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🍋 Private Equity 🤝 College Admissions

Why private equity is investing in the ACT standardized test, plus Netflix crushed earnings.

Together With

“Envy is inversely correlated with self-examination. The less you know yourself, the more you look to others to get an idea of your worth.” — Lawrence Yeo

Good Morning and Happy Friday! Netflix crushed Wall Street’s expectations, growing subscribers by 16%. Blackstone had a great quarter too, with its infra portfolio climbing 4.8%. Google fired 28 workers for protesting $1.2 billion Israel contract. Trump Media is telling investors how to block their shares being used by short sellers. March home sales dropped despite a surge in supply. And 23andMe’s CEO is considering taking the company private.  

SQUEEZ OF THE DAY

Private Equity 🤝 College Admissions

Is there anything private equity won’t touch in 2024?

Private equity funds aren’t just resting their laurels on outbidding blue collar Americans for single-family homes. Now? They’re going after their next target - U.S. college entrance exams.

Take the popular entrance exam. ACT Inc. The ACT has been bleeding money since the pandemic - thanks to so many colleges going test-optional.

And last week ACT announced they’ll partner with the private equity firm Nexus and become a for-profit company. They say the cash infusion is a much-needed lifeline.

Nexus is trying to frame the investment as a positive investment to society and college education as a whole - they say they’re saving the ACT. But others aren’t as enthusiastic. The ACT is a non-profit for a reason - it provides trust that it’s a fair evaluation. Non-profit entities need to be fairly transparent with the public to retain their preferential tax status - private equity-owned entities usually like to be as mystified as it gets.

Takeaway: The ACT says they won’t immediately raise their registration fee - which is currently at $93. And it costs almost $20 to send your score to each college you apply to. But we’ll have to wait and see how the ACT’s private equity backers get creative with “unlocking value.” And with regulators starting to question private equity’s involvement in healthcare deals, education could be next. 

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HEADLINES

Top Reads

  • Netflix blows past earnings estimates, subscribers grew 16% (CNBC)

  • Blackstone earnings rise as value of investments climb (YF

  • Google fired 28 employees for protesting deal with Israel (CNBC)

  • Trump Media tells DJT shareholders how to block stock being used by short sellers (CNBC)

  • March home sales dropped despite a surge in supply (CNN)

  • 23andMe CEO considers taking the company private (CNBC)

  • Mortgage rates surge past 7%, reaching this year’s highest level (CNN

  • Vista Equity raises more than $20B for a new fund (Axios)

  • Wall Street bank leaders hail IPO market’s budding revival (YF)

CAPITAL PULSE

Markets Rundown

Stocks closed higher for the fifth straight session as Tesla weighs down stocks.

Movers & Shakers

  • (+) Duolingo ($DUOL) +5% after inclusion into the S&P MidCap 400.

  • (+) JetBlue ($JBLU) +4% after JPMorgan upgraded the airline.

  • (–) Tesla ($TSLA) -4% after a downgrade by Deutsche Bank.

Private Dealmaking

  • Ramp, a corporate finance management startup, raised $150 million 

  • Flink, an ultra-fast delivery company, raised $106 million

  • Cape, a mobile carrier, raised $61 million

  • Kontakt.io, a hospital indoor tracking startup, raised $47.5 million 

  • Flatpay, an SMB payments startup, raised $47 million 

  • Anvilogic, an enterprise data management startup, raised $45 million

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

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As long as he keeps changing his identity he can keep one step ahead of his past - and stay alive.

The only thing he must not do is fall in love . . .

“How many lifetimes does it take to learn how to live?”

DAILY VISUAL

Estimated Money Rounded Up per Acorns Customer

Source: Axios

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DAILY ACUMEN

Habits

When trying to build new habits, the conventional wisdom of starting small may not work for everyone. For some, the low effort of "tiny habits" can also mean low reward, making it hard to stay motivated.

If the activation energy to start a micro-habit feels too high compared to the payoff, it may be better to dive into a more engaging, substantive version of the habit.

The key is finding your minimum effective dose - the smallest the habit can be while still feeling meaningful and worth the effort. Reflect on what naturally holds your interest and curiosity. Maybe researching and optimizing is more motivating than repetitive daily practice.

Or social accountability from joining a community provides the missing reward. Building habits is not one-size-fits-all, so experiment to find the approach that aligns with your unique brain wiring and definition of "worth it."

ENLIGHTENMENT

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MEME-A-PALOOZA

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