After two warnings to investors (but no bans) from the SEC on ICOs, alt-coins like Ethereum and Litecoin have exploded higher in the last 24-48 hours, pushing the former over $60 billion market cap - bigger than GM and Aetna.
Interest in cryptocurrencies has been surging since futures launched (but volume in Bitcoin futures tumbled today relative to yesterday)...
Spot Bitcoin prices are holding near record highs...
But it seems investors in the crypto space are diversifying across the entire alt-coin space...
And as Cryptocurrencies soar, gold is getting hammered... Gold up 7.5% YTD, Bitcoin +1675% YTD
This is the most retarded scandal to ever rock the government, this one originates from a tweet from the WH Press Sec., Sarah Huckabee Sanders. She tweeted this complete nonsense on Thanksgiving.
I? dont cook much these days, but managed this Chocolate Pecan Pie for Thanksgiving at the family farm! pic.twitter.com/rO8nFxtly7
The subsequent result of this obvious stock photo image has led to some pretty hilarious roastings on Twitter, all well deserved, and might I say in tradition with American bullying and the festivities of the holiday season. We are a very charitable people, none more charitable than with our sharp barbed insults.
Now there are some out there on the right who are actually defending the alleged chocolate pecan pie, for reasons that escape the basic tenants of reason and justice. Clearly, Sarah Sanders is fucking with people and making a mockery of her position. But who gives a shit anymore, right?
Hey look what I just built, a fucking orbital space cannon (OSC).
Is the world"s richest man starting to get a little concerned that his $90 billion fortune in Amazon stock might just be fully valued? Well, judging by his SEC disclosures from last Friday, Bezos provided investors with roughly 1.1 billion reasons why the answer to that question may be a resounding "yes".
As Bloomberg points out, Bezos sold a total of 1 million Amazon shares over the course of three days last week netting roughly $1.1 billion in proceeds. The sale represented just 1.3% of Bezos" total stake in Amazon and leaves him with 16.4% of the company"s shares outstanding.
Of course, the stock sales came after Amazon beat earnings estimates the week prior (see: Amazon Soars Above $1,000 After Smashing Expectations) and pushed the stock to new all-time highs. As an added benefit, the move also once again thrust Bezos ahead of Bill Gates on the Billionaire leader board.
Of course, Bezos previously reported that he would sell $1 billion a year in Amazon stock to fund his Blue Origin LLC, the rocket company fueling his dream of sending people into space. That said, this was Bezos" second $1 billion sale in a matter of 6 months so perhaps Blue Origin just needed a little extra cash this year?
Then again, maybe this is just "tax planning" or "diversification" or any of the many other excuses executives give for selling their own stock...certainly it has nothing to do with Amazon"s 282x P/E ratio...
At a time when the SEC is still debating whether to permit bitcoin-based ETFs in the US, Europe has been one step ahead thanks to the Swedish-based XBT Exchange Traded Notes (from provider CoinShares). And today, remaining one step ahead of the US, the same team behind the XBT ETN has launched the first ever ETN for Ether, the native token of the Ethereum platform, which will be listed on the Nasdaq Stockholm.
The two ETNs, COINETH:SS and COINETHE:SS are denominated in SEK and EUR respectively, and similar to the group’s bitcoin ETNs, the ether products are structured to track the price of ether, as determined by an index rate comprising the average of the 3 most liquid ether exchanges, daily. The factsheet for the ETN creator, CoinShares, can be found here.
No longer limited to OTC and/or other potentially "shady" exchanges, investors who want direct exposure to ether can now trade via a broker platform; Notably, the 2 listed trackers are the only route for European investors to add ether to their portfolio via an established exchange. Today"s launch means that the NASDAQ now has 2 crypto-assets listed, Bitcoin and Ether, making it the only established exchange with multiple crypto-investment vehicles.
Unlike direct exchange trading, the ETNs will be traded during normal market hours on Nasdaq in Stockholm, and what is notable is that in some jurisdictions, the note may be eligible for investment via tax-advantaged retirement accounts. Bitcoin and Ethereum-based IRAs, anyone?
According to CoinShares, "The Ether listing is a great example of traditional finance (Nasdaq) working to innovate in collaboration with the emerging world of crypto-finance. This Standing in contrast to recent comments from some high-level traditional finance executives who are apparently more dismissive of crypto-finance."
