Three Things (7/1)
Jul 1, 2022
1) FTX rumored to purchase BlockFi: Reports on Thursday indicate that FTX is rumored to buy crypto lender BlockFi for pennies on the dollar. The sale follows an emergency line of credit facilitated by FTX about a week ago. Reports indicate FTX may pay $25 million for the lender, 99% below their last valuation of $4.8 billion.
Titan’s Takeaway: Crypto markets have not been immune to the broader equity downturn as embattled firms look for off ramps amid market volatility. Excess liquidity and reckless leverage continue to be a downfall for businesses regardless of the asset class.
2) Amazon scores big: Amazon, in partnership with BT Sport, is nearing a deal to own the UK broadcasting rights for Europe’s top soccer tournament, the UEFA Champions League. The deal is rumored to cost 1.7 billion euros. The news follows Amazon’s 11 year deal to broadcast live NFL games in the U.S.
Titan’s Takeaway: The content arms race continues as Amazon looks poised to increase prime memberships by offering live sports to its members. After missing out on the Indian Premier League cricket rights, it’s clear Amazon is eager to expand its recurring revenue globally by tactically choosing leagues that target an international audience.
3) Restoration Hardware cuts guidance: Restoration Hardware is the latest retailer to cut its financial targets, citing a weaker-than-expected economic environment. Company sales are expected to decline between 2% and 5% for the fiscal year.
Titan’s Takeaway: Restoration Hardware benefitted from a pull forward in demand during the pandemic as quarantine helped drive furniture purchases for a homebound customer base. The change in guidance confirms that consumers are pulling back on discretionary purchases, a worrisome trend for high end retailers moving forward.
Cash Management
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