finance
The audio companion to Bloomberg Opinion’s beloved Money Stuff column hosted by its author Matt Levine, “whose deadpan style mixes technical elucidation and wit” (NY Times). Once a week, Matt and his friend, Bloomberg News reporter and TV host Katie Greifeld, talk about Wall Street, finance and…other stuff. New episodes every Friday.
The Treasury Department is reportedly considering action against a growing trend of "3:51 exchange" ETFs, which wealthy families are using to defer capital gains taxes on appreciated assets. Bloomberg News identified over 100 such ETFs, including those linked to the family behind Hot Pockets and the GameStop saga.
Truth Social is launching an API service that will charge hedge funds and quantitative trading firms $100,000 per month for early access to posts, particularly those from Donald Trump. This move is seen as a significant revenue driver for the company, potentially exceeding its current income from social media operations.
The SEC's past crackdown on financial firms using personal phones for work communications, which resulted in billions in fines, is being re-examined following Coinbase's settlement with the agency. Coinbase received $150,000 from the SEC related to its own cell phone misuse, a stark contrast to the large penalties imposed on banks.
The market for sports-related financial products is expanding with the introduction of new ETF structures. One concept involves 'sports indexes' tied to the performance of individual teams, offering investors a way to gain exposure to wins and losses similar to betting, but within an ETF wrapper.
This episode marks the final broadcast for hosts Matt Levine and Katie Greifeld of the 'Money Stuff' podcast, as they move on to new roles. The discussion covered the proliferation of tax-deferring ETFs, a controversial API from Truth Social, SEC regulatory actions, and novel sports-themed investment products.
During a 75-dollar session, an animal communicator relayed messages from pets to their owner about her pregnancy. The cat reportedly thought the owner was sick and felt relieved to learn she was pregnant, while the horse, Gus, was described as excited and proud, viewing the baby as his own.
A Subversive All Seasons Sports ETF has been filed with the SEC, aiming to hire professional gamblers to make sports bets packaged into an ETF. While presented as a novel financial product, discussions on the podcast questioned its fun factor for investors and its long-term viability compared to other ETF structures.
South Korean regulators have temporarily halted new listings of single stock leverage ETFs due to extreme volatility and potential risks to the market. In addition to the halt, they are increasing training requirements for investors and adjusting minimum trading lot sizes.
MicroStrategy CEO Michael Saylor, in an interview, addressed the company's Bitcoin treasury strategy and its underlying software business. He indicated that while the Bitcoin strategy is paramount, the software business supports 1,500 employees. Saylor also touched on debt risks associated with Bitcoin's price fluctuations.
SpaceX's stock has recently traded below its IPO price of $135, a notable event given its prior strong performance. This decline is occurring as lock-up periods are set to expire soon, potentially leading to a significant increase in available shares and further impacting the stock price.
A new set of exchange-traded funds (ETFs) are being launched that aim to track the Nasdaq 100 and S&P 500 indexes but specifically exclude companies run by Elon Musk. These ETFs, named the Nasdaq 100 Ex-Elon ETF and the S&P 500 Ex-Elon ETF, are designed to cater to retail investors who are reportedly unhappy with Musk's inclusion in major market indexes. The move reflects a growing sentiment among some investors to avoid Musk's companies due to personal or valuation concerns.
Multi-strategy hedge funds, acting as index rebalancing traders, reportedly made $3.7 billion in June by capitalizing on predictable demand from index funds. This strategy involves anticipating and fulfilling the large buy orders that index funds must execute when companies are added or removed from major indexes, such as SpaceX's recent inclusion in the Nasdaq 100. While this practice can be profitable, it also carries significant risk, as highlighted by a previous loss of $900 million for the same team in February.
The Justice Department and several state attorneys general have sued major egg producers for allegedly manipulating egg prices through a practice referred to as 'egg Libor'. Producers are accused of artificially inflating prices by submitting fake bids to an egg pricing service, which then influenced wholesale contract prices. The companies have settled, agreeing to pay the equivalent of 50 million eggs, which will be distributed to food banks. This settlement occurred despite the backdrop of bird flu, which already drove up egg prices.
Around the time of the alleged egg price manipulation, controlling families of major egg producers like Cal-Maine Foods and the Adams family sold significant amounts of stock. The Cal-Maine Foods controlling family sold $300 million worth of stock in an underwritten offering. This offering prospectus disclosed the Justice Department's investigation into high egg prices as a risk factor, raising concerns about whether investors were fully informed about the ongoing probe.
SpaceX's inclusion in the Nasdaq 100 index has generated significant backlash from retail investors, who are reportedly 'really mad' about the change. This controversy highlights the unusual public engagement with index construction rules, with many investors expressing strong negative sentiments towards Elon Musk's involvement. While index providers like Nasdaq and potentially the S&P Dow Jones Indices have adjusted their rules, the fervor indicates a strong investor desire to align portfolios with personal or ethical preferences, even if it leads to less conventional investment strategies.
Susquehanna Investment Group has filed a lawsuit against 100 anonymous individuals, referred to as "John Does," alleging they engaged in insider trading against the firm through options on Chinese brokerages. The firm claims this scheme allowed traders to profit from a crackdown on cross-border trading by Chinese regulators, which caused the brokerages' share prices to plummet.
The Securities and Exchange Commission (SEC) has issued a request for comments regarding the ETF application process, signaling a need to refine how it oversees new and unconventional ETF products. This comes as a surge in filings for areas like prediction markets and sports gambling ETFs has led to concerns about a 'dog-piling' effect among issuers and the potential for a confidential filing process.
MicroStrategy is experiencing financial difficulties due to a significant drop in the value of its Bitcoin holdings and increasing interest expenses on its debt. The company's 'Stretch' preferred stock, designed to maintain a $100 par value, has seen its dividend rate skyrocket to 15%, creating substantial carrying costs.
The launch of sports gambling Exchange Traded Funds (ETFs) in the US, a prediction made by Matt Levine, continues to be hampered by regulatory hurdles, primarily the SEC's cautious approach to novel investment products. While some believe sports gambling ETFs could offer bond-like returns, the SEC's recent pause on prediction market applications and its request for comments on ETF processes suggest a prolonged wait.