Category: Tech

Almost Friday! Dan DeFrancesco in NYC. The biggest golf tournament of the year, the Masters, kicks off today. Here’s a guide to the players with the best chance of winning. Even if golf isn’t your thing, the concessions at Augusta National, and their eye-popping prices (in a good way), are worth a peek. 

Reminder that you’ve still got one last chance to get your questions in for Friday’s mailbag. (No personal finance questions, please. You shouldn’t be taking that kind of advice from me anyway.) I’ll do my best to answer as many as I can. 

Today, we’ve got stories on some uber-wealthy families teaming up, eye-popping quotes from Credit Suisse’s final shareholder meeting, and the food you should to eat to give your brain super powers.

But first, can you explain what venture debt is? Asking for a friend.

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1. Debt in doubt.

Of the many knock-on effects from the downfall of Silicon Valley Bank, the role the bank played in lending to startups was one of the biggest. At the time of its collapse, SVB had more than $70 billion in credit lines on its books.

Initially, private credit investors sprung to action to cash in. But a long-term solution presented itself when First Citizens Bank bought the assets of SVB, including its loan book, at the end of last month.

Well, not quite. 

The venture debt community, which has grown considerably as equity funding has dried up, is skeptical that First Citizens is the best firm for the job, Insider’s Darius Rafieyan reports. 

Reporting from the first annual Venture Debt Conference in New York, which First Citizens seemed to be absent from, Darius details how attendees and panelists questioned the family-run regional bank’s ability to take over the complex and nuanced business that is venture debt. 

Darius’ story has lots of colorful quotes and anecdotes, but one of my favorites is a bank executive recalling how a First Citizens’ employee asked for help understanding how to value a venture loan book after the deal was announced. (Not great, Bob!)

I’m all for learning on the job, but that type of knowledge seems like a prerequisite for buying a business with more than $70 billion in venture debt. 

The loss of SVB was always going to create a gap in the industry that would prove tough to fill. But, if First Citizens is as ill-equipped to take over SVB’s venture-debt business as some believe, that only further complicates the matter.

And it’s a problem that will likely only impact the most in need, as is usually the case.

For the biggest players, or those with the biggest backers, there will always be people keen to lend. But for those on the outskirts, it’ll make an already challenging environment even more so. 

Click here to read more about why everyone’s confused about the future of SVB’s loan business.

In other news:

2. Two really rich families team up. The Desmarais family, the name behind the ubiquitous Canadian investment group Power Corp., and the Rockefeller family, I think we all recognize that name, both invested in the wealth management firm that bears the latter’s name. More on the investment that pushed Rockefeller Capital Management’s valuation to $3 billion.

3. ‘I didn’t bring my gun, don’t worry.’ That about sums up the thoughts from a wild final shareholder meeting for Credit Suisse. Angry investors had choice words for the Swiss bank’s board. Read the most-colorful quotes from from the meeting here.

4. The luxurious toys of the ultra rich are also helping them save on taxes. The wealthy have figured out how to get tax write-offs on their private planes and massive yachts by using them for a bit of “business,” ProPublica reports. Here’s how it works.

5. Don’t touch that 401(k)! That might seem obvious to some, but a growing number of people are cashing out their retirement savings when they switch jobs despite not even being strapped for cash. More on why that’s a terrible idea.

6. Blame it on the boomers. While that is an answer to many questions, this time I’m talking about the difficulty millennials (this one included) are having trying to buy a home. This is why boomers are blowing it for the rest of us. 

7. Cash App’s creator was fatally stabbed in San Francisco. Bob Lee, Square’s first CTO and the brains behind Cash App, was serving as chief product officer of fintech MobileCoin. More here. Meanwhile, Elon Musk, Jack Dorsey, and other tech execs react to the news.

8. A guy who bet big on tech thinks now it’s a good time to bet big on tech. Chase Coleman, the founder of Tiger Global Management, now thinks tech stocks are a good bet, per Bloomberg. Yes, that’s the same Tiger Global that had a horrible 2022 betting on tech stocks. But I am sure that’s just a coincidence. Here’s why Coleman is feeling so bullish.

9. Literal brain food. A new study claims a magnesium-rich diet will make your brain bigger and healthier. Time to break out the leafy green veggies and nuts. More on what you should eat for “brain care.”

10. Catch some Zs on the road with these pillows. Check out our guide to the best travel pillows. I can’t promise you won’t look like a dork wearing these, but that’s a sacrifice you must be willing to make. Check out our reviews.

Curated by Dan DeFrancesco in New York. Feedback or tips? Email ddefrancesco@insider.com, tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London. 

