🤯 This Company Might Buy 7-Eleven For $86 Billion

Good afternoon! Elon Musk’s $44 billion Twitter purchase, now rebranded as X, has turned into a financial black hole for the seven banks that backed it, including big names like Bank of America and Morgan Stanley. They’re stuck with $13 billion in “hung” debt that’s been gathering dust on their balance sheets for a record 20 months—making this the banking world’s worst hangover since the 2008 financial crisis. With X’s value plummeting faster than a meme stock on a bad day, those loans have become nearly impossible to offload.

This debacle has officially earned the title of “worst buyout since the financial crisis,” according to the Wall Street Journal. Not only are these banks grappling with unsold debt, but they’re also watching their bonus pools dry up as the losses pile on. Sure, they’re getting above-market interest payments (because who doesn’t love a risky tech buyout?), but overall, this deal has become the ultimate cautionary tale in corporate M&A—one that’s making Wall Street bankers seriously reconsider their next big bet.

MARKETS

• After a blazing rally that brought the market close to its all-time highs, stocks paused on Tuesday, ending their longest winning streak this year. The S&P 500, which had surged nearly 8% in just eight days, edged lower alongside the Nasdaq, both weighed down by energy stocks and the anticipation of Fed Chair Powell’s upcoming speech at Jackson Hole.

• Investors, who have recently turned euphoric, are now shifting focus to potential insights on the next rate cut, leading to heightened volatility as markets await clearer signals on monetary policy.

STOCKS
Winners & Losers

What’s up 📈

• Fabrinet ($FN) soared 15.74% after reporting strong fourth-quarter revenue and earnings, coupled with a growth strategy that includes constructing a new facility.

• Palo Alto Networks ($PANW) jumped 7.18% after the company reported second-quarter earnings yesterday that exceeded analysts' expectations across key topline metrics.

• Sirius XM ($SIRI) climbed 6.91% after securing a three-year deal worth $125 million with "Call Her Daddy" podcast host Alex Cooper, moving her show from Spotify ($SPOT).

• Darden Restaurants ($DRI) gained 3.65% after Raymond James reaffirmed its Outperform rating on the Olive Garden parent company, following the relaunch of its popular "Never-Ending Pasta Bowl" promotion.

• PayPal ($PYPL) rose 3.54% after announcing the strengthening of its global strategic partnership with Adyen, a leading financial technology platform.

• Eli Lilly ($LLY) edged up 3.05% after announcing that its weight loss drug reduced the risk of developing type 2 diabetes by 94% in individuals with pre-diabetes and obesity.

• Take-Two Interactive ($TTWO) surged 2.86% after revealing that the highly anticipated Borderlands 4 will be released in 2025.

What’s down 📉

• AST SpaceMobile ($ASTS) dropped 11.09% on Tuesday, pulling back after a recent surge fueled by upbeat earnings and the announcement that the company is on track to launch five satellites in early September.

• Insulet ($PODD) fell 6.87% alongside Dexcom ($DXCM), which declined 6.23%, after Eli Lilly's weight loss drug demonstrated a significant reduction in the risk of developing type 2 diabetes.

• JD.com ($JD) slid 4.57% as shares of U.S.-listed Chinese companies declined following China's central bank decision to leave its one-year and five-year loan prime rates unchanged.

• Phillips 66 ($PSX) dropped 4.20%.

• Boeing ($BA) also declined 4.20% after a report indicated the company found structural cracks in its 777X test jets.

• Celsius Holdings ($CELH) decreased by 2.91% as the company, a consistent strong performer, lagged this quarter with the energy drink industry experiencing slowing growth for the first time in years.

• Estee Lauder ($EL) dipped 2.02% after reporting upbeat Q4 earnings but issuing worse-than-expected guidance for fiscal year 2025 EPS. The company also announced that President and CEO Fabrizio Freda will retire at the end of FY25.

