What we’re reading (3/6)
“When SPAC-Man Chamath Palihapitiya Speaks, Reddit And Wall Street Listen” (Wall Street Journal). “Mr. Palihapitiya is the man of the market moment. The founder of tech-investing firm Social Capital Holdings Inc. has charmed Wall Street to raise billions of dollars to bring startups public. Amateur traders hang on his every word for clues about his next target—and for the insults he hurls at the high-finance elite. (Hedge funds, he said last April, deserved to get wiped out when coronavirus shutdowns devastated the economy.)”
“Stocks Face The Crosscurrents Of Higher Interest Rates And Fiscal Stimulus In The Week Ahead” (CNBC). “The Covid-19 aid package is on track for final congressional approval in the week ahead — and it could be a double-edged sword for markets. The legislation should be greeted by optimism around the powerful lift it could give the stock market and the economy, but it could also be met with concern about what a historically large stimulus package could do to inflation and interest rates.”
“John McAfee Is Indicted For Altcoin Pump-And-Dumps And ICO Schemes” (Wired). “On Friday the US Attorney’s Office of the Southern District of New York indicted McAfee and executive assistant Jimmy Watson on multiple charges that encompass two alleged cryptocurrency schemes. (McAfee was previously indicted in October for separate tax evasion charges.) According to court documents, McAfee and his associates raked in a combined $13 million between the two efforts, both of which relied on using McAfee’s popular Twitter account to push niche cryptocurrencies or promote initial coin offerings without disclosing that he stood to profit, either through investment gains or promotional fees.”
“Demoralized Junior Bankers Are Contemplating Ditching Investment-Banking Altogether As They Battle Burnout After A Grueling Year Working From Home” (Business Insider). “[I]nvestment-banking revenues at the top banks increased 23% to $49.4 billion, according to Coalition, but headcount to handle the additional workload didn't grow correspondingly. Front-office staffing was flat compared to 2019 and revenue per full-time employee increased to $2.9 million, a 23% uptick.”
“Turns Out Hertz’s Future Not As Bright As Day Traders Hoped” (Dealbreaker). “[T]he people running Hertz did have the gumption to do what GameStop’s leaders did not, which was to throw their hands into the air and say, ‘You wanna buy this stock? Here, have as much of it as you’d like.’ In doing so, of course, Hertz did have to mention that the stock people were eagerly buying at about $2 apiece would eventually be worth almost exactly the same amount less once the bankruptcy sorted itself out, which is why the SEC politely requested it stop selling them. That means today those apparently illiterate investors are only out $29 million instead of $500 million.”
