Good Morning! Hope y’all had a wonderful Christmas. Elon Musk shot down a scarcity mindset and suggested that there is an unlimited potential for creating jobs and businesses. The largest banks in America want to sue the Federal Reserve over new rules about annual stress tests. The Starbucks barista strike is expanding to historic levels as workers demand pay raises in more 300 stores in 45 states.

While Nvidia dominated this year, 2025 could be different. Middle-class Americans are cutting back on holiday gifts as inflation continues to take a toll. Plus, what it would cost to live like the ‘Home Alone’ family today.

Start 2025 strong—Gelt helps high earners and business owners save thousands with tailored tax planning. Schedule a free call today.

_{SQUEEZ OF THE DAY}

Soho House Going Private Again

After three years of trying (and failing) to woo public markets, Soho House is preparing to go private.

Last week, Soho House confirmed it received a $1.75 billion buyout offer from a third-party consortium. The offer, backed by its largest shareholder, Ron Burkle, represents an 83% premium over its $4.91 closing price before the news but is far below its $2.8 billion IPO valuation in 2021. Shares jumped 47% after the announcement, the highest in nearly a year.

The company rebranded as "Membership Collective Group" in 2021, hoping to position itself as a tech-like subscription-based business, but failed to convince investors.

To boost growth and satisfy Wall Street, Soho House also aggressively expanded its membership base. But this came at the expense of its signature exclusivity, leading to complaints of overcrowding and declining service quality. The backlash forced the company to pause new memberships in key markets like London, NYC, and LA.

Soho House struggled to juggle exclusivity, profitability, and investor growth expectations. With $650 million in debt and interest rates exceeding 8%, the company was hemorrhaging cash and only turned a modest $200k profit last quarter, the first in its 30-year history. Shares were down 65% from the IPO price before the buyout offer.

Takeaway: Soho House may have been too cool for Wall Street. Public markets weren’t the right fit for a business balancing exclusivity and trying to please Wall Street. Private ownership could be exactly what it needs to regain its footing and preserve its X-factor. After all, it’s hard to stay exclusive when everyone can buy a share of you.

_{PRESENTED BY GELT}

Make 2025 The Year You Stop Overpaying (on Taxes)

The New Year is the perfect time to reassess your tax strategy. Don’t let a one-size-fits-all CPA cost you thousands in unnecessary taxes.

Gelt’s specialized tax experts work with you year-round to create tailored strategies that help high earners and business owners lower their liability and keep more of what they earn.

Schedule a free tax call today and learn how to:

• Maximize deductions and secure tax-free retirement plans

• Leverage proactive tax strategies for 2024

• Access exclusive tools in Gelt’s Platform like Tax Library and Tax Projections

Make 2025 the year you keep more of your money. Gelt’s plans don’t just pay for themselves—they deliver peace of mind.

_HEADLINES

Top Reads

• Elon Musk says there's 'infinite potential' for job creation (Fox)

• Starbucks barista strike expands as workers demand pay raises (CNBC)

• Biggest banks planning to sue the Fed over annual stress tests (CNBC)

• For the middle class, fewer gifts under the tree this year (WP)

• The man who wants to be the Musk of crypto (YF)

• Why the Great Resignation became the Great Stay (CNBC)

• Lego is keeping the toy industry afloat (CNBC)

• Nvidia dominated 2024 big-time. Next year could be different (YF)

• CFPB sues Walmart over drivers' pay (CNN)

• How the Fed (mostly) pulled off a rare economic feat (YF)

• American Airlines ground stop ends (ABC)

• What it would cost to live like the ‘Home Alone’ family today (CNBC)

_{CAPITAL PULSE}

Markets Rundown

Stocks Rise Ahead of the Holiday

On Tuesday, the Nasdaq extended its outperformance from Monday, while American Airlines recovered from earlier losses following a brief grounding of U.S. flights due to a technical issue.

Treasury yields climbed for a second day, with the 10-year yield reaching 4.6%, the highest since May, bolstering the U.S. dollar against major currencies.

Meanwhile, France's CAC 40 rose after the country’s new prime minister pledged to reduce the budget gap.

10-Year Yield Nears Yearly High

The 10-year Treasury yield has surged following last week’s Fed decision and revised projections, which signaled fewer rate cuts in 2025. Policymakers remain cautious as the economy performs well and uncertainty around inflation persists, reducing the urgency to cut rates further.

