I loved watching the TV series Billions which had as its main character Bobby Axelrod, a hedge fund manager with questionable morals. Insider trading was the norm in Billions and many other misdemeanors were perpetrated. I believe season 7 is coming soon, can’t wait. Talking about billionaires, recognize this dude below?

The dude’s name is Sam Bankman-Fried (pronounced “Freed” and not like Kentucky “fried” chicken), a 30 year old who founded and controlled a cryptocurrency exchange called FTX. He was also CEO of Alameda Research, a quantitative cryptocurrency trading firm. FTX filed for bankruptcy on 11/11/22 (a rather symmetrical date). Forbes has estimated Bankman-Fried (SBF) was once worth US$32 billion but earlier today reported that he only had US$100,000 left in the bank. Hard to believe that, I am sure that he has many millions hidden away in offshore tax friendly jurisdictions.  SBF’s parents are both law professors at Stanford University. His father is also a clinical psychologist who specializes in treating young adults suffering from anxiety and depression. I am sure Professor Bankman-Fried will have some comforting words for his son. SBF’s mother is reportedly a tax expert, and focuses on moral philosophy and distributive justice. I had to google the last term, never heard of it before today. Mrs Google tells me that “distributive justice” is about socially just allocation of resources. I am surprised the ANC has not cottoned onto “distributive justice” but give them time. Their last election slogan “building better communities together” did not translate into reality with load shedding, crumbling water infrastructure and sewerage flowing into rivers and oceans. I digress.

It has been a year like no other in recent history on stock markets. There have been some unbelievable gyrations in share prices and market capitalizations. Market darling, Amazon, has endured some pain and suffering in 2022. Or shall I say, its shareholders have seen value evaporate faster than the morning mist in the Kalahari desert. Amazon had a cracking time in financial year (FY) 2020 and 2021 as we spent more time online than in shopping malls. Amazon’s revenue (excluding that from Amazon Web Services) went from US$245 billion in FY2019 to US$408 billion in FY2021. Amazon reported a rather pedestrian 6.0% increase in revenue for the 3 months ended 31 December 2021 as compared to the comparable period in FY2020. What do you think the stock market’s reaction was? I would have expected some weakness in Amazon’s share price. The results were announced on 3 February 2022. The next day Amazon’s share price jumped by 13.5%. That created a new record of an increase in market capitalization of US$191 billion in one day. Take that online shopping fanatics.

Amazon also became the first listed company in history to lose more than 1 trillion US dollars in market capitalization in a year. Its market capitalization peaked at US$1.89 trillion in July 2021. By 9 November 2022 the share price had plunged to US$86.14, wiping just over US$1 trillion dollars of shareholder value. This is probably due to Amazon’s poor financial results recently as its core platform incurred losses of US$8.1 billion in 2022 so far. Amazon is blaming higher shipping costs and inflation for its woes.

Talking about calamities, how about Meta Platform’s (aka Facebook) share price over the past year? Meta’s market capitalization has declined by over US$600 billion over the past year. It set a new record of a US$232 billion decline in value on 3 February 2022 after it released its annual results for FY2021. The stock market was seriously unimpressed, particularly with Meta’s obsessive focus on virtual reality and augmented reality. The Reality Labs division is focusing on the metaverse, a virtual reality world where one can interact with family and friends. Meta is betting the house on this technology platform, spending significant amounts on creating and enhancing its virtual reality centered metaverse. The Reality Labs division has incurred a cumulative operating loss of US$21.7 billion over the past two years. The stock market is not convinced about this strategic move.

Meta’s fortunes were also not helped by Apple’s move to improve user privacy. Apple now requires apps to ask users for permission before tracking them across other apps and websites. Meta announced in February 2022 that Apple’s increased privacy settings may reduce Facebook’s revenue by US$10 billion annually. Good on you Apple, I am growing increasing disenchanted with Facebook and its tracking of my internet activities. I recently did some research on a USA listed biotech company. Lo and behold, the next time I logged onto Facebook, there was an advert about the self same aforementioned biotech company. Eish.

Take care out there and all the best from BeechieB.

PS I will be posting again soon dealing with US money supply and fascinating stock market research I recently stumbled upon.