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  • Daily Scoop 22-11-9

Daily Scoop 22-11-9

👋 Your Wednesday Scoops - Airbnb fee change & Sweetgreen wilts

Today's Scoop:Concern

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Big Picture

  1. Fear is spreading through crypto markets as a major exchange faces insolvency.

  2. Corporate financial reports have gotten uglier.

  3. Mortgage rates are still climbing.

The Market: 

⬇️

-2.1%

S&P 500: 3,748.57

1Mo:

 

+4%

 

| 1Yr:

-19%

 

| 5Yr:

+45%

The market tumbled lower today amidst significant

instability in crypto markets

. One of the biggest exchanges might be going under. Tech companies are already slashing jobs amidst slowing growth, and investors are wondering how far this spreads.

FTX, the formerly third-largest crypto exchange, is in crisis.

You may know FTX from the Miami Heat arena or Tom Brady. Amidst rumors of FTX's financial instability, the world's largest exchange and major FTX-rival Binance yesterday offered to buy FTX and bail them out. Only 24 hours later, Binance backed out of the deal, saying FTX's issues "are beyond our control or ability to help" and exchanges that "misuse user funds will be weeded out by the free market." To put this into perspective, FTX handles almost half as much trading volume as Robinhood does (but crypto, not stocks).

This is almost like hearing rumors of Robinhood going bankrupt on Monday, then Fidelity offering to buy it on Tuesday, then Fidelity backing out on Wednesday and saying Robinhood's too far gone.

Beyond that,

corporate financial reports have gotten uglier

as earnings season went on. Investors are now projecting declining corporate profits for the fourth quarter.

Mortgage rates keep climbing

. The Mortgage Bankers Association said an average 30-year mortgage is up to 7.2%, nearly a two-decade high.

Company Scoops ❤🌎💰

(Click to dig in & vote your reaction, see how others feel)

Airbnb

-

Sweetgreen's

-

Disney's

-

AMC's

-

Roblox

(These links only work for 24 hours while the story is live)

🤓 Inside Scoop...

Unprofitable

companies face the risk of

running out of cash

. If their sales aren't covering their expenses, companies can take out regular loans from banks, open revolving

credit

facilities like a corporate credit card, or borrow from investors with

bonds

. If they don't want

debt

, companies can also sell an ownership stake in their business for cash, aka

stock

or

equity

. The first time they sell shares to public investors is called an

Initial Public Offering

(IPO), where they raise money from public investors like us. Anytime they sell new shares after that is called a

secondary offering

or issuance. Companies only get money from selling new portions of their company for the first time. Once the stock is out there, we're all just buying and selling from each other.

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