While cash has outperformed investment-grade bonds for the third time in four years, we believe the Fed’s easing cycle in 2025 will position bonds to outperform cash next year.

We expect 10-year yields to remain within the 4% to 4.5% range, supported by Fed rate cuts and bond purchases, though resilient growth and fiscal deficits may limit any significant decline.

Another Strong Year Despite a Bumpy End

Despite December’s volatility, stocks remain on track for over 20% gains for a second consecutive year. The Magnificent 7 mega-cap tech stocks drove more than half of the S&P 500's advance, though market breadth improved in the second half of 2024.

Looking ahead to 2025, we expect earnings growth to take the lead in driving market returns, with limited room for further valuation expansion.

Volatility may pick up as investor sentiment heats up, but the investment outlook remains optimistic. With healthy economic growth, rising corporate profits, and less restrictive central bank policy, the bull market is poised to extend into 2025.

Movers & Shakers

• (+) International Seaways ($INSW) +9% after company announced it will be added to the S&P SmallCap 600 index.

• (+) Arcadium Lithium ($ALTM) +6% after shareholders approved the Rio Tinto deal.

Private Dealmaking

• Arcadium Lithium announced a $6.7 billion sale to Rio Tinto

• Lens, a blockchain L2 network, raised $31 million

• Justt, a chargeback management startup, raised $30 million

• Funding Societies, an SME lending platform, raised $25 million

• Boon, an AI tools for fleets developer, raised $20.5 million

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

_{BOOK OF THE DAY}

Experiential Billionaire

Our entire lives, we are taught to measure our wealth in currency. But when we reach the end, the number one regret of the dying isn't about money. It's about experiences they wished they'd had—but didn't.

Our experiences are the real wealth of our lives. But if that's the case, why don't we have a real plan for how we seek them out and invest in them? Instead, we postpone our personal goals to "someday" and put them off until it's too late.

Bridget Hilton and Joe Huff started life with zero connections, money, fame, or education. But by leaning into the joy of remarkable experiences, they discovered their power to transform lives. Bridget and Joe have spent years interviewing social science experts, conducting one of the largest surveys on life experiences ever done, and turning themselves into experiential guinea pigs.

Together they have trained to be samurai, danced with the northern lights, tracked silverback gorillas in a hailstorm, stood face-to-face with hungry lions on safari, sped across glaciers on dogsleds, absorbed life lessons from Maasai tribesmen, built schools for kids in need, studied with monks, helped give 50,000 people hearing, swum with sharks, and explored the experiential riches life has to offer.

Experiential Billionaire unlocks the secrets to living a truly fulfilling and regret-free life in a guidebook backed by compelling research, told through gripping, real stories, and filled with actionable takeaways.

“The art, science, and path to building a life rich in experiences.”

_{DAILY VISUAL}

Companies Talking More About Tariffs

_{PRESENTED BY HEBBIA}

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• Saves hours of work per day on diligencing, screening, memo writing

• Scans PDFs, documents, and more (no length limit)

• Drafts one-pagers off your team’s investment philosophy

Don’t just take our word for it–Andreessen Horowitz, Index Ventures, Google Ventures, and Peter Thiel just invested $130 million into this game-changing AI. 

Book a quick demo to see Hebbia in action.

_{DAILY ACUMEN}

Curiosity

Curiosity isn't just for scientists and artists—it’s a gateway to stronger relationships, empathy, and resilience.

When we genuinely inquire about others, asking thoughtful questions and listening deeply, we foster connection.

Studies reveal that people like us more when we show interest in their stories, and curiosity can even inspire mutual openness, creating a positive feedback loop.

Beyond connection, curiosity helps build empathy. By exploring others’ perspectives, we better understand their emotions and experiences.

It also equips us with psychological flexibility, allowing us to view challenges as opportunities for growth rather than obstacles.

Choosing curiosity may not come naturally, but it’s always an option. The next time you're in a conversation, ask: What can I learn from this person?

You might find it not only deepens your connection but also enriches your own understanding of the world.

_{ENLIGHTENMENT}

Short Squeez Picks

• 4 types of experiences to seek in 2025

• Jeff Bezos 3-step strategy for Amazon’s success

• 3 phrases to stop passive-aggressive behavior and get respect

• Phrases to get rid of if you want to speak like a true leader

• Are you ultra-rich, rich, or merely affluent?

_{MEME-A-PALOOZA}

Memes of the Day