Good Morning! Apollo is providing $2.6 billion in financing to the Yankees to support franchise growth and refinance existing debt. The University of Michigan is dropping first-semester grades for freshmen to curb a mental health crisis. And CoreWeave popped 11% as revenue doubled on accelerating AI infrastructure demand. (stock was up 16% after hours)

Phoebe Gates reportedly knew her e-commerce startup Phia was taking credit for sales it didn't drive. Mamdani is taking on Amazon in a new battle over New York's delivery workers. And Bezos is among investors nearing a deal for the Liverpool soccer club.

Plus: Cava sales jumped 9% as American diners flock to pita chips and salmon, private credit firms are clamping down on loan sweeteners amid fears of shadow defaults, and 5 bad management behaviors that drive good employees away.

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SQUEEZ OF THE DAY

Leopold’s Second Act

It has only been a few weeks since Leopold Aschenbrenner nearly blew up his hedge fund, got margin-called and had to sell the leveraged part of his portfolio to Ken Griffin’s Citadel. Now Situational Awareness is turning investors away, and not because they fled, but because too many are showing up wanting in.

A new report says that Silicon Valley investors have been flooding the fund with interest since last month’s blowup, enough that Situational is telling prospective LPs it is not accepting new capital for now. Elad Gil, one of Silicon Valley’s most prominent venture investors, publicly said he’d asked to invest in Aschenbrenner’s fund for the first time. And Sequoia partner Pat Grady said he expects Aschenbrenner to be “a fixture in Silicon Valley for a long time to come.”

As a refresher, Situational got crushed on a concentrated, leveraged portfolio of AI trades last month and was forced to sell the financed portion of its public book. Aschenbrenner has since stripped all leverage from the fund and described the episode as leaving “very expensive scars.”

In most corners of finance, that kind of forced liquidation would send investors running in the opposite direction. Instead, days later, Situational put another $400 million into Source Foundry, a secretive semiconductor-equipment startup backed by Sequoia, bringing its total investment there to roughly $500 million. So while the leverage is gone, the conviction clearly is not.

And even parts of Wall Street appear willing to reconsider. Morgan Stanley had originally reportedly declined to take Situational on as a prime-brokerage client when the fund launched because of concerns about Aschenbrenner’s lack of investing experience. But, more recently, Morgan Stanley had been preparing to onboard the fund anyway.

Barclays went the other direction, rejecting Situational shortly before the blowup because of its concentration in one sector, a decision that probably looked pretty good by the end of July.

Takeaway: A few weeks ago, Leopold Aschenbrenner was fighting margin calls and unloading billions of dollars of stock. But now investors are lining up again because no one wants to miss out on the next big thing in AI, which Leopold is apparently an expert in. Whether Leopold blows up again or makes generational wealth for his investors, only time will tell.

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HEADLINES

Top Reads

• Apollo inks $2.6 billion financing deal with New York Yankees (BB)

• University of Michigan drops first-semester grades to ‘curb mental health crisis’ (WSJ)

• CoreWeave stock pops 11% as revenue doubles on accelerating AI infrastructure demand (CNBC)

• Phia app co-founders pushed for features taking credit for sales it didn’t drive (BB)

• Mamdani takes on Amazon in new battle over New York’s delivery workers (WSJ)

• Bezos is among investors nearing deal for Liverpool soccer team (WSJ)

• Cava sales jump as American diners flock to pita chips, salmon (BB)

• Private-credit firms clamp down on loan sweeteners in fear of ‘shadow defaults’ (WSJ)

• Anthropic tries to shore up investor confidence ahead of blockbuster IPO (WSJ)

• Hollywood mogul Ari Emanuel to buy theater giant in $6 billion deal (WSJ)

• Morgan Stanley starts $1.5 trillion venture for US innovation (BB)

• Anthropic strikes $9 billion deal with cloud computing firm Riot (BB)

• On sales disappoint after Swiss brand resists markdowns in US (BB)

• Why JPMorgan is investing big in the 2028 LA Olympics (CNBC)

• Intel upsizes stock offering to $20 billion at $95 per share as AI demand accelerates (CNBC)

• Blackstone-backed REIT agrees to buy H&R in C$3.4 billion deal (BB)

• Adani lands $800 million data center loan as US drops charges (BB)

• Nvidia chip securitization is Wall Street’s hottest new concept (Axios)

• Ship pays $4 million to cut 10-day line to cross Panama Canal (BB)

CAPITAL PULSE

Markets Rundown

Market Update

• Markets closed lower ahead of Wednesday's CPI report; the 10-year Treasury yield eased near 4.69%.