AQUISITION
Circle K Operator Eyes 7-Eleven in Mega-Deal

Alimentation Couche-Tard ($ANCTF) , the Canadian powerhouse operator behind Circle K, is pulling out all the stops with a fresh bid to acquire Japan's Seven & i Holdings, the parent company of 7-Eleven. If this $38 billion proposal gets the green light, it could end up being the company's biggest deal yet—but that’s just the starting figure( only based on Seven & i Holdings Marker Cap). When you factor in earnings multiples, the final price tag could soar as high as $86 billion. Yes, you read that right.

Chasing the Convenience Crown

Couche-Tard has been deal-hungry since its humble beginnings in Quebec, and they aren’t slowing down. Founder Alain Bouchard has had 7-Eleven on his wishlist for decades, and now he’s making his boldest play yet. The acquisition would catapult Couche-Tard to the top of the global convenience store game, adding 7-Eleven's 13,000 North American locations to its already impressive portfolio.

But it’s not all smooth sailing—U.S. antitrust regulators are likely to scrutinize the deal, fearing it could lead to higher prices and fewer jobs. Couche-Tard is no stranger to regulatory challenges, though. They’ve tangled with authorities before, most notably in their failed bid to buy France's Carrefour ($CRRFY) in 2021.

A New Era for Japanese Assets?

This deal, if it happens, would be the biggest foreign acquisition of a Japanese company ever. Seven & i has been under pressure from activist investors to streamline its operations, and selling to Couche-Tard could be a win-win. Japanese assets are hot commodities right now, with renewed interest from global investors spurred by governance reforms and a booming stock market.

As Couche-Tard gears up for this potentially historic deal, one thing is clear: They’re playing for keeps in the global convenience store arena. Whether they can clear the hurdles remains to be seen, but if any company can pull off a mega-merger, it’s the deal-hungry Couche-Tard.

NEWS
Market Movements

• Kroger Co. ($KR) is selling $10.5 billion of bonds on Tuesday to help fund its acquisition of fellow grocer Albertsons Cos. in what will be one of the biggest corporate bond deals of the year.

• Boeing ($BA) halted tests on its 777X fleet after finding structural damage in one plane, raising concerns over further 777X delays.

• Kamala Harris proposes raising the corporate tax rate to 28%, rolling back a Trump law.

• Canadian National Railway and Canadian Pacific Kansas City plan to lock out nearly 10,000 workers this week, potentially halting Canada’s rail network and impacting the shipment of key exports.

• Johnson & Johnson ($JNJ) will pay as much as $1.7 billion for V-Wave Ltd., bolstering its development efforts to treat heart failure as it goes deeper into medical technology.

• A long-term study showed that Eli Lilly’s ($LLY) weight loss drug tirzepatide, used in Zepbound and Mounjaro, reduced diabetes risk by 94% in obese or overweight adults.

• Amazon ($AMZN)-backed Anthropic hit with a class-action lawsuit over copyright infringement.

• Alaska Airlines ($ALK) & Hawaiian Airlines ($HA) merger clears U.S. Justice Department review.

• Edgar Bronfman Jr. formally submitted a $4.3 billion bid to take control of Paramount Global ($PARA) and quash an existing offer from Skydance Media, according to a person familiar with the proposal.

• OpenAI announces a content deal with Condé Nast, including content from Wired, The New Yorker, and Vogue.

• Shein sues Temu over copyright infringement, alleging the rival loses money on every sale.

IPO
Google’s IPO Turns 20: $1,000 Then Worth $66K Today

Then and Now
Remember when Google ($GOOGL) was just a scrappy startup with big dreams of organizing the world’s information? Well, 20 years ago from yesterday, they went public in a super unconventional way—a Dutch auction, where investors set the price by bidding. If you had thrown $1,000 into the pot back then, it would be worth about $66,522 today. Not bad for something cooked up in a Stanford dorm room.

Dominating the Market
Fast forward two decades, and Google—now under Alphabet—has morphed into a global powerhouse, controlling over 90% of the search market and pulling in $328 billion in revenue over the last year. It’s still swimming in cash, with $30 billion in free cash flow, making sure it stays ahead in the AI race. But it's not all smooth sailing. The feds are breathing down its neck, with a recent antitrust ruling against it and whispers of a potential breakup. Yet, despite the legal drama, Google’s grip on our daily lives remains ironclad.

