🍋 Billionaires Cashing Out

Author

Short Squeez
December 15, 2021

Together With

"Please don’t call the manager on me, Senator Karen." – Elon Musk

Good Morning! Fed is expected to announce some sweeping changes to monetary policy after its meeting today. With inflation no longer transitory, Fed is expected to release a new forecast of 2-3 interest rate hikes in 2022 (previously there were no hikes expected in 2022) and another 3-4 in 2023. Tampa is apparently the city with the highest Nov year-over-year inflation at 8%, outpacing New York, Chicago and Los Angeles – 5, 6 and 6% respectively. Elon Musk cannot stay out of the news and got into another tussle with Elizabeth Warren on Twitter. He responded with 5 tweets (& counting) after "Senator Karen" accused him of not paying his fair share of taxes.

1. Story of the Day: Billionaires Cashing Out

Billionaires are selling stock in record numbers. They’ve unloaded $43 billion since the start of December, more than double the $20 billion they sold in all of 2020.

Why are they selling?

Tax Bill

They are worried about an upcoming tax bill in 2022, and selling now could save them as much as 8% in taxes reportedly being considered. Even long time HODL-ers such as Google founders who haven’t sold shares since 2017 are getting in on the action. Sergey Brin ($1.7 billion) and Larry Page ($1.8 billion) sold stock this year, while Musk has sold $12.7 billion of Tesla stock, first time he’s sold stock since 2016.

Top of the Market

Many founders and VCs believe that valuations are out of control and we are reaching end of the bull market. They want to exit concentrated positions and diversify into other assets (such as $10 million JPEGs of apes on the internet).

IPOs

A number of companies have IPO’d recently and allowed founders to cash out and diversify their incomes. Airbnb’s founders have sold more than a billion in stock since they went public last December. Brian Armstrong, CEO of Coinbase, has also sold at least $300 million of Coinbase stock since they went public in April.

Personal Reasons

Then there are personal reasons for people like Jeff Bezos, who have expensive hobbies such as escaping to space for a 10-minute panoramic view of the earth. Bezos has sold more than $9 billion of Amazon stock this year, Meta Zuck has sold $4.5 billion (8x more than he sold in 2020) while Jack Dorsey has sold $500 million of Block (ex. Square).

Short Squeez Takeaway: Expected tax hikes in 2022 are probably a big reason why the billionaires are selling aggressively. An additional 8% in taxes could mean a lot more Billionaire billions going away in taxes. The market is already showing signs of frothiness with the kangaroo swings over the last few weeks. Many market pundits believe that we are hitting a peak market cycle and 2022 is going to be Spain without the S.

Source: Bloomberg

2. Markets Rundown

US stocks booked back-to-back losses for the first time this month, after data showing another jump in wholesale inflation and ahead of the Fed's meeting today.

Movers & Shakers

  • (+) Terminix ($TMX) +18% after it agreed to be acquired by British rival Rentokil as it seeks to push further into the US.

  • (+) Beyond Meat ($BYND) +9%  after Piper Sandler upgraded it to neutral from underweight.

  • (–) Dell Technologies ($DELL) -2% after Evercore downgraded the stock to in line from outperform.

3. Top Reads

  • Omicron is spreading faster than any other Covid variant, WHO warns (CNBC)

  • Judge Hands Cineworld $965 Million Defeat After Failed Takeover (BB)

  • Former SpaceX engineer alleges in essay that company culture is ‘rife with sexism’ (CNBC)

  • Cathie Wood remains concerned about deflation, not inflation (Reuters)

  • Instagram accounts created with stolen pics push fraudulent crypto schemes (CNBC)

  • Golden State Warriors’ Stephen Curry breaks the NBA career 3-point record (CNBC)

  • Amazon worker caught on camera threatening to shoot someone (Fox)

  • Havoc is playing out below the surface of the stock market (BB)

  • JPMorgan tells unvaccinated workers to stay home (WSJ)

A Message From Sweater: The Venture Capital Fund for Everyone

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Venture capital is no longer just a club for the uber wealthy—it’s our time to put stake in the companies we want and know will change the world. Sweater, the VC Fund for everyday investors is coming soon. 

4. Book of the Day: How I Invest My Money

The world of investing normally sees experts telling us the “right” way to manage our money. How often do these experts pull back the curtain and tell us how they invest their own money? Never. How I Invest My Money changes that. In this unprecedented collection, 25 financial experts share how they navigate markets with their own capital. 

In this honest rendering of how they invest, save, spend, give, and borrow, this group of portfolio managers, financial advisors, venture capitalists and other experts detail the “how” and the “why” of their investments. They share stories about their childhood, their families, the struggles they face and the aspirations they hold. Sometimes raw, always revealing, these stories detail the indelible relationship between our money and our values. 

How I Invest My Money inspires readers to think creatively about their financial decisions and how money figures in the broader quest for a contented life.

“The idea that anybody could work really hard for some extra savings, then employ those dollars into different businesses to work around the clock for them was, and still is, endlessly fascinating to me.”

5. Short Squeez Picks

6. Daily Visual: Top 2021 Google Searches

Source: Statista

7. Daily Acumen: Habits of Exceptionally Likeable People

They Ask Clarifying Questions 

They Put Away Their Phones

They Are Genuine

They Don’t Pass Judgment

They Don’t Seek Attention

They Are Consistent

They Use Positive Body Language

They Leave a Strong First Impression

They Greet People by Name

They Smile

They Balance Passion and Fun

People who are likeable make networking easy, foster harmony in the workplace, and bring out the best in everyone around them. Add these skills to your repertoire and watch your likability soar.

8. Crypto Corner

9. Memes of the Day

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