December 2022

Markets

S&P 500 -16%, Tech QQQ -30%, Utra tech! ARKK Tech -65%

• 4.6% on 6 month treasury.
• Inflation. 7.1% YoY.  
• Fed raised 0.5%. So now 4.25% – 4.5%. Probably going to 5.0 – 5.5%.
  • Fastest in history. 

My Mortgage. 4.5% and adjusting again to 2.25% + LIBOR. 

Baby its cold outside! 

Crypto

• SBF in US and out on bail!  $250 million. 
• Caroline and Wang charged. Caroline Ellison, the former chief executive of Alameda Research, a trading firm tied to FTX, and Gary Wang, FTX’s former chief technology officer, both pleaded guilty to criminal offenses similar to those Mr. Bankman-Fried was charged with last week. Ms. Ellison, 28 years old, pleaded guilty to seven counts, including wire fraud and conspiracy to commit securities fraud, according to her plea agreement, which was signed Monday. Mr. Wang, 29, pleaded guilty to four counts, including wire fraud.
• Caroline interview. 

Tesla & Twitter

• Twitter Spaces. 1 hour interview with 38,000 listening.
  • 13.56. Making ads better.  
  • Making sure Twitter doesn’t go bankrupt. 
• Tesla stock down 69% YTD. $400b company. 
• Now it could triple in 2023. Buffet will probably take a serious look. 
• Elon has inspired a CEO and silicon valley “builders” renaissance. 
• Elon to step down as CEO. Mr. Beast!? 
• San Francisco to investigate worker conditions. Sleeping at work! 
• From WSJ: Redundant managers, along with managers who have opaque responsibilities, are in essence professional critics. 

Tesla catalysts:

• Tesla energy.
  • MegaPack in Lathrop.
• FSD
• Tesla Semi
• Cyber Truck

All they want for Christmas is to stop that Mariah Carey song. 

Netflix 

• Last week, Netflix said “Wednesday” had crossed 1 billion hours viewed, only the third title to do so within 28 days of its release, joining “Stranger Things 4” and “Squid Game.” 
• Netflix Training classes 
• See Rich Greenfields tweet about eyeballs. 

Recommendations

• White Lotus.
• Wednesday
• The Peripheral on Amazon. 
• Mr. Beast interview on Rogan. Saw it on a list of most liked podcast episodes. 
• Country xmas on Spotify. 

Markets

Down 17% was down 25%. 

Meta job cuts. 11000 13%. Brad Gerstner letter. A summary of some of the layoffs this year…

• Twitter: cutting 50% of its workforce (estimated 3,700 jobs).
• Facebook ($META): cutting 13% of its staff (11,000 jobs), its largest round of 

Crypto

SBF is a FRAUD! Bernie Madoff style! 

FTX lends money to Alameda!! $10b loan on $16b in assets.  

 FTX meltdown. FTX. Alameda. Binance. Coinbase. Nothing safe. 

• FTX has a prominent list of backers such as Sequoia Capital, BlackRock Inc., Tiger Global Management and SoftBank Group Corp.
• Sam Bankman-Fried. $8b shortfall! He was worth $26b…apparently. 
•  Tom & Gisele. Hedgefunds. 
• FTX Arena in Miami. Home of Heat. FTX on umpire uniforms. 
• Celeb lawsuits: https://deadline.com/2022/11/tom-brady-giselle-bundchen-ftx-lawsuit-larry-david-steph-curry-crypto-1235174541/
  • In the case of Curry, the NBA legend admitted in another tongue-in-cheek-ish TV spot that he was not that knowledgeable about crypto. He added, looking at the camera: “I don’t need to be. With FTX I have everything I need to buy, sell, and trade crypto safely.”
• FTX’s new chief executive“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,”  “From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
• SBF is 2nd largest democratic donor this election cycle. $37 million. 
• SBF parents. raised by two Stanford professors who specialize in law and taxes.
• Caroline Ellison.
  • Caroline interview. 
• Related party loans:
  • $300m from last $450m investment to SBF.  
  • Alameda Research had $4.1 billion in related-party loans. Among those were $1 billion to Bankman-Fried, $543 million to FTX Director of Engineering Nishad Singh and $55 million to FTX Digital Markets head Ryan Salam

Twitter

Lays off ½ of 7500 workers. 

Had to bring some back.  

The whole world shit-posting that the site will go down now. Tesla AI runs with 150 engineers. 
Ligma and Johnson.

Markets

Down 20%. Was 25%, but rallied up 5% just this week.  

GDP growth 2.6% (-1.6 and -0.6 in Q1 and Q2). So no recession…currently. 

Apple. +7%

Amazon. -14% 

Meta. -25%

Amazon. AWS insanely profitable. All other biz combined is break-even. Sales of $127b and Operating Income of only $2.5b (2%).

• Story: AWS $5.4b. All Other: $-2.9b. Everything losing money!! 
• Tesla: $5b on $21b. 

Meta: meltdown. 

“Meta’s results last night was an absolute train wreck that speaks to pervasive digital advertising doldrums ahead for Zuckerberg & Co. as they make the risky and head scratching bet on the metaverse,” Wedbush analyst Dan Ives said in a report. 

Revenue flat to Q4 20 at $27b. NI 4.3 vs 7.8!! 

Viral Video (Play audio). 

Twitter: what “products” does a 23 yr old product manager manage? 

• 71% off high. 
• Mkt cap $265b. Was 913b.
• Headcount growth! The number of employees is up over 3x from 25k to 85k employees in just the last four years! 
• Wants everybody to work in MetaVerse!? 
• Brad Gerstner letter.
  • To accomplish this goal, we recommend a three step plan that will double FCF to $40 B per year and focus the company’s teams and investments:
    • Reduce headcount expense by at least 20%;
    • Reduce annual capex by at least $5 B from $30B to $25B; and
    • Limit investment in metaverse / Reality Labs to no more than $5B per year.

The Netflix rebound.

• Hammered too hard initially. 
• Reached “profitability” and growing. No one else has.
  • Disney will. 
  • Amazon spending too much! 
• Advertising more appreciated. Not affected by Apple tracking. A rich ocean to fish in. 
• Comcast. Peacock has 15m subs and lost $614m in the quarter. 

Twitter takeover. 

• Walks in with Kitchen Sink. Entering Twitter HQ – let that sink in!”
• Fires CEO and CFO and head lawyer. $100m in severance pay
• Denies that he’ll fire 75% of workforce. 
• Tesla engineers reviewing code. 
• Employees walking out with boxes. Hoax? 
• Just tweeted: Twitter will be forming a content moderation council with widely diverse viewpoints. No major content decisions or account reinstatements will happen before that council convenes.
• People threatening to leave.. Where? Truth Social, Parler? 

Tesla: 

• Cruise vs Tesla FSD in SF. 

Recommendations: 

• Upload on Amazon