Hello and welcome to Alts Cafe
Highlights from the full issue:
- Macro: The IMF upgraded China’s 2024 GDP
- Real Estate: Pending home sales fell to a four-year low
- Startups: Elon Musk’s xAI raised $6 billion
- Private Credit: GTCR acquired Surmodics for $627 million
- Crypto: PayPal is now available on the Solana blockchain
- NFTs: Cristiano Ronaldo unveiled his fourth NFT collection
- Art: Lely portraits flopped at auction
- Vintage Autos: Mecum’s auction net $108 million in sales
- Coins: An 1891 Netherlands 25 Cents sold for $1.13 million
- Farmland: The rural mainstreet index fell to 44.2 in May
- Luxury: Chanel’s revenues rose 16% to $19.7 billion in 2023
- Wine, Tequila, and Spirits: Alcohol delivery has hit DC
- Film & Music: Sony Music is in talks to buy Queen’s catalog
- Precious Metals: Alabama abolished capital gains tax on gold
- Collectibles: John Lennon’s guitar sold for $2.85 million
- Websites: Shane Cultra sold YourLogoHere.com for $45,888
Let’s go.
Wyatt
Table of Contents
Macro View
Bullish News
- US consumer confidence rose to 102.0 in May from 97.5, driven by job growth and stock market optimism.
- The IMF upgraded China’s 2024 GDP growth forecast on Wednesday to 5% after a strong Q1.
- US bank profits surged 79.5% in Q1, driven by lower special assessment costs and higher noninterest income.
- The primary Federal Reserve inflation gauge cooled in April, raising hopes for a rate cut as soon as September.
- Bank of America strategists have predicted strong gains, with the S&P 500 up 11.8% YTD due to robust earnings.
- EU economic growth rebounded in Q1 2024, as strong fundamentals signal gradual expansion, according to the EC report.
Bearish News
- US economic growth in Q1 was revised down to 1.3% from 1.6% as consumer spending slowed.
- Dallas Fed’s survey showed worsening May business conditions, with activity index at -19.4.
- Natural disasters have triggered lasting economic impacts, increasing the unemployment rate by 0.5 percentage points.
- Initial jobless claims rose to 219,000, with the four-week average hitting 222,500, the highest since last September.
- China’s factory activity dipped in May as the property downturn continued, weakening domestic demand.
What are the odds?
Get $25 to play around with using this link.
What are we doing?
Altea Highlights
Check out the full roundup.
Live Deals
Alts.co Equity Round
- Minimum Investment: $5k
- Investment Type: SAFE
- Valuation: $7.5m for the first $250k; $12m thereafter
After a successful pilot program for Altea, our private member community for accredited alternative investors, we’re raising a small round of equity for Alts.co.
What’s changed?
The round is more than half full. There’s a bit more space at the $7.5m valuation, but that’ll rise to $12m soon.
Alts 1
- Minimum Investment: $20k
- Duration: 10 years (8 to go)
- Target IRR: 20%
- Investment Type: Reg D fund, alternative assets.
What’s the deal
This is our own fund, so please note the obvious bias.
Alts 1 represents a pioneering venture into the realm of alternative investments, seeking to capitalize on unconventional assets historically outperforming traditional market instruments. The fund, led by a team with a blend of military, financial, and technological expertise, positions itself as a dynamic entity agile enough to exploit market inefficiencies across a broad spectrum of alternative assets, including art, crypto, tequila, and more niche ventures like sports cards and distressed music rights.
Funding Status: $500k
What’s changed?
We hope to have the portal open for investment next week if not the week after.
Upcoming Deals
Equity stake in festival-caliber opioid documentary
- Investment Size: $300,000
- Minimum Investment: $50,000
- Potential IRR: 40%
- Deal Type: Equity
- Deal Duration: 1-2 years
This investment opportunity involves providing gap financing for the near-complete documentary feature film “Getting Well,” centered on the community response to the opioid crisis in Kensington, Philadelphia. The film promises to be a festival and awards contender, with possible sale outcomes to major networks like HBO and potential showcases at prestigious film festivals such as Sundance.
Drift Capital Fund I LP
- Raising: $75M
- Minimum Investment: $125,000
- Target returns: 12% to 15%
- Management fee: 2%
- Carry: 20%
- Duration: 10 years
Drift Capital Fund I, L.P. aims to provide investors with access to the collectible car market by identifying, acquiring, and preserving notable automobiles. The fund intends to fractionalize ownership among investors, offering a diversified portfolio of vehicles deemed as “investment-grade.” This deal stands out for its unique approach to asset allocation, emphasizing the historical stability and appreciation of collectible cars.
