Greg Tomaselli

You have to build a business worthy to sell for cash if you want to make it great! This is regardless of whether you want to sell it or not one day. Its a method of building with solid growth, layered with robust risk management. I have learnt these things the hard way, and I have sat at every end of the negotiation table, it is always the same. M&A is hard, but there are 5 critical things that make it way easier 👇 #1 🏆 - A clear and strong business model and MOAT is the most important. People need to understand (i) how you make money and (ii) how you protect that money making machine. Simpler and stronger, the better! #2 🏆 - The leaner your cost base is, the more valuable your company. Of course this is within reason, you cannot strangle growth. Unnecessary fat in the business wastes value and you miss out on reinvesting in growth. It also takes effort and time to find and reduce the unnecessary fat, so you lose out on the purchase price big time! #3 🏆 - Clean, timely and well presented historic financials and management reports are incredibly valuable. This builds trust with potential buyers, and allows you to govern, grow and pivot effectively. #4 🏆 - A robust and logical financial model with attractive but realistic projections is essential. You have to truly understand the drivers of value in your business, and have clear levers to accelerate them. To successfully build a financial model worth its salt, you need to master this! Without a solid model, buyers can take advantage of your great unknowns, because you don't understand your value or your potential. #5 🏆 - You have to have a company vision that all your staff truly buy into themselves. Only hire true believers that want to make the same impact! Soldiers are more valuable than mercenaries, as they just keep jumping to the highest bidder. Impact of these 5 factors: Confidence in the above factors ensures you have the upper hand when you meet potential investors. Its a game of strength and weakness. And hey, if you don't want to sell, then at least you are building a solid and growing business! The things you have to avoid like the plague 👇 🚫 Customer concentration risk; and 🚫 Key man risk - whether its you as a founder or anyone on your team. These two things give buyers all the power. Deal mechanisms to watch out for 👇 💰 Cash deals are truly the best! 💰 Seller financing or requirements to stay on for x number of years post acquisition with payouts dependent on performance is soul crushing and stressful. 💰 Share swaps are the most risky mechanisms hands down, and you have no control of the outcome of all your hard work! One bad move from their executives and your payout becomes worthless. Let me know if you have anything to add, questions or if you have experienced some of this? I am always looking to partner with high potential founders to build valuable businesses, as well as curious investors to accelerate the value of these businesses.

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ServiceNow missed by 2 cents and was down ~18% in premarket - 24% after earnings. That would be its biggest one-day drop on record. Look past the 2 cents. GAAP EPS was $0.27 vs. $1.00 adjusted. Revenue +20.5%. GAAP operating income −33%. Interest expense went from $6M to $81M after the Armis deal.

DoorDash is paying $17B for Instacart. The number I'd read first isn't the price. It's $1.25B. That's what DoorDash owes Instacart if antitrust kills the deal. 7.4% of the equity value. Instacart's fee the other way: $650M. The terms: > $65/share, a 26% premium to the Oct 22 close > At least 75% cash, up to 25% DoorDash stock > Expected close: end of 2027 or first half of 2028 > Outside date: 12 months, plus up to four 3-month extensions if antitrust is the only thing left. Up to 2 years in limbo. What DoorDash is buying (Instacart Q3): > GTV: $10.5B, up 15% > Revenue: $1.10B, up 17% > Adj. EBITDA: $342M, up 23% > GAAP net income: $147M, up 2% > Free cash flow: $307M Price check: ~12.4x Q3 adj. EBITDA annualized. ~29x Q3 GAAP net income annualized. What I'd want in the data room: 1. The bridge. Adjusted EBITDA grew 23%. Net income grew 2%. That's a 21-point gap. Show me what's in it. 2. The cash. 75% of $17B is at least $12.75B. DoorDash has ~$6.0B in cash and short-term investments. Even spending all of it, that's ~$6.8B+ of new debt, backed for now by a JPMorgan bridge loan. 3. The synergies. "$500M or more" a year, net of investments. But DoorDash says it will reinvest more than 100% of synergies in year one. Year one is negative by design. 4. The grocers. Instacart's value is its retailer relationships. Which contracts have change-of-control or exclusivity terms? 5. The stock leg. The all-stock election is 0.3372 DASH shares. That's only worth $65 if DASH is at ~$192.76. A $1.25B reverse break fee is DoorDash putting a price on its own regulatory risk. Follow for deal teardowns without the hype.

