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🍋 Checking in on Chief Twit

🍋 Checking in on Chief Twit

November 14, 2022

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"Every business is like an impressionist painting: it looks simple from far away, but chaotic from up close." — David Perell

Good Morning! Tough weekend for Sam Bankman-Fried. As if FTX’s bankruptcy wasn’t enough, Bloomberg reported he now personally has a net worth of $0 lol. The story keeps getting weirder by the day and Reuters reported that at least $1 billion worth of customer funds vanished from FTX.

Walmart is telling suppliers it won’t pay for higher prices as the economy slows. This has been the worst year for stock/bond investment mixes in the last 100 years. And prosecutors are seeking 15 years for Elizabeth Holmes - she’ll be sentenced this week.

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1. Story of the Day: Checking in on Chief Twit

It’s only been a few weeks but sounds like Chief Twit’s in a bit of trouble. Musk sounded the alarm on Twitter’s revenue problem last week. He even hinted the company could go bankrupt.

Twitter had financial issues before Musk took the company private. But over the past few weeks, advertisers have left the platform at a record rate.

Musk has mocked the advertisers that left. But he needs his advertisers more than they need him. Musk bought Twitter through a leveraged buyout, and he’ll owe over $1 billion in interest payments alone over the next 12 months.

Twitter needs to turn a profit fast. But Musk isn’t just turning off advertisers - his employees are also more demoralized than ever. Elon is known for being a demanding boss, but that worked at Tesla and SpaceX where employees could buy into a larger mission than themselves.

Twitter’s objective right now is to rather boost profits for Musk and other shareholders. Some employees even think Twitter’s straying from its core mission. They note that Musk's career has been making something out of nothing, but his Twitter takeover almost feels like the exact opposite.

Takeaway: Elon Musk is usually able to get away with being a demanding boss. But Twitter seems different. Employee buy-in is low and some are resigning en masse. Musk has his hands full if he wants to turn a quick profit soon. His other companies might be able to help though. SpaceX ordered one of the largest advertising packages available from Twitter... (reportedly >$250k to put their brand on top of the main Twitter timeline for a day)

2. Markets Rundown

If you want access to Wall Street insider interviews, industry deep-dives, and investment ideas, check out our Insiders newsletter.

Stocks closed out last week with a rally after strong inflation data.

Movers & Shakers

(+) Ralph Lauren ($RL) +9% after UBS called the clothes maker a 'turnaround stock..'
(+) Netflix ($NFLX) +6% after major banks upgraded the stock.
(–) Duolingo ($DUOL) -13% as the company continues to lose money.

Private Dealmaking

Near, a Singapore marketing and operating platform, raised $100 million
Ramp, a crypto payments infrastructure platform, raised $70 million
TRM Labs, a blockchain intelligence firm, raised $70 million
Kyte, a California rental car startup, raised $60 million
Beekeeper, a remote work platform, raised $50 million
Archax, a crypto trading startup, raised $29 million

4. Book of the Day: Bully Market

Jamie Fiore Higgins became one of the few women at the highest ranks of Goldman Sachs. Spurred on by the obligation she felt to her working-class immigrant family, she rose through the ranks and saw it all: out-of-control, lavish parties flowing with never-ending drinks; affairs flouted in the office; rampant drug use; and most pervasively, a discriminatory culture that seemed designed to hold back the few women and people of color employed at the company.

Despite Goldman Sachs having the right talking points and statistics, Fiore Higgins soon realized that these provided a veneer to cover up what she found to be an abusive culture.

Her account is one filled with shocking stories of harassment and jaw-dropping tales of exclusionary behavior: when she was told she only got promoted because she is a woman; when her coworkers mooed at her after she pumped for her fourth child, defying the superior who had advised her not to breastfeed; or when a male boss used a racial epithet in front of her, other colleagues, and clients without any repercussions.

Bully Market sounds the alarm on the culture of finance and corporate America, while offering clear, actionable ideas for creating a fairer workplace. Both a revealing, extraordinary look at the industry and a top Wall Streeter’s explosive personal story, Bully Market is an essential account of one woman’s experience in a flawed system that speaks to the challenge and urgency for change.

“I felt guilty making so much – ten times more than my doctor.”

5. Daily Visual: Inflation Cools More Than Expected

Year over year change in Consumer Price Index

Source: Axios

6. Daily Acumen: Memory Attic

"A fool takes in all the lumber of every sort that he comes across, so that the knowledge which might be useful to him gets crowded out, or at best is jumbled up with a lot of other things, so that he has a difficulty in laying his hands upon it.

Now the skillful workman is very careful indeed as to what he takes into his brain-attic."