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How the crypto world keeps melting down as the FTX scandal unfolds – News Opener

In this week’s Distributed Ledger newsletter, MarketWatch Editor in Chief Mark DeCambre breaks down the widening fallout from the bankruptcy of FTX and the bizarre behavior of its founder and former CEO, Sam Bankman-Fried.

Readers were taken aback by the description of the company’s previous lack of financial controls by its new CEO, John Ray III, who has worked on large bankruptcies over several decades, including that of Enron. Nathan Vardi broke down 10 surprising revelations Ray made of FTX’s pre-bankruptcy practices, including some that could only be described as absurd.

For those who can’t get enough of this story, here’s a link to the entire FTX bankruptcy filing.

The breaking news on Nov. 18 was that $477 million in assets reported to be transferred without authorization from FTX following its bankruptcy filing on Nov. 11 were actually seized by the Bahamian government.

More on the FTX debacle:

Here’s why the Federal Reserve intentionally sends a confusing message

James Bullard, head of the Federal Reserve Bank of St. Louis.


Getty Images

On Thursday, investors dumped stocks and bonds after James Bullard, president of the Federal Reserve Bank of St. Louis and a member of the Federal Open Market Committee, said the central bank might have to push the fed funds rate much higher than previously indicated to bring down inflation.

Rex Nutting explains why regional regional Fed presidents send signals that differ from the monetary policy statements from Federal Reserve Chairman Jerome Powell.

More about market reaction to Fed policy: Financial markets run with ‘peak inflation’ narrative again. Here’s why it’s complicated.

Brett Arends: History says inflation could persist for a decade

Can Twitter return to being a normal, profitable company?

How the crypto world keeps melting down as the FTX scandal unfolds - News Opener

MarketWatch photo illustration/iStockphoto

This might surprise you: Twitter reported net profits for nine of its last 12 quarters as a publicly traded company, according to FactSet. And those were not adjusted numbers — they were positive earnings per share per generally accepted accounting principals (GAAP).

After Elon Musk purchased Twitter in October and saddled the company with $13 billion in debt that partially funded the deal, he quickly laid off half the social-media company’s staff, saying he had to do it to avoid a $700 million net loss in 2023 when interest payments on the new debt will total $1.3 billion, according to reports.

Musk already had a full plate as CEO of Tesla
TSLA,
-2.84%

and SpaceX, but now he is making headlines every day at Twitter, and there appear to be operational risks — he may have fired too many employees too quickly for the social-media pioneer to keep functioning normally.

The quick layoffs also raise the question of why Musk didn’t take more time to set up a smoother process to reduce staff and expenses. After all, Twitter reported having over $5 billion in cash, equivalents and short-term investments as of June 30.

On Nov. 17, Twitter said its offices would be closed, with remaining employees denied badge access until Nov. 21, after reports of mass resignations that followed Musk’s Nov. 16 message to employees requiring them to agree to “long hours at high intensity” or leave with three months’ severance pay.

Musk is also considering appointing a successor to run Tesla. Mark Hulbert considers what that may mean for Twitter, its corporate culture and its chances of returning to profitability.

Related: Elon Musk testifies in shareholder lawsuit over Tesla compensation package

A very bad sign appears at semiconductor darling Nvidia

How the crypto world keeps melting down as the FTX scandal unfolds - News Opener

It has been a stormy 2022 for Nvidia.


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The iShares Semiconductor ETF
SOXX,
-0.16%

has risen 25% since hitting its 2022 closing bottom on Oct. 14. But it is still down 31% this year, with dividends reinvested.

There is a lot to digest, because the stock market is forward-looking and a lot of bad news is already reflected in stock prices because of reduced sales guidance from companies and a lowering of estimates by analysts.

Therese Poletti dug into the most recent earnings report from industry bellwether Nvidia
NVDA,
-2.92%

and highlighted an alarming development.

Some better tech news: Cisco provides some light amid the tech gloom as earnings show the company is on ‘the road to normal’

More on chip makers: 18 semiconductor stocks that shine when compared with Nvidia this earnings season

Two sides of a short-sale at Twist Bioscience

Shares of Twist Bioscience
TWST,
-3.50%

have fallen 35% over the past week, including a 20% plunge on Nov. 14, after Scorpion Capital called Twist a “‘synthetic biology’ swindle” in a report.

In an email, Angela Bitting, Twist’s senior vice president for corporate affairs, called Scorpion Capital’s report “highly misleading.” Read more, as reported by Ciara Linnane.

A quick-start guide to compiling documents for emergencies

Beth Pinsker provides a financial cheat sheet to help you prepare for family emergencies.

More personal finance help:

Retirement — and planning for it the right way

How the crypto world keeps melting down as the FTX scandal unfolds - News Opener

istock

Over the long term, the obvious way to plan for life after the end of your working career is to save and invest. But there are financial adjustments to consider as you prepare for retirement.

What about the non-financial elements of retired life? Richard Eisenberg shares an online tool that may help, especially if you enjoy taking a quiz.

Jim Blankenship: Can my ex-husband take some of my Social Security?

There’s bad news and good news from retailers

How the crypto world keeps melting down as the FTX scandal unfolds - News Opener

Target disappointed investors, reporting that expenses were rising more quickly than sales.


AFP via Getty Images

Shares of Target
TGT,
+0.50%

tumbled on Nov. 16 after the retailer reported disappointing quarterly results, which included rising expenses in many areas, including “inventory shrink,” which means losses from theft. In contrast, Walmart
WMT,
+0.82%

posted its largest earnings gain in four years.

More coverage of retail results and expectations:

How to watch the World Cup starting on Sunday

How the crypto world keeps melting down as the FTX scandal unfolds - News Opener

Bloomberg

The games begin on Sunday and run for four weeks. Mike Murphy provides a guide to how to watch and which matchups might be the most compelling.

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