LT Weekly: April 10, 2026
The exciting Nasa Moon Mission is slated to come to a close, with Artemis II expected to touch down on the West Coast tonight. We will be watching for that!
In the meantime, optimism regarding war de-escalation boosted the markets this week with Nasdaq’s +4.7% rally leading, followed by the S%P 500’s +3.6% increase. AI was once again a main driver for stocks across the sector, both positively and negatively. On the latter in particular, cyber security stocks took it on the chin on the back of AI disruption concerns stemming from an Anthropic update (see Theme #2).
Big picture, we focused on the below developments and themes in this edition:
- Pershing Lays Out A Path To UMG’s Value Creation
- AI Developments Span Cybersecurity, Competition, and Compute This Week
- Amazon’s Chip Business Is “On Fire” & “Will Be Bigger Than [People] Think”
- Cybercrime Losses Hit New Highs While AI-Related Fraud Becomes a Meaningful Category
- Shorts Sellers Generally Hold Onto Their Top Picks In Q1
- Falling Global Worker “Engagement” Doesn’t Bode Well For AI Productivity
- Grab Bag: Greece Social Media Ban / Nexstar-Tegna Merger Hits Another Bump / Prediction Mkt Updates
** Also, in case you have not had a chance to take a look, CLICK HERE to see our recent quarterly report, LionTree’s Lens – Spring 2026 **
Lastly, I wanted to highlight that LionTree Advisors is proud to have served as exclusive financial advisor to Bregal Sagemount on its strategic growth investment in Redgate Software.
Have a nice weekend.
Best,
Leslie
Pershing Lays Out A Path To UMG’s Value Creation
Pershing Square’s proposed combination of Universal Music Group (UMG) and SPARC Holdings (its SPAC) was a main event this week. Bill Ackman’s fund has been a long-time shareholder of the Co and seemingly got tired of watching the stock decline from ~€29/share in mid Feb 2025, to a low of €15.5/share towards the end of last week. Public music-oriented stocks have been under a lot of pressure, stemming from some company-specific factors, but also from general fears about the long-term impact of AI on the labels’ business model. Pershing is not worried about the latter, and in fact, similar to what we have heard from UMG’s mgmt, they believe that AI will be a net positive.
On company specific factors, the fund believes that shares of the NEW UMG will re-rate by 1) optimizing capital allocation and the balance sheet; 2) improving financial disclosures, expanding investor access, and publishing a “long term algorithm with a focus on per share EPS growth”; 3) enhancing corporate governance…including refreshing the board, and 4) listing in the US. In addition, the stock appreciation that would come from projected adj EPS growth of +15-19% CAGR over the next 6 years and assumed multiple expansion.
In this transition, Pershing estimates that UMG shareholders will receive an estimated value of €30.40/share, or a 78% premium to UMG’s last closing price pre-announcement. While UMG shareholders will get fewer shares in the NEW UMG, the Pershing Team argues that the newCo will be much more valuable.
How do the fund’s 2025-31 financial projections compare to current Wall Street consensus expectations? They are more bullish. Pershing’s adj EPS CAGR assumptions for the NEW UMG at +17% (at the mid-pt) are much higher than cons +9.3%. Their 2031 adj EBITDA margin estimate of 25.5% (at the mid pt) exceeds cons 24%. Lastly, their Streaming & Subscription CAGR projection of +10% (at the mid-pt) compares to cons +7.7%.