Sunday ScariesJune 28, 2026

Vol. 10 · Week of June 28, 2026

Sunday Scaries Vol. 10

AI-linked stocks sold off hard as markets stopped rewarding capex and started demanding returns on $452B of AI spending. Merck KGaA is buying Bio-Techne for $11.3B, and a $3.9B healthcare take-private cleared its vote. Five-minute recap before Monday.

Last week the Fed told the market to stop pricing rate cuts. This week the market found something new to worry about: whether the whole AI trade has gotten ahead of itself. One warning from a Korean chip supplier on June 24 set off a global selloff, with the Nasdaq down 2.2% and Alphabet shedding as much as 10% over two sessions, as investors finally started asking whether $452 billion of AI spending is actually earning its keep. Real M&A kept moving underneath the noise: Merck KGaA agreed to buy Bio-Techne for $11.3 billion, a $3.9 billion healthcare take-private cleared its shareholder vote, and healthcare quietly became the hardest seat to land on the Street. Five minutes, every section, ammo for Monday.

Top Stories of the Week

1. AI stocks took a beating, and the market wants proof the capex is paying off.

A warning from a single Korean chip supplier on June 24 was enough to crack the AI trade. The Nasdaq fell 2.2% to 25,587 and the S&P 500 dropped 1.4% to 7,365, with the damage concentrated in the names that led the rally: Alphabet shed 6 to 10% over two sessions, Amazon fell 4%, and Micron tumbled 13% before clawing some of it back. The trigger was not the chip warning itself, it was what the warning crystallized. The big tech platforms have now committed a combined $452 billion to AI capital spending, and investors have stopped taking the returns on faith. Alphabet's free cash flow fell 47% year over year and Amazon's collapsed 95%, both buried under record capex, and the market finally asked the obvious question: where is the payoff?

Why you care: This is the free-cash-flow-versus-revenue-growth debate that sits under every tech and growth-equity valuation. When a company pours money into capex and the cash flow does not follow, the market re-rates it, and walking the capex-to-FCF bridge is exactly what TMT and growth interviewers are testing right now.

Interview angle: "For a couple of years the market paid AI names for revenue growth and read capex as ambition. This week it flipped to paying for monetization, which is a classic growth-to-maturity re-rating. A DCF captures it through lower near-term free cash flow and a higher discount rate; trading comps capture it as multiple compression. Same story, two lenses."

2. Merck KGaA is buying Bio-Techne for $11.3B to bulk up in life-science tools.

On June 25, Germany's Merck KGaA agreed to buy Bio-Techne, a Nasdaq-listed maker of reagents and diagnostic tools, for $73 a share in all cash. That is a 36% premium to the stock's one-month average price and an enterprise value of $11.3 billion (about 9.9 billion euros). The logic is scale: Merck KGaA is pushing deeper into high-growth reagent and diagnostics markets to take on Thermo Fisher at the top of the life-science tools industry. The financing is the part worth studying. Merck is funding the deal with existing cash and new debt while explicitly committing to keep its investment-grade rating, and it is underwriting roughly 140 million euros of annual cost synergies it expects to fully bank by year three. Guggenheim and J.P. Morgan advised Merck; Goldman Sachs advised Bio-Techne. Close is targeted for late 2026 or early 2027, pending regulatory approval.

Why you care: One deal, a stack of interview topics: cross-border structure, premium justification, a multi-year synergy build, and a capital structure threaded between leverage and a credit-rating constraint. Healthcare and life-science coverage groups love this profile because every lever is visible.

Interview angle: "The real tension is leverage versus the rating. Merck wants to fund an $11.3 billion deal with debt but refuses to lose investment grade, so the question becomes how much debt the balance sheet can carry before the agencies flinch. That constraint, not the headline price, is what actually shapes the financing."

3. Record capital raises are stacking up, and some big names are calling a top.

Step back from the selloff and the capital-markets backdrop looks frothy in a way career bankers recognize. In a single stretch of June, Alphabet pulled in roughly $85 billion from a secondary stock offering, Nvidia raised $25 billion in its first bond sale since the AI boom began, and the record SpaceX IPO we covered when it priced rounded out the biggest cluster of mega-raises in memory. Strategists started saying the quiet part out loud. Allianz's chief investment officer described the path as moving "from healthy boom, into stretched boom, into bubble territory," and Capital Economics told clients the S&P 500 could fall 21% from its peak by the end of 2027 after one final blow-off rally. The pattern, equity and debt and IPOs all rushing the same window at once, is the kind of thing that tends to show up near a top.

Why you care: This is live ECM theory. Secondary offerings, debut bond deals, and record IPOs all printing at once is a textbook late-cycle signal, and understanding why issuers and underwriters race to raise into a hot window is exactly the contextual judgment banks want from incoming analysts.