• Investors have made Toronto-Dominion the most-shorted bank in the world, Bloomberg reports. 
• Short sellers have accumulated a staggering $3.7 billion in wagers against the Canadian lender.
• The short interest suggests increased investor pessimism toward TD and the American banking system. 

Investors appear more bearish on Canada-based lender Toronto-Dominion (TD) than any other bank in the world.

Short sellers have increased their bets against TD to $3.7 billion – the biggest short position against any financial institution, according to Bloomberg. Here’s a closer look at what’s going on.

What is short-selling?

Short selling, also known as shorting, refers to investors borrowing stock to sell with the goal of buying it back later at a lower price and returning it to the lender, pocketing a profit. Traders engage in short selling when they expect a company’s stock price to decline, and want to make money if that happens.

Why are investors shorting TD? 

TD is being targeted because of its planned takeover of US regional bank First Horizon, its exposure to Canada’s weakening housing market, and its ties to troubled US lender Charles Schwab, per Bloomberg. 

The lender first announced its $13.4 billion buyout of First Horizon in February 2022. But sentiment has turned against regional banks following the collapse of Silicon Valley Bank, and TD’s shareholders aren’t so enthusiastic about the deal anymore. 

“Walk away and take the break fee and be able to get other deals cheaper now,” one shareholder told Reuters, suggesting TD may be overpaying for its acquisition. 

First Horizon shares are trading about 30% below TD’s offer price of $25 a share. Since announcing the takeover, shares of Canada’s second-largest lender are down about 11%. 

Meanwhile, TD’s exposure to Canada’s housing slowdown is also eroding investors’ confidence in the bank. That’s because the lender operates in an environment where variable-rate mortgages are popular and consumer insolvencies are growing.

According to the Canadian government, the total number of insolvencies rose by 13.5% in January. If fewer people are repaying their debts, that could pose problems to TD if it has a substantial number of consumer loans on the line. 

“TD sits uniquely in the middle of two broad headwinds,” Daneshvar Rohinton, a portfolio manager at Industrial Alliance, told Bloomberg. “The fears around Canadian housing will be projected onto TD,” he added. 

At the same time, TD’s 10% stake in Charles Schwab – whose stock price tumbled after it revealed $28 billion in unrealized losses on its bond holdings as of December 31 – has contributed to investor bearishness toward TD. 

What does this mean for the banking sector? 

The rising short interest against TD signals there are lingering doubts among investors about the US banking sector.

Three US banks – Signature Bank, Silicon Valley Bank and Signature Bank — folded last month, sending shockwaves across the banking sector and fueling concerns about the entire financial system. 

JPMorgan CEO Jamie Dimon fanned those fears in his annual letter to shareholders, published on Tuesday. He warned the banking turmoil isn’t over and its repercussions will be felt for years to come.

Of course, the short sellers could be wrong about Toronto-Dominion, and might be excessively pessimistic about its First Horizon deal, Charles Schwab stake, and exposure to Canada’s housing market. Yet the huge sums of money being wagered against the lender shouldn’t be ignored.

Hi! Dan DeFrancesco in NYC, but I might be on my way to Virginia soon if these dolphins don’t stop it with the bullying. 

I still need questions for the upcoming reader mailbag. Drop any finance-related (or non-finance) questions you have for me here. (No email needed!) I’ll answer them in Friday’s newsletter.

Today, we’ve got stories on crypto getting in on the AI bandwagon, the consultants still vying for the UBS-Credit Suisse mandate, and some more workout advice.

But first, iiiiiiiiiiiiiiiiiiiiit’s TIME!

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1. M&A from the top rope.

Wait, what’s that? Do you hear that? Is that…

M&A! M&A! For God’s sake, M&A is back!!

After nearly 12 months of a dealmaking drought, the bankers finally have something to cheer about.

Monday was quite the start to Q2 with not one, but two massive deals announced. First up was Extra Space Storage’s $12.7 billion acquisition of fellow real estate investment trust Life Storage. Citigroup, JPMorgan, Wells Fargo, and Bank of America were among the banks advising on the deal.

Not to be outdone, 20 minutes later the World Wrestling Entertainment and UFC announced plans to merge to form a new public company valued at more than $21 billion, per the deal. For this one, Morgan Stanley, Goldman Sachs, The Raine Group, JPMorgan, and Moelis all served as advisors. 

Earlier this year, some pegged the merger market getting back into the swing of things by mid-year. But the bank crisis of the past few weeks led some to question whether that was still a reality.

