Meme stocks soar on bad news for Melvin Capital and Russia’s invasion of Ukraine [Thornton/MarketWatch]
News that Ken Griffin’s Citadel LLC hedge fund is further paring back its $2 billion investment in Gabriel Plotkin’s short-selling fund Melvin Capital was explosive Schadenfodder for social media’s army of “Apes….”
The uncertainty created by Putin’s military action is a perceived gift to the Apes, who have indeed long believed that market shrinkage would dry up a deep pool of synthetic shorts that they contend have artificially delayed meme stocks from “mooning….” It also plays into the retail hope that more market pain from Russia’s invasion —even without Western sanctions on the all-important SWIFT payments system— will keep Powell from his aggressive rate-raising schedule in 2022, and keep the cheap money train rolling for retail investors to keep HODLing their favorite names.
SPAC Startups Made Lofty Promises. They Aren’t Working Out. [WSJ]
Nearly half of all startups with less than $10 million of annual revenue that went public last year through a special-purpose acquisition company, known as SPAC, have failed or are expected to fail to meet the 2021 revenue or earnings targets they provided to investors…. Investors and academics have criticized speculative companies’ use of projections, saying they are used to create buzz and attract investors. The U.S. Securities and Exchange Commission has indicated it is considering new limits on the practice and some federal lawmakers have advanced bills to curtail it. While regulations around traditional initial public offerings strongly discourage companies from making forecasts about future performance, companies that list publicly by merging with SPACs—which are sometimes called blank-check companies—have freely used forecasts, often presenting investors with charts showing enormous growth.
BitMEX Founders Hayes, Delo Plead Guilty in U.S. Over Money-Laundering Controls [Bloomberg]
Under the plea deal, the parties agreed that the federal sentencing guidelines call for a sentence of six to 12 months each. [Arthur] Hayes and [Benjamin] Delo each also agreed to pay a fine of $10 million…. Hayes, Delo, [co-founder Samuel] Reed and Gregory Dwyer, the exchange’s first employee, were charged in October 2020 over their failure to implement programs to prevent money-laundering or verify the identities of its customers. Prosecutors claimed they set up BitMEX in the Seychelles in part to avoid regulatory scrutiny.
Coinbase Profit Surges During Bitcoin’s Wild Rally and Selloff [WSJ]
For the fourth quarter, Coinbase had net income of $840 million, or $3.32 per diluted share, on net revenue of $2.5 billion, the company said Thursday, compared with earnings of $177 million on net revenue of $497 million a year earlier.
Analysts had projected earnings of $1.94 a share on revenue of $1.97 billion, according to FactSet…. The fourth quarter was a particularly volatile one for cryptocurrencies. The price of bitcoin rose from $43,800 to a record $68,991 by November, a gain of 58%, pushing the value of the entire crypto market to a record $3 trillion. From there, however, bitcoin fell 33%, finishing the quarter at $46,208.
L Catterton Hires Goldman, Morgan Stanley for Possible Summer IPO [WSJ]
Greenwich, Conn.-based L Catterton manages roughly $30 billion, and its portfolio includes a swath of well-known consumer companies. Among them: German shoe manufacturer Birkenstock GmbH and children’s-apparel maker Hanna Andersson. In 2020, it sold Cholula for around $800 million at a sizable profit after owning the hot-sauce company for less than two years.
‘Pharma Bro’ Martin Shkreli Banned for Life From Public-Company Roles [Bloomberg]
He’s “unfit to serve as an officer or director of any public company,” the U.S. District Court for the Eastern District of New York said…. Shkreli argued that a permanent bar would be excessive because he has “already been sufficiently deterred and punished” following a parallel criminal case. He instead sought at most a 10-year bar along with conditions on service as a public company officer or director after that period.