Morning Coffee: Euphoric JPMorgan MD says it’s a great time to be alive. There’s a new euphemism for poor performance

Sir John Templeton, the famous investor, once said that the most dangerous four words in the English language are “it’s different this time”.  But, of course, he was on the buy-side.  David Bauer, head of equity capital markets (ECM) Americas at JP Morgan, has put the opposing case quite succinctly – “unlike other IPO cycles”, this one involves a “real catalyst” which will be “generationally transformational”.  Being an ECM banker is no longer simply about doing deals that involve planet earth but about doing deals that involve interplanetary economic activities. “When you think about the space economy, you have to value it in a different way,” declares Bauer.

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The scoreboard, it’s fair to say, is entirely on Bauer’s side.  The SpaceX IPO shot up on its first day of trading, then went up again, and then went up again.  Anyone who was allocated shares in the offering is so far in profit by more than 50%; even if you bought in the open market on the first day, you’re likely to be up more than 20%.  And so the question is not so much whether SpaceX is a success, as to whether it’s worth chasing.

Bauer really thinks it is. His investment thesis goes that this is a once in a lifetime opportunity to participate in “the reindustrialisation of America”, and so backward looking valuation measures don’t matter.  But, of course, he’s on the sell-side.  He has done his job and booked his fees the moment that the final “yours” was said and the books were closed. 

For the Bauers of the world, the fees are terrific. As Bauer says, “what a time to be alive” as a bulge bracket investment banker.  Dealogic industry statistics are out for the first half of 2025, and US equity capital markets revenues are up 152% on last year.  This is partly driven by a few big deals, nearly all of which have involved JPM, but it’s by no means just a SpaceX story – total global revenue is up 22% on the first half of 2025, and Goldman Sachs has reported M&A revenue up 48% on a record-breaking $1trn of deal volume.

Sceptics might say that it would hardly be a bubble worth the name if it didn’t break a few records, and that to quote the old road safety slogan, “the faster the speed, the bigger the mess” when valuations normalise. 

But for the time being, it’s great indeed to be alive, and the second half of the year might be even greater.  Although the base for comparison is a little more demanding, there are still some very big IPOs scheduled for H2, including OpenAI and Anthropic.  So David Bauer is likely to reach a plateau of sustained excitement, rather than experiencing any comedown.   Even if you worry that it might all end in tears, it’s worth remembering the wisest proverb of them all, that the stock market can stay irrational much longer than you can stay solvent.

Elsewhere, Robinhood is reducing its headcount by 10%, like a lot of tech firms, but unlike many of its peers, it doesn’t seem to be attributing the job losses to the impact of AI.  According to the memo sent by CEO Vlad Tenev, “The goal is to maximize our talent density”.

This is a genuine innovation in the art of euphemism; it requires quite a few moments’ thought to realise that “talent density” means something like the average amount of talent per employee, and so you can increase this average by getting rid of employees who have … less than the average amount of talent.

In other words, it’s a performance related, “rank-and-yank” type reduction in force.  But expressed in such poetic language that the underperforming “Robinhoodies” might have been half way out of the door before they realised. If they had any doubt, then recruiters like Lee Harding will presumably set them right – he’s quoted as saying that if he had been among those let go, he’d interpret the memo as meaning “I’m not good enough”.

Which means that AI probably wasn’t involved in any way with this latest round of redundancies.  Such a masterpiece of corporate speak could surely only have been written by a human being.

Meanwhile …

All sorts of SpaceX employees and former employees are now very rich, “even the baristas”.  One of them says that he has been receiving handwritten notes from wealth managers, and a lot of branded private bank swag. (Business Insider)

At the other end of the scale, here’s some advice for a former banker who thought that the streets of fintech were paved with gold, but who has found themselves with probably worthless equity, a boring product and an office with queues for the only toilet. Usually, it’s possible to make a return without too much humiliation. (Global Capital)

Deloitte in the UK is planning “voluntary” job cuts for as many as 175 employees of its audit business. This isn’t about AI and it doesn’t appear to be a “talent density” exercise either – it’s more a result of stagnant revenues and lower than usual natural churn of people leaving audit for other jobs. (Bloomberg)

Although AI hiring is famously quite inaccurate, it needs to be remembered that human beings are also pretty bad at trusting unreliable gut instincts.  Perhaps a combination of the two might do better than both. (WSJ)

Teoman Guler, the head of North American gas and power trading at DRW appears to be taking the fall for the losses it experienced earlier this year.  It seems that although he’s made a lot of profits for them in the past, heads had to roll. (Bloomberg)

Crypto bros in Europe might have a few problems ahead.  Sources talking to Reuters say that the application of Binance for a licence to do business in Greece (and therefore all across the EU) might be running into trouble. (Reuters)

Among the matters at issue in a recent case between John Paulson and one of his business partners were “$112,936 connected to American Express rewards points that the arbitrator found were improperly retained” (NY Post)

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