! Want to upgrade your morning routine with a touch of humor and a splash of style? Feast your eyes on the Wall Street Brews drop.

We've crafted a limited supply of mugs that are sure to make you the envy of your office (or home office, we don't judge). Featuring our Top 12 Wall Street quotes, these mugs are the perfect blend of sophistication and sarcasm.

Imagine starting your day with a sip of coffee from a mug that reads "I just need a job where I do nothing" or "Don't smile, it communicates capacity". You'll be the life of the virtual meeting (and maybe even score some bonus points with your boss).

And if you want to collect them all, we've got a discounted bundle for you.

Shop our individual mugs below and add some humor to your daily grind.

1. This drink tastes like I can do another year of banking

2. Never let anyone ruin your day. Ruin theirs first

3. What a great day to hate your job

4. Private Equity is an essential service

5. I pick my guys like I pick my stocks, always bet on the losers

6. Pronouns? Tired/Depressed/Anxious

7. Tax the fat, not the rich

8. Don't smile, it communicates capacity

9. If you don't work on Wall Street, you don't matter to me

10. Anyone that is happy at their job doesn't make a lot of money

11. I just need a job where I do nothing

12. I didn't get this far in life being sober

3. Top Reads

• The earnings recession is about to begin (YF)

• IMF cuts GDP forecast, says global economy heading for weakest growth since 1990 (CNBC)

• US labor market is showing shades of 2019 (Axios)

• Why Amazon is underperforming Meta despite similarities (YF)

• Blackstone raises $30.4 billion for latest real estate fund (Reuters)

• What to watch in March inflation report (Axios)

• The FedEx driver could be going extinct (BB)

• Billionaire Ken Griffin gives $300M to Harvard (Fox)

• AI is flooding the workplace, and workers love it (Vox)

• Why leasing an EV might be a smarter choice right now (Axios)

4. Shortform Book of the Day: Trust

Trust is the fuel for all of life. We are wired biologically, neurologically, emotionally, spiritually, and psychologically to trust.

Trust is the currency that drives every relationship, beginning with the foundational bond between infants and their mothers, extending to the trust networks that undergird every human endeavor – art, science, commerce – and binding together every relationship we have ever had or ever will have. Nothing in our world works without trust.

It is tempting to think that trust is simple, that we should be able to spot a lack of trustworthiness relatively easily. But we all have our stories about misplaced trust. We either missed clear or subtle warning signs or there just were not any warning signs to see. Everything looked good on the surface, and maybe it was. But we got burned anyway.

And sometimes we struggle to earn and keep the trust of those around us when trust bonds fail to form or are broken. When trust breaks down, so does our ability to move forward.

Dr. Cloud explores the five foundational aspects of trust that must be present for any relationship to function successfully and helps us to understand how to implement them. He also guides us through the difficult process of repairing trust when it has been violated and broken, even when restoring trust feels impossible.

Rich with wisdom drawn from decades of experience in clinical practice, business consulting and research, Trust is the ultimate resource for managing this most complex and fundamental of human bonds, allowing us to experience more fruitful and rewarding relationships in every area of our lives.

“Understand and manage trust for successful relationships through five foundational aspects.”

Read More Books in Finance, Economics, and More with Shortform

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5. Short Squeez Picks

• Stop telling everyone what you do for a living

• A two-minute burnout checkup

• Common phrases people with high emotional intelligence use

• 15 unconventional rules about life, money, and success

• The problem with weather apps

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6. Daily Visual: Office Space Available for Rent Hits New Record High

US office space available for lease

_{Source: Axios}

7. Daily Acumen

Overthinking can be a common pitfall for intelligent individuals, often leading to analysis paralysis and inaction.

When it comes to success, strategic thinking is essential, but it's important to recognize when your intelligence might be getting in the way.

In today's daily acumen, we explore how to overcome overthinking and make smarter decisions.

Identify the Signs of Overthinking: Be mindful of when your thoughts begin to spiral or when you're excessively weighing the pros and cons of a decision. Recognizing the signs of overthinking can help you intervene and change your approach.

Allow for Unconscious Processing: Sometimes, it's best to step away from a problem and let your brain work on it unconsciously. Engage in other activities, get some rest, or meditate to give your mind a break and allow for insights to emerge naturally.

Consider Values and Ethics: When faced with a difficult decision, it might be more a matter of values and ethics rather than logical analysis. Reflect on your personal beliefs and values to help guide your choices.

Embrace Hands-on Experimentation: Instead of getting stuck in thought loops, try a hands-on approach. Test ideas, prototype solutions, or gather data through experience, as this can often be more informative than merely thinking about the problem.

8. Memes of the Day

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