The WC – Let’s make terrible investments

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The WC is a selection of five useful, interesting & notable insights, handpicked by our CIO Wyatt Cavalier and pumped into your inbox every Wednesday.

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The World Cup is here

Never one to let FIFA corruption, boycotts, and/or human rights abuses spoil a bit of lowkey degen fun, we’ve started our own World Cup fantasy league at Alts Towers.

The tournament starts next weekend in Qatar, and I’d be delighted if you played along.

It’s free, and the winner gets some free Alts swag.

Celeb degens

Speaking of degen behavior, you may be surprised to learn how much money some celebs have publicly plowed into NFTs.

DJ Steve Aoki leads the charge at over $7m invested. There are also some quite surprising names in there —

Shamed CEOs living the dream

If a founder came to you looking for investment, and the most prominent item on their CV read something like this:

  1. Founded a multi-billion dollar company.
  2. Destroyed multi-billion dollar company while perhaps diving into a serious drug habit.
  3. Was paid billions of dollars to leave the destroyed company.

…Would you invest in his next venture? No? Nope? Hell no? Of course not?

Enter Andreessen Horowitz, True Ventures, and Addition, who gave a combined $375m to… 🥁

former WeWork CEO Adam Neumann ($350m from a16z)

and…

former Peloton CEO John Foley ($25m from the latter).

Neumann suckered a16z into investing in a bunch of Miami condos in August, where the current sales to list price is 96%.

Not a hot market.

Foley convinced people to give him $25m for a DTC custom rug business.

Just waiting for the rug pull.

Just how sketchy is Binance?

Binance is one of the largest cryptocurrency exchanges in the world.

Responsible for $7.7 trillion crypto exchange volume in 2021.

Yesterday, the founder and CEO Changpeng Zhao publicly announced his company was liquidating their deposits at rival FTX, exacerbating a bank run on the latter.

He then bought up the insolvent exchange at fire sale rates. A capitalist master class.

Other Binance controversies include:

It’s currently being investigated US Department of Justice and IRS for money laundering. UK financial regulators have ordered they stop operating in the UK but they have not. They operate worldwide and don’t pay much attention to regulations in any country.

They don’t even have an official headquarters, to make it harder for regulators to pin them down.

They also built ties with the FSB by giving them detailed customer data including names and addresses.

Short term, this deal is great for Zhao. He picked up a company with over $1B investment for pennies on the dollar.

Long term? This stuff doesn’t exactly inspire institutional confidence in crypto.

$10B for sports franchises

Two of the twenty most valuable sports teams are on the block:

  • The Washington Commanders — valued between $3.5b and $5.6b.
  • Liverpool Football Club — valued between $4.1b and $4.5b.

While NFL teams can only be owned by Americans, football teams are up for grabs to the highest bidder.

If Chelsea’s $3.2B fire sale this year is anything to go by, a lot of rich guys/countries are frothing at the mouth right now.

State investment in sports teams isn’t new.

Newcastle United, Manchester City, NYC FC, and Paris Saint Germain are all owned by countries. In fact, speculation is that Saudi Arabia’s recent purchase of historic favorites but recent cellar-dwellers Newcastle United for $400m earlier this year prompted FSG (Liverpool’s current owners) to throw in the towel.

How do a bunch of rich guys field a competitive team against a squad owned by a country?

It raises a lot of questions about the integrity of sports when some teams have unlimited funds.

But hey, at least Elon’s not buying Manchester United anymore.

What caught your eye this week?

Cheers,

Wyatt

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Author

Wyatt Cavalier

Wyatt Cavalier

With a background in finance & intelligence analysis, Wyatt has an unhealthy obsession with finding the best blue chip investment opportunities. His previous newsletter, Fractional, resonated deeply with subscribers, bringing actionable insights and unconventional trading strategies. His rare book collection specializes in banned editions. He currently lives in Spain with his beautiful wife, three young boys, and dog Monty.

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