🍋 The Accountant Who Shorted the Market

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Good Morning! Looks like renters can finally take a sigh of relief, as the median rent in the U.S. finally declined 6% during the second half of 2022 to $2,305.

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MoviePass is staging a comeback. After closing in 2019, the movie-ticket-subscription service already has 800k users signed up for its waiting list. And the economy is showing signs of sizzling success, closing last week with its fourth-straight week of gains.

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1. Story of the Day: The Accountant Who Shorted the Market

Last week, Gautam Adani was ruling the financial world as the third richest man on the planet, with a vast empire of Indian conglomerates under his control. But it seems like Hindenberg Research, a tiny investment firm in New York, may have sent Adani's empire tumbling down like a house of cards.

Founded in 2017 by Nathan Anderson, Hindenburg Research takes its moniker from the infamous 1937 blimp bash-up, embodying the ultimate example of a man-made disaster. This fearless firm takes no prisoners, taking aim at fraudulent companies with their sharp-shooting short-selling strategies.

Hindenburg made its name exposing shady crypto firms and unprofitable electric vehicle companies, but now they’ve moved on to the biggest whale of them all. They're alleging that their latest investigation into Adani is exposing the biggest corporate scandal of all time – and they've got the receipts to prove it.

Adani’s empire lost $50 billion in value following the news. Adani says he’ll take legal action against Hindenberg, but that might not be enough to placate investors.

Takeaway: Short sellers using forensic accounting is nothing new - Enron and Bernie Madoff were ultimately brought down by CPAs scouring financial statements for any accounting irregularities. But in some ways, Hindenburg is stepping up to the plate to take on the Goliath of financial shenanigans. And after Adani's $50 billion fortune was erased from the market last week, it looks like it might be working.

2. Markets Rundown

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Stocks closed higher after positive economic data and a Tesla-led rally.

Movers & Shakers

• (+) Tesla ($TSLA) +11% after the company brought in record profit in Q4.

• (+) American Express ($AXP) +11% after the company issued better-than-expected revenue and earnings guidance.

• (–) Intel ($INTC) -6% after lower-than-expected revenue for the chipmaker.

Private Dealmaking

• Character, an AI chatbot founded by two former Google researchers, raised $200 million

• Boston Metal, a developer of technology to decarbonize steel production, raised $120 million

• Pearl Health, a healthcare primary care platform, raised $75 million

• Crux, a data analytics and integration company, raised $50 million

• Precision Neuroscience, a brain-computer interface startup, raised $41 million

• Dayforward, a life insurance startup, raised $25 million

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3. Top Reads

• Microsoft’s big ChatGPT investment should have the competition shaking (YF)

• Lonely layoffs in the work-from-anywhere world (Axios)

• Tesla had its best week since May 2013 (CNBC)

• Fidelity cuts its Twitter valuation again (Axios)

• 8 habits of the ‘ultra-wealthy’ (CNBC)

• Toyota rethinks EV strategy with new CEO (WSJ)

• Bitcoin miner Argo hit with lawsuit over misleading IPO (BB)

• Amazon axes free grocery delivery on some Prime orders (Fox)

• Tesla’s future as a super conglomerate (SA)

4. Book of the Day: For Blood and Money

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For Blood and Money tells the little-known story of how an upstart biotechnology company created a one-in-a-million cancer drug, and how the core team―denied their share of the profits―went and did it again.

In this epic saga of money and science, veteran financial journalist Nathan Vardi explains how the invention of two of the biggest cancer drugs in history became (for their backers) two of the greatest Wall Street bets of all time.

In the multibillion-dollar business of biotech, where pharmaceutical companies, the government, hedge funds, and venture capitalists have spent billions on funding, experimentation, and treatments, a single molecule can stop cancer in its tracks―and make the people who find that rare molecule astonishingly rich.

For Blood and Money follows a small team at a biotech start-up in California, who have found one of these rare molecules. Their compound, known as a BTK inhibitor, seems to work on a vicious type of leukemia. When patients start rising from their hospice beds, the team knows they’re onto something big.

“Scientific thriller about what it takes to bring a wonder drug to market―and save countless lives.”

5. Short Squeez Picks

• 7 powerful visuals that will change how you learn

• 11 book and music recommendations that will ignite your imagination

• 3 rules people in the world’s happiest country follow

• Why the best things in life must be let go

• The most important lesson about stress

• Daloopa is giving Short Squeez readers access to ten financial models (any public company) if you sign up for a free account on their website

6. Daily Visual: Cost of a Big Mac in Select Countries

As of July 2022

Source: Axios

7. Daily Acumen

Kindness Can Have Unexpectedly Positive Consequences:

"These findings suggest that what might seem small when we are deciding whether or not to do something nice for someone else could matter a great deal to the person we do it for.

Given that these warm gestures can enhance our own mood and brighten the day of another person, why not choose kindness when we can?"

Source: Scientific American

8. Memes of the Day

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