Good Morning! Spirit Airlines revived merger talks with Frontier Airlines. Meanwhile, American Airlines got hit with a $50 million fine for mistreating passengers with disabilities and Boeing posted a $6 billion loss, its largest since 2020. September home sales hit their lowest level since 2010. And YouTube brand Dude Perfect is dreaming big after raising $100 million.

Plus, Goldfish is trying to reel in adults with a name change, Warren Buffett says he doesn’t endorse any candidates or investments, and three strategies to get promoted.

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_{SQUEEZ OF THE DAY}

The PE Firm That Returned 79x

Lime Rock Management, a private equity firm specializing in energy investments, achieved a remarkable 79x return on its 17-year investment in CrownRock, a West Texas oil producer, reports the WSJ.

The firm had invested $96.5 million in 2007 and patiently held the asset through shifts in the oil industry. Their investment culminated in a $12.4 billion sale to Warren Buffett-backed Occidental Petroleum, marking one of the most impressive returns in private equity history.

Lime Rock’s decision to hold CrownRock for far longer than the typical 5-7 year private equity window allowed it to benefit from key advancements in oil extraction technologies, as well as increased cash flow from CrownRock’s operations.

Despite pressures to sell earlier, Lime Rock stood firm, confident in CrownRock’s potential. CrownRock doubled its production between 2019 and 2022, positioning itself as an attractive asset during a time of rapid consolidation in the U.S. oil sector.

The sale to Occidental followed a wave of mergers and acquisitions across the energy industry, driven by companies like Buffett’s Occidental seeking cash-flow-positive assets.

Lime Rock’s strategic patience, including a continuation fund raised in 2018, enabled early investors to cash out while allowing new backers to participate in CrownRock’s continued growth.

Takeaway: Lime Rock’s historic success highlights the value of patience and strategic timing in private equity, particularly in sectors where technological advancements and market conditions shift. It also shows that continuation vehicles, when used effectively can lead to outsized returns for investors. Kudos to Lime Rock for holding out for 17 years and securing their 79-bagger.

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_HEADLINES

Top Reads

• Frontier, Spirit Airlines revive merger talks (YF)

• American Airlines fined $50M for mistreating passengers with disabilities (Axios)

• Goldfish is changing its name to appeal to adults (CNN)

• Private equity healthcare deals rebound despite regulatory scrutiny (WSJ)

• Blackstone says the private credit industry is still in its very early days (YF)

• New rule brings open banking to US (YF)

• Inside the fall of 23AndMe (CNBC)

• Stripe’s $1.1 billion deal for Bridge marks much needed win for VC (CNBC)

• New Boeing CEO sets sights on ‘leaner’ future as quarterly loss tops $6 billion (CNBC)

• Watchdog orders Goldman, Apple to pay $89M on consumer failures (YF)

• September home sales drop to lowest level since 2010 (CNBC)

• Dude Perfect dreams big after $100 million funding haul (Axios)

• Warren Buffett says he doesn’t endorse candidates or investments (CNBC)

• Vista's Smith says AI is driving portfolio company production (Axios)

_{CAPITAL PULSE}

Markets Rundown

Stocks close lower: U.S. equity markets finished lower on Wednesday, weighed down by weakness in growth sectors. Information technology and consumer discretionary stocks fell more than 1.5%, while utilities and real estate were the only S&P 500 sectors to finish higher. Corporate headlines drew attention, with McDonald's shares under pressure following a report linking an E. coli breakout to the restaurant.

In contrast, Texas Instruments rose 4% after delivering strong earnings results. Global markets were mixed, with Japan's Nikkei declining and China posting gains. The Bank of Canada cut its policy rate by 0.5%, bringing it to 3.75%, following the Fed’s recent policy moves. Bond yields climbed again, with the 10-year Treasury yield rising to 4.24%, its highest since July.

Third-quarter earnings take the spotlight: With limited macroeconomic data this week, markets are focusing on corporate earnings. About 20% of S&P 500 companies are reporting this week, including Tesla, which is due to report after the market close today. So far, 77% of companies have exceeded earnings expectations.