• WTI crude rebounded near $83 as markets weighed diplomacy over Strait of Hormuz disruptions.

• Asia and Europe traded mixed; the U.S. dollar was little changed.

Earnings Season

• July CPI is expected to ease to 3.4% and core CPI to 2.5%, due Wednesday; PPI follows Thursday.

• ADP showed private employers added an average of 8,250 jobs per week for the four weeks ending July 25, down from 11,000.

• Job openings of 7.4 million continue to exceed the 6.9 million unemployed.

Movers & Shakers

• (+) KKR ($KKR) +7% after Nvidia named the private equity megafund one of six Wall Street partners in a $500B AI infrastructure coalition.

• (+) On Holding ($ONON) -20% because the Swiss running shoe brand missed Q2 revenue estimates and trimmed guidance.

• (–) Life360 ($LIF) -25% after the family-safety app’s Q2 GAAP EPS of $0.06 missed the $0.08 consensus.

Prediction Markets

• PPI YoY numbers come out tomorrow around 8:30am EDT.

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

Private Dealmaking

• Francisco Partners agreed to buy Moneris, a Canadian fintech, for around $1.5 billion

• Vaderis Therapeutics, a Swiss biotech focused on rare vascular diseases, raised $152 million

• Zenity, an AI agent security and governance platform, raised $125 million

• Expedition Therapeutics, a developer of oral therapies for inflammatory and respiratory diseases, raised $115 million

• Hinge Health agreed to acquire Cylinder Health for $105 million

• Epicrispr, a developer of programmable epigenetic medicines, raised $90 million

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BOOK OF THE DAY

The Motive

Description:
A concise leadership fable from Patrick M. Lencioni that examines the underlying motivation behind leadership. Lencioni distinguishes between leaders who see their position as a reward for their accomplishments and those who view leadership as a responsibility to serve their organization. Through a fictional conversation between two rival CEOs, he explores why leaders sometimes avoid difficult but essential responsibilities, such as managing direct reports, confronting difficult behavior, and building a cohesive leadership team, and provides a practical framework for becoming a more effective leader.

Book Length: 192 pages
Release Date: February 26, 2020

Ideal For:
Executives, founders, managers, and aspiring leaders who want to understand what effective leadership actually requires beyond strategy, authority, and status.

Leadership isn't the reward for doing the hard work; leadership is the responsibility to keep doing the hard work.

DAILY VISUAL

AI Hitting European Jobs Harder

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DAILY ACUMEN

Open Loops

An unfinished task occupies far more space in your mind than a finished one, even when the finished task was larger and more important. Psychologists first noticed this watching waiters, who could recall an entire order in perfect detail right up until the bill was paid, at which point it vanished from memory almost instantly. The brain does not treat completion as a reason to stop tracking something. It treats completion as permission to finally let it go.

This is why a half sent email or an unresolved conversation can occupy more mental bandwidth at two in the morning than an entire day of finished, successful work. The open loop keeps quietly running in the background, consuming attention you are not even aware is being spent, until it is either closed or written down somewhere the mind trusts enough to stop guarding it.

The practical use of this is almost embarrassingly simple. Write the open loop down, even as one line noting what it is and when you will deal with it, and a surprising amount of the noise disappears immediately. The brain was never trying to solve the problem at two in the morning. It was only making sure you would not forget it existed.

ENLIGHTENMENT

Short Squeez Picks

• The best Trader Joe’s skincare products

• A workplace issue that looks like burnout but isn’t

• One thing your relationship needs more than chemistry

• Why does our mind wander?

• 5 bad management behaviors that drive good employees away

MEME-A-PALOOZA

Memes of the Day

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