Leave it to a bunch of professional wrestlers and cage fighters to throw caution to the wind and dive in head first. 

When you think about it, the WWE-UFC deal might be the best way to get the market going again. It’s the type of transaction that has a little bit of everything, meaning companies could use it as a litmus test for their own potential deals.

For example:

Two public companies: Endeavor Group (UFC’s parent company) and WWE are publicly traded. (The new company will trade under the ticker “TKO.” Love that.) 

Massive interest: The UFC is arguably the third-most popular professional sport in the US. WWE, meanwhile, has a rabid, wide-ranging fan base and one of the biggest social-media presences in the world.

Fight for media rights: Both UFC and WWE have streaming deals with ESPN and NBCUniversal’s Peacock, respectively. When those deals expire in the coming years, they could look to negotiate a joint deal, per Axios. 

Outside-the-ring/cage issues: Earlier this year a video of UFC president Dana White slapping his wife made the rounds. Meanwhile, WWE executive vice chairman Vince McMahon returned to the company less than 6 months after retiring amid sexual misconduct allegations.  

So are the floodgates going to open? Should analysts brush up on Excel?

There is a real case to be made for the market starting to pick up. And just like a pool party, nobody seems to want to be the first one in, but once things get going everyone’s putting their swim suit on. 

In other news:

2. More people want out of Blackstone’s REIT…again. The giant investment firm once again stopped people from pulling money from the Blackstone real estate income trust (BREIT), Reuters reports. Here’s more on why the firm limiting redemptions from BREIT is bad news for its strategy of attracting smaller investors.

3. Crypto gets on the AI bandwagon. It was only a matter of time. The crypto community is now pitching itself as playing a key role in AI development thanks to its decentralized nature. Check out these 12 crypto projects touting their ability to make AI cheaper to develop.

4. What’s going on with Charles Schwab? Shares in the brokerage dropped 33% in March, its worst month since 1987. More on the company’s difficult March.

5. Nobody wants the bad bonds the banks are looking to sell. Banks hold as much as $30 billion of so-called hung debt on their balance sheets that is proving difficult to move in the wake of the fall of SVB, The Wall Street Journal reports. Speaking of SVB, The Washington Post has a report on how executives tweaked with the bank’s risk model until it showed them what they wanted. (Is that what they mean when they say they need to “recalibrate” the model?)

6. The next Joe Rogan? Lex Fridman has grown a massive following thanks to his popular show, “The Lex Fridman Podcast,” whose guests have ranged from Mark Zuckerberg to MrBeast. But his decision to interview controversial figures — such as Ye, the rapper formerly known as Kanye West — has drawn criticism from some, who suggest he’s contributing to the spread of misinformation. More on Fridman’s rise here.

7. One of the biggest prizes in consulting has almost been decided. Four consulting firms remain for the honor — and millions of dollars in fees — of advising UBS on how to fit Credit Suisse into its firm, the Financial Times reports. Here’s who remains in the latest “Hunger Games” of consulting.

8. Beats by AI. Even music is set to be disrupted by artificial intelligence. From mastering a track to writing lyrics to even creating music videos — they still make those? — everything is on the table for the tech. Check out these 13 startups primed to shake up the industry. 

9. Peek inside a $7.5 million Manhattan brownstone. The three-story building is currently owned by an architect and includes an indoor waterfall and an open-aired rooftop. Check out pics from the 6,500-square-foot property.

10. More workout advice. We’ve got a personal trainer sharing “cheat codes” he wishes he knew when he started. And we’ve also go a bodybuilder who shares some advice on how to get better gains at the gym. Most important, get your mornings in order.

Curated by Dan DeFrancesco in New York. Feedback or tips? Email ddefrancesco@insider.com, tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London. 

Welcome back! Dan DeFrancesco in NYC.

I’m still taking questions for the reader mailbag. Drop any finance-related questions you have for me here. (Don’t worry, it’s anonymous.) I’ll answer them in Friday’s newsletter.

Today, we’ve got stories on why the world’s richest people aren’t spending enough on cybersecurity, a job in AI that pays six figures but doesn’t require a tech background, and what not to do at the gym.

But first, remind me where you went to school.

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1. Non-target? Not a problem.

Who doesn’t love an underdog story?

Insider’s Emmalyse Brownstein has one about an investor’s unique path to Wall Street. Matthew Alfieri nabbed a job straight out of college within Goldman Sachs’ investment bank despite coming from a very non-Goldman school: SUNY Albany.

Alfieri, who spent nearly a decade at Goldman before moving to investment firm Centana Growth Partners, where he is a partner, shared some tips with Emmalyse for aspiring Wall Streeters who aren’t at so-called target schools. 