Oracle is up 10% on a promise. Free cash flow turns positive in the second half of FY2028. That's still more than a year away. Then $30B+ in FY2029. To get there it's raising another $20B ($10B stock, $10B debt), on top of the $20B of stock it already sold this fiscal year. That's $40B of new capital before the cash machine starts. Investors are paying today for FY2029 cash flow.

Peltz's $1.4B Wendy's bid is the equity only. Add ~$2.4B of securitized debt net of cash and the real price is ~$3.8B. About 8x annualized first-half EBITDA. The catch: adjusted EBITDA fell 15% last quarter, so the 8x sits on a shrinking number. And one of the buyers, Flynn, is among Wendy's biggest franchisees. It has seen the real numbers from the inside. Cheap price, or cheap for a reason?

Seagate beat. Raised guidance. Cut debt to $1.6B. Stock fell ~6% after hours. Up 143% this year, "beat and raise" isn't news. It's the entry fee. The markets are figuring out this AI demand thing...

$101 in cash vs. ~$89.47 in Patrick stock. That's $11.53 a share, ~13% more, for LCI holders, at Tuesday's close. The board still backs Patrick. The vote is Nov 18. Walking costs $94.2M. But "non-binding" means no financing, no diligence, no signed deal yet. A cash bid is a number. A stock bid is a bet.

GE Vernova made $1.3B last quarter. It generated $5.4B of free cash flow. That's 4.2x net income. And it just agreed to spend $9B on Trench Group. Q3 2026, from GE Vernova's release: • Revenue: $12.64B, up 27% • Net income: $1.29B • Adjusted EBITDA: $1.94B • Operating cash flow: $6.06B • Free cash flow: $5.41B, vs. $0.7B a year ago • Orders: $29.3B, up 96% organically. Backlog: $197B The company's own explanation: FCF was up "primarily due to higher positive benefits from working capital." The 10-Q shows where it came from. Contract liabilities, mostly cash received from customers before delivery, rose about $19.8B in nine months. Part of that came from acquiring Prolec GE, but much of it is new customer collections. Now the tell. Nine-month FCF is already $15.3B. The full-year guide is $16–17B. That implies only $0.7–1.7B in Q4. Working capital giveth, and it starts to taketh. The Trench deal: • $9.0B, funded half cash, half debt • 13x adjusted EBITDA. But it's 2028 EBITDA, before synergies • Trench expects $1.9B of 2028 revenue at ~36% margin. Today it's a bit over €1B (~$1.12B) • Close: late 2027 What I'd want in the data room: 1. The trailing multiple. 13x is on a number two years out that assumes ~70% revenue growth. What's the multiple on today's EBITDA? 2. Whose numbers. The release says Trench's figures were "prepared by GE Vernova based on data provided by Trench Group" under Trench's accounting policies. That's the QoE gap in one sentence. 3. The seller. Triton, a PE firm. Trench has doubled revenue since going independent in 2024. PE exits get priced on the best forecast the seller can defend. 4. The backlog. ~$5B of "backlog and framework agreements." Framework agreements aren't firm orders. Split them. Customer cash is the best cash a company can get. It's also a loan from your customers, paid back in product. Trench also just opened a plant in Charlotte, NC. 765kV equipment production is expected to start in late 2027. Follow for deal teardowns without the hype.

