🍋 The EBITDA Catch

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Good Morning! According to a new study, American workers are taking less and less PTO, opting instead for just a few scattered days off throughout the year. Many say taking vacation has a negative stigma in their office.

Meme stock traders who invested in Bed Bath & Beyond are now feeling the burn as the retailer's stock plunges into a downward spiral, with eight out of the last nine trading days resulting in losses.

Zuck is taking a leaf out of Elon’s book and announced a paid verification service for Facebook/IG, with rollout set to begin in Australia and New Zealand this week. Consumer debt jumped to a record $16.9 trillion last quarter, showing that Americans aren’t slowing down spending even despite recession fears or high inflation.

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1. Story of the Day: The EBITDA Catch

EBITDA has seen its fair share of ups and downs. But as the market continues to shift and challenges arise, a new report by S&P has revealed the dirty truth: EBITDA projections have been wildly off the mark for years.

EBITDA, the beloved acronym for earnings before interest, taxes, depreciation, and amortization was once viewed as a crucial measure of a company's financial health. However, during boom times with low-interest rates, this once-revered figure was transformed into a marketing tool that was suspect at best.

Bankers and private equity firms use questionable "add-backs" to boost their earnings projections. As the saying goes, "money talks," but it seems like EBITDA was speaking a different language altogether. S&P’s study found that 97% of risky business deals in 2019 fell short of 3-year earnings forecasts, and EBITDA projections were a key reason.

Takeaway: EBITDA is still one of the most popular metrics on Wall Street, but the metric comes with a catch: it's a non-GAAP metric and fuhnancial engineers can get very creative with their add-backs. Rosy EBITDA projections often don’t tell the full story and can mask the ugly truth about the financial health of companies e.g. how much debt a company is carrying.

2. Markets Rundown

Stocks closed lower as persistent inflation points to a higher rate hike next month.

Movers & Shakers

• (+) DraftKings ($DKNG) +15% after the sports-betting company boosted its outlook.

• (+) Deere ($DE) +8% after the machinery company’s profits beat forecasts.

• Redfin ($RDFN) -7% after the real estate brokerage’s revenue fell. 

Private Dealmaking

• Aera Therapeutics, a gene medicine startup, raised $193 million

• Disc Medicine, a biopharmaceutical company, raised $62.5 million

• Light Field Lab, a holographic display startup, raised $50 million

• Freeform, a metal 3D printing company, raised $45 million

• Craft, an enterprise data platform for supply chains, raised $32 million

• Earth Finance, a climate investing firm, raised $14 million

A Message from RYSE: There's One Big Opportunity Left in The Smart Home Industry

Ring 一 Acquired by Amazon for $1.2B

Nest 一 Acquired by Google for $3.2B

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Radical Efficiency: RYSE can starkly reduce energy bills, lower cooling costs by up to 24% and lighting costs by up to 74%, a revelation in carbon reduction efforts.

Invest in this exclusive public offering before RYSE is a household name.

3. Top Reads

• Apple Watch patent fight timeline (Axios)

• How Bed Bath & Beyond sidestepped bankruptcy for now (Fox)

• Inside Peloton’s rise, fall, and attempted comeback (CNBC)

• When a savings account is very risky (Axios)

• What to do about a boss pinging you at all hours (WSJ)

• Economic forecasts are getting revised up, and people aren’t too thrilled about it (YF)

• A new model of private equity and employee ownership (CBS)

• The top 10 US cities for digital nomads (CNBC)

• Investors are in a bind as risk appetite slams into resolute Fed (YF)

• Sticky inflation opens the door for a steeper Fed rake hike in March (Fox)

4. Book of the Day: Minds Wide Shut

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Polarization may be pushing democracy to the breaking point. But few have explored the larger, interconnected forces that have set the stage for this crisis: namely, a rise in styles of thought, across a range of fields, that literary scholar Gary Saul Morson and economist Morton Schapiro call “fundamentalist.”

In Minds Wide Shut, Morson and Schapiro examine how rigid adherence to ideological thinking has altered politics, economics, religion, and literature in ways that are mutually reinforcing and antithetical to the open-mindedness and readiness to compromise that animate democracy.

In response, they propose alternatives that would again make serious dialogue possible. Fundamentalist thinking, Morson and Schapiro argue, is not limited to any one camp.

It flourishes across the political spectrum, giving rise to dueling monologues of shouting and abuse between those who are certain that they can’t be wrong, that truth and justice are all on their side, and that there is nothing to learn from their opponents, who must be evil or deluded.

But things don’t have to be this way. Drawing on thinkers and writers from across the humanities and social sciences, Morson and Schapiro show how we might begin to return to meaningful dialogue through case-based reasoning, objective analyses, lessons drawn from literature, and more.

“If one has ever wondered how an entire nation could have followed a murderous leader, one needs to understand that it doesn't take that many people actually believing what the leader says. They just need to be willing to repeat whatever their side is saying.”

5. Short Squeez Picks

• The one choice Bezos says separates dreamers from doers

• How to share your salary expectations

• 5 ways to set yourself up for success

• When harder is better for learning

• Is self-control the #1 rule of the 21st century?

6. Daily Visual: National Debt as a Percentage of GDP

_{Source: Axios}

7. Daily Acumen: Few Ideas

1. The happiness of most people is not ruined by great catastrophes or fatal errors, but by the repetition of slowly destructive little things.

2. People get in trouble when they confuse the two types of stability. Relationships, for example, require attention and care. If you assume that your relationship is passively stable, you’ll wake up one day to divorce papers.

3. Shake off that erroneous notion that life is there and you're just gonna live in it. Versus embrace it, change it, improve it, make your mark on it...Once you learn that, you'll never be the same again.

8. Memes of the Day

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