Interview angle: "When everyone issues at once, it is rarely a coincidence. Companies and their bankers are racing to lock in cheap capital before the window shuts, which is why timing risk is the first thing an ECM banker raises with a client. The same behavior that funds growth on the way up is what marks the top on the way out."

Deals of the Week

A founder-and-PE group is taking Select Medical private for $3.9B, and the vote just cleared. The merger was signed in March, and on June 26 Select Medical's shareholders approved it, clearing the last big hurdle to close. The buyers are the company's founders alongside private-equity firm Welsh, Carson, Anderson & Stowe, the classic founders-next-to-a-sponsor take-private of a large healthcare-services operator. The advisor stack is the lesson: a take-private this size pulls in a special committee with its own bankers and counsel, separate advisors for the sponsor, and company counsel on top, which is how one deal ends up listing Goldman, J.P. Morgan, Wells Fargo, Barclays, Cravath, Skadden, Ropes, and Dechert all at once.

Buy-side (founders / WCAS): J.P. Morgan and Wells Fargo (financial); Barclays (financial to WCAS); Cravath and Ropes & Gray (legal)
Sell-side (Special Committee): Goldman Sachs (financial); Skadden (legal); Dechert (company counsel)

Biogen is buying RayThera for up to $1B, with most of the price tied to milestones. Announced June 17, the deal hands Biogen an early-stage immunology pipeline for an upfront payment plus contingent consideration that can reach $1 billion if the assets hit their development and regulatory milestones. No advisors were disclosed, but the structure is the whole point: tying most of the headline number to milestones lets a buyer take a shot at an unproven pipeline without paying full price for science that has not de-risked yet. It is becoming the default architecture for early-stage biotech M&A. (See the pro tip below.)

Buy-side (Biogen): Not disclosed
Sell-side (RayThera): Not disclosed

Pro tip: The contingent value right, the CVR, is your structure to know cold this week. The setup: a buyer is not convinced an asset is worth the asking price, so instead of paying it all upfront, it pays a smaller guaranteed amount plus a promise. Hit these milestones, an FDA approval, a trial readout, a sales target, and the seller collects the rest. That bridges the gap between a seller who believes in the science and a buyer who refuses to overpay for results that have not landed yet, which is why CVRs run all through healthcare and biotech M&A. Biogen and RayThera is the clean version: up to $1 billion, but only if the pipeline delivers. Here is the catch most candidates miss: a CVR is essentially an option the buyer writes to the seller, so it shifts the development risk back onto the people who built the asset. Explain that risk transfer and you understand the structure better than most first-years.

Recruiting Pulse

Bonuses came in up about 10%, and the bar to convert went up with them. The 2025 performance-cycle numbers are in, and pay rose roughly 10% across the sector, with elite boutiques pushing total comp toward $500,000 for top associates. Recent grads tell us the raise is real, but so is the selectivity behind it. Groups that ran lean through the 2024 deal drought are rebuilding headcount deliberately, which makes superday processes at the top banks more competitive per seat than they were two years ago. Here is what actually changed: turning a summer offer into a full-time seat now takes clear deal exposure or real project ownership you can point to, not just good facetime and clean model formatting. Walk into the conversation able to name what you actually drove.

Healthcare is the hardest coverage seat on the Street right now. Between this week's Select Medical take-private and a steady run of 2026 healthcare platform deals, the candidates we talk to keep naming healthcare coverage at the bulge brackets and elite boutiques as the toughest group to crack. The reason it stayed hot is structural: recurring revenue, regulatory defensibility, and a private-equity exit appetite that never really cooled, which kept deal flow alive through the 2023 and 2024 slowdown when other groups went quiet. If you are aiming at healthcare, expect the technicals to go sector-specific fast. Know how to normalize EBITDA for a healthcare-services platform, how government reimbursement rates flow into a valuation, and how a CVR works, since that structure has shown up in more than one healthcare deal lately.

What's New on Superday AI

Three things worth your time this week:

Healthcare is the hottest seat. Now you can run a mock built for it.

Pick an industry group when you start a custom mock interview, Healthcare included, and the AI interviewer stops asking generic technicals and starts asking the sector's: how you normalize EBITDA for a services platform, how reimbursement risk hits a model, how to value a pipeline. FIG, TMT, Energy, Real Estate, Consumer & Retail, and Restructuring are all there too. Walk into a group-specific superday having already practiced the questions that group actually asks.

Start a healthcare mock

The bar to convert went up. Make sure your resume clears it.

Our resume scoring grades yours against the analysts who actually got hired, then tells you what is dragging it down: the weak bullet, the missing quantified result, the experience you are underselling. Upload it once and you get a straight read on where you stand and exactly what to change, so you fix it before recruiters see it instead of after.

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