The technology and communication services sectors are expected to lead, with double-digit growth in earnings for Q3. Looking ahead, S&P 500 earnings are projected to grow by 15% in 2025, though that could be optimistic. However, the favorable macroeconomic backdrop should continue to support corporate profits and the ongoing bull market.

Performance check: It’s been a strong year for stocks, with the S&P 500 up 24% including dividends through Tuesday’s close. Unlike in 2023, which was dominated by mega-cap tech companies, market leadership has broadened across sectors. While information technology and communication services have gained over 30% year-to-date, other sectors like utilities, financials, and industrials have also performed well, each up more than 20%.

Movers & Shakers

• (+) Spirit Airlines ($SAVE) +46% after renewed merger talks with Frontier Airlines.

• (+) Stride ($LRN) +39% because the for-profit learning company beat earnings.

• (–) McDonald’s Corp ($MCD) -5% after a reported e. Coli outbreak from the fast food chain’s burgers.

Private Dealmaking

• Second Name Brand bought the Voortman cookie brand for $305 million

• Valon, a mortgage servicing platform, raised $100 million

• Moneybox, a digital wealth management platform, raised $91 million

• Socket, a cybersecurity startup, raised $40 million 

• Tennr, a workflow automation platform, raised $37 million

• OneStep, a digital physical therapy startup, raised $36 million

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

_{BOOK OF THE DAY}

Jump

Jump tells Larry Miller’s journey from the violent streets of West Philly in the 1960s to the highest echelons of American sports and industry. Miller wound up in jail more than once, especially as a teenager. But he immersed himself in the educational opportunities, eventually took advantage of a Pennsylvania state education-release program offered to incarcerated people, and was able to graduate with honors from Temple University.

When revealing his gangland past caused him to lose his first major job opportunity, Miller vowed to keep it a secret. He climbed the corporate ladder with a number of companies such as Kraft Foods, Campbell’s Soup, and Jantzen, until Nike hired him to run its domestic apparel operations. Around the time of Michael Jordan’s basketball retirement, Nike Chairman Phil Knight made Larry Miller president of the newly formed Jordan Brand.

In 2007 Paul Allen convinced Miller to jump to the NBA to become president of the Portland Trailblazers, one of the first African-Americans to lead a professional sports team, before returning to Jordan Brand in 2012.

All along, Miller lived two lives: the secret of his violent past haunted him, invading his days with migraines and his sleep with nightmares of getting hauled back tojail. More than a rags-to-riches story, Jump is also a passionate appeal for criminal justice reform and expanded educational opportunities for incarcerated and formerly incarcerated people across the United States.

Drawing on his powerful personal story, as well as his vast and well-connected network, Miller plans to use Jump as a launching point to help expand such opportunities and to provide an aspirational journey for those who need hope.

“One of the most successful businessmen in the country, who has led Nike’s Jordan Brand from a $200M sneaker company to a $4B global apparel juggernaut, tells the remarkable story of his rise from gangland violence to the pinnacles of international business.”

_{DAILY VISUAL}

Chick-fil-A Keeps Mooning

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_{DAILY ACUMEN}

Survival Mode

Feeling overwhelmed at work often stems from our nervous systems being stuck in "survival mode," where anxiety and stress seem to dominate our days. However, simple practices can help us move out of this state and regain control.

Techniques like "4x4 breathing," which involves a slow inhale, a pause, a slow exhale, and another pause—all for a count of four—activate the body’s relaxation response, signaling safety to your brain.

Integrating movement breaks, like stomping your feet or walking during meetings, helps discharge tension, while visualizing a peaceful scene when transitioning between tasks allows your mind to reset.

Defending your schedule is also key—avoid back-to-back meetings and give yourself time between commitments to regroup and maintain focus.

Setting boundaries with technology, like turning off non-essential notifications or having "tech-free" time before and after work, is essential for true recovery.

Moving beyond survival mode isn’t about eliminating stress but about managing it effectively, creating space to thrive rather than merely endure.

_{ENLIGHTENMENT}

Short Squeez Picks

• A manager’s guide to identifying and investing in high-potential talent

• What happens to your body when you run a marathon?

• The number one habit to reduce dementia risk

• Three strategies for success if you want a promotion

• 7 ways to overcome time blindness

_{MEME-A-PALOOZA}

Memes of the Day