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🍋 FTX Was Running on Vibes

🍋 FTX Was Running on Vibes

FTX is in trouble. But over the past few days, we found out how much the company stumbled.

November 18, 2022

Together With

"Why join the navy if you can be a pirate?" — Steve Jobs

Good Morning! 2022 got even rougher for Zuck yesterday. Meta admitted to firing employees for hacking into users' accounts. Things also went from bad to worse at Twitter, as reportedly 75% of its workforce chose to quit rather than accept Elon's ultimatum to sign up for the "extremely hardcore" conditions and "long hours" in his vision for Twitter 2.0.

Ticketmaster was equally glitchy and canceled the general public ticket sale for Taylor Swift's upcoming Tour after a chaotic presale event. And Amazon CEO Andy Jassy warned employees of more job cuts next year.

Looking for a nonpartisan, independent, subscriber-supported politics newsletter that summarizes the best arguments from the left and right? Then check out Tangle.

1. Story of the Day: FTX Was Running on Vibes

FTX has gone from riches to rags overnight. But over the past few days, we found out how terrible the situation really was.

SBF’s time running the show is over after FTX filed for bankruptcy. He stepped down and faces a heap of legal trouble. The exchange brought in a new CEO, John Ray III and Jay’s not mincing words about the dumpster fire he inherited.

Ray led the restructuring of Enron, the largest corporate bankruptcy in American history. But he thinks FTX’s collapse is even worse!

Ray was baffled at the company’s internal controls. The company kept no cash or employee records. The company didn’t even record crypto deposits on its balance sheets. ‘Random’ managers approved expense reports with emojis, and ultimately the lack of structure brought about the company’s downfall.

Takeaway: FTX wants to bounce back and avoid insolvency. While hiring John Ray was a good step (and a mistake according to disgraced ex-leader SBF), the exchange still has its work cut out for it. It was one wild ride for FTX. We'll have to see where it goes from here, but safe to say penthouses in the Bahamas on the company dime won't be part of the restructuring plan.

2. Markets Rundown

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

Markets closed lower as the yield curve flashes recessionary signals.

Movers & Shakers

(+) Bath & Body Works ($BBWI) +25% because the stock's per-share earnings were double what analysts expected.
(+) Macy's ($M) +15% because the company's revenue and profits beat earnings.
(–) Norwegian Cruise Line ($NCLH) -7% after a downgrade and the company's CEO and CFO sold company shares.

Private Dealmaking

Matter Labs, an Ethereum scaling startup, raised $200 million
CG Oncology, a developer of treatments for urology cancer, raised $120 million
Jnana Therapeutics, a drug discovery startup, raised $107 million
Bishop Fox, a cybersecurity platform, raised $46 million
Yahaha, an immersive gaming platform, raised $40 million
WeaveGrid, an electric vehicle data software provider, raised $35 million

A Message from Tangle: Looking for balanced, unbiased political news?

Tangle is a nonpartisan, independent, subscriber-supported politics newsletter that summarizes the best arguments from the left and right on one big political debate every day.

It is trusted by over 50,000 readers in 55 countries, and for many thousands of readers it is the only news outlet they trust.

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4. Book of the Day: Good Arguments

When Bo Seo was 8 years old, he and his family migrated from Korea to Australia. At the time, he did not speak English, and, unsurprisingly, struggled at school. But, then, in fifth grade, something happened to change his life: he discovered competitive debate.

Immediately, he was hooked. It turned out, perhaps counterintuitively, that debating was the perfect activity for someone shy and unsure of himself. It became a way for Bo not only to find his voice, but to excel socially and academically.

And he’s not the only one. Far from it: presidents, Supreme Court justices, and CEOs are all disproportionally debaters. This is hardly a coincidence.

By tracing his own journey from immigrant kid to world champion, Seo shows how the skills of debating—information gathering, truth finding, lucidity, organization, and persuasion—are often the cornerstone of successful careers and happy lives.

“Bo Seo tells the inspiring story of his life in competitive debating and reveals the timeless secrets of effective communication and persuasion.”

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5. Daily Visual: Freelance Frenzy

US self-employed workers

Source: Axios

6. Daily Acumen

"I’ve come to believe that this is the defining characteristic of my generation: keeping our options open.

The Polish philosopher Zygmunt Bauman has a great phrase for what I’m talking about: liquid modernity.

We never want to commit to any one identity or place or community ... so we remain like liquid, in a state that can adapt to fit any future shape.

And it’s not just us—the world around us remains like liquid, too.

We can’t rely on any job or role, idea or cause, group or institution to stick around in the same form for long—and they can’t rely on us to do so, either.

That’s liquid modernity: It’s Infinite Browsing Mode, but for everything in our lives."