Good Morning! Jefferies wrote off another $10M in First Brands exposure, souring otherwise strong earnings. Meta and Google were found liable for harm to children's mental health in a landmark US case. Barclays is pulling back from asset-based lending to smaller borrowers after two portfolio collapses.

SpaceX may move on a record $75B IPO as soon as this week. A Deutsche Bank strategist built a "pressure index" to predict when Trump is likely to TACO. And a Blitzer and Blackstone-backed group bought Indian cricket franchise RCB for $1.8B.

Plus: Why bankers are seeing dollar signs in private credit's meltdown, some hotels are transforming underused ballrooms into members-only spaces, and 5 ways to maintain deep focus from an attention span expert.

How reliable are LLMs for financial modeling? Find out here.

SQUEEZ OF THE DAY

KKR’s $2B Bundt Cake Deal

KKR has agreed to acquire Nothing Bundt Cakes from Roark Capital for more than $2 billion.

Nothing Bundt Cakes was founded by two mothers in Las Vegas in 1997 and sells frosted Bundt cakes in flavors like red velvet, confetti, and banana pudding. KKR is apparently allocating some of its $600 billion in AUM to cream cheese frosting.

The appeal is the model. Nothing Bundt Cakes is mostly franchised, asset-light, fee-heavy, and highly scalable. Franchisees take on the labor and operating headaches while the parent collects royalties.

Roark bought the chain in 2021, expanded it across hundreds of U.S. locations, and KKR is now buying a franchising system with predictable cash flow that just happens to sell cakes.

The deal also fits into a much bigger playbook in which private equity has spent years consolidating food and restaurant franchises. Roark already owns Subway, Dunkin', Arby's, and Jimmy John's through Inspire Brands. Blackstone bought Jersey Mike's. Sycamore grabbed Playa Bowls. In that context, Nothing Bundt Cakes is another tollbooth business in a category Wall Street increasingly treats like infrastructure.

The consumer concern, as always: when PE buys your favorite brand, the first question isn't about free cash flow, it's whether the product is about to get worse. Smaller portions, higher prices, slightly more depressing customer experience. KKR has been a leader in employee ownership programs though, so here's to hoping they go easy on the frosting.

Takeaway: KKR didn't buy a cake company. It bought a royalty stream wrapped in cream cheese icing. The bet is that Americans will keep celebrating birthdays, graduations, and random office Tuesdays with a Bundt cake. Historically, that's been a pretty good wager.

PRESENTED BY MOSAIC

How Reliable Are LLMs for Financial Modeling?

AI has transformed how Wall Street handles language-based work. Summarizing earnings calls, processing CIMs, drafting memos… for tasks like these, LLMs are definitely a game changer.

But financial modeling is a different problem entirely.

LLMs are probabilistic by nature. Run the same model twice and you get two different answers. For a summary of an expert call, that's fine. For an LBO supporting a multi-billion dollar investment decision, that's a structural problem.

A financial model needs to be 100% correct. A 99% accurate LBO is still a wrong LBO. And LLMs are nowhere near 99%...

AI adds more randomness to a system that needs less.

What firms actually need is purpose-built software where the math is locked in and never in doubt. Not AI making it up as it goes.

That's the approach Mosaic takes, fully automating the LBO process so the output is the same every single time. The questions on a deal should be about the business, not whether the math is working correctly.

Read the full article here.

HEADLINES

Top Reads

• Jefferies' investment banking windfall eroded by credit woes (BB)

• Meta, Google found liable in social media addiction case (BB)

• Barclays pulls back on asset-based lending after MFS, Tricolor (BB)

• SpaceX may move on record IPO as soon as this week (YF)

• Pressure on Trump? Wall Street's got an index for that (Axios)

• David Blitzer and Blackstone-backed group snaps up Indian cricket franchise RCB for $1.8 billion (CNBC)

• Why bankers see dollar signs in private credit's meltdown (WSJ)

• Private credit’s ‘zero-loss fantasy’ is coming to an end as defaults and fund exits rise (CNBC)

• Morgan Stanley's Wilson sees S&P profit boom despite Iran war (YF)

• Private credit's 'zero-loss fantasy' is coming to an end as defaults and fund exits rise (CNBC)

• Scion of $6 billion Carlyle fortune defies private equity slump (BB)

• Goldman Sachs lifts US recession probability to 30% (WSJ)

• Hotels are adding social club memberships, here's what you get (WSJ)

• Zuckerberg launches Meta small business initiative (Axios)

• Park Slope preschool director embezzled $2.8 million, US says (BB)

• Cruise influencers earn up to $350,000 as Gen Z drives industry growth (BB)

CAPITAL PULSE

Markets Rundown

Market Rebound

• U.S. equities moved higher on optimism around potential de-escalation in the Middle East

