Binance/FTX Drama Is a Movie

[The Daily Peel... ]() Nov 10, 2022 | Peel #335 Market Snapshot Sam Bankman-Fried comes across as the people’s champ. Dude manages a crypto empire from the Bahamas, seems to only own flip-flops and cargos, and hasn’t gotten a haircut this decade. But his firm FTX wishes they had more suits in their ranks after a sudden liquidity crunch sent SBF’s firm and his net worth spiraling. [image] Talk Like a VC in Just 4 Hours [image]( There’s a reason venture capital is considered the mountaintop of investing. It’s laid back, sexy, and generally just f*cking awesome. Patagonia vests and Allbirds to work, weekends off, and the potential to make stupid sums of money from just one home run are just some of the reasons why many see it as the best job in the industry. The hardest part is breaking in. Unless you rub elbows with tech titans or founded a unicorn recently, it’s gonna be a tough slog. But if you’ve got 4 hours, you can gain an edge over a huge number of other applicants through [WSO’s VC Bootcamp](. Learn the essentials of the space—including early-stage instruments, term sheet modeling, and due diligence—in this jam-packed series of video lessons. Because we’re so confident that Peel readers would love the course, we’re giving out free access to our [Excel Modeling Course]( for the first 50 Peel readers to sign up in the next 24 hours. Don’t let this slip your mind—spots are filling up fast. The next Uber is out there, but you can’t get a piece of it if you’re on the outside looking in. [Take the first step]( towards becoming a Sand Hill Road legend today. Banana Bits - [Add Salesforce to the list](=) of tech giants taking a haircut - Inflation, schminflation—demand for makeup and beauty products is [as high as ever]() - Bitcoin is sitting at a [2-year low]() as crypto was broadly routed Wednesday - [Yeezy designs will survive]() despite their creator’s departure from the company Macro Monkey Says Disney & Thrill Whether it’s ride-sharing or streaming, the [ZIRP]( days of burning cash until you’re big enough to eke out a profit are over. Unless you’re already Goliath. - Disney’s made it clear to investors that it’s willing to spend whatever it takes to gain a place on your smart TV - We’re not talking metaverse levels of investment here, but it’s still over a billion per quarter - Since its launch in 2019, Disney+ has swallowed $8 billion in investor money, with the promise that it’ll all be worth it once it becomes a market leader - Buying growth is easy. Now try turning those new subs into profits. On one hand, Disney could slash spending and rely on legacy content to turn its streaming service into a cash cow. Other than maybe Marvel, it’s got one of the deepest entertainment catalogs on the planet. But that would cut subscriber growth at the knees, all but ensuring Netflix’s continued dominance in the streaming wars. Streaming execs across the industry, not just at Disney, have to get the balance right. Grow too fast, and your service will become a money pit. Grow too little, and you’ll never achieve the scale required to rake in meaningful profits. Disney’s betting that the weakest players will die off amid the coming economic downturn. Only the big boys that can reach deep into their pockets to keep churning out new content will remain. But if what they’re left with is an unprofitable service that still plays second fiddle to Netflix, it could mean billions down the drain. Meme of the Day [image] [Source]() What's Ripe Meta ($META) ↑ 5.18% ↑ - 11,000 heads are rolling at Meta HQ this week, and investors couldn’t be happier - This thing is up 15% in the past week, giving some solace to Zuck, who’s still curled up in a ball after watching his net worth [plummet by $100 billion]() Life Time Fitness ($LTH) ↑ 4.39% ↑ - After watching Peloton poach members throughout the pandemic, traditional gyms are making a comeback - A Q3 profit surprise shows plenty of people are opting to share sweaty equipment instead of [getting yelled at]( by trainers on a screen What's Rotten Disney ($DIS) ↓ 13.22% ↓ - The Mouse had a splashy streaming debut, but it’s been more expensive and difficult to gain a foothold in the space than initially expected - Strong theme park performance saved the quarter, but CEO Bob Chapek needs to deliver on [his promise](=) to turn Disney+ profitable by 2024 Robinhood ($HOOD) ↓ 13.76% ↓ - $HOOD was the big loser in the doomed Binance/FTX acquisition, since investors had hoped the latter would snap up the battered app - The odds of Robinhood remaining relevant in the crypto world have plummeted, minimizing the growth potential of the company Data Peel [image] [Source](=) Thought Banana Bahamian Billionaire Bailout When the crypto bros emerged from their caves and became the hottest thing in finance, they were broadly seen as the good guys. Wall Street had been in bed with the feds for too long, and here were the saviors ready to blow up the establishment. - We trusted these supergeeks with more of our hard-earned dough than we’d care to admit without understanding a thing about the underlying technology - The FTX drama has shown that decentralization and light regulation over anything having to do with money can be sketchy - Crypto has a long uphill climb back to its 2020/2021 peak Here’s an overly simplified synopsis of the Binance/FTX drama: SBF managed to elevate himself to the crypto god tier, [amassing a net worth of $26 billion](=) at his peak through his firm FTX. And he didn’t just do well for himself—he made it his mission to fight against the crypto winter, pouring personal funds into various nearly-dead projects from his base in the Bahamas. As Robinhood made abundantly clear during its $GME charade, wild swings in prices can dry up cash reserves faster than people realize. Freefalling crypto prices sent FTX into a liquidity crunch, and it was basically in a get-funding-ASAP-or-die situation. Binance was initially declared the savior, announcing it would swallow up FTX at cents on the dollar. SBF’s firm was saved, but his fortune had been decimated. Now regulators are spoiling the party, and the deal is dead in the water…gotta keep your head on a swivel with this story. Crypto evangelists will say that mismanagement was the root of FTX’s woes, but it’s hard to see how clearer regulation wouldn’t have at least softened the blow. The big question: Will regulators pounce on the opportunity to crank up crypto regulation in response to the Binance/FTX drama? Banana Brain Teaser Yesterday — A ladder hangs over the side of a ship anchored in port. The bottom rung of the ladder touches the water. The distance between rungs is 30cm, and the length of the ladder is 270cm. If the tide is rising at a rate of 15cm per hour, how long will it be before the water reaches the top rung? The ship will rise with the tide, so the water will always remain level with the first rung. Today — It’s 50 bananas off the [WSO's VC Bootcamp](. LFG! There are three light switches outside a room. Inside is a single light bulb, controlled by one of the three switches. You need to determine which switch operates the bulb. You can turn the switches on and off as many times as you wish (they are all off to begin with) but may only enter the room once. There is no one there to help you. The door to the room is closed, and there are no windows, so you cannot see inside. How can you discover which switch operates the bulb? Shoot us your guesses at [vyomesh@wallstreetoasis.com](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) with the subject line “Banana Brain Teaser” or simply [click here to reply!](mailto:vyomesh@wallstreetoasis.com?subject=Banana%20Brain%20Teaser) Wise Investor Says “Time is your friend; impulse is your enemy.” — Jack Bogle How would you rate today’s Peel? [image]( [image]() [image](=) [All the bananas]() [Decent]() [Rotten AF](=) Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? Sign up for the WSO Daily Peel [here](. [ADVERTISE](=) // [WSO ALPHA]( // [COURSES](=) // [LEGAL](=) Don't want The Daily Peel? [Unsubscribe here](. Click to [Unsubscribe]( from ALL WSO content IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States