Predictably, the people behind the ether ETN - XBT Provider by CoinShares - were delighted with getting their product to market first: “The listing of these two Ether ETNs is a major win for European investors who have been requesting these products for over a year now. As of today, if investors want hassle-free exposure to the price movements of ether, they simply call their broker or trade on their normal brokerage platform - that’s truly remarkable. We are thrilled to be able to deliver on investor demand via a safe, familiar route in Nasdaq,” says Laurent Kssis MD of XBT Provider by CoinShares.
“Today is a historical moment for Ethereum and ether as an asset; and for the future of crypto-assets. It was a little over two years ago that the bitcoin ETNs began trading – offering investors exposure to bitcoin via an established exchange for the first time. Today, we are able to bring Ether to the market and mark another major first. It is important to remember how far and how fast the space has matured in the less than 8 years since this revolution began,” says Ryan Radloff, Co-Principal at CoinShares.
“We’ve stated before that as a group, CoinShares is committed to delivering world-class research and professional-grade access to crypto-assets. Today marks a critical step in delivering on that mission. This launch is the result of a tremendous amount of hard-work from the CoinShares team, key partners and our counterparts at Nasdaq. We could not be more proud to bring this latest set of pioneering product to the market,” says Daniel Masters, Co-Principal at CoinShares.
“This is an important moment for investors as they now have access via a safe and familiar route to gain exposure to the price movements of Ether. Nasdaq has consistently proven to be a great partner with respect to bringing these new technologies to market and this latest move is further evidence of their commitment to innovation. This product has been highly requested by investors and we at the CoinShares Group are excited to play a role in bringing it to market,” says Laurent Kssis, MD at XBT Provider, A CoinShares Company.
It remains to be seen whether established traders in the space will pick the ETN over a direct exchange traded method, although considering that as of August, there were at least 55 cryptocurrency funds, making the product increasingly more accessible to retail will probably mean that as the price goes higher, institutional interest in catering to momentum chasers will only grow. Just ask Goldman.
Is it too late for Verizon to get some more of its money back?
After the entity responsible for selling Yahoo agreed to cut $350 million off the company’s sales price earlier this year following revelations that hackers had stolen sensitive account information of as many as 1.5 billion user accounts during two separate data breaches, the Wall Street Journal is now reporting that the scale of one of those intrusions was much larger than initially believed.
A 2013 data breach that was initially believed to have impacted 1 billion, actually impacted all of Yahoo"s 3 billion user accounts, Verizon announced on Tuesday. Verizon’s acquisition of Yahoo formally closed in June after contentious negotiations that were complicated by the discovery of the hacks. The smaller of the two incidents, which took place in 2014, was first disclosed to the public last September. It reportedly involved 500 million user accounts. Three months later, in December, the company publicized the 2013 hack.
The stolen data included names, email addresses, dates of birth, telephone numbers and encrypted passwords, Yahoo has said. In October, before the second breach was even disclosed, Verizon signaled that it would likely consider the data breach to be a “material event”, allowing it to change the terms of its deal to buy Yahoo, which it did in February.
As WSJ pointed out, the disclosure shows that executives are still coming to grips with Yahoo"s myriad security problems.
Even before the number of affected user accounts was revised higher to 3 billion, the breach was still the largest on record by number affected. However, most experts consider the Equifax breach, which involved sensitive financial and personal information like credit card, social security and drivers’ license numbers, more damaging than the Yahoo breach.
A spokesman for Oath, the new name of Verizon’s Yahoo unit, said the company determined last week that the break-in was much worse than thought, after it received new information from outside the company. He declined to elaborate on the source of that information. Compromised customer information included usernames, passwords, and in some cases telephone numbers and dates of birth, the spokesman said.
Fortunately for Yahoo executives, as part of the revised deal, Verizon agreed to forfeit the right to sue Yahoo for allegedly covering up the hacks. Meanwhile, the entity selling Yahoo has retained liability for an SEC investigation that was launched in January, as well as any shareholder lawsuits related to the deal itself.
After the massive Bitcoin price surge in November 2013, the popularity of launching new cryptocurrencies took off along with it.