The Road Ahead
While Google is dealing with regulatory headaches and the threat of new rivals like OpenAI, it’s still got a few tricks up its sleeve. With a mountain of data, cutting-edge tech, and deep pockets, Alphabet is well-positioned to fend off challenges. So, could Google keep rewarding investors for another 20 years? If you ask Wall Street, the answer is: probably. After all, this isn’t just any search engine—it’s Google. And if you’re still unsure about the question just Google it.

EARNINGS
Lowe's Q2: Waiting for the Home Improvement Comeback

By The Numbers:

• Revenue: $23.59 billion (down 5.6% YoY)

• Adjusted EPS: $4.10 (beat $3.97 estimate)

• Same-Store Sales: -5.1% (worse than expected -4.43%)

• Full-Year Sales Forecast: Now $82.7B-$83.2B (down from $84B-$85B)

• Comparable Sales Forecast: -3.5% to -4% (previously -2% to -3%)

Lowe's ($LOW) just trimmed its full-year forecast as the DIY boom continues to fizzle. The home improvement giant is feeling the squeeze from a sluggish housing market, high interest rates, and inflation that's keeping consumers away from big renovation projects. Now, Lowe's expects comparable sales to drop 3.5% to 4%, a steeper decline than previously thought.

CEO Marvin Ellison points out that with mortgage rates sitting higher than a ladder in an attic, folks are putting off the move-and-renovate cycle. Instead, they're waiting for the Federal Reserve to give the green light with a rate cut, which, let’s be honest, feels like watching paint dry. For now, big-ticket items like kitchen overhauls and flooring projects are taking a back seat.

However, it’s not all doom and gloom. Lowe's saw some bright spots with their pro customers—think contractors and electricians—who’ve kept their tool belts busy, driving sales in building materials and appliances. Meanwhile, online sales showed some growth too, which the company is trying to boost by expanding delivery options.

Despite the challenges, Lowe's shares have risen 9.3% year-to-date, even as they lag behind the S&P 500's 18% gain. The company’s outlook suggests the industry is waiting for the pendulum to swing back, with a potential recovery possibly starting in 2025. Until then, both Lowe’s and Home Depot ($HD) are playing the waiting game, hoping for that DIY resurgence.

Calendar
On The Horizon

Tomorrow

Investors will have the chance to review the minutes from the Federal Open Market Committee's (FOMC) July meeting. The FOMC, responsible for setting U.S. monetary policy, holds significant influence over decisions like interest rate adjustments. Although no rate cuts were made during their last meeting, the minutes may offer insights into whether the committee is leaning towards future cuts and which economic indicators are guiding their decisions. Understanding these details is crucial for investors as they navigate market expectations.

Before Market Open:

• Target ($TGT) made waves earlier this year by slashing prices on 5,000 items in a bid to lure back consumers, raising concerns about the state of consumer spending. However, as other retailers have posted strong earnings, it remains to be seen if Target can keep pace or if it's losing ground to competitors. Analysts are expecting earnings of $2.19 per share and revenue of $25.22 billion.

• Analog Devices ($ADI) has enjoyed a meteoric rise in stock price, fueled by the excitement around AI. But with such rapid gains, investors are now questioning whether the stock's surge is justified. They’ll be looking for confirmation that the company can sustain last quarter's impressive revenue growth to support its lofty valuation. Analysts are forecasting earnings of $1.50 per share on $2.27 billion in revenue.

After Market Close:

• Snowflake ($SNOW), a major player in cloud computing, has been struggling to keep up with its competitors despite the AI boom. The company has been burning through cash to close the gap, a strategy that hasn’t sat well with shareholders who are concerned about rising operating costs and shrinking profits. Investors will be looking for a clear turnaround plan from management. The consensus calls for earnings of $0.16 per share on $851.16 million in revenue.

• Zoom ($ZM), once a pandemic favorite, has seen its stock plummet since lockdowns ended. Now, the company is being eyed by some as a potential value play, with investors wondering if the prolonged selloff has bottomed out. If so, they might be looking at a company in the midst of a significant transformation. Expectations are for $1.21 in earnings per share on $1.15 billion in revenue.

ENTERTAINMENT
Meme Street