• S&P 500 +0.5%, while the Russell 2000 +~1% outperformed

• Gains were broad-based, with most sectors higher, led by consumer discretionary and materials

• Energy and real estate were the only sectors to lag

• Global markets followed suit:

  • Japan’s Nikkei ~3%

  • European equities 1%+

• Treasury yields declined, with the 10-year at ~4.32% and 2-year at ~3.88%

• WTI crude fell ~1.3%, settling near $91 per barrel

Geopolitical Developments

• Reports indicate the U.S. proposed a 15-point plan, including a one-month ceasefire

• Market sentiment improved on the prospect of easing tensions

• However, Iran has denied active negotiations, highlighting continued uncertainty

• A key signal to watch remains the resumption of oil flows through the Strait of Hormuz

• While volatility may persist, early data suggests economic activity remains resilient, with PMI readings still in expansion territory

Movers & Shakers

• (+) Arm Holdings ($ARM) +16% after the semiconductor company unveiled its first-ever in-house chip, the AGI CPU, designed for AI data centers, and projected it would generate $15 billion in revenue by 2031.

• (+) Chewy ($CHWY) +13% because the pet retailer beat Q4 adjusted EBITDA estimates and reported 30% growth in that metric year over year, with management guiding for continued margin expansion in fiscal 2026.

• (–) On Holding ($ONON) -11% after the Swiss sneaker company announced its CEO Martin Hoffmann will step down on May 1, with co-founders stepping in as co-CEOs 

Prediction Markets

• After this weekend, who will make the Final Four?

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

Private Dealmaking

• Merck will acquire Terns Pharmaceuticals for around $6.7 billion in cash

• A group including Blackstone acquired Royal Challengers Bangalore from United Spirits for $1.78 billion

• Halter, a developer of smart cow collars, raised $220 million

• Dash0, an observability platform, raised $110 million

• Mirage, the maker of the Captions video editing app, raised $75 million

• Normal Computing, a developer of software for chip design and thermodynamic computing, raised $50 million

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

BOOK OF THE DAY

The Algorithm

Description: A behind the scenes look at how some of the world’s most iconic companies scaled at extraordinary speed. Former Tesla president Jon McNeill distills the repeatable system he used to drive hypergrowth across multiple organizations, breaking down how leaders align product, operations, talent, and execution to unlock rapid expansion. The book focuses on practical frameworks rather than theory, showing how disciplined systems and decision making can turn ambitious visions into scalable outcomes.

Book Length: 222 pages
Release Date: March 24, 2026

Ideal For: Founders, operators, executives, and anyone interested in how high growth companies actually scale from the inside.

Hypergrowth is not luck or timing alone. It is the result of a repeatable system that aligns strategy, execution, and people around a clear objective.

DAILY VISUAL

70% of US Apple Users Pay for iCloud+ Storage

PRESENTED BY STELRIX

“Put It On My Stelrix”

Most consumers swipe plastic at 22% APR and buy liabilities that build debt.

High-net-worth individuals approach it differently. Through their private bank, they borrow against their portfolios - using securities-backed lines to fund real estate, art, even aircraft - while keeping their capital invested and compounding.

Stelrix brings that same strategy to your wallet.

Your card syncs directly to your investments, creating a dynamic line of credit backed by your portfolio. That means you can fund a major purchase without unwinding positions, triggering capital gains, or stepping out of the market to raise cash.

It’s the difference between financing lifestyle at consumer rates and structuring liquidity the way allocators do.

When the right opportunity (or indulgence) comes along, your portfolio doesn’t have to take the hit.

Join the Stelrix waitlist.

DAILY ACUMEN

Certainly Wrong

The most expensive belief you will ever hold is the one that feels the most obvious. In markets, in careers, in the story you tell yourself about where you're headed, certainty is not a sign that you've done the work. It is usually a sign that you've stopped doing it.

AI is making this worse in ways most people haven't caught up to yet. A tool that can produce a confident, well-structured investment thesis in seconds is not giving you conviction. It is giving you the feeling of conviction, which is a completely different thing and considerably more dangerous. The research is unambiguous: the more fluently people use these tools, the more they confuse facility with understanding, and the wider the gap grows between how right they think they are and how right they actually are.

The investor who has wrestled manually with a balance sheet, who has been burned by a thesis that looked airtight, who has sat with genuine uncertainty long enough to respect it, has something no prompt can produce. They know what it feels like to be wrong. That knowledge is not a scar. It’s the only real protection against the next time certainty shows up wearing a suit and speaking in complete sentences.

ENLIGHTENMENT

Short Squeez Picks

• Your daily walk matters more than you think

• 5 ways to maintain deep focus from an attention span expert 

• Why the global elite gave up on spelling and grammar

• To create better memories, stop taking so many photos

• The 3 types of reading and the 2 you’ll pick

MEME-A-PALOOZA

Memes of the Day

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