Pantile Asset Research Structured Note
- Investment Size: $500k
- Minimum Investment: $50k
- Potential IRR: 12% net return per annum
- Deal Type: Hedge Fund Structured Note
- Deal Duration: Two years
A 3-year private debt investment, offering 12% interest per year, paid semi-annually, plus 20% of upside strategy returns paid on the debt obligation. The note is a bullet note (principal paid at maturity), and it is callable by the investor after 2 years. The proceeds are used to leverage firm capital for trading. This issuance would add to the debt we have already issued and paid out, starting in October 2023.
Investor Field Trips
A music-themed investing adventure to Music City, USA.
- Est. dates: October 21 – 25
- Est. cost: $7,000 – $9,000
ALTS 1 Fund news
Portal access for new investors should be ready this week.
Real Estate
Bullish News
- The US housing market has tilted in favor of buyers, with 30% of inventory seeing price drops.
- The average price of a single-family home in the US may reach $382,000 by 2030, a 48% increase from the past decade.
- Bulloch County saw double-digit percentage increases in property values, with the County tax digest increasing by 17%.
- Rockford, Illinois, became the country’s top real estate market with median home prices soaring 51.7%.
- US home prices hit a new all-time high in March, with San Diego posting the largest annual gain of 11.1%.
- EXIT Realty partnered with Earnnest, a digital earnest money collection app, to create more secure transactions.
Bearish News
- Pending home sales fell to a four-year low in April as mortgage rates topped 7%.
- The total value of delinquent commercial real estate loans more than doubled to $24.3 billion last year.
- South Korea’s rental housing market loses more than a billion dollars to “jeonse” scams every year.
- Boston’s downtown real estate collapsed, with Q4 2023 sale prices down over 30% year-over-year.
How to invest in real estate right now:
Keep an eye out for jeonse’s.
Startups
Bullish News
- Wisconsin launched a $100 million venture capital initiative to invest in startups across the state.
- Elon Musk’s xAI raised $6 billion at a $24 billion valuation, becoming the second-most-valuable generative AI company.
- Venture capital firms deployed $350 billion into startups in 2021, compared to $20 billion in 2004.
- The Senate introduced legislation to increase the minimum tax credit to $2,500 for small businesses.
- CinRx Pharma raised $73 million to continue its “hub and spoke” model of startup formation, producing five companies.
Bearish News
- California has proposed to suspend NOL deductions, forcing businesses to pay $16 billion in taxes.
- General Catalyst-backed cancer care platform Jasper Health laid off approximately half of its 48-person team.
- Salesforce shares slumped about 18% after reporting quarterly revenue below expectations for the first time since 2006.
- Snowflake’s customers’ accounts may have been compromised by attackers exploiting stolen credentials.
- Lucid Motors announced plans to cut 400 jobs, or 6% of its workforce, after reporting a $685 million loss in Q1.
- A jury found that Boeing stole trade secrets of aerospace startup Zunum Aero, Inc., awarding nearly $90 million in damages.
How to invest in startups right now:
Boeing can’t catch a break. It’s jets, on the other hand, have no trouble breaking.
Private Equity and Private Credit
Bullish News
- CIBC hired Brad Aston, a Barclays veteran, as global head of leveraged finance to expand its business in the US.
- Deloitte predicted that 25% of PE firms will use AI to augment their portfolio valuations over the next 5-7 years.
- GTCR agreed to acquire Surmodics for $627 million, a 41.1% premium to its 30-day average closing price.
- Intermediate Capital Group (ICG) is on track to raise the largest-ever GP-led secondaries fund.
- Goldman Sachs Asset Management closed its fifth senior direct lending fund, raising more than $20 billion in total capital.
Bearish News
- Hedge funds were hit by buyout-backed exits dropping to $345 billion in 2023, the lowest in a decade.
- PE firms sat on $3.2 trillion in unsold assets, failing to exit investments to meet limited partner demand.
- PE investments in healthcare services decreased by 20% in Q1 2024 compared to Q1 2023.
- A lawsuit against a new SEC rule requiring private funds to provide investors with regular disclosures could harm investor protections.
- Southeast Asia’s PE deal value fell 39% to $9 billion in 2023 compared to the previous five-year average.
How to invest in PE and Private Credit right now:
PE firms are still mastering the exit strategy.
Crypto
Bullish News
- Franklin Templeton, VanEck, and Invesco Galaxy filed amended S-1 forms for their spot Ethereum ETF applications.
