It is incredible to me that Matt Levine can be majorly interesting (3-5 segments every newsletter)—funny, newsy, lots of relevant info... what the kids call "signal"—every god damn day!
I can be interesting and smart and, you know, bring 10% of what Levine brings... maybe 3-4 times a month. This dude just knocks em out of the park every day (#918198, #919576). Major fangirl.
Private equity, using leverage buyouts, has a simple job description:
"The job is not to find good companies and own them forever, but to buy cheap companies, fix them up and flip them. The goal is to earn a spread, to buy inefficient companies cheaply, make them efficient quickly, and then sell them at a higher price."
So, Kravis and Roberts (the KKR & Co. peeps) became incredibly wealthy and with tons of assets under management. ... and then the low-hanging fruits for their brilliant gameplay ran out. What we gonna do now?
...well, just manage institutional money like every other large pile of money:
Yes, right, the opportunity to buy underperforming companies and flip them for huge profits in five years has decreased, but KKR’s pile of cash has increased, so there are other things it can do.
Also, OBVIOUSLY GameStop news (#926077). Tots Matt Levine theme
Two options:
1. "One possibility is that shareholders will pay a premium for every public company that owns Bitcoins, so every company can boost its valuation by putting out a one-sentence press release about Bitcoin."
2. "Another possibility is that public company that owns a lot of Bitcoin is a more or less winner-take-all category, where retail investors will pay up a lot for the one most salient meme-iest public company that owns Bitcoin but will have no interest in imitators"
If 1., this is the beginning of a mad rush. If 2., (Micro)Strategy has an insane head start and nobody's gonna catch them.
"But GameStop is GAMESTOP!"
True dat. Financial markets in the 2020s is a weird-ass place.
It has its own powerful memetic first-mover advantage; maybe it can apply that to owning a pile of Bitcoin.
non-paywalled: https://newsletterhunt.com/emails/177469