I like this story a lot, but I’m completely biased. I’m a product of the SUNY system (Plattsburgh!). And while I’m not comparing myself to Alfieri — he was a rising star, after all — I can relate to going from a lesser-known school into an industry known for its elitism. So if the rest of this newsletter reads like a giant projection of my insecurities, you’ve been warned. 

I hope Alfieri’s story isn’t just valuable to students trying to break into Wall Street. Stories like these should be a wake-up call to finance firms. The only acceptable junior talent doesn’t have to just come from the handful of schools with 11-figure endowments. 

Let’s set aside the obvious fact there are intelligent, hard-working people who don’t end up at elite universities. Wall Street could also benefit from casting a wider net among universities to get some diversity of thought. If you hire a ton of people from the New-England-prep-school-to-Ivy pipeline, you’re bound to get some groupthink.

A state schooler might not be able to debate the finer points of Hume or Kant, but their perspective could be differentiated from a group of people who operated in certain bubbles most life.

And at the very least, they’ll probably be a fun time at happy hour. 

Click here to read some tips for how to nab a job on Wall Street despite not coming from an elite school.

In other news:

2. The world’s wealthiest people are cheaping out on cybersecurity, and it’s costing them. Family offices aren’t willing to spend a ton on cybersecurity, and it’s making them a target for criminals. Here’s why the uber wealthy are so susceptible to attacks. 

3. This fintech helps Wall Street keep tabs on employees’ messengers. Apps like WhatsApp and Signal have become popular communication tools across the Street. But they can also be thorn in a firm’s side from a regulatory perspective. LeapXpert helps finance firms secure these messaging apps for professional use. Check out the pitch deck it used to raise $22 million.

4. This VC is giving its backers early access to the startups it invests in. Base10 Partners has a new program that enables its LPs to co-invest with the VC in growth-stage companies. Here’s why it could help the firm compete with bigger VCs.

5. This is what the top minds in AI are focused on these days. The Cerebral Valley AI Summit was a chance for dozens of AI experts to discuss the future of the space. From the recent advancements to the risks, there was lots to discuss. These are the 3 biggest takeaways from the event. 

6. An annual salary of $335,000 and no background in tech required. So you want to get in on the AI craze but you’re not a STEM expert? Your best bet might be a role as a “prompt engineer,” which entails writing questions and prose for AI chatbots to learn from. Read more here.

7. US banks have lots of unrealized losses on their books. About $620 billion from investments in bonds as of the end of 2022, according to Bloomberg. And while it’s not a death sentence for most banks, it’s still a problem they’ll need to consider going forward. Here are some cool graphics illustrating the data.

8. The kids want a seat at the grown-ups table. So-called “shadow boards,” which enable employees to work with senior execs on initiatives, are rising in popularity. Often it’s a way for younger employees to share their input. More on how Gen Z wants a seat at the table. 

9. Before you get started on the weight-loss drug everyone is talking about. Here are 5 things you should know about Ozempic, the wonder drug that’s sweeping the nation. From the side effects you can expect to the different forms of the medication, here’s the advice from doctors.

10. If you want to take an old-school approach to weight loss… A gym owner shares some common mistakes people make when they are hitting the weights. Read them all here.

Curated by Dan DeFrancesco in New York. Feedback or tips? Email ddefrancesco@insider.com, tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London. 

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• For Love & Money is a biweekly column from Insider answering your relationship and money questions.
• This week, a reader’s husband doesn’t think the cost of a gym membership is a good use of money.
• Our columnist gives a path the couple can take toward meeting both of their priorities.
• Got a question for our columnist? Write to For Love & Money using this Google form.

Dear For Love & Money,

My husband is really controlling with money. He sees anything I spend outside of the bare essentials as frivolous. We aren’t wealthy, and we do have a lot of credit card debt, but we have a decent income, and we should be able to afford some extras. The main extra we are fighting about right now is a gym membership. I am “allowed” my $10 a month membership to a cheap fitness club, but I would really like us both to go to one of the nice ones with a smoothie bar, sauna, and a pool. In a perfect world, I would also have a personal trainer.

I see it as an investment in our health, which is the most important thing. My husband doesn’t want a membership at all, and if I’m being honest, it shows. I get that our finances are important to him, and our credit card debt stresses him out, but I care about both of us looking and feeling our best. He is out of shape and always complaining about aches and pains. How do I get him to understand the importance of putting our health first?