- $18 billion worth of cryptocurrency was moved into ”re-staking” platforms, which offer rewards for locking up tokens.
- PayPal announced that PayPal USD (PYUSD) is now available on the Solana blockchain.
- Funds lost to cryptocurrency fraud and hacks declined 12% year-over-year in May.
- President Joe Biden’s campaign began reaching out to crypto industry players for guidance on “crypto community and policy.”
- The Polkadot community approved a significant upgrade known as the Joint Accumulation Machine (JAM).
- Morgan State University was awarded a three-year, $1.05 million grant from Ripple to support blockchain research.
- Talos, a crypto trading software unicorn, acquired Skolem, a DeFi-access platform, to expand its on-chain capabilities.
Bearish News
- President Biden vetoed a bill overturning SAB 121, an SEC bulletin establishing controversial accounting standards for crypto custodians.
- The RedTail crypto-mining malware exploited a Palo Alto Networks firewall vulnerability.
- A survey found 60% of US crypto investors don’t understand blockchain technology.
- Japanese crypto exchange DMM Bitcoin reported a $305 million bitcoin theft, one of the largest attacks ever.
- Binance founder Changpeng Zhao began his four-month prison sentence in California after pleading guilty to enabling money laundering.
- Fraudsters stole over $37 million from Coinbase Pro users through phishing and social engineering.
How to invest in Crypto right now:
Everybody welcome Paypal to the blockchain.
NFTs
Bullish News
- Cristiano Ronaldo unveiled his fourth NFT collection with Binance.
- NFT royalties are introducing fairer revenue streams for gaming creators, enforcing true digital ownership for players.
- Sei Network integrated with OpenSea marketplace, enabling seamless NFT adoption with low fees and fast transactions.
- Donald Trump’s NFTs surged over 90% in value following his pro-crypto comments.
- NodeMonkes led NFT sales for the second time this week, topping nearly $1 million in daily sales.
- Square Enix is moving Symbiogenesis NFT character minting to Arbitrum, reducing gas fees to 1/1000 of the previous cost.
Bearish News
- NFT sales dropped from $1 billion in April to $624 million in May.
- Yuga Labs faced backlash over a new Punk-themed NFT collection criticized for “diluting” the CryptoPunks brand.
- The US Treasury report said NFTs and NFT platforms can potentially be used to launder proceeds from crimes.
How to invest in NFTs right now:
I knew I should have bought the dip on the Trump NFT.
Artwork
Bullish News
- Heffel’s spring sales set records with Mary Pratt and Takao Tanabe, totaling $22.6 million and 96% sell-through.
- Jean-Michel Basquiat’s Native Carrying Some Guns, Bibles, Amorites on Safari sold for $12.6 million, setting a season record.
- Artrade has launched a new feature called ‘Fragments,’ which links a physical masterpiece to a token on Solana.
- The Getty Research Institute acquired the archive of American gallerist and curator Peter MacGill.
- Former Microsoft CEO Bill Gates has amassed an art collection valued at approximately $127 million.
Bearish News
- RansomHub claimed responsibility for the cyberattack on Christie’s auction house and has threatened to leak the sensitive data of 500,000 clients.
- Sotheby’s is set to lay off dozens of workers employed in the UK, with potential similar layoffs in New York and elsewhere.
- The FBI is investigating the sale of hundreds of items stolen from the British Museum to American buyers.
- Lely portraits owned by bankrupt collector James Stunt flopped at auction, with two failing to sell.
How to invest in Artwork right now:
RansomHub really nailed its branding.
Vintage Autos
Bullish News
- The rare 1960 Ferrari 250 GT SWB Berlinetta is set to fetch over $7.6 million at auction through Sotheby’s.
- Michigan extended the time vehicles with historic plates can be driven on public roads from one month to three.
- Dana Mecum’s 37th Original Spring Classic auction concluded with more than $108 million in sales over nine days.
- $3 million worth of classic cars were recovered by Ontario police after a months-long investigation.
- The Aston Martin DBZ Centenary Collection is offered at half the original $8 million price.
Bearish News
- Vintage cars, including a 1972 Mustang and a 1950 Plymouth, were crushed by a fallen oak tree during a thunderstorm.
- Rick Ross’ Car & Bike Show faced severe backlash for poor organization, long lines, and capacity issues, with many demanding refunds.
How to invest in Vintage Autos right now:
Summer drives in Michigan just got that much better.
Rare Coins
Bullish News
- Coin experts expect certain rare coins to significantly rise in value in 2024 due to a surge in buying interest.
