What we’re reading (1/5)
“ChatGPT Creator Is In Talks For Tender Offer That Would Value It At $29 Billion” (Wall Street Journal). “OpenAI, the research lab behind the viral ChatGPT chatbot, is in talks to sell existing shares in a tender offer that would value the company at around $29 billion, according to people familiar with the matter, making it one of the most valuable U.S. startups on paper despite generating little revenue.”
“Hedge Funds Gave Startups Billions. What Are They Worth?” (Bloomberg). “Mining data from thousands of mutual funds over the past year, Bloomberg tracked down their valuations for 46 private companies that also count the five hedge fund firms as investors. Of those, about 70% of the private companies had been marked down by mutual funds through September last year, with an average decline of 35%. Some holdings were slashed by as much as 85%…In some cases, the data show hedge fund marks haven’t caught up.”
“The Perfect Fraud For Our Times” (Dealbreaker). “The special-purpose acquisition company isn’t bound by many rules. Indeed, that is one point of them—to elide the disclosure and due-diligence rules required by an ordinary initial public offering…But SPACs are bound by at least one rule, and that is: Until a deal is actually consummated, the money collected stays in an interest-earning trust account and not, say, in the CFO’s Robinhood account to play around with meme stocks and crypto, even if those might earn investors a few more basis points than the trust account. Which in the case of the aforementioned now-former CEO, they didn’t.”
“Tesla Isn't Apple, Elon Musk Isn't Steve Jobs, And Its Cars Aren’t The Next iPhone” (Insider). “What should be more concerning to investors is it's becoming less clear by the day how Tesla itself can remain competitive in an EV market that's growing fast and in danger of leaving the company behind.”
“What Is Going Wrong With American Higher Education?” (Marginal Revolution). “In my own field, economics, the prospect of having to do a “pre-doc” and then six years for a Ph.D. is driving away creative talent. On the research side, there is an obsession with finding the correct empirical techniques for causal inference. Initially a merited and beneficial development, this approach is becoming an intellectual straitjacket. There are too many papers focusing on a suitably narrow topic to make the causal inference defensible, rather than trying to answer broader, more useful but also more difficult questions.”
