Good Morning! A federal judge blocked Kroger’s $25B acquisition of Albertsons. Meanwhile, Apollo is targeting $25B for its flagship PE fund and Blackstone $5B for its life sciences fund. Spotify stock has surged 5x in under two years, and Elon’s net worth crossed $400 billion.

Insurance stocks have been spiraling since the UnitedHealthcare saga. The CEO's alleged killer had 'ill will toward corporate America,' and reportedly wrote, 'these parasites had it coming' in his manifesto.

Plus, Trump made a vow to anyone who invests $1 billion or more in the US 'GET READY TO ROCK' and Wall Street is fueling the build-to-rent boom.

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_{SQUEEZ OF THE DAY}

Private Equity 🤝 Walgreens

Walgreens has fallen far from its glory days. In 2015, the company was valued at over $100 billion. Four years later, private equity giant KKR made a $70 billion offer.

Fast forward to today, and Walgreens’ value has plummeted to just $7.5 billion.

That changed yesterday when news broke that Sycamore Partners, a private equity firm specializing in retail turnarounds, was in talks to take the company private. The announcement sent Walgreens’ stock soaring nearly 20%, boosting its market cap to $9 billion.

Walgreens’ challenges have been mounting for years. A key turning point was its 2015 acquisition of Alliance Boots, a $6 billion move aimed at expanding its footprint in Europe. But the deal proved rocky, burdening the company with financial pressures while it struggled to maintain strength in its core U.S. pharmacy business.

More recently, Walgreens has shifted to damage control. It announced plans to close 1,200 underperforming stores (about 1 in 7 locations) and scaled back its healthcare ambitions by reducing its stake in VillageMD. Earlier this year, the company revealed that 25% of its stores were unprofitable, highlighting the depth of its struggles.

What went wrong? Walgreens has faced relentless headwinds—declining reimbursement rates for prescriptions, intensifying competition from Amazon, Target, and Dollar General, and shrinking margins in its retail operations. Unlike its rival CVS, which diversified into insurance and pharmacy benefit management, Walgreens doubled down on retail pharmacy, a strategy that hasn’t paid off.

Takeaway: If anyone can save Walgreens, it’s Sycamore Partners. Renowned for their expertise in retail turnarounds, Sycamore has successfully restructured brands like Staples, Ann Taylor, and Chico’s. They excel at streamlining operations, selling off assets, and refocusing businesses. But with Walgreens’ challenges running deep across all segments, this would undoubtedly be one of their toughest projects yet.

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_HEADLINES

Top Reads

• UnitedHealthcare CEO's alleged killer has 'ill will toward corporate America,' police say (Fox)

• Family of UnitedHealthcare CEO suspected killer has big business empire (Fox)

• Kroger and Albertsons grocery megamerger halted by two courts (CNN)

• Alphabet shares jump 6% after ‘breakthrough’ quantum chip (CNBC)

• Apollo targets $25 billion for flagship private equity fund (YF)

• Blackstone eyes $5B for live sciences investments (WSJ)

• Macy's activist investors want the retailer to make significant changes (Fox)

• Trump taps Andrew Ferguson for FTC chair (Politico)

• Google removes negative reviews of McDonald's location (Fox)

• Tapped-out private equity investors decline new commitments (WSJ) 

• Gas prices are the lowest since 2021 (Axios)

• Insurance stocks have fallen since UnitedHealthcare (CNBC)

• The big business bet behind Juan Soto's massive Mets contract (Axios)

• Spotify's $100 billion rally (Axios)

• Elon’s net worth crosses $400 billion (X)

• Wall Street fuels build-to-rent boom (WSJ)

_{CAPITAL PULSE}

Markets Rundown

Stocks Dip Amid Narrow Leadership

U.S. equity markets closed lower Tuesday, with both the S&P 500 and Nasdaq down 0.3%. Leadership was concentrated in the communication services sector, which rose over 2% thanks to a surge in Alphabet shares following its announcement of a breakthrough in quantum-computing chip technology.

Most other sectors were flat to lower, while Oracle shares dropped more than 6% after disappointing earnings. Overseas, European markets traded lower, and Asian markets were mixed. Bond yields climbed slightly, with the 10-year Treasury yield rising to 4.23% and the 2-year yield at 4.14%.