- Stack’s Bowers Galleries announced Part I of the L. E. Bruun Collection, the world’s finest collection of Scandinavian coinage, valued at over $10 million.
- An 1891 Netherlands 25 Cents sold for $1.13 million, becoming the most expensive Dutch coin ever sold.
- A ‘Petition Crown’ of Charles II sold for $1 million, becoming the most expensive British silver coin ever sold at auction.
- A European woman stumbled upon 2,150 silver coins minted between 1085 and 1107 in the Czech Republic.
Bearish News
- The value of “generic” US gold coins has fallen to historic lows in relation to spot gold prices.
- Air travelers left behind nearly $1 million in coins at TSA checkpoints in 2023, about twice as much as in 2012.
- In 1973, five armed men stole more than 6,000 ancient coins worth roughly $8.5 million, and 15% of them are still missing.
How to invest in Rare Coins right now:
Is TSA hiring?
Farmland
Bullish News
- China’s farmland transfer area increased from 29,789 to 37,638 million hectares between 2015 and 2020.
- Wind and solar projects had a combined footprint of 423,974 acres in 2020, only 0.05% of the 870 million acres of farmland.
- PA Gov. Shapiro put forth a budget proposal that prioritizes agriculture through the Department of Ag’s budget and related investments.
- Washington County, Maryland preserved a 143.65-acre farm, adding to the 40,000 acres of preserved land in the county.
- Thanos Technologies and IFFCO partnered to transform Indian farmland with drone technology across 10 lakh acres.
Bearish News
- Farmland sales have been slowing down across parts of the Midwest, with an uptick in no-sales in February and March.
- The rural mainstreet index fell to 44.2 in May, remaining below growth neutral for the ninth straight month.
- A hydroponic farm in Winston-Salem, funded with $2.5 million, exceeded its budget by 100% and produced little food.
- AM Best downgraded the credit ratings of Farm Bureau Mutual Insurance Company of Arkansas due to severe weather-related losses.
- The former head of the Panoche Water District pleaded guilty to stealing roughly $2 million worth of federally owned water.
How to invest in Farmland right now:
Absolute power corrupts absolutely, even if your power is being the head of a water sanitation plant.
Luxury Goods
Bullish News
- The largest luxury retail groups purchased properties worth over $9 billion for landmark stores in top shopping locations since early 2023.
- Mytheresa and Vestiaire Collective have expanded their partnership as luxury resale demand soars, with over 26,000 items listed since 2021.
- Chanel’s revenues rose 16% to $19.7 billion in 2023, but Hermès is narrowing the gap with a 5-year CAGR of 14.3%.
- Bottega Veneta tapped actor Jacob Elordi as its newest brand ambassador.
Bearish News
- FTC’s antitrust actions have begun targeting luxury handbags, causing concern over misplaced priorities.
- Capri Holdings reported an 8.4% revenue decline in Q4 due to softening global demand for luxury fashion.
- US consumers suing Hermès expanded their antitrust case, accusing the company of forcing buyers to spend thousands on other products before purchasing a Birkin bag.
- China has banned ‘wealth-flaunting‘ on social media, blocking accounts of influencers showing luxury lifestyles.
How to invest in Luxury Goods right now:
The FTC is starting to remind me of my mom.
Wine, Tequila, and other Spirits
Bullish News
- Advanced Spirits launched Barrel Hub, the first e-commerce platform for the wholesale bulk whiskey market.
- A rare whiskey auction is being held by Bonhams Skinner in June, with some bottles expected to sell for up to $20,000.
- The Wine Market Council launched a new study to better engage younger and multicultural consumers.
- The Ontario government revealed plans to expand the alcoholic beverages marketplace 16 months earlier than initially planned.
- Alcohol delivery has expanded in the DC suburbs as jurisdictions loosen rules on alcohol purchase and consumption.
Bearish News
- Revolution Bars rejected Nightcap’s restructuring proposal as “incapable of being delivered.”
- Colorado’s Golden Moon Distillery ceased operations after failing to find a buyer.
- Five Tennessee retailers were fined over $50,000 for illegally shipping alcohol without a license.
- A mobile wine bottler is seeking defense coverage in a wine contamination dispute titled “Ultima Mobile Bottling, Inc v. Nationwide Agribusiness Insurance Company”.
How to invest in Wine and Spirits right now:
Looks like it’s time to check out DC.
Music and Film
Bullish News
- Sony Pictures Entertainment’s senior management remains “optimistic” about the future of cinema.
