Short Squeez
Posts
🍋 The Merger No One Asked For

🍋 The Merger No One Asked For

SBF and his company FTX are eyeing struggling Robinhood. Coinbase is down bad after Goldman downgraded it. JetBlue upped its break-up fee for Spirit to get a deal done. Inflation is expected to sting this 4th of July, as food prices are up as much as 36%.

Short Squeez
June 28, 2022

Together With

"If nothing is so useless as an 'ivory tower' academic theory that goes unused, nothing is so very practical as the theory that works." — David Swensen

Good Morning! Coinbase is down bad. It was downgraded by Goldman Sachs and has now fallen 77% this year, mirroring crypto fortunes. JetBlue is hoping persistence pays off, as they try to acquire Spirit. On Monday, JetBlue upped its break-up fee to $400 million from $350 million to show its commitment to getting a deal done. Get ready to shell out some extra cash this weekend at the 4th of July BBQ, as food prices are up as much as 36%. (A sharp increase from the 16 cents in savings last year)

ICMYI: Short Squeez recently hit 100,000 subscribers! As a THANK YOU to you, we are giving away 3 months of our premium membership for FREE. Sign up here.

1. Story of the Day: The Merger No One Asked For

Rumors that Sam Bankman-Fried's FTX might be thinking about acquiring Robinhood sent the latter up 14% and briefly halted trading. The rumors were quickly dispelled by the FTX CEO though.

SBF said, "We are excited about Robinhood's business prospects and potential ways we could partner with them, and I have always been impressed by the business that Vlad and his team have built. That being said, there are no active M&A conversations with Robinhood."

Not active doesn't mean there's no potential (that's why I like to refer to my 6 pack abs as not active). Last month, SBF bought a 7.6% stake in Robinhood worth $648 million at the time. It's been a tough year for Robinhood, down ~50% this year, due to lower revenues and monthly active users.

As people familiar with the matter say that there are internal discussions going on, it seems like some sort of de could be struck when you look at SBF's recent altruism. His companies, FTX and Alameda, have been bailing out struggling crypto companies (which is probably all of them right now). It provided BlockFi with a $250 million revolving credit facility and Voyager Digital with $500 million in financing.

Short Squeez Takeaway: "It was the best of times, it was the worst of times," Charles Dickens, or something. Robinhood went from being one of the hottest tech stocks to one of the worst. It ended up creating the bane of its own existence too. Meme stock traders who aren't afraid to bite the hand that fed them, and are happy to bring it down into the dark.

2. Markets Rundown

Stocks traded sideways before ending slightly lower after having a good last week. Mondays man....

Movers & Shakers

(+) Robinhood ($HOOD) +14% because of rumors FTX was considering acquiring the retail platform.
(+) BioNTech ($BNTX) +7% on news that its booster shots with Pfizer improved immune response to the omicron variant.
(–) Digital World Acquisition Corp ($DWAC) -10% after a filing showed its board of directors received subpoenas from a federal grand jury.

Private Dealmaking

WorkMotion, global HR management platform, raised $50 million in Series B funding
Hokodo, a BNPL startup, raised $40 million in Series B funding
HappyVore, plant-based meats company, raised €35 million
Incredibuild, distributed games and software development platform, raised $35 million in Series B funding
Omi, SaaS for rendering 3D photos/video for brands, raised €6 million in seed funding
Magical Mushroom, sustainable packaging startup, raised £3 million led by Ecovative Design

3. Top Reads

Wall Street layoffs likely ahead as two-year hiring boom turns to bust (CNBC)
Energy-hungry data centers are quietly moving into cities (TR)
Why are Amazon searches returning more confusing results than ever (WSJ)
Sports assets could be a new form of gold (FoS)
Is ESG’s growth tilt really necessary? (MS)
Hottest US housing markets now have bigger share of price cuts (BB)
Nike delivers strong earnings despite macro problems (CNBC)
These stocks have gotten demolished (TII)
Investors should learn from past bear markets (CNBC)

A Message from LMNT

Wall Street really be like work hard, play hard but y’all know how hard it is to work after a night out.

Enter LMNT, the ideal drink to help with your nasty hangover and make you feel human again. Now you can party all night and not bust your models in the morning.

LMNT is a tasty electrolyte drink mix with everything you need and nothing you don’t. No sugar. No coloring. No artificial ingredients. No gluten. No fillers. No BS.

LMNT is used by everyone from NBA, NFL and NHL players, Olympic athletes, Navy Seals to everyday moms and exercise enthusiasts.

LMNT is offering Short Squeez readers a free sample pack with any purchase. That’s 8 single serving packets FREE with any LMNT order.

This is a great way to try all 8 flavors or share LMNT with a #REF!-ed out friend. Get yours now! (deal is not available on their regular website)

4. Book of the Day: The Fish That Ate the Whale: The Life and Times of America's Banana King

Named a Best Book of the Year by the San Francisco Chronicle and The Times-Picayune

The fascinating untold tale of Samuel Zemurray, the self-made banana mogul who went from penniless roadside banana peddler to kingmaker and capitalist revolutionary

When Samuel Zemurray arrived in America in 1891, he was tall, gangly, and penniless. When he died in the grandest house in New Orleans sixty-nine years later, he was among the richest, most powerful men in the world.

Working his way up from a roadside fruit peddler to conquering the United Fruit Company, Zemurray became a symbol of the best and worst of the United States: proof that America is the land of opportunity, but also a classic example of the corporate pirate who treats foreign nations as the backdrop for his adventures.

Zemurray lived one of the great untold stories of the last hundred years. Starting with nothing but a cart of freckled bananas, he built a sprawling empire of banana cowboys, mercenary soldiers, Honduran peasants, CIA agents, and American statesmen.

From hustling on the docks of New Orleans to overthrowing Central American governments and precipitating the bloody thirty-six-year Guatemalan civil war, the Banana Man lived a monumental and sometimes dastardly life. Rich Cohen's brilliant historical profile The Fish That Ate the Whale unveils Zemurray as a hidden power broker, driven by an indomitable will to succeed.

“Show me a happy man and I will show you a man who is getting nothing accomplished in this world.”

5. Short Squeez Picks

Ray Dalio answers mega questions
Is 60/40 really dead this time?
Almost everyone works from home — if they can
Delta Investment Tracker allows you to track all your investments in one place, so get a clear overview of everything that you own in one app. Check it out today!

6. Daily Visual: Global Market Size by Mobility Service

Projected data for 2025 and 2030

Source: Axios

7. Daily Acumen: Ideas

Fluency Heuristic: Ideas that can be explained simply are more likely to be believed than those that are complex, even if the simple-sounding ideas are nonsense. It occurs because ideas that are easy to grasp are hard to distinguish from ideas you’re familiar with.

Emotional Contagion: One person’s emotions trigger the same emotions in other people, because evolution has selected for empathizing with those in your social group whose actions you rely on.

Meat Paradox: Dogs are family, pigs are food. Some animals classified as food are wrongly perceived to have lower intelligence than those classified as pets. An example of morality depending on utility.

Luxury Paradox: The more expensive something is the less likely you are to use it, so the relationship between price and utility is an inverted U. Ferraris sit in garages; Hondas get driven.

Bounded Rationality: People can’t be fully rational because your brain is a hormone machine, not an Excel spreadsheet.