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Qatalyst founder Frank Quattrone(AP Photo/Paul Sakuma)

Last night's stunning news that Cisco would buy AppDynamics for $3.7 billion wasn't just bad news for the tech IPO market, but it was also bad news for tech IPO bankers.

None of the eight underwriters of the now-scuttled AppDynamics IPO ledthe sale, including bulge-backer leads Morgan Stanley, Goldman Sachs and J.P. Morgan (although at least MS and GS are claiming some credit, in releases sent out today). Instead, it was led by advisory firm Qatalyst Partners ― which Techcrunch reports hadn't even been retained to run a dual-track process. Instead, Qatalyst saw a hot IPO prospect, rang up prospective buyers and found a taker.

Banker blues: What this means the underwriters won't be getting paid for the IPO ― namely since there is no IPO. One of those bankers tells me he expects to receive at least some of the merger advisory fee "given how far we went into the IPO" (it was expected to rice tonight), although nothing has been formally communicated.

But that's really just a short-term issue, and relatively small dollars. The larger frustration for big banks is that San Francisco-based Qatalyst continues to muck up their M&A advisory business. The whole reason so many Wall Street firms now underwrite smallish tech IPOs is because it's viewed as a foot in the door with companies that would otherwise go with Qatalyst for their M&A business (which is where the real fees are generated). Now even that strategy is arguably under assault, since IPO underwriters can't run dual-track processes without their issuer's consent.

Bottom line: Cisco's $3.7 billion purchase of AppDynamics is a huge win for Qatalyst and AppDynamics shareholders. It's a big loss for Wall Street.

Go deeper

"Atmospheric river" swings Northern California from drought to flood

Satellite view of the bomb cyclone swirling off the coast of the Pacific Northwest and the atmospheric river affecting California on Oct. 24. Photo: CIRA/RAMMB

A series of powerful "atmospheric river" storms are delivering historic amounts of rainfall across parts of drought-stricken California and the Pacific Northwest.

Why it matters: The atmospheric river, packing large amounts of moisture, was causing Northern California to whiplash from drought to flood, as it slowly moved south overnight. It's triggered widespread power outages, flooding and mudslides.

Updated 1 hour ago - World

U.S. threatens to cut aid to Sudan after military takeover

Sudanese Prime Minister Abdallah Hamdok during a 2020 news conference in Khartoum, Sudan. Photo: Mahmoud Hjaj/Anadolu Agency via Getty Images

Sudan's civilian Prime Minister Abdalla Hamdok was put under house arrest and several other ministers were detained Monday in what appears to be a military coup in the country, per local reports.

The latest: The head of the military faction of the Sudanese government, Gen. Abdul Fattah al-Burhan, said in a statement that he is announcing a state of emergency, suspending several parts of the interim constitution and dissolving the civilian government and interim sovereignty council — the highest governing body in the country.

Facebook's pivotal week

Illustration: Aïda Amer/Axios

They're battening down the hatches at Facebook headquarters this week as the company faces a trifecta of tumult: a continuing wave of negative press coverage fueled by document leaks, a critical earnings report Monday and a reported name change looming.

The big picture: All this is unfolding as Mark Zuckerberg tries to transform Facebook from a social network into the prime mover behind a new "metaverse" of VR- and AR-driven remote work and play.