- AI music generator Suno raised $125 million in a series B funding round.
- Warner Music Canada inked a deal with multi-platinum producer Eli Brown and his Loophole Records label.
- Sony Pictures Entertainment CEO Tony Vinciquerra said the company will use AI primarily to produce films for theaters and television more efficiently.
- The global market for silicone films, estimated at $1.1 billion in 2023, is projected to reach $1.9 billion by 2030.
- Sony Music is reportedly in talks to pay $1 billion for Queen’s music catalog.
Bearish News
- Ticketmaster was hit with a class action lawsuit over an alleged hacking incident that compromised 560 million customer’s data.
- “Furiosa: A Mad Max Saga” narrowly beat “The Garfield Movie” in a disastrous Memorial Day weekend, the worst in nearly three decades.
- StubHub was hit with a $16.3 million jury verdict for breach of contract and tortious interference with client Spotlight Ticket Management.
How to invest in Music and Film right now:
Keep an eye out for Sony.
Metals and Gems
Bullish News
- The global rare-earth metals market is projected to reach $10.9 billion by 2029, growing at a CAGR of 12.6%.
- Alabama abolished income taxes on capital gains from the sale of gold and silver, becoming the 13th state to end this tax.
- Idaho is exploring low-emission rare earth metals manufacturing from domestic sourced minerals.
- OnlineMetals.com expanded its online capabilities by deploying a new B2B Ecommerce platform.
- Metals Acquisition Limited signed a subscription agreement, investing $2.5 million in Polymetals Resources Limited for a 4.31% stake.
- Lumina Gold Corp. drew an additional installment of $10.2 million with Wheaton Precious Metals International Ltd.
Bearish News
- The soaring value of copper spurred a wave of costly theft cases, with losses of $200,000 in Michigan and $300,000 in St. Louis.
- Movado’s Q1 sales fell 6% due to retail challenges; De Beers’ rough diamond sales dropped to $380 million from $479 million.
- Debswana’s rough diamond sales plummeted 48.3% in Q1 2024 to $560.9 million as the global diamond market struggled.
- The silver market is very small and in a structural deficit, according to Endeavour Silver’s Dan Dickson.
- Thieves broke into a Kay Jewelers store at the Tulare Outlets, stealing valuables.
How to invest in Metals and Gems right now:
Every kleptomaniac begins with Kay.
Collectibles
Bullish News
- John Lennon’s long-lost 1964 Framus “Help!” Hootenanny acoustic guitar sold for a record $2.85 million at a Times Square auction.
- Two old Rs 10 notes from 1918 fetched over Rs 12 lakhs at a London auction.
- A worn-down 1952 Topps Mickey Mantle card sold for $20,000 on eBay despite its poor condition.
- Maxwells’ auctions saw a rising demand for collectibles, with notable sales like a £760 Boba Fett figure and £3,100 Marvel comics.
Bearish News
- Two Washington men were arrested for defrauding customers of over $2 million in sales of fake sports and Pokémon cards.
- Brick Fest Live at Birmingham NEC disappointed attendees with half-empty rooms despite promises of rare collectibles.
- Kobe Bryant’s “Achilles Jersey,” which Ken Goldin promised would sell for $3 million and $5 million, sold for $1 million over the weekend.
How to invest in Collectibles right now:
Lennon’s guitar sale marks the highest-selling piece of Beatles memorabilia ever sold.
Websites and Domains
Bullish News
- Shane Cultra sold YourLogoHere.com for $45,888 via Atom.com, scoring a 20x profit after acquiring it for $2,005 in 2018.
- The .XYZ Registry celebrated its 10th anniversary with 3.4 million domains registered and nearly 3 dozen TLDs.
- Stanton County EMA launched the first website in the US developed using FEMA’s Hazard Mitigation Grant funds.
- GoDaddy won its reverse domain name hijacking case as SmartCatch’s error in Whois date led to UDRP dismissal.
Bearish News
- The Justice Department disrupted a botnet that allegedly enabled cybercriminals to steal billions from financial institutions.
- Despite being banned in the EU and Canada, content from Russia’s RT network is still spreading through hundreds of sites.
- ICANN laid off 7% of staff due to a $10 million budget shortfall and sluggish domain name growth.
How to invest in Websites and Domains right now:
More like ICANT.
That’s all for this week
Cheers,
Wyatt
Disclosures
- We hold BTC, ETH, and a couple Star Wars Action figures in our ALTS 1 Fund.
- There are a couple of affiliate links above. If you click them, we may get a couple of bucks.