Good Morning! OpenAI ditched plans to transition into a for-profit company, Berkshire Hathaway fell 5% following news of Buffett’s retirement, and Apollo CEO Marc Rowan says he doesn’t agree with Buffett on tariffs.

Bill Ackman doubled down on Howard Hughes with a $900M investment, aiming to build a modern-day Berkshire. Palantir raised its guidance on surging AI demand, and the White House may cut loan funding to schools with too many delinquent grads.

Plus: Hollywood stocks fell after foreign film tariffs, Apple will sell corporate bonds for the first time since 2023, and is it even worth it to become a doctor or lawyer anymore?

Top firms like Evercore and CVC already use Mosaic to build LBO models in mere minutes. It's time that you do too.

SQUEEZ OF THE DAY

Tariff M&A Is Here

Looming tariffs are already sparking some M&A activity, and Skechers just became the footwear industry’s biggest buyout to date. 

Private equity firm 3G Capital announced a $9.42 billion take-private deal for Skechers, valuing the company at $63 per share (~30% premium) and ending its 26-year run on the public markets.

Skechers leans heavily on offshore manufacturing and is particularly vulnerable to rising trade tensions. Roughly 40% of the brand’s U.S. footwear inventory comes from China, and another 40% from Vietnam.

Under the proposed 145% tariff on Chinese imports, the company could be facing a massive hit to margins. In April, Skechers pulled its full-year guidance, citing “global trade policies” and broader uncertainty.

While 3G claims the deal has been in the works for years, the timing suggests otherwise. The Brazilian-led private equity firm is known for its operational overhauls and margin-juicing strategies, having previously acquired Burger King, Kraft Heinz, and Anheuser-Busch.

With costs rising and consumer demand softening, Skechers may have seen private ownership as a safer path forward.

Founder and CEO Robert Greenberg, now 85, will remain at the helm, along with President Michael Greenberg and COO David Weinberg. The Greenberg family has deep roots in the company’s operations, and sources say the deal was negotiated directly with 3G, no formal sale process was run.

Takeaway: Skechers didn’t get forced into this deal, but it didn’t exactly walk away from it either. With a Chinese cost base and a middle-income customer base, the company faces an uncertain near-term outlook. Going private gives it room to reset, and 3G Capital now holds the keys to the biggest footwear deal of all time.

HEADLINES

Top Reads

• OpenAI scraps plan to transition into a for-profit company (CNBC)

• Apollo CEO does not agree with Warren Buffett on tariffs (YF)

• Trump administration threatens schools with student-loan restrictions (WSJ)

• Pershing Square strikes $900M deal for more control of Howard Hughes (CNBC)

• Palantir lifts full-year guidance as CEO cites ‘tectonic shift’ in AI adoption (CNBC) 

• Carlyle CEO Harvey Schwartz says actively looking for investments (YF)

• Berkshire Hathaway shares fall 5% after shocking Buffett exit (CNBC)

• Skype is officially a thing of the past after 22 years (Fox)

• Stocks are sanguine despite the tariff chaos (Axios)

• Messaging app used by Trump official suspends operations after reported hack (CNBC)

• The clock is ticking and Trump needs a trade deal badly (CNN)

• CEOs push AI and computer science as a grad requirement (Axios)

• Credit Suisse to pay $511M for helping U.S. taxpayers hide over $4B overseas (CNBC) 

• Apple to sell corporate bonds for the first time since 2023 (YF) 

• Hollywood studio stocks fall after Trump proposes foreign film tariff (CNBC)

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Top firms like Evercore and CVC already use Mosaic to build LBO models in mere minutes. It's time that you do too.

CAPITAL PULSE

Markets Rundown

Market Update

• U.S. stocks edged lower Monday, ending the S&P 500’s nine-day winning streak, as energy stocks weighed and traders braced for this week’s Fed meeting.

• Most sectors finished flat-to-down, with consumer staples among the few gainers. The energy sector dropped 2%, pressured by falling oil prices after OPEC+ announced fresh supply increases starting in June.

• European markets were mixed, reacting to better-than-expected eurozone sentiment data, while bond yields inched higher in the U.S.; the 10-year Treasury closed at 4.34%.

• The ISM Services PMI rose to 51.6, above expectations, signaling continued strength in U.S. services despite tariff overhangs.

• The S&P 500 is up ~13% since the April 8 low, driven by improving trade sentiment and expectations for a dovish Fed later this year.