Inflation Remains in the Spotlight

Market focus is shifting to the November CPI inflation data, with expectations for a 0.2% monthly increase in headline CPI, translating to a 2.7% annualized rate. Core CPI is forecasted to rise 0.3% month-over-month, holding steady at 3.3% annually. Recent inflation data has been stubborn, with the three-month annualized core CPI rate rising to 3.6%, up from under 2% in July.

While the Fed is expected to cut rates by 0.25% at its December 18 meeting, its approach to easing in 2025 may remain cautious given strong economic growth and inflation above its 2% target.

Small-Business Optimism Surges

The NFIB Small Business Index soared to 101.7 in November, its highest reading since June 2021 and a significant jump from October’s 93.7. The increase was driven by improved economic expectations, with optimism about the economy reaching levels unseen since 2020. This marks a reversal after 37 months of readings below the long-run median of 99, attributed to higher borrowing costs and inflation.

The positive sentiment aligns with recent outperformance by small- and mid-cap stocks, as the Russell 2000 and Russell Mid Cap Indexes have gained over 6.5% this quarter, outpacing the S&P 500’s 5% rise. Easing monetary policy and robust economic growth could further bolster small businesses moving forward.

Movers & Shakers

• (+) Walgreens Boots Alliance ($WBA) +18% after rumors that Sycamore Partners will acquire the company.

• (+) Alphabet Inc. ($GOOGL) +6% after announcing a breakthrough quantum chip.

• (–) Oracle Corp. ($ORCL) -7% because of an earnings beat.

Private Dealmaking

• Gen Digital bought mobile banking firm MoneyLion for around $1 billion

• MUFG will acquire WealthNavi for $664 million

• Helen of Troy bought Olive & June for $240 million

• Mets Logistics, a cold storage provider, raised around $121 million

• Tasca Therapeutics, an oncology biotech, raised $52 million

• LambdaTest, a software testing platform, raised $38 million

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

_{BOOK OF THE DAY}

The Price of Tomorrow

We live in an extraordinary time. Technological advances are happening at a rate faster than our ability to understand them, and in a world that moves faster than we can imagine, we cannot afford to stand still. These advances bring efficiency and abundance--and they are profoundly deflationary.

Our economic systems were built for a pre-technology era when labor and capital were inextricably linked, an era that counted on growth and inflation, an era where we made money from inefficiency. That era is over, but we keep on pretending that those economic systems still work.

The only thing driving growth in the world today is easy credit, which is being created at a pace that is hard to comprehend--and with it, debt that we will never be able to pay back. As we try to artificially drive an economic system built for the past, we are creating more than just economic trouble. 

On our current path, our world will become profoundly more polarized and unsafe. We need to build a new framework for our local and global economies, and soon; we need to accept deflation and embrace the abundance it can bring. Otherwise, the same technology that has the power to bring abundance to us and our world will instead destroy it.

In this extraordinary contrarian book, Jeff Booth, a leading mind and CEO in e-commerce and technology for 20 years, details the technological and economic realities shaping our present and our future, and the choices we face as we go forward--a potentially alarming, but deeply hopeful situation.

“The mirage of growth today is nothing more than a debt-fuelled spending binge.”

_{DAILY VISUAL}

Confidence Soars after Trump's Re-election

_{PRESENTED BY CORPORATE FINANCE INSTITUTE}

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_{DAILY ACUMEN}

Sharper Thinking

Daniel Dennett, the brilliant philosopher-engineer, armed us with mental tools to see the world more clearly.

Among them: Occam’s Razor, which trims unnecessary complexity to find simpler, more plausible explanations. Think: fewer assumptions, fewer errors.

Then there's Occam’s Broom, which warns against sweeping inconvenient truths under the rug—a favorite move in debates and conspiracy theories alike.

But the real magic?

Engaging with others. By challenging and being challenged, you refine your ideas and move closer to the truth.

Dennett’s advice? Stay curious, question boldly, and always wonder, “What if I’m wrong?”

_{ENLIGHTENMENT}

Short Squeez Picks

• How to influence people and succeed at work

• 4 ways to trust your instincts for smarter decisions

• Hacks to remember names more effectively

• What investors can learn from the world’s most resilient shrub

• 7 awkward things people with poor social skills do

_{MEME-A-PALOOZA}

Memes of the Day