| The Information is hosting an event on the impact of AI on the IPO market in San Francisco on November 14th, with speakers from NYSE, Citi and J.P. Morgan. How is the IPO market shaping up for tech and what will AI's impact be? More details & request an invite here. Greetings! You could be forgiven for missing, amid the onslaught of tech company earnings news lately, what may be the most startling business story of the week. That would be the plan by enterprise software and bitcoin investment firm MicroStrategy to raise a massive $42 billion over the next three years to buy more bitcoin, using equal parts debt and equity. The total raised would nearly double MicroStrategy's size, given that it has an enterprise value now of about $50 billion. Close watchers of the company may not be surprised. Since 2021, what was an aging software firm with steadily declining revenues has reinvented itself as a bitcoin investor, reflecting executive chair Michael Saylor's belief that bitcoin is the "Facebook of money." As of Sept. 30, MicroStrategy has spent a total of $9.9 billion on its bitcoin holdings, which at bitcoin's current price of around $69,000 are worth $17 billion. While the company is sitting on big gains now, its position didn't look so great in late 2022 and early 2023 when bitcoin fell as low as $17,000. (The company still has its software business, although its revenues have lately been hurt by its transition to the cloud.) So how did MicroStrategy executives arrive at $42 billion as the amount to raise for future purchases? CEO Phong Le told analysts on Wednesday, when he unveiled the fundraising plan, that fans of "The Hitchhiker's Guide to the Galaxy" know that the "answer to the ultimate question of life" is the number 42. Le added, helpfully, that the number 42 is also "the sum of 21 plus 21." (No wonder these MicroStrategy guys get paid the big bucks.) And the number 21 "is a magical number in the world of bitcoin" because the maximum number of bitcoins that can ever be in circulation is 21 million, he further explained. You get the picture. What does Wall Street think of MicroStrategy's plans? Not much. The stock closed the week down 11% from Tuesday's close—the day before the funding announcement. Still, some analysts are fans. After all, MicroStrategy stock has outperformed even artificial intelligence star stock Nvidia so far this year, rising 263% to Nvidia's 173%, according to Koyfin. It's even outperformed bitcoin itself, which is up 63%, refuting the idea that investors should just buy the cryptocurrency directly. That's likely because MicroStrategy has financed much of its purchases with debt, which magnifies gains on an investment as the price rises—but also increases the losses if the price falls. Depending on whether Saylor's thesis is right, MicroStrategy's bet will either be the greatest home run of all time or a disaster with few parallels. Imagine claiming a refund for a product you are returning, but sending back a box filled with junk rather than the item itself. That's what happened to an online cookware merchant, Ann Gehan reported in this eye-opening piece about the scams that are ubiquitous in e-commerce nowadays. The piece is definitely worth a read. Also this week: - One group of workers that may be particularly vulnerable to replacement by AI are junior salespeople, we detail in this deep dive.
- Also on the AI front, Kalley Huang broke news that Meta was developing an AI search engine. Natasha Mascarenhas revealed that AI founders are starting their own investment funds. We reported new details of xAI's fundraising plans. And we got an inside look at CoreWeave's finances, including how much business its rival Microsoft is giving it.
- Device nerds will enjoy Wayne Ma's report on how Apple, for the first time, is doing the preliminary manufacturing work for an iPhone in India—in this case, the base model of next year's iPhone 17. This story describes the exacting process of making these devices. Also on Apple, Anita Ramaswamy argued in this True Value column that the stock is too expensive at current levels, particularly given the risks of its AI investment strategy.
- We scooped the news that productivity startup Miro would lay off 18% of its staff.
- Start your weekend off with The Big Read on how Elon Musk will win no matter what the outcome of the election is.
- Salesforce CEO Marc Benioff is in talks to sell Time magazine to a Greek magazine group, potentially at a loss, CNBC reported.
- MGX, a new AI-focused investment firm backed by United Arab Emirates capital, has had talks to invest in Elon Musk's xAI, representatives of the two firms have said privately. XAI, maker of the Grok chatbot, has been discussing raising $5 billion at a valuation of about $45 billion.
- Chinese research institutions with ties to the People's Liberation Army used Meta's open-source Llama artificial intelligence model to develop an AI tool with potential military applications, Reuters reported.
More than 100,000 readers rely on The Information's Creator Economy newsletter for coverage of the creator startups making waves, big tech companies' social media playbooks, and scoops on the sector's biggest hires. Start receiving the free newsletter here. |
0 comentários:
Postar um comentário