Lyft Inc. announced a promising outlook for profitability, with margins expected to expand by an impressive 500 basis points for the year in a press release on Tuesday. Consequently, Lyft's stock soared, experiencing a remarkable 67% surge in after-hours trading.
However, during an analyst call less than an hour later, Lyft's Chief Financial Officer Erin Brewer clarified that the company anticipated adjusted earnings margins, relative to bookings, to grow by 50 basis points, not 500 as previously stated. Brewer attributed the discrepancy to a "clerical error" when questioned by an analyst. As a result, the stock relinquished some of its gains, although it remained significantly elevated, rising by as much as 30% on Wednesday morning, marking the largest intraday gain in nearly four years.
Markets
Market dynamics on Friday saw an uptick in U.S. Treasury yields as investors analysed recent economic indicators and their potential implications for Federal Reserve monetary policy. At 4:27 a.m. ET, the yield on the 10-year Treasury increased by over two basis points to 4.2635%, while the 2-year Treasury yield rose by nearly four basis points to 4.6075%.
Source: CNBC
Earlier this week, the consumer price index for January revealed a 0.3% monthly increase and a 3.1% annual rise, slightly surpassing expectations. This heightened uncertainty surrounding the timing and frequency of rate adjustments, alongside concerns regarding the impact of elevated rates on the economy. Federal Reserve officials have consistently emphasized their commitment to data-driven decision-making.
Meanwhile, the European Central Bank (ECB) faces a distinct situation. François Villeroy emphasised the importance of timely rate cuts to maintain flexibility in adjusting policy after the initial move.
In the realm of emerging markets, U.S. investors are reallocating their investments, favouring exchange-traded funds devoid of exposure to China while divesting those heavily tied to the Chinese economy, which is grappling with a weakening growth outlook.
Corporate News
Santander is set to increase bonuses for investment bankers by approximately 10%. AMAT experienced a 12% surge in post-market trading following a bullish revenue forecast, whereas Coinbase returned to profitability for the first time in two years. However, DoorDash and Roku witnessed declines due to disappointing guidance, while DraftKings' earnings fell short of expectations.
XP Power cautioned investors about lower-than-expected full-year revenues, leading to a sharp decline in early trading. Swisscom remains the sole party in discussions with Vodafone Group regarding its Italian assets.
M&A
Dealmaking activity activity remained robust, with Tod’s founding family collaborating with buyout firm L Catteron to potentially take the luxury brand private.
The deal spurred chatter of consolidation among smaller luxury firms including Salvatore Ferragamo, Brunello Cucinelli, and UK’s Burberry, while the delisting of Tod’s is “highly likely”, according to Citi analysts.
Private Credit
KKR & Co. took the lead role as the investor and arranger in a $2.34 billion unitranche debt facility provided to MB2 Dental Solutions, a Dallas-based network of dental practices. This financing is earmarked for facilitating acquisitions and supporting the company's growth trajectory, as disclosed by a knowledgeable source.
In another instance, a consortium of private credit lenders spearheaded by KKR & Co. extended a $2.775 billion loan to facilitate Clarience Technologies' acquisition of Safe Fleet.
Blue Owl Capital Inc. is spearheading a private credit package exceeding $2 billion for RLDatix, a healthcare software company. Ares Management Corp. and Golub Capital are also notable participants in this financing arrangement, which encompasses a $1.6 billion seven-year term loan, a $250 million delayed-draw term loan, and a $200 million revolver. The primary purpose of this new debt issuance is to refinance existing facilities.
Additionally, General Atlantic concluded the final fundraising phase for its second strategic capital fund, amassing $2.7 billion. This figure represents a 23% increase from the firm's previous fund, as confirmed by an individual familiar with the matter.