A Bank On The Brink

Ever since the collapse of Silicon Valley Bank (SVB), First Republic Bank has been investors’ next major worry.

For those not caught up on the regional bank’s journey, the chart below highlights some key moments over the last two months. 👇

Essentially its interest rate risk and depositor base were similar to the banks that collapsed. As a result, investors and depositors pulled their funds from the bank and exacerbated the issues. A $30 billion bailout from eleven of America’s largest banks and a selling of assets was supposed to stem losses and restore confidence. However, the last few weeks have shown those efforts weren’t enough. 😬

Today the stock plummeted to fresh lows on a Reuters report that claimed the U.S. Federal Deposit Insurance Corporation (FDIC) is preparing to place it under receivership “imminently.” 😱

Reuters previously reported that a government-brokered rescue deal was in the works. However, its source today said the FDIC has decided the regional bank’s position has deteriorated, and there is no more time to pursue a private sector rescue. ⌛

If the reports are true, it will be the third U.S. bank to collapse since March. At its peak in November 2021, it was worth over $40 billion. And today, its market cap ended at $653 million as investors positioned themselves for official receivership news over the weekend. 📰

Also, it’s worth noting the Fed released a report on the SVB collapse that primarily blames the bank’s managers. We wonder what they’ll say about this situation… 🤔

AI’s Copyright Crisis Begins

We all knew copyright law would be a key issue at the heart of the artificial intelligence (AI) revolution, but we didn’t know when. Well, the time has come. ⌛

Today, The New York Times filed a lawsuit against Microsoft and OpenAI, accusing them of infringing copyright and abusing the newspaper’s intellectual property. In its court filing, the publisher said it looks to hold the two companies accountable for the “unlawful copying and use of The Times’s uniquely valuable works,” claiming billions in statutory and actual damages.

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March Madness Continues At NYCB

When regular people talk about March Madness, they’re referring to college basketball. But when traders and investors talk about March Madness, they’re referring to a regional bank stock imploding.

We’re about a year out from three regional banks failing and/or being rescued, and now the sharks are circling New York Community Bancorp. The long story short, until today, is that the regional lender has too much commercial real estate exposure, weak internal controls over financial reporting, and a new CEO trying to right the ship. 🗞️

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Peloton’s New Partnership

With Peloton’s turnaround strategy not yet bearing the fruit it had anticipated, the company continues to lean on partnerships to grow market share. For example, in September, the company entered a 5-year strategic partnership with Lulemon to bring its content to the athleisure brand’s exercise app. It also made Lululemon Peloton’s primary athletic apparel partner. 👟

It’s still too early to tell whether or not that cooperative effort is working, but management seems to think further initiatives like it will help boost revenues. As a result, it’s partnering with TikTok to bring short-form fitness videos and other content to the social media platform.

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Adobe Leads Day Of Breakups

Most of today’s stories were related to hookups in the market, but we also need to touch on some major breakups. 💔

The first and most prevalent news story was that Adobe and Figma have called off their $20 billion acquisition. The two companies have faced intense scrutiny from European regulators, today saying, “There is no clear path to receive necessary regulatory approvals from the European Commission and the U.K. Competition and Markets Authority.”

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