Short Squeez
Posts
🍋 Wall Street is Eating

🍋 Wall Street is Eating

Plus: SpaceX is at an all-time low, BC is eyeing LIV Golf, and the four biggest hedge funds were hit with cyberattacks in the same week.

Short Squeez
August 06, 2026

Together With

“I continue to believe it is possible we are near a major top, and possibly a 1987-type fall.” — Michael Burry

Good Morning! SpaceX stock fell 13% to an all-time low of $108 as AI spending concerns rattled investors and a massive share unlock looms. Citadel's flagship fund surged 5.9% in July after the firm bought Situational Awareness's public book, pushing year-to-date gains to 12%. And major hedge funds including Point72, Millennium, Two Sigma, and Citadel were targeted in a wave of attempted cyberattacks.

BC Partners' credit arm is leading a group looking to lend money to LIV Golf, a lifeline for the tour after Saudi Arabia's PIF pulled its funding earlier this year. Bank of America spends $250 million a year on GLP-1 drugs for its employees. And Sequoia raised $10 billion for AI reindustrialization investing.

Plus: Google shook up its AI leadership as the DeepMind chief shifted roles, why Nvidia bankrolls its rivals, and the economics of owning a cafe.

The largest firms are pouring billions into AI deployment. The smartest are turning to purpose-built solutions like Blueflame. Sign up to learn more.

SQUEEZ OF THE DAY

Wall Street is Eating

Source: Bloomberg

Investment bankers might have spent the past few years complaining about a frozen deal market on Wall Street. But in 2026 the deals are back, trading desks are printing money, and bankers are preparing to become extremely annoying at holiday parties again.

Bonuses for equity sales, trading and underwriting are projected to rise as much as 30% or more this year, per Johnson Associates, the highest of any sector. M&A could see increases of 15% to 20%, while fixed-income traders are expected to get a more restrained 7.5% to 12.5%.

SpaceX's IPO alone threw off ~$500 million in fees, with Goldman and Morgan Stanley taking ~$100 million each and BofA, Citi and JPMorgan ~$75 million apiece. One rocket company going public funds quite a few Hamptons houses.

Volatility, shifting rate expectations and geopolitical chaos have kept desks busy, and hedge funds are pulling their biggest quarterly inflows in two decades too. Wall Street has spent years warning that volatility is bad for markets while quietly charging clients every time they panic.

Normally, a boom like this would lead banks to hire aggressively. But that is not happening, and AI and other technology are allowing firms to process more deals and trading activity without adding nearly as many people. As Johnson Associates put it, “The people that survive are going to make more.” The remaining bankers may be paid better and mentored more closely, but breaking into the industry could become even harder.

The reversal stings most in private markets, which owned finance comp for a decade. Large PE firms may see 2.5% to 7.5%, smaller and midsize shops flat, and private credit down as much as 10% on weak fundraising and record-low distributions. The bankers who watched colleagues leave for buyout firms finally get to send the "hope all is well" text in the other direction.

Takeaway: Bonuses are surging because trading, underwriting and M&A revenues are booming, but this cycle feels different because banks aren't pairing the revenue with a hiring spree. AI doesn't need to replace every banker to change the economics. It just needs to help the same number of bankers collect a much larger fee pool.

Curious how your firm stacks up? Wall Street 360 has the most up-to-date comp data across 1,000+ Wall Street firms.

PRESENTED BY BLUEFLAME AI

"AI Helped Us Close Deals We Would Have Missed"

That’s what 1,000 dealmakers said last month in a survey conducted by Datasite, Blueflame’s parent company, and FT Longitude, and nearly one in four said AI has already helped them close a deal they would have otherwise missed. 62% now say relying on human judgment alone is no longer defensible in complex deals.

The industry is past AI experimentation. Currently, half of deal teams have AI embedded in their due diligence. But the study draws a hard line between firms bolting on generic tools and firms building AI into how the deal team actually operates.

Private equity firms and investment banks are choosing Blueflame AI to do the latter. Amp, Blueflame's AI agent for dealmaking, takes on the process-heavy work like reviewing data rooms, surfacing red flags, comparing targets, and it leaves the decision making to the deal team.

Learn how Blueflame can help your deal team today.

HEADLINES

Markets Rundown

Market Update

Nasdaq fell about 0.8%, the S&P 500 slipped 0.2%, and the Dow gained 0.5% as investors weighed earnings and reports of a possible Strait of Hormuz agreement.
ADP showed private employers added 44,000 jobs in July, below the 75,000 estimate; the 10-year Treasury yieldclosed at 4.61%.
The ISM Services PMI rose to 54.1 in July, following Monday's ISM Manufacturing PMI of 55.6.

