🪙 Crypto’s double trouble
Hey Snackers,
When Apple introduced its VR headset this week, it steered clear of using baggage-carrying buzzwords like “virtual reality,” “metaverse,” and “AI.” Oh, and it’s not a “headset” — it’s a “wearable spatial computer.”
Stocks inched up yesterday, led by gains in the financials sector. Investors have eyes on the Fed’s June 13-14 meeting, where the US central bank is expected to take a break from hiking rates (at least for this month).
The SEC sues the 2 biggest crypto exchanges in a one-two punch for the industry
Like Conor McGregor vs. the Paul Bros… This week the Securities and Exchange Commission sued the No. 1 and No. 2 largest crypto exchanges, Binance and Coinbase. The separate lawsuits could be a regulatory KO for crypto companies in a smackdown with regulators that’s been escalating since FTX collapsed in November, taking customer funds down with it.
The charges: The SEC said that Binance and Coinbase are operating as unregistered exchanges in the US, buying and selling crypto assets that the SEC now classifies as securities (including popular tokens like Solana and Cardano). It also said Binance mishandled customer funds, among other charges.
The consequences: Significant fines and penalties are on the table. Bigger picture: If it’s decided the exchanges broke US laws, more crypto companies could move operations to crypto-friendlier countries (which some have already started doing).
Two POVs… For the umpteenth time, SEC Chair Gary Gensler called crypto a “Wild West” industry that intentionally skirts the rules. SEC Enforcement Chief Gurbir Grewal said, “You simply can't ignore the rules because you don’t like them or because you’d prefer different ones.” But many crypto companies have yelled “nuh-uh!” on repeat, calling out regulators for relying on “regulation by enforcement,” instead of providing clear guidance up front.
If crypto companies were in the Shire before… now they’re spotlighted by the Eye of Sauron. Whether they wanted rules or not, crypto companies have avoided many of the rules and regulations traditional US financial companies must comply with. The crackdown could slow an industry known to move fast (think: fewer new tokens), and Coinbase said the SEC’s ability to deny new listings could hurt its transaction revenue. Yet consumers may be better protected.
Saudi-backed LIV Golf surprisingly joins forces with the PGA Tour, teeing up a new era
If you can’t beat ’em… Yesterday the PGA Tour agreed to “join under one umbrella” with the Saudi-backed LIV Golf, ending a heated rivalry. In a joint statement, LIV, the PGA, and DP World Tour (aka the European Tour) said they'd work together to combine their businesses and drive fan engagement. The merger will end all legal disputes between the tours, and potentially bring some champion players back under the PGA’s 94-year-old umbrella.
Green treaty: The PGA will have majority voting rights and control over the new entity (which doesn't have a name yet), but final details won’t come for a few months.
Mixed reviews: While some pros say the merger is good for the game, others are accusing the PGA of selling out to the controversial Saudi wealth fund (which has been accused of engaging in sportswashing). Some players missed out on hundreds of millions by refusing to work with LIV and stay loyal to the PGA.
Tough competition… LIV broke into pro golf last June, luring top-tier players with contracts worth $100M+ and record tournament prizes. But tensions were high: After LIV’s launch, the PGA Tour suspended 17 players, including champs Phil Mickelson and Dustin Johnson, for competing in rival LIV’s first tournament. In return, LIV and a number of its players sued the PGA, arguing that the tour used monopoly power to prevent vendors, media companies, and others from working with them. Now they’re joining forces.
It's a new chapter for golf… The partnership could combine resources, sponsorships, and media rights. And it could benefit players and boost the sport’s popularity globally. But the controversy around using Saudi-backed $$ could also lead to tension between the newly created entity and players and fans.
What else we’re Snackin’
MadMed: Merck sued the Biden admin over the power it gave Medicare to lower drug prices. Merck believes that its lucrative diabetes and cancer drugs will be subject to a “sham” price-negotiation program.
Feta: Chipotle's Mediterranean-style rival, Cava, is reportedly looking to raise $274M in an IPO (initial pita offering?), which would value it at $2.1B. The unprofitable (but growing) chain could be a test for the extra-dry IPO market.
Power: The first new nuclear reactor built in the US in over four decades is going online soon in Georgia. Nuclear power is having a moment as concerns grow over oil-price volatility and sustainability.
Privacy: Microsoft agreed to pay $20M to settle FTC charges that it illegally collected personal data from children. Last week Amazon settled with the FTC as regulators crack down on misuse of kids’ data.
Oleato: Cold brew with a splash of EVOO is expanding: Starbucks is bringing its divisive olive-oil-infused coffee to nearly a third of US company-owned stores. Starbs’ CEO said the launch was “highly successful.”
Wednesday
- Earnings expected from Campbell Soup, GameStop, and Rent the Runway
Authors of this Snacks own shares of: Amazon, Apple, Microsoft, Starbucks, and Rent the Runway