Starbucks has generated record quarterly sales thanks in large part to the 51% year-on-year revenue growth it achieved in China. This is no small feat given the average person in China isn’t all that interested in coffee and drinks only twelve cups per year. Yes, per YEAR. I don’t know about you, but twelve cups of coffee does not see me through the week. Given coffee is quite addictive (I’m drinking one (a decaf) as I write this), I suspect there is still quite a lot of room for growth in China.

The lowdown

• 🥤 Starbucks has record sales quarter driven by China sales and complex drinks.

• 👎 Fitch downgrades US debt from AAA to AA+ due to steady deterioration in standards of governance.

• 🩳 Billionaire hedge fund manager Bill Ackman is shorting 30 year treasuries, based on belief inflation may remain higher, longer.

Flex your finance muscle 💪

Secondary share sale

A secondary share sale refers to existing shareholders in a company selling their stake, or a portion of it, to other investors. Unlike a primary share sale where the company itself issues new shares to raise funds, in a secondary share sale, the company does not issue new shares and doesn't directly gain from the transaction. The purpose is to create a liquidity event for early investors, founders, and employees.

To give you a recent example, online broker eToro has just announced a $120 million secondary share sale. As part of the deal, early employees and angel investors were given the chance to sell shares to some of eToro's existing institutional investors. The transaction valued the company slightly lower than a previous primary funding round that had valued the company at $3.5 billion.

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Kretinsky in talks to buy a division of Atos

French tech group Atos is in exclusive discussions to sell one of its units to a PE firm run by Czech billionaire Daniel Kretinsky. This forms part of a larger overhaul of the European software company.

The potential deal would give the unit an enterprise value of €2 billion broken down as €100 million ($110 million) in cash and the transfer of €1.9 billion in debt to the buyer. This decision comes after a series of profit warnings and a sharp fall in Atos’s market value from €8.2 billion at the end of 2020 to about €1.1 billion now.

Kretinsky has been a busy man. This deal comes in the wake of a series of purchases by the billionaire in France, including a stake in the indebted supermarket group Casino – another distressed asset.

The content we're consuming today

• FT: Inside the race to lead EY after bungled break-up plan ($).

• Behind the Money podcast: Institutional investors take to the pitch.

• Money Talks podcast: Lights! Camera! Inaction…

Off-balance sheet items

• I am not a car person but the just announced hybrid Toyota Landcruiser is one of the coolest cars I have ever seen (but I also think the Tesla Cybertruck looks cool). Watch this video from Doug DeMuro to understand why the Landcruisers are so good.

The bottom line