In fact, as Visual Capitalist"s Jeff Desjardins notes,if you go back at historical snapshots around that time, you’ll see that there were literally hundreds of new coins available to mine and buy. Here’s one from November 2014 – a time when there were only 32 coins that were worth more than $1 million in market cap, and 354 coins that were worth less than $50,000, usually trading for tiny fractions of a cent.
It seems like everyone and their dog were launching cryptocurrencies back then, even if they were a longshot to materialize into anything.
Then vs. Now
Fast forward to today, and things haven’t changed much – many people and companies are still launching new cryptocurrencies through a mechanism known as an ICO (Initial Coin Offering).
The only difference?
Today, there is real money at play, and in 12 months the number of cryptocurrencies worth >$1 million has soared by 468%. Meanwhile, the total value of all currencies together has skyrocketed by 1,466%.
Cryptocurrency is so hot, in fact, that raising money through ICOs has become more effective than traditional early-stage angel and VC funding.
For the long-time advocates of Bitcoin and other cryptocurrencies, it is now their moment in the sun.
And with this ICO activity and a wealth of opportunities emerging, a new breed of Bitcoin millionaire has been born. Like the wealthy tech founders that exit and give back to their local startup ecosystems, these new digital tycoons are using their newfound wealth to invest in upstart crypto projects that show potential – ultimately, further enhancing the ecosystem.
Out of the Woodwork
Of course, whenever there is a massive surge in prices and speculation, there are two other players that tend to come out of the woodwork.
One is of the scammer and shyster variety, and certainly crypto-fueled scams are a concern for everyone else in the broader ecosystem.
Perhaps even a bigger threat, however, are the regulators – and in recent weeks the SEC has voiced concerns about ICO “pump and dump” schemes, while Canadian authorities have clearly stated that “most ICOs need oversight”.
With the market exploding with hundreds of new cryptocurrencies and the total value reaching $177 billion, a new series of questions has emerged: what risk do ICO scams ultimately have on market? And, could misguided regulation disrupt the momentum of the crypto boom?
Gabriel Scheare began mining Bitcoin in 2013 and then moved into real estate development a year later by co-founding Fort Galt, a new start-up village for entrepreneurs. He lives in Valdivia, Chile, near the project build site.
Listen to the full audio here, or read below for the slightly abbreviated transcript.
So What is Fort Galt?
Fort Galt is a startup village for entrepreneurs. So it’s not that unlike other gated communities, or homeowner’s associations, except that it’s very intentional in its design, and who it’s catering to.
It sort of came to being when I met my business partners, Luke and Lourdes Crowley at an entrepreneurship boot camp called exosphere. And that was a three-month program where a whole bunch of people gathered together in Chile from all over the world with business ideas and basically just trying to figure out what they wanted to do with themselves.
Some people had some good ideas, some not so much, but it was this great sort of an incubator type environment where there was a whole lot of cross pollination going on because everyone was living in close quarters, working in close quarters so ideas flowed very freely…
And so we really loved this environment… but it was very limited time wise, after the three months everyone went back to their home countries and fell back into their old habits. A lot of the business ideas never panned out and people just kind of let things fall apart.
But we got to thinking, what if we could solve that shortcoming at the end of the pipeline there. What if we could provide housing options, some kind of residential option for this where people wouldn’t have to go home after three months, where they could stay and keep working as long as they needed to.
We eventually got together… and we started basically asking ourselves what would our perfect community look like? Where do we want to live? How can we incorporate this theme into some sort of a permanent living environment?
And that was essentially three years ago and it has been sort of this slow step by step process of figuring everything out from absolutely nothing to where we are right now. Which is this gorgeous coast property in Valdivia rainforest. And we are essentially ready to pour concrete now once the weather clears up.
Did you all have this same Atlas Shrugged idea? Are you all big fans of Ayn Rand, or all pretty libertarian?
We all kind of have that background in common. It’s not a prerequisite for people moving in though. A lot of the people that we met at exosphere were very much not libertarians in their speech in what they professed. But what we found was that if you expatriate from your home country and you’re an entrepreneur… and go your own way and carve out your own way and make your own life–you’re pretty libertarian.
…So we did meet some of those, and some of those types of people even ended up joining us in the end. It was kind of reassuring that way and we have sort of incorporated that lesson in our own marketing and design. We don’t try to make it sound like we are only appealing to hardcore Objectivists. If you’re responsible for your own outcomes, if you’re a self-motivated self-reliant type person then you’re most of the way there.