Earnings Season

AMD beat estimates on strength in its Data Center segment, though shares fell on profit-taking after a 140%+ year-to-date gain.
SpaceX reported better-than-expected revenue in its first quarterly filing as a public company, but shares fell after capex came in at $18.4 billion, above the $13.2 billion estimate.
S&P 500 earnings are on pace to grow 45% year over year this quarter, with full-year growth estimated near 30%.

Movers & Shakers

(+) Shopify ($SHOP) +17% after Q2 revenue of $3.58 billion beat the $3.45 billion consensus, up 34% year-over-year.
(+) Disney ($DIS) +4% because the company beat Q3 earnings estimates on strength in its theme parks and streaming segments.
(–) SpaceX ($SPCX) -14% after investors focused on surging AI costs even despite revenue up 92% year-over-year.

Prediction Markets

The price of H200s has doubled from earlier in the year.
Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

Disney agreed to sell its 50% stake in A+E Global Media to Hearst for $1.2 billion
Volta Infra, a Singaporean AI cloud company, raised $300 million
Horizon3 ai, a penetration testing platform, raised $250 million
Okta acquired Permiso, an identity security startup, for a reported $200 million
Eliyan, a developer of optical interconnect solutions, raised $145 million
River, an Indian EV maker, raised $120 million

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

BOOK OF THE DAY

Therapy Nation

Description:
A provocative examination from Jonathan Alpert, a practicing psychotherapist, of how modern therapy culture has expanded beyond the therapist's office into everyday life, workplaces, education, and public discourse. While arguing that therapy can be transformative when practiced well, Alpert contends that an overemphasis on validation, emotional processing, and self-diagnosis has, in some cases, weakened resilience and personal agency. Drawing on decades of clinical experience, case studies, and cultural analysis, he challenges readers to rethink what effective therapy should accomplish and advocates for a return to approaches that emphasize accountability, coping skills, and long-term growth.

Book Length: 320 pages
Release Date: May 19, 2026

Ideal For:
Readers interested in psychology, mental health, culture, leadership, and understanding the broader societal impact of therapy and emotional well-being.

Growth doesn't come from endlessly explaining your struggles, it comes from developing the strength to move beyond them.

DAILY VISUAL

Mortgage Rate Rises to Highest Level in a Year

PRESENTED BY STELRIX

How the Rich Borrow Until They Die

ProPublica once calculated that America's 25 wealthiest paid a “true tax rate” of 3.4% on $401 billion in wealth growth*. Their playbook has three steps. 1. Buy assets that appreciate. 2. Borrow against them when cash is needed. Since loan proceeds aren't income, no tax bill arrives. 3. Then die, because heirs inherit at a stepped-up basis, meaning decades of embedded gains are wiped clean for tax purposes and the estate simply settles the loans. Larry Ellison has pledged billions in Oracle stock this way for years. Stelrix introduces the borrow step, with an investment-backed credit card, to portfolios without a private banker.

Explore Stelrix's Instagram for more luxury and finance news and sign-up for their waitlist today.

DAILY ACUMEN

Choice Overload

More options should make a decision easier. Past a certain point, they do the opposite. A well known study found shoppers offered twenty four flavors of jam were far less likely to buy any than shoppers offered six, even though the larger display drew more people in. Choice, past a threshold, stops feeling like freedom and starts feeling like a burden the brain would rather avoid than resolve.

This plays out in decisions that matter more than jam. The investor staring at hundreds of funds who ends up parked in cash, paralyzed by the comparison required to feel confident in any single pick. The manager with forty resumes who cannot commit to an interview slate because each additional option resets the fear of missing a better one still in the pile.

The fix is not fewer opportunities. It is narrowing the field deliberately before you evaluate it, setting hard criteria that cut twenty four options to three before you taste any of them. Good decisions rarely come from surveying everything available. They come from ruthlessly reducing the field to a size the mind can actually reason about.

ENLIGHTENMENT

Short Squeez Picks

The economics of owning a cafe
The lost art of the bromance
A decision coach’s approach to making hard decisions
Are therapists to blame for the rise of adults cutting off their parents
How much coffee is safe to drink

MEME-A-PALOOZA

Memes of the Day

📣 Partner With Us: Get in front of an audience of over 1 million finance professionals, business leaders, and policy influencers. Submit a partnership inquiry.

📊 Wall Street Comp & Culture Data: Get the most detailed comp, carry, and culture insights across 1000+ Wall Street firms. Explore the data.

📈 Grow With Us: Work directly with the Overheard on Wall Street team to scale your finance brand. Schedule your free consult.

🧢 Wall Street Shop: Explore our collection of finance-themed apparel and merchandise. Visit the shop.

📬 Deals Newsletter – Buysiders: A curated roundup of major M&A, private equity, and VC activity. Plus access to private deal flow. Subscribe here.

What'd you think of today's edition?

Reply

or to participate.