Hey Snackers,
This CES car is giving us mood-ring flashbacks: BMW showed off a color-changing concept vehicle that one day could match drivers’ emotions. We’re imagining a sea of red at rush hour.
In an economy where good news is bad news, stocks fell after surprisingly strong December jobs numbers. Investors feared the still-hot labor market could lead to more aggro rate hikes.
Throwing in the (bath) towel… Shares of Bed Bath & Beyond lost over a quarter of their value yesterday after the embattled retailer said it might file for bankruptcy. Refresher: BB&B has racked up big debts over the years and has struggled to attract new shoppers online and in stores. Now the home-goods legend says it may not have enough $$ to cover key expenses.
Private label, public problems… During the pandemic shopping boom, BB&B focused on creating private-label brands to compete with cheaper offerings from Amazon and Walmart. Yet the pivot resulted in shoppers struggling to find recognizable brands they actually wanted (think: Keurigs and KitchenAid mixers). Last year, BB&B said it had lost $175M in sales because of out-of-stock items. Now it’s still exploring non-bankruptcy options like restructuring and raising cash, but it could be too little too late.
Category-killers are getting killed… Old-school category-killers like Barnes & Noble, Blockbuster, and BB&B snatched sales from small businesses as they spread across America. BB&B used to be the go-to for dorm hauls and bathroom makeovers. Now shoppers have a wide variety of online retailers (cough, Amazon) to choose from, and OG category-killers are dying. Case in point: Toys R Us filed for bankruptcy in 2017 and JCPenney followed suit in 2020.
Mega bank run… The California bank that helped fuel the crypto boom is feeling crypto winter's wrath. Silvergate announced yesterday that it's cutting 40% of its staff following an $8.1B bank run — which the biz says forced it to sell assets at a $718M loss to cover. That's more than its total profit since 2013 (ouch). That news, plus word that Silvergate's halting its digital-currency plans (down the drain: $196M spent on Facebook's Diem tech) led to a nearly 50% decline in Silvergate stock. Now its execs say the biz could be a takeover target.
High roller… with a low-key profile. Silvergate greases the crypto industry's wheels by helping big businesses move big bucks in and out of crypto platforms. 90% of the bank's deposits are crypto-related. It’s provided banking services to Coinbase and Gemini and held deposits for both FTX and its sister hedge fund, Alameda Research. Once it got into crypto, it blew up fast: by 2019 it served 1.6K miners, exchanges, and crypto custodians. As of last year, it held $16B in deposits — up from $2B in 2020. Now it’s blowing up again, in a bad way:
Big bets mean big risks… Silvergate put most of its eggs in the crypto basket, helping it grow from a relatively small SoCal bank to an industry player. But as crypto winter set in and investors ran for sunnier pastures, that basket has come back to bite it — and the wider industry could suffer from the fallout. Silvergate’s expected to report this month.
🤹♀️ Quirky… NFTs are heading to a US court this month after luxury designer Hermès sued an artist over his digi assets depicting Birkin bags (meet: MetaBirkins). The trial could set the tone for how courts treat NFTs.
🪙 Coins… A judge ruled that bankrupt crypto lender Celsius owns the $4.2B that customers deposited into 600K interest-bearing accounts (putting them last in line for repayment). Also, the NY attorney general sued Celsius's founder, accusing him of fraud.
🌶️ Spicy… Sam Bankman-Fried pleaded not guilty to eight criminal charges related to FTX’s collapse. His trial is scheduled to start in October, but two former colleagues have already pleaded guilty.
Authors of this Snacks own: shares of Amazon, CVS, Tesla, and Walmart
ID: 2666330