It sounds like it’s more for young entrepreneurs and a lot of people that move there would have to be more location independent, is that correct?
That was the idea, and we incorporated in the design of our first main residential building, a handful of these small entry level affordable rooms with those types of people in mind. But we also found that we were appealing to a lot of other types that we didn’t count on.
A lot of retirees that are looking for an interesting environment to live in and interesting people to work around and a lot of ex-military people for some reason. They kind of go through this phase where they kind start to reevaluate their life choices and start planning an exit strategy and we tend to pop up on their radar.
How do you feel about the military people, is there a little piece of you that’s like, oh good, now we have this tight knit community that can defend itself?
The more talent we have the better. I kind of adhere to this concept of keeping the community small enough where you can actually know everyone very well. That’s the context I grew up in, in a small farming community. You didn’t have very many neighbors but you made the effort to get to know them very well because you knew you would have to lean on them sometimes.
It was kind of anarchism in practice just by default because there were no cops around. There was this one summer where we had all these straw bales that caught fire and the whole farm could have burnt down but the neighbors saw the smoke and they all came and put the fire out. Not the fire department the neighbors. So we are carrying that philosophy into this context. We want basically an environment populated your ideal neighbors.
Could this be a curation space for investors, with the young entrepreneurs living alongside older experienced retirees?
Absolutely, and that is one of the things that attracted me to Chile in the first place. There was this other project that was promising a very similar environment where you would have the young nimble start-up kids co-mingling with the older retiree people who have more experience to share, could be valuable mentors, maybe some investors with capital to share… so yea we are definitely working that angle.
How much of a town do you think you’ll be able to make it?
I’m a big believer Dunbar’s number which says once you get over 100 people it gets really hard to actually know them. So somewhere near 100-150 people, I would think would be kinda the max.
What will happen if there is overwhelming demand for this? Would you start another next door? Or say tough luck?
We just have to listen to the market on that. If there is a waiting list of people that want to live in the same general location, then we have to find another property close by…
But for me, the long term plan is to replicate this all over the world, using the Freemason concept of having a lodge in each town so people can travel freely and work easily and integrate into new places as they are traveling. So eventually we can network all these locations together to be a sort of decentralized nation that’s not dependent on any one physical country.
The fact that it’s on the coast, is that more than aesthetic? Or is there something there?
Ha! You’re thinking ahead. You can’t really look at the beach and not envision building some kind of a port there. It doesn’t have to be anything enormous but some kind of a dock or something at some point will definitely be considered. We do have members that have boats and it would be convenient for them. And of course, we are all big fans of seasteading so we would love to participate in that…
I’ve heard you say in the past, the reason you’re channeling Ayn Rand is that [the inhabitants of Galt’s Gulch] weren’t just going off on their own, they were going to Galt’s Gulch to live amongst these other producers. How can you make sure the people moving here are that type of person? Is there a curation process?
Yes, we do vet people before we let them join. normally that just involves getting to know them a bit through conversations. And we have a lot of people that like to come down and actually visit the site see it for themselves. We have had to turn a few people away but not very many…
Right now all the big decisions are made by the founding partners, just by default, because we are the ones that are actually here doing stuff. As things come together and people move in on site and the population blossoms it will be up to the members to decide whether or not they like our service…
So people will own their own lots?
Yes. If you look on the website there’s a map showing the lots and you can buy any of those right now. We aren’t actively pushing them yet because we decided to focus on marketing the main building first because that’s kinda the reason for people to be here.
I mean unless you just love living on the coast in a gorgeous rainforest, which I mean I would. But that’s not enough of a reason to really justify leaving your life behind and moving to Chile and taking a huge leap like that. But once the crown jewel is in place then we think that will serve as a sufficient magnet to really attract people to come and buy lots…
In the main building in order to avoid all the SEC regulations and crap like that, we came up with a clever system kind of based again on the Freemason model of a private club. There’s a lot of loopholes around rules and things like that there, so what it is you’re are buying a membership into the clubhouse.
So you are not buying property which the SEC would regulate. We don’t have to worry about our US clients or anything like that because they aren’t buying land they aren’t buying any kind of asset. They are buying a membership which entitles them to exclusive use of their room. And it’s transferable, they can pass it on to their heirs, they can sell it. In practice, it is as if they bought the property. But legally speaking it is just a club membership.
