Good morning! Retail investors are breaking single-stock buying records after the recent sell-off, with 70% of inflows into Mag7, and 40% into Nvidia alone. Scott Bessent says he and Trump are focused on lowering 10-year yields, not Fed cuts.

Google scrapped DEI hiring and launched Gemini 2.0, its most powerful AI model. Banks sold $5.5B of the $13B Twitter buyout debt at 97 cents on the dollar. Plus, why Starbucks is giving out free coffee Monday.

With Elf Labs’ funding round closing soon, take advantage of this Short Squeez exclusive investment opportunity.

_{SQUEEZ OF THE DAY}

Lessons From a Lousy Bonus Season

If you’ve been refreshing your checking account and wondering if HR forgot to hit "send," you’re not alone. The 2024 bonus season is leaving plenty of bankers with a sinking feeling, not because it was catastrophic, but because it wasn’t the windfall many were banking on.

Despite overall increases from last year, expectations were much higher, and the letdown has been mighty. According to eFinancialCareers, envelopes have been opening to numbers far smaller than the ones in people’s heads, and the collective despair has been palpable.

Why the disappointment? Because many on Wall Street still believe bonuses work like a performance-based report card or a partnership payout. In reality, your bonus is a simple equation:

What your boss thinks you’d get elsewhere minus your perceived laziness in actually finding another job.

The 2024 bonus season wasn’t actually terrible. Most people got more than last year, and hardly anyone who didn’t deserve it got a zero. But banks weren’t feeling generous, even for top performers. The reason? No mass layoffs in 2023. Unlike previous downturns, when headcount reductions led to sharp rebounds in pay, banks held onto staff through the deal drought. Now, as dealmaking is expected to pick up, firms aren’t scrambling to retain talent, they’re already “right-sized” for the recovery.

Translation: There’s no reason to bid up compensation when you don’t fear losing people.

Takeaway: If your bonus felt underwhelming, it’s not because the industry is in trouble, it’s because banks don’t feel the need to overpay. Your real bonus? The fact that you weren’t fired last year. And if you were hoping to flex with a new Rolex…well, maybe next year.

P.S. We’ve started collecting responses for our annual Wall Street comp survey to break down pay across sectors (IB, PE, ER, etc.) and firms (if we get enough data).

Please drop your bonus number here. We need ~1,000 responses for an accurate report. Your response will be greatly appreciated!

_{PRESENTED BY ELF LABS}

Limited Access: Invest in the Future of Entertainment & AI

Investment Opportunity: Elf Labs, Inc.

Industry: Entertainment & Technology

Investment Terms: Equity Offering | Share Price: $2.00 | Minimum Investment: $974.00

Why Invest?

• Iconic Intellectual Property: Elf Labs owns over 100 trademarks and 400 international copyrights, including reimagined versions of classic characters like Snow White, Cinderella, and Sleeping Beauty.

• Innovative Technology: The company is developing immersive experiences using proprietary augmented reality (AR) and virtual reality (VR) technologies, enabling high-fidelity 3D content accessible without headsets.

• Proven Leadership: The management team boasts a track record of generating over $6 billion in licensing transactions, with products featured in major retailers.

Use of Funds: Proceeds will be allocated to content production, technology development, and expanding licensing opportunities in the $2 trillion entertainment and merchandise market.

Risks: As with any early-stage company, investments carry risks, including market competition, technological development challenges, and the need for successful execution of business strategies.

_HEADLINES

Top Reads

• Retail traders break records, piling into ‘Mag 7’ after recent sell-off (CNBC)

• Bessent says he, Trump are focusing on 10-year yields, not Fed (YF)

• Google scraps diversity-based hiring targets (YF)

• Google opens its most powerful AI models to everyone (CNBC) 

• Tech CEO praises Elon Musk's DOGE as a 'revolution': 'Transparency to government' (Fox)

• Scott Bessent defends Elon Musk (Fox)

• Big Tech's uneven earnings can't shake Wall Street's AI fervor (YF)

• IRS workers can't take Trump's "buyout" until after tax season (Axios)

• Banks sell down $5.5 billion of Musk's X debt to investors (YF)

• Super Bowl LIX sports betting expected to exceed $1.3 billion (Axios)

• PwC discourages White, Asian students from applying to career program (Fox)

• Bridgewater's flagship fund rose 8.2% in January (YF) 

• Private payrolls expanded by 183,000 in January, topping expectations (CNBC)

• Apollo plans to build the first marketplace for private credit (BB)

• Starbucks promotes rare free coffee deal for rewards members (Axios)

_{CAPITAL PULSE}

Markets Rundown

Stocks Close Higher Despite Mixed Earnings

The stock market closed higher on Wednesday, with the S&P 500 gaining 0.4% and the Dow rising 0.7%.