$HOOD just posted its biggest revenue quarter ever at $1.42B. The stock dropped ~7% after hours anyway, and the call explains why. Both are true. Full breakdown 👇 THE STOCK REACTION • Closed at $94.56, traded ~$87.60 after hours, down ~7.4% (Investing.com) • Revenue came in a little light of the ~$1.43B Street number • Adj EPS $0.60 vs ~$0.55. GAAP EPS $0.51 missed the $0.55 LSEG estimate (Reuters) THE SCOREBOARD • Revenue $1.42B, up 12% YoY and 9% QoQ • GAAP EPS $0.51, down 16% from $0.61. Net income $476M, down 14% • Adj EBITDA $808M, up 9%, 57% margin REVENUE • Transaction $867M, up 19%. Options $399M, up 31% • Event contracts $173M, up over 6x. Crypto $120M, down 55% (was $268M a year ago) • NII $415M, down 9%. Other $142M, up 61% (Trump Accounts, Gold) CUSTOMERS • 28.7M funded, up 7%. Gold 5.2M, up 34% • Platform assets $396B, up 19%. Net deposits $15.7B • Margin book a record $22.1B, up 59% WHY GAAP EPS FELL • Pre-tax $625M vs $634M, basically flat • Tax $149M vs $78M, effective rate ~12% to ~24% (my math) • $67M unrealized loss tied to Robinhood Ventures. Adj EPS is a brand new metric WHAT THEY SAID ON THE CALL • October: equity, options and crypto ADVs running ~5% lighter than Q3. Event contract ADVs up ~10% • Early Q4 take rates: "spreads are a little bit tighter," per CFO Shiv Verma • October net deposits over $13B, $6B of it the Dell Trump Accounts gift. YTD over $68B, already past the 20% growth target • Prediction markets are "almost a $500-million-a-year business," Verma told Reuters. Non-sports hit ~30% of volume, up from ~15% • Crypto take rate fell on Robinhood Earn, a stablecoin product with $500M+ in assets that monetizes lower • Rate math: every 25bp move is ~1.5% of revenue. Trump Accounts costing ~$100M this year COSTS AND GUIDE • Opex $739M, up 16%. Credit loss provision $71M vs $26M (Gold Card) • 2026 adj opex + SBC guide top end trimmed to $2.675B to $2.75B. No revenue guide CASH • Cash $5.8B vs $4.3B. LT borrowings from 0 to $2.66B • Buybacks $25M vs $107M, $689M YTD. Diluted shares 911M vs 918M • OCF $1.2B isn't clean FCF for a broker • NII ~29% of revenue, event contracts ~12%, crypto ~8% (my math) MY TAKE The deposit line is the strongest thing they reported. $68B YTD is a big number with two months still left. But Q4 is starting with core trading ADVs ~5% lighter and tighter spreads, so revenue per trade is moving the wrong way right when the Street wanted a clean quarter. Prediction markets drove most of the transaction growth (my math), now ~12% of revenue and almost $500M a year, and that's also the line with the most regulatory exposure. It's also a line I think the least sustainable as we don't know how long this gambling culture will last with tough times on the horizon. I'd want to see the take rate hold in Q4 before paying up for the deposit growth. Can prediction markets keep making up for crypto if spreads stay tight and state regulators keep pushing back? Not financial advice. DYOR.

$11.57B for Globalstar. Amazon gets about two dozen satellites. That's under 1% of the 3,200 it plans by 2029. So what's it really buying? ~25 MHz of mobile-satellite spectrum, and the Apple deal to power satellite features on the iPhone and Apple Watch. The tell: if Globalstar misses its operational milestones, the price drops by at most $110M. That's less than 1% of the deal. Amazon is paying for the license and the customer, not the hardware.

HOOD reports after the close. The Street's at ~$1.42B revenue and $0.56 EPS. Crypto volumes are still weak. Options and event contracts are where the growth is. Both are true. Full breakdown 👇 WHAT THE STREET EXPECTS 
• ~$1.42B revenue / $0.56 EPS, vs $1.27B / $0.61 in Q3'25 
• Last quarter: $1.31B revenue, $0.62 EPS (included $0.14 from RVI gains) 
• Options are pricing a ~9.5% move either way 
• Stock is down ~19% YTD WHAT THE MONTHLY DATA ALREADY SAYS 
• End of Aug: 28.6M funded customers, $384B platform assets, $4.0B in Aug net deposits 
• Jul + Aug equity notional ~$668B, options contracts ~617M 
• Crypto: $10.9B in July, $17.5B in August, still down ~38% YoY in August 
• Sept through the 24th: ~$267B equity, ~234M options, ~$17B crypto, ~4.4B event contracts 
• Margin book ~$21.5B at the end of Aug WHAT I'M WATCHING ON THE CALL 
• Event contracts vs crypto revenue (Q2: event contracts $156M, crypto $100M) 
• Gold subscribers after the 4.8M Q2 print, and NII vs the rate path 
• Whether adjusted opex plus SBC stays inside the $2.675B to $2.775B 2026 guide MY TAKE 
I'd look at the transaction mix first. Options and event contracts need to keep making up for weaker crypto. NII still matters, but I think how durable this quarter is comes down to whether prediction markets and options volume hold up when crypto is quiet. Does the event contracts line hold up when crypto stays quiet, or is too much of the transaction revenue riding on one product? Not financial advice. DYOR.

