1. New York Sues Two Crypto Firms
2. Disney Discloses ESPN Financials for First Time
3. Bezos-Backed Trucking Startup Shuts Down
4. Citi Fires Employee Over Antisemitic Post
5. Fed Holds Off on November Rate Hike
6. U.S. Jobless Claims Fall Sharply
7. Tesla Stock Plunges 10%
1. New York Sues Two Crypto Firms
New York Attorney General Letitia James has accused crypto exchange Gemini Trust and DCG’s Genesis Global Capital of defrauding consumers out of $1.1 billion.
Their joint crypto lending platform, Gemini Earn, allegedly failed to disclose critical risks to investors. After major players like FTX collapsed last year, Gemini’s asset values plunged.
NY prosecutors say Gemini failed to disclose the risk profile of its partnership with Genesis. At one point, 60% of its assets were reportedly loaned to Alameda Research, a trading firm linked to FTX’s founder.
Ironically, Gemini and Genesis are now suing each other.
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2. Disney Discloses ESPN Financials for First Time
In this week’s earnings report, Disney revealed for the first time that its ESPN sports division could be valued at $22 billion.
Earlier this year, CEO Bob Iger reorganized Disney into three divisions: Entertainment, Sports, and Parks. In July, he said Disney was seeking strategic investors to help shift ESPN toward streaming.
In the first nine months of fiscal 2023, ESPN’s profit dropped 20% to $1.48 billion.
Disney acquired ESPN in 1996 when it bought ABC.
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3. Bezos-Backed Trucking Startup Shuts Down
Seattle-based trucking logistics startup Convoy, backed by Jeff Bezos and Bill Gates, announced it is shutting down after failing to find a buyer over four months.
CEO Dan Lewis told staff today that it would be their last day at work.
At its peak, Convoy was valued at $3.8 billion. Its workforce had already shrunk from 1,500 to 500, and the company was weeks away from running out of cash.
Lewis cited a recessionary logistics and capital market environment for the closure.
According to PitchBook, Convoy raised over $1 billion in total funding.
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4. Citi Fires Employee Over Antisemitic Post
Citigroup announced today that it has fired an employee whose antisemitic social media post was exposed by watchdog group Stop Antisemitism.
Citi released a statement condemning hate speech and antisemitism, saying the post was unacceptable.
Citi has significant operations in Israel, including investment banking and wealth management.
The company’s CEO said last week that some employees in Israel had been called up for military service.
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5. Fed Holds Off on November Rate Hike
At the Economic Club of New York, Fed Chair Jerome Powell said the Fed would not raise rates at its November meeting—but added that further hikes remain possible.
This marks the second consecutive meeting without a rate increase, following 19 months of steady hikes.
The announcement caused the 2-year Treasury yield to dip and the dollar to weaken.
Powell also noted rising geopolitical tensions, calling the loss of innocent lives “horrifying.”
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6. U.S. Jobless Claims Fall Sharply
The U.S. Labor Department reported that initial jobless claims fell to 198,000 for the week ending October 14—lower than all economists’ forecasts.
However, continuing claims rose to 1.73 million, suggesting it’s becoming harder to find new jobs.
Stephen Stanley, chief economist at Santander US Capital Markets, said hiring is slowing but remains historically strong.
Almost every industry continues to show job gains.
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7. Tesla Stock Plunges 10%
Tesla stock dropped 9.9% today to around $219, erasing $70 billion in market value.
The EV maker has been cutting prices to maintain sales, signaling that customers are no longer willing to pay premiums. Meanwhile, investors are increasingly skeptical of Tesla’s lofty valuation.
Analysts believe Tesla’s stock is becoming more like a traditional automaker’s, especially since price cuts haven’t significantly boosted sales.
JPMorgan analysts said Tesla’s valuation is looking increasingly unsustainable.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.