And dispute resolution?
The first step is just resolve your own problems, come on, we’re all frickin grown-ups, act like them. But if that fails people agree to a third party arbitrator…
It’s just sort of a case by case thing, but there are steps in our policy to handle these things…
We’re definitely not like that stereotypical homeowner’s association that runs around measuring blades of grass.
Who’s gonna build the roads?
Where we’re going, we don’t need roads. Seriously though, we do have these little paths throughout the village. How they want them built up, will be up to them, the members that is.
Right now they’re just tramped down dirt, they are fine for most cars. But if they want gravel they can have gravel if they want pavement that’s fine, if they want solid platinum, I guess that’s possible. It’s all comes down to how much do they want to pay for.
I once lived at a homeowners association in California that was built around of a golf course, and everyone resented that gold course because it was just a money pit. There was no avoiding having to pay for it so I definitely learned my lessons from that and we are not imposing costs on the members that they don’t want. It is just going to be up to them, how much service do they want, how much infrastructure do they want, and are willing to pay for.
What part of the project are you most focused on right now, where’s all your time and energy going?
… I started this new little project called the Crypt Academy which is essentially a one room schoolhouse. The idea being that we will offer free educational courses for the locals… to promote cryptocurrency use. Because here in South America it is still one of those crazy nerd things that doesn’t make any sense and is scary and stuff. We just need a physical interface to help people get comfortable to help people use it and try it.
The idea of the one room schoolhouse goes back to where I grew up. My grandparents went to one and that was very common back then where you’d have the older kids in school mixed in with the young kids so they could help them and then the young kids had fresh perspectives on things and they can help each other.
It’s just this melting pot of not just talent but also enthusiasm too because sometimes you can get burnt out. And sometimes the teacher needs help too like managing a bunch of kids is hard sometimes. We know this is a village where kids will be growing up so thinking ahead and having a facility like that in place will be useful. We can use it not just for putting on workshops but also for our own children to go to school in.
It almost sounds like this is an alternative to college?
Our experience at exosphere made [it] painfully clear. College and university or whatever is obsolete. That model is completely useless now, it looks like a joke. So we need to rethink this, and that doesn’t necessarily always mean making things more high tech more advances and weird.
Sometimes you can look to the past for inspiration too. And basically, with this one room school house that’s the point because we are teaching cutting edge scary tech stuff were balancing that out by doing it in a more comfortable old fashioned environment to help people feel comfortable through the process…
How can readers keep up with what you’re doing?
If you want to keep tabs on what we’re doing, we do have a mailing list for the newsletter at FortGalt.com.
[We’re] gearing up to do fundraising for the construction of crypt academy, so the fundraising will be going through September… and you can keep track of that at cryptacademy.com.
One of Wall Street’s first bitcoin analysts believes the chances that the SEC will approve the first bitcoin exchange-trade fund by the end of 2018 have improved substantially since the agency rejected two proposed funds back in March.
“Things have changed. My odds of Bitcoin ETF approval within 18 months are WAY up,” said the analyst, Spencer Bogart, formerly of investment bank Needham & Co., in a tweet.
Things have changed. My odds of Bitcoin ETF approval within 18 months are WAY up.
Bogart believes the probability that an ETF will be approved during this time frame has climbed above 75%.
While Bogart didn’t elaborate on his reasoning, or provide concrete odds, the SEC and other US regulators appear to have warmed to bitcoin in recent months. Last week, the SEC ruled that coins produced by initial coin offerings are securities and should be registered and regulated as such.
In June, The CFTC issue a license to LedgerX allowing it to create the first swap-execution facility for the clearing and settlement of bitcoin options, a decision that will likely attract more traditional hedge funds and CTAs to trade crypto.
Grayscale, the sponsor of the Greyscale Bitcoin Investment Trust, an open-ended grantor trust that trades OTC, is seeking permission to list GBTC on the NYSE’s Arca platform, which would effectively transform it into the first bitcoin ETF(and we note that its NAV premium has actually normalized very modestly in recent weeks since we brought attention to it...)
A final ruling from the SEC is expected during the fall.
Bogart, who is now the head of research at Blockchain Capital, correctly anticipated the SEC’s previous rejections in a widely distributed research paper published when he was still at Needham. Back in February, Bogart said that the fund could attract $300 million in capital during its first weeks, which would likely cause the bitcoin price to surge.
And finally, with approvals for options/futures, we suspect a Bitcoin Futures ETF may actually occur before a Bitcoin ETF.
Crazy John McAfee from the jungles of Belize is running a tiny company, specializing in cyber-security and mining bitcoins.
Revenues for the last quarter eclipsed $300m, from basically nothing when he took over, yet no one gives a shit.
The stock has been stuck in retard range, thanks to a pending SEC execution.
Nevetheless, McAfee says his little offal of a company will be profitable by year end -- all thanks to bitcoins.
"We will definitely be profitable before the end of the year," McAfee said in a phone interview Wednesday. "From bitcoin mining, we will get the experience and expertise to apply the blockchain to our security products."
Their bitcoin mining operations are located deep in the mountains of Washington state, manned by two lads whose only task is to ensure the air conditioners are operating efficiently, in order to protect the mining machines from overheating.
There"s digital gold in them hills.
On Monday, the company said it got financing to acquire 1,000 mining computers from Bitmain Tech, a Chinese based firm. With these new computers, MGT will have a total of 1,300 mining for bitcoins. McAfee"s goal is to become the biggest bitcoin miner in the world.
With the new mining capacity, McAfee intends to generate 225 bitcoins per mo, up from the current 100.
The blockchain has taken on an absurd amount of "alternative currencies." One of the hot one"s now is based on RARE PEPE art, designated as PEPE CASH, backed by rare Pepe art. You can"t make this stuff up. McAfee insists we"re not in a crypto-bubble.
"No matter how much government and regulators may scream and complain, there will be a world standard alternative currency," McAfee said. "Bitcoin appears to be the one... It cannot possibly be a bubble."
Aside from suing Intel for the right"s to rename their company John McAfee Global Technologies, McAfee"s employees, 12 in total, are focused on cyber-security. They"ve developed a product dubbed "Sentinel", which is an anti-hacking software, and they"re developing a "privacy phone" that has a kill switch on it.
"I don’t know anyone more capable than me," said McAfee. "I have never lost in terms of business and I certainly don’t intend to start now."
2014 and early 2015 was a great time for Nehal Chopra, recently named an Institutional Investor Rising Star, the former Tiger Seed"s hedge fund Tiger Ratan Capital Management had received a $25 million investment in 2011 from investing legend Julian Robertson himself (subsequently the amount grew to $100 million) and after a series of impressive annual returns, including three straight blockbuster years, gaining 26.3% in 2012, 46.8% in 2013 and 22.3% in 2014, she was running a whopping $1.4 billion by June 2015.
The financial press would not stop fawning over Chopra.
Nehal Chopra has been sprinting ahead of the pack most of her life. She became a top-ranked youth tennis player growing up in Mumbai, and received an MBA from Wharton while most of her peers were getting their bachelor"s degrees Before she was 30, she persuaded billionaire Julian Robertson to seed her hedge fund firm Ratan Capital Management. Since 2009, Chopra has averaged 19 per cent annual gains by betting on companies in upheaval, almost triple the industry average. To her supporters, including Robertson, she"s a brilliant stock picker.
Chopra pitched Robertson after meeting him at charity events. The billionaire was impressed by her academic pedigree and tennis prowess. After growing up in Mumbai, where she attended Fort Convent and Sydenham College, Chopra graduated in 2002 from Wharton.
In short order, she made countless other financial outlets including both CNBC...
... and Bloomberg TV, where she appeared on Tom Keene"s show alongside Robertson himself.
That appearance, however, was her personal "top tick", because shortly thereafter, everything started going very wrong for Chopra, who as it later emerged was heavily invested in a handful of "hedge fund hotel" stocks, many of which were about to suffer spectacular losses.
After posting a 15.5% return in the first quarter of 2015, the fund collapsed - largely a function of the implosion of VRX - eventually producing a 19% loss for the year, a swing of more than 34% points in just nine months. As Institutional Investor reported, the fund continued to implode in the first half of 2016 when it suffered a 51.59% drawdown from May 2015 through June 2016.
As we previously reported and as II notes, like many of the Tiger Cubs and Seeds, Ratan runs a concentrated portfolio but Chopra always took it to a much greater extreme, with Ratan typically owning just seven to nine individual stocks.
Think Bill Ackman. And just like Ackman, Ratan was mauled by its huge bets on drug companies Valeant and to a lesser extent, Allergan, which started to suffer big losses in the middle of 2015. They accounted for 35% of assets at the end of June 2015, just before the two stocks, especially Valeant, went into their tailspins. Valeant fell 75% in the first quarter of 2016 alone. At the end of Q2 2016 of last year, Ratan liquidated four positions, including Valeant and Allergan.
By the third quarter of 2016 Ratan liquidated four positions again, including two major holdings: Starz, the cable television network that was the firm’s third-largest position, and bottler Coca-Cola European Partners.
By the end of the fourth quarter Ratan was much more diversified, holding 20 individual stocks, a lot for the firm. All but six were new positions.
However, it was too little, too late for none other than her original sponsor, and as Institutional Investor reports, Julian Robertson told investors in the Q4 of last year that he was redeeming his money from Chopra"s Tiger Ratan Capital Master Fund.
In 2016, Tiger Partners, LLC and Tiger Accelerator Seed Holdings, L.P. (“collectively, Tiger”) fully redeemed its investment in funds advised by Ratan and terminated its “seed” arrangement with Ratan. Ratan no longer shares revenues or any economics with Tiger.
Tiger Ratan has even dropped the “Tiger” name from its funds.
In its SEC filing, the firm reported having $375 million in regulatory capital, an inflated figure which includes leverage and notional values of derivatives. At the end of 2016, Ratan’s U.S. stock portfolio was valued at $165 million, up modestly from $135 million the previous quarter, and down over $1 billion from the $1.4 billion in AUM as of the summer of 2015.
The firm also disclosed in the filing that it currently has just four employees. It is not clear if it can afford any more employees with such a modest AUM. It was also not clear if this is the first time Julian Robertson has "disowned" a former Tiger Seed and if his departure will prompt the rest of her LPs to follow suit.
With Tesla stock price down 15% in the last few weeks, amid a roaring market, it appears doubts about Elon Musk"s omnipotence are creeping in once again... and rightly so. Despite the hype surrounding hundreds of thousands of pre-orders due to start production in H2 2017, buried deep within the company"s most recent 10-K filing is an admission that there is still no Model 3 beta prototype.
The fanfare surrounding the pre-order-fest for the Tesla Model 3 continues to support the stock in many analyst"s (and investor"s minds). However, with production due to begin in H2 2017 (just 4 months away) and delivery in 2018, doubts are starting to appear, judging by the stock"s demise since earnings...
And Car and Driver"s Anton Wahlman - who appears to be one of the few who actualy read Tesla"s 10-K filing - may have found the reason for the doubts...
From the filing:
“We expect that the next performance milestone to be achieved will be the successful completion of the Model 3 Beta Prototype, which would be achieved upon the determination by our Board of Directors that an eligible prototype has been completed. Candidates for such prototype are among the vehicles that we are currently building as part of our ongoing testing of our Model 3 vehicle design and manufacturing processes.”
In other words, Wahlman points out, Tesla has not “completed” a Model 3 “beta prototype” as of, well, either of these two dates: December 31, 2016 (the period that the SEC filing covers), or March 1, 2017 (the date on which the document was filed). Pick your poison.
We know that around mid-February 2017, Tesla is said to have started building the next stage of Model 3 prototypes. It is from this batch that they appear to be creating the first “beta prototype.”
What does this mean for production? In theory, there is nothing that prevents Tesla from delivering what a normal car company would call a prototype test vehicle of some sort and simply declare victory on its original timeline. This is what Tesla did for the Model S in June 2012 and for the Model X in September 2015. After those events, it took at least another approximately three months—arguably a fair bit more—for proper volume production to take root.
That is to say that, no matter how immature, Tesla could indeed deliver a Model 3 in July 2017 and declare victory. However, that is not to be confused with what a normal car company would call its start of sales to the general public.
Basically, Car and Driver"s Wahlman says, it comes down this:
If it’s prudent to start production of an all-new car three to six months after the advent of a “beta prototype,” then why don’t all automakers do this? Why do they take approximately two years for the preproduction testing stages, if only three to six months are necessary?
We will find out in the second half of this year.
More smoke and solar panel mirrors?
Still withcash burn at a billion dollars, there"s probably nothing to worry about...