Ares is paying a 30% premium for Apollo's MidCap BDC. It's also buying it about 15% below NAV. Both are true. Full breakdown 👇 THE DEAL
• ~$2.6B enterprise value, cash plus stock
• $10.88 per MFIC share (~$1.21 cash + ~$9.67 in ARCC stock)
• 30.1% premium to Monday's close, 25.8% to the 30-day VWAP
• MFIC's preliminary NAV as of Sept 30 is ~$12.86
• So a 30% premium to the stock still works out to roughly a 15% discount to NAV WHAT CLOSING LOOKS LIKE 
• Pro forma: 800+ portfolio companies, over $31B of investments at fair value
• 200+ new incumbent positions, 600+ sponsors
• Wells Fargo lined up $750M of additional secured financing
• Close targeted for 1H 2027 MY TAKE 
I'd want the credit migration tape on the MidCap book, sponsor concentration, and how much of the accretion is just a lower cost of capital on a bigger book. Paying a premium to the stock while still buying below NAV is pretty standard BDC consolidation math. I think the risk sits in the loan marks and whether those yields hold once rates settle. Who's stress-testing the MidCap book against a flatter rate path before this closes? Not financial advice. DYOR.

Advent returned ~$13B to investors this year. LPs just handed it $30B. $3B+ goes to a new mid-market fund: $100–350M equity checks, companies worth up to $1.25B. Big-fund diligence is moving down-market. Sellers: get your own QoE before theirs.

Pre-tax profit +$2.3B. $1.4B of it is a legal charge that didn't repeat. That's 61% of the "growth." > Ex one-offs: +$0.9B. > Revenue: $18.6B, below estimates. > Wealth: flat at $2.7B, after +15% and +23% the prior two quarters. The market didn't sell the profit. It sold the growth.

JetBlue's revenue jumped $490M last quarter. Its loss still got bigger. Q3 2026, from the company's release: • Revenue: $2.81B, up 21% • Fuel: $868M, up $329M • Operating loss: $144M ($111M adjusted) • Interest expense: $149M • Net loss: $257M, vs. $143M a year ago Read that again: interest expense was bigger than the operating loss. Balance sheet, Sept 30 vs. Dec 31: Cash + investments: $1.63B, down from $2.48B. $851M gone in nine months > Total debt: $8.39B > Book equity: $1.34B, down from $2.12B The stock is up ~20% after the call, after management said there's a "disconnect" between its results and the bond selloff. What I'd want in the data room before believing it: 1. The interest line. Net interest was $132M last quarter. Even at operating breakeven, JetBlue loses money. The 2028 target of "at least $1 EPS" is ~$377M of net income on today's share count. Show me the bridge. 2. The liquidity. The $2.2B "liquidity" includes a $600M undrawn revolver. Cash you have to borrow isn't cash. 3. The ~$7B of unencumbered assets. New appraisals lifted the aircraft and engines to $2.8B, and $250M more aircraft-backed debt funds in Q4. That's collateral for the next round of secured debt. Whoever lends against it moves ahead of today's unsecured creditors. 4. Fuel. Fares covered ~87% of higher fuel costs in Q3, but Q4 fuel is guided to about $4.64 a gallon, and the 2026 margin guide just got cut. Can fares keep up? Revenue fixed the fuel problem. It didn't fix the debt problem. Follow for deal teardowns without the hype.

The definition of F# You money 🤣

$300B of PE-backed debt due in 2028–2029. Software is about a third of the risky loans in that window. Look, I'd focus less on the size of the wall and more on who already termed out versus who's still on floating rate with soft sponsor support. I'd want the maturity ladder by vintage, and how much of that software book still needs add-on M&A to hit the model. I'd treat refi risk as a diligence item today.

HealthSpan is taking Surgery Partners private for ~$5.7B EV. Public shareholders get $23.50 cash, about a 49% premium over Friday's $15.75 close. Bain rolls its ~39% and stays in. 200+ locations, 30 states, ~5,000 affiliated physicians. Close targeted for Q1 2027. Cash on hand plus new debt, with commitments already secured. What I'd want in the data room: • physician partnership concentration by site, • same-store case growth versus payor mix, and • how that new debt sits against ASC cash conversion. A nonprofit-system affiliate buying a PE-backed ASC platform while the sponsor rolls 39%. For QoE I'd spend more time on that structure than on the headline EV. So who's really underwriting the physician retention risk here?

EQT owes Range $1.148B if it walks. Range owes EQT $423M. 2.7x. The premium: ~$2.19B over Friday's close. Base synergies: $325M a year. 6.7 years to earn it back, undiscounted. The break fee shows how badly EQT wants it. The payback shows what it's betting on: gas demand. There is always a trade-off.