Sincerely,

Gym Rat

Dear Gym Rat,

Couples who share a life also share financial responsibilities. Even couples who divide their bills equally and don’t use a joint bank account are investing their time and money into the same life. This shared responsibility often means shared debt, shared costs, shared sacrifice, and shared indulgences. But what shared finances don’t necessitate are shared financial priorities — even if it might be easier when they align. I say this because the root of your dilemma is a stark difference in priorities.

You say your husband is controlling with finances, but later in your letter, you ask me how to get him to put both of your health needs first. And I wonder: Is he controlling? Or does he simply prioritize financial fitness while you prioritize physical fitness?

What I find interesting about your difference in priorities is that, taken separately, both of your financial priorities would usually serve as trump cards. There is a mindset around health that you espoused in your letter yourself when you say that health “is the most important thing.” But people hold the same mentality around financial health — after all, If you don’t have money, you can’t afford security of any kind. And what’s more important than that?

I think you are both right. Both physical health and financial health are worthy priorities. If you can’t get around due to aches and pains, what is the point of having money? If you spend all your money on expensive gyms, luxury meal plans, and personal trainers, then how do you plan to pay for all of those years you’ve tacked onto your life?

In situations like yours, where two people hold different but equally important money values, the solution isn’t for one of you to persuade the other into your way of thinking. It’s to find a solution that asks each of you to sacrifice a little so that both of you can prioritize your values.

But compromise is difficult, because it requires us to analyze our motivations with brutal honesty. In your case, that might mean asking yourself if a membership to a luxe gym is actually necessary for your health, or if it’s just something that sounds really nice. For his part, your husband may need to ask himself if his aversion to spending money on his physical fitness is really about saving a buck or if he’s actually disinterested in being physically active.

Being honest with ourselves about why we have our priorities isn’t only an exercise in self-denial, however. Your husband doesn’t have to go to the gym if he doesn’t want to. And you don’t have to stay at a budget gym if your desire for saunas and smoothies is solely self-indulgent. But an honest analysis is the first step towards the hard business of differentiating between our wants and our needs and ultimately coming to a mutually acceptable compromise.

Beyond analyzing your own priorities, however, you will also need to stop analyzing your husband’s. He isn’t wrong. Financial fitness is important, and if he is stressed out by credit card debt, helping him eliminate it isn’t something you ought to be arguing anymore than he ought to be calling your desire to get in shape “frivolous.” You both need to respect each other’s priorities. Remember, our priorities are based on our ingrained values, and I can’t think of anything more futile than trying to reason someone out of theirs.

But the good news is that you don’t have to change one another’s mind. Because ultimately, you both want the same thing. He wants to stress less about money, and you want to pursue physical health in a way that is going to require some expendable income. The best way for both of you two get your way is for you to get rid of your credit card debt.

Reaching a compromise will mean making a plan together for paying it off, and in the meantime, you should probably continue working out at the affordable gym you’ve been going to. Your husband’s part of this compromise will mean making the commitment now to celebrate your last credit card payment by purchasing a gym membership for you at a nicer gym. And if he is feeling so inspired, he may even join you.

You asked me how to get him to understand the importance of putting health first, and I’m afraid I didn’t give you the answer you wanted. But I guess what I’m trying to say is that while health and finances rank high on the list of important considerations in life, in a marriage, at the very top sits you and your spouse’s relationship. Because when you share a life, you share outcomes. You share happiness. And that’s something you both want.

Rooting for you both,

For Love & Money

Hello, readers. Hallam Bullock here, coming to you from London on April Fools’ Day. My advice for you today would be to not believe everything you hear, but that’s my mantra most days.

We’ve spoken about college majors here before. If you want to make a lot of money in your first job, we broke down the best and the worst degrees. 

However, there are people who make boatloads of money without a degree altogether. One underground miner we spoke to makes as much as $160,000 a year. We’ve also written about new AI “prompt engineer” jobs that can pay up to $335,000 a year — and many don’t even require a background in tech 

Now, before you start mulling a career change, let’s take a look at the week’s top tech stories.

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1. The latest development in AI: humanity has decided it can say “no.” 

Elon Musk was one of more than 1,000 people to sign an open letter calling for a six-month pause on advanced AI development. 

Why, I hear you ask? Simply put, experts are worried AI could become too powerful. The letter cited several potential risks to humanity and society, including the spread of misinformation and automation of jobs.

Meanwhile, ChatGPT has been banned in Italy over privacy concerns. Italy’s national data-protection agency said the restriction was temporary, but also announced it was starting an investigation into the AI’s creator, OpenAI. 

Read more on the tech experts trying to pause AI’s development here. 

Top tech stories of the week: