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Chapter 1: What led to Thoma Bravo's write-down on Medallia?
We're going to get that sound ready because we got some bad news. Toma Bravo is taking a massive write-down on a software company called Medallia. Toma Bravo is reportedly handing over the software company Medallia to creditors after restructuring negotiations failed to materialize. This is a $5.1 billion equity wipeout for the firm. who bought the business for $6.4 billion in 2021.
There's some background in Reuters that I think I should read through, and then you can sort of give me your analysis and what you're seeing on the timeline around take. So from Reuters, exclusive, Toma Bravo nears agreement to turn software firm Medallia over to creditors. That does not sound good.
Private equity firm Tomo Bravo is nearing an agreement to hand over software firm Medallia to lenders, wrapping up months of restructuring negotiations. The move will wipe out $5.1 billion in equity. Medallia has struggled in recent months under the weight of $3 billion of debt, which it owes to Blackstone, KKR, Apollo Group, and Antares Capital.
Toma Bravo, Blackstone, and KKR declined to comment. Apollo and Medallia didn't immediately return requests for comments to Reuters. So like other software companies, Medallia's valuation has been hit in recent months over concerns that its services will eventually be supplanted by artificial intelligence. What does Medallia do?
Medallia provides software that collects and analyzes customer and employee feedback for companies. We've had some startups, some of them backed by Sequoia Capital, that are using AI to do this exact thing. That's a potential disruption. And then there's also rolling around.
So their main rivals, Qualtrics.
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Chapter 2: How did Medallia's debt impact its valuation?
Yep. But yeah, and maybe you said this already, but you know that Sequoia was one of the big backers at Medallion. I didn't know. When they were a private company.
Oh, interesting.
I mean, they're still private.
There's a long history of that with the firm that was before Zenefits was called like Success Factors. Lars Dahlgaard did that deal.
Sequoia is the real winner here. They did $35 million in 2012. They did another $50 million in 2014. And then they later led a $150 million round.
Wow. And then eventually, did they take it public, or did they sell it for $6 billion to Toma Bravo directly from the private? Was Medallia ever a public company? That would be interesting.
I think they were.
You look that up, and I will keep reading from this to give some more back story. So private equity firms invested heavily in the software sector when interest rates were low following the peak of the COVID-19 pandemic. We all remember. 3% interest rates. It was the golden era of startups and growth. All the DCFs were massive.
And then, of course, the valuations came down once the interest rates went up. So investors have become increasingly nervous about the sustainability of high valuations assigned to some of those assets and the debt raised to buy them.
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Chapter 3: What role does AI play in Medallia's future?
So just basically getting out-competed in the market. And just to go back to the earlier point, yes, Medallia went public in 2019 on the NYSE. It was taken private July 26, 2021. It had been trading around the $5 billion mark prior to the take private at 6.4.
So Toma Bravo, after taking it private, installed a new leadership team in early of 2025. Marshall, Blackstone's global head of private credit, said that they were working on a turnaround plan, and we expect there to be discussions around the capital structure. And so people are black-felling on the timeline.
Brandon says, yes, I am sure this is the bottom in software, and we won't get worse from here. Not good signs. This is potentially one of those cockroaches that Jamie Dimon is worrying about. There's another post that seems like it was deleted, but we can get some of the screenshot here.
The tough thing is that everyone involved here has been on a kind of a press tour saying, like, everything's fine. Yes. Like, we're all good. Yes. AI is going to be an accelerant. But even ignoring the AI question, a lot of these businesses no longer are founder-led. They're competing against other companies that are founder-led. Mm-hmm.
And yeah, it's just kind of credit to Jamie Dimon for his comments saying like, you know, I don't think this is over. When you had first brands and some other shutdowns.
Yeah, in the previous startup era, there were... I mean, I feel like it would have been hard to raise for just like a vanilla Qualtrics or Medallia competitor and just saying, like, pre-AI, like, we're just going to build SaaS, and we're just going to build a CRUD app and write software.
Yeah, a new player is a company, Aru.
Yeah, that's a very different approach.
Simulation.
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Chapter 4: What are the implications of Blackstone and KKR's involvement?
Do not go to China, Noah. Do not go to China.
Yeah, this is an interesting thing. But maybe a potential bargaining chip in all of the other discussions.
In tech, Tyler always points out that tech is too focused on chips when it comes to Chinese diplomacy, that there are many, many other questions around trade, and what Apple's doing, and rare earths, and just the broad history of the Chinese empire that play into what their Taiwan policy is, how they will interact in the Middle East. And we tend to focus it all on AI.
It's all about the data centers and the chips. And perhaps there are more things. And this is one example of something else that is a key factor in a broader negotiation that includes chip exports and also rare earths and also talent movements and whether or not Manus will be able to move over to meta and a million other things. And so that is the job of these world leaders is to
swirl around all the different trade-offs and get to, hopefully, a good deal for both sides.
Breaking news. GPD 5.5 is out. Oh, it is. Is out. Introducing GPD 5.5, a new class of intelligence for real work and powering agents built to understand complex goals, use tools, check its work, and carry more tasks through to completion. It marks a new way of getting computer work done. Now available in chat, GPD, and Codex. I like this demo of the Rubik's Cube.
GPT-5.5 excels at writing and debugging code, researching online, analyzing data, creating documents and spreadsheets, operating software, and moving across tools until a task is finished. GPT-5.5 delivers this step up in intelligence without compromising on speed, matches GPT-5.4 per token latency in real world serving. There's the model card there. And there are some other posts.
We will wait for the reactions to come in. We will gather them. We'll summarize them. But the team cooked.
Cooked. Congratulations to everyone that worked on this.
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Chapter 5: What is the significance of ChatGPT 5.5's release?
Lorraine. Lorraine.
The lore plus explain.
I could tell John, can you Lorraine GPT 5.5?
Yes. Give you the lore and tell you about what happened with 4.5, 4.0, 3.5, 3 DaVinci, give you the whole lore, but then also explain what this model is capable of. That's the full Lorraine of GPT 5.5. But we're not here to talk about Lorraine. We're here to talk about Choppelganger, which is a new word in Merriam-Webster, the dictionary.
It's basically the main dictionary as far as I'm concerned. Choppelganger is a term for a less attractive version of someone or something. So whoever's going out there and distilling 5.5 into sort of a chopped version of it, that will be the Choppelganger of the official GPT 5.5.
So stay away from the chapel gangers unless you're really down on your luck and you need a Chinese open source model to do something for you. Then buyer beware because it might have some flaws. Separately, there is new news from Michael Kratios that the government seems to be taking anthropic and open AI's messaging around distillation very seriously and is setting up a task force.
We can read a little bit more about this later. But setting up a task force to actually figure out how to prevent distillation at scale. As the models get bigger, it's more and more of an economic impact.
When you're talking about a $100 million training run and a Chinese lab can distill it and sneak the weights out and exfiltrate the data, that's a lot different of an economic impact from stealing something that, I don't know, cost billions to train or billions to put together. Good news there, hopefully they're successful.
It was also sort of a white pill to see a lot of the labs working together to understand, hey, we're seeing this weird amount of data go to this particular company. Are you seeing the same thing? Or it's a shell company and we have five shell companies in these areas that are asking for these queries. And then the other lab says, oh yeah, we're actually getting something similar.
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Chapter 6: How is the tech industry responding to layoffs at Meta and Microsoft?
Maybe there's AI gains. Maybe there's different investment strategies. We will have to see where they are moving chips around, what projects they are actually cutting, what projects they are doubling down on, because these companies are also hiring at all times, effectively. Well, Kristof had some actual media ideas for the tech industry. He says there's not enough media in tech.
He's upset. We need more tech-positive media.
For sure. So he says, silent library with founders. Winner gets investment.
What is silent library?
Silent library? So is this like a webcam that observes people?
Silent library is a... television show. It has four seasons. It's a game show.
It's a game show. Game shows are fun. I can see a game show being fun, at least different.
Six friends vying for a cash prize. If only they can remain silent as one of them is forced to endure a bizarre stunt while seated in a library. Okay. Okay. What else? Jackass with founders.
What does that mean? How do you make that tech related? Maybe like humanoid robots? When I think of Johnny Knoxville, I just think of bull riding effectively. And so I imagine riding some sort of robotic bull would be it. It's very dangerous. The team that worked with Bam Margera and Johnny Knoxville, they had some serious injuries from time to time.
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Chapter 7: What are the key predictions from Kevin Kelly's 2016 insights?
So it was really popular probably 2010 to 2013. Okay, okay. And I will say a lot of people use these videos as a sort of college guide. So I'm sure they have millions of views at this point.
Kevin Kelly, the founder of Wired, had some incredible predictions in 2016. Let's read through them. Summary of the inevitable understanding the 12 technological forces that will shape our future. This was Kevin Kelly's book from 2016. According to Kelly, much of what will happen in the next 30 years is inevitable. The future will bring with it even more screens, tracking, and lack of privacy.
In the book, he outlines 12 trends that will forever change the ways we work, learn, and communicate. Becoming, moving from fixed products to always upgrading services and subscriptions. That has definitely happened. We're moving away from even seats. Everything's consumption-based now. Cognifying, making everything much smarter using cheap, powerful AI that we get from the cloud. Nailed it.
That is a fantastic prediction for assuming he wrote it. He actually wrote it probably in 2015, published in 2016.
But he's the creator of Wired. He's been tapped into tech his entire career. Depending on unstoppable streams of real time for everything, for sure. Turning all services into screens, that definitely happened. Your toaster can watch TV now. Shifting society from one where we own assets to one where instead we have access to all services at all times. Collaboration at mass scale.
On my imaginary sharing meter index, we are still two out of 10. Filtering, harnessing, intense personalization in order to anticipate our desires. Remixing, unbundling existing products into their most primitive parts and then recombining in all possible ways. That's definitely happening. Coconut simulator, unironically, an example of that.
Interacting, immersing ourselves inside of computers to maximize their engagement. Tracking, employing total surveillance for the benefit of citizens and consumers. Sounds scary, potentially a good outcome if things are done properly. Promoting good questions is far more valuable than good answers.
What? You think total surveillance is potentially a good outcome?
Well, he says total surveillance for the benefit of citizens and consumers. So if there is a black box where my Netflix activity exists, where no Netflix employee can see it because it's encrypted, but it can make great recommendations and recommend me the next great show that I will actually enjoy, I'm cool with that surveillance.
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Chapter 8: What is Bob Iger's new role and its impact on Disney?
For the benefit of John Coogan.
Yeah, yeah. There is a surveillance bull case. Constructing a planetary system connecting all humans and machines into a global matrix. Okay, that one we're still waiting on. But a lot of good, interesting predictions. Jason Schumann says, wild how accurate these predictions were. And they were, in fact.
Well, more breaking news in the journal. Bob Iger is returning to where? Disney? Thrive. Thrive. No way. That's amazing. Back to Thrive. Love it. Yeah, I think he's been an LP in Thrive. He also bought a piece of Thrive. Yeah, that's right.
Okay, well, that'll be a good next act for him. I'm very interested to see where he goes. There's a whole alumni class coming together. Reed Hastings is out and on to the next thing. We'll see where they go, hopefully.
Back to Intel. Intel announced its first quarter earnings after the bell on Thursday, beating analysts' expectations on the top and bottom line and providing better than anticipated Q2 guidance on strong data center sales. Intel said it expects a revenue of $13.8 to $14.8 billion for the second quarter. Wall Street was anticipating $13 billion.
And as of this morning, they were at around $100 billion. times PE, and so only up for Intel.
Climbing the ranks, climbing the ranks. Tesla also released Q1 earnings, revenue of 22.4 billion versus 21.4 billion estimated, so they beat on top line. They also beat on net income. 1.45 billion versus 1.17 billion estimate. The interesting article in the journal was that Elon was being more cautious about Tesla, saying, I think we need to get realistic about some timelines.
So he is certainly not pumping everyone up, and he's trying to sort of reset around the fundamentals. We will see where that goes. It is a wild timeline that SpaceX, if it goes out at $1.75 trillion, will be bigger than Tesla, which is sitting around $1.1, $1.2 trillion these days. So still both huge companies.
Credit to Bubble Boy over on X. Two hours ago, he says, everyone asks me about how I'm playing earnings. He says, doubling down, 25% of my portfolio is in Intel calls.
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