The real estate and information technology sectors led the gains, while the communication services sector lagged due to Alphabet's earnings results, which exceeded analyst expectations for earnings per share but fell short on revenue.

On the economic front, the ADP employment survey showed a strong 183,000 private sector jobs added in January, beating expectations.

However, the ISM services PMI for January was 52.8, below expectations, indicating a slower pace of growth in the services sector.

With labor-market conditions expected to remain supportive throughout 2025, driving economic growth, and corporate earnings expected to grow 14% in 2025, the outlook remains positive.

Movers & Shakers

• (+) Mattel Inc ($MAT) +15% after the toy giant will raise Barbie prices because of China tariffs.

• (–) Alphabet Inc ($GOOGL) -7% after cloud sales fell short of expectations.

• (–) Uber ($UBER) -8% after a lower-than-expected bookings forecast, Q4 profit miss.

Private Dealmaking

• Semgrep, an application security platform, raised $100 million

• Teladoc Health will acquire Catapult Health for $65 million

• Cashfree, an Indian payments startup, raised $53 million

• MagicSchool AI, an AI education platform, raised $45 million

• Protex AI, a workplace safety tech developer, raised $36 million

• Clear Labs, a diagnostics sequencing platform, raised $30 million

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

_{BOOK OF THE DAY}

Buy What You Love Without Going Broke

There’s a lot of noise out there about how to spend (and not spend) your hard-earned money. But what if you made financial decisions based on what you value—instead of what others are telling you to value?

This is the empowering approach Jen Smith and Jill Sirianni, hosts of the Frugal Friends podcast, want you to take to improve your spending habits.

They believe you can value anything (yes, anything!), whether that’s a daily latte, fancy dinners out, or vacations. But, despite what social media is saying, you don’t value everything.

The Frugal Friends’ wisdom comes from personal experience: Jen paid off $78,000 of debt in two years without a six-figure income, while Jill has a background in social work and downsized to an RV to pay off student loans. Together, their advice is both relatable and actionable.

“Jen and Jill are paving the way for women who want to win with money without opting out of consumption altogether.”

_{DAILY VISUAL}

Wall Street Rethinking Palantir’s Stock Price

_{PRESENTED BY MACABACUS}

On Your VP’s Desk In Minutes

Your VP just dropped three deals on your desk. The client meeting is in 4 hours. You need comps, a pitch deck, and a client memo – and your analyst is "WFH."

Macabacus has your back:

• Pull perfect models from your firm's library

• Drop in quick charts that update automatically

• Dynamically link models, charts & tables to your presentation

• Generate deal-ready tombstones

• Create templated memos from dynamic data

Watch how a $2B deal comes together in 90 seconds.

_{DAILY ACUMEN}

1+1=1

The concept of marriage as 1+1=1 suggests that a successful union is more than just two individuals coexisting; it's about creating a unified whole. 

This involves personal growth, where each partner strives to be their best self, contributing positively to the relationship. 

Emotional intimacy, built through presence, empathy, and open communication, forms the cornerstone of this unity. 

Passion, nurtured through consistent effort and shared experiences, keeps the relationship vibrant. 

Finally, shared responsibility ensures both partners actively contribute to the marriage's well-being, working together as a team. 

By prioritizing these elements, couples can create a marriage that is stronger than the sum of its parts, a true partnership where 1+1=1 signifies a shared life, goals, and a deep, unbreakable bond.

_{ENLIGHTENMENT}

Short Squeez Picks

• 3 mental shifts to become a confident public speaker

• The 5 types of visualization every high performer needs to know

• 10 two-minute habits to boost your self-confidence 

• The transformative power of journaling

• Non-obvious signs of a dying relationship

_{MEME-A-PALOOZA}

Memes of the Day