Economic Data Highlights

• ISM Services PMI (Apr): 51.6 – above forecast, signals services sector resilience

• 10-year Treasury yield: 4.34% – modestly higher on rate outlook

• 2-year Treasury yield: 3.83% – reflects short-term Fed policy stability

• OPEC+ supply news: Oil prices fell as more output expected in June

• U.S.-China tariffs: Remain above 100% on both sides; timeline for resolution unclear

• Fed outlook: No change expected Wednesday; futures pricing in first rate cut by July, three total in 2025

Reported Earnings

• Palantir Technologies (PLTR) – Reported May 5: Q1 EPS beat at $0.13 vs. $0.08 est; revenue rose 21% YoY to $634M. AI platform demand and government contracts remained strong.

• Ford Motor Company (F) – Reported May 5: Missed EPS at $0.01 vs. $0.02 est; revenue met expectations at $42.8B. Margins pressured by EV losses and rising supply chain costs.

• ON Semiconductor (ON) – Reported May 5: Beat EPS at $0.57 vs. $0.51 est; revenue declined 5% YoY to $1.86B. Automotive demand cooled, but industrials held up.

Earnings Today

• Advanced Micro Devices (AMD) – Reporting May 6 (After Market Close): Analysts expect Q1 revenue of $7.13B (+30% YoY) and adjusted EPS of $0.94.

• Electronic Arts (EA) – Reporting May 6 (After Market Close): EA has guided for Q4 revenue between $1.68B and $1.83B, with analysts projecting EPS of $0.91.

• Datadog (DDOG) – Reporting May 6 (Before Market Open): Expected to post Q1 revenue of $741.4M and EPS of $0.42.

Movers & Shakers

• (+) Skechers ($SKX) +24% after a take-private announcement at $9.42 billion.

• (–) Berkshire Hathaway ($BRK.B) -5% after Buffett announced his retirement.

• (–) On Semiconductor ($ON) -8% after the semiconductor company expects lower demand.

Private Dealmaking

• 3G Capital bought Skechers for $9.42 billion

• Sunoco bought Parkland for $9.1 billion

• Pershing Square invested around $900 million into Howard Hughes Holdings

• Anysphere, an AI coding assistant maker, raised $900 million

• Apex, a satellite bus developer, raised $200 million

• AuthMind, an identity protection startup, raised $19.3 million

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

BOOK OF THE DAY

These Strange New Minds

In this accessible, up-to-date, and authoritative examination of the world’s most radical technology, neuroscientist and AI researcher Christopher Summerfield explores what it really takes to build a brain from scratch.

We have entered a world in which disarmingly human-like chatbots, such as ChatGPT, Claude and Bard, appear to be able to talk and reason like us - and are beginning to transform everything we do.

But can AI ‘think’, 'know' and ‘understand’? What are its values? Whose biases is it perpetuating? Can it lie and if so, could we tell? Does their arrival threaten our very existence?

These Strange New Minds charts the evolution of intelligent talking machines and provides us with the tools to understand how they work and how we can use them.

Ultimately, armed with an understanding of AI’s mysterious inner workings, we can begin to grapple with the existential question of our age: have we written ourselves out of history or is a technological utopia ahead?

“An insider look at the Large Language Models (LLMs) that are revolutionizing our relationship to technology, exploring their surprising history, what they can and should do for us today, and where they will go in the future.”

DAILY VISUAL

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DAILY ACUMEN

Legends Series: Jim Simons

Jim Simons didn’t just play the market—he reverse-engineered it.

A former codebreaker for the NSA and a math professor, Simons launched Renaissance Technologies in 1982.

He didn’t hire traders—he hired physicists and statisticians.

Their goal? Find tiny inefficiencies that humans couldn’t detect.

The result was the Medallion Fund, Wall Street’s most successful and secretive moneymaking machine, with a jaw-dropping 66% annual return (after fees!) from 1988 to 2018.

Simons didn’t believe in stories or CNBC soundbites.

He believed in signals—millions of them. Trades were sometimes held for minutes. The edge was razor-thin, but relentless. 

Today’s market is noisy. AI hype. Tariff uncertainty. Shaky earnings. But Simons’ lesson stands: edge belongs to those who process more data than everyone else—and act on it faster.

As tech stocks whipsaw and traders hunt narrative, Simons would say: let them talk. The money is in the math.

ENLIGHTENMENT

Short Squeez Picks

• 10 hacks for mastering time management

• Is it even worth it to become a doctor or lawyer anymore?

• The best at-home espresso machines

• How to define your personal brand at work

• 5 public speaking tips for better presentations

MEME-A-PALOOZA

Memes of the Day

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