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- July 26 - This Week in Alternative Investments
July 26 - This Week in Alternative Investments
Adam Katz
July 26, 2024
Brought to you by Hiive, who created the leading index tracking Pre-IPO stocks - the Hiive50
Headlines
Wiz turns down Google
Ethereum ETFs debut
A record-breaking Ruth jersey
Blackstone’s office struggles
Plus: Revolut heading towards an IPO, Kamala and crypto, Meta’s ChatGPT competitor, and much more.
Performance
Bitcoin | Hiive50 |
FTSE VC Index | Zillow Home Value Index |
*as of close of market July 25
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Market Updates
Cybersecurity firm Wiz turned down a $23 billion offer from Google. Wiz would have been Google’s largest acquisition ever, and a significant boost over its prior valuation of $12 billion. However, a letter from CEO Assaf Rappaport to employees made it clear that Wiz is eyeing an IPO and wanted to remain independent. If there are opportunities for investors to acquire pre-IPO shares, the failed deal provides an updated valuation and an indication that an IPO is potentially on the horizon.
The long-awaited Ethereum ETFs launched this week. The first day of trading saw a volume of more than $1 billion, with over $100 million in net inflows. But despite creating easier access to the cryptocurrency, the price of ETH has dropped roughly 10% since trading began. After its ETFs launched in January, BTC saw an 18% decline initially, but a month out the price started to rise and it now sits 50% higher than its level at launch. ETH will not necessarily follow the same pattern, but the early decline is no reason to write it off.
Babe Ruth’s “called shot” jersey set a world record. The 1932 game-worn and photo-matched item that the Babe wore when he hit his best known dinger received a bid of $13.3 million at Heritage Auctions, which would be the most expensive piece of sports memorabilia ever to sell. The auction ends on August 24, and the seller has until August 20 to set a reserve price, so there is a possibility there won’t be a completed sale. Heritage estimates the bidding for the jersey could hit $30 million, though there is some controversy surrounding the photo-match that might affect the final price.
Blackstone’s mortgage trust cut its dividend by 24%, causing its shares to drop by 10%. The commercial real estate finance arm of the world’s largest alternative asset manager has seen its office borrowers struggle to make payments on their loans. Of their U.S. office space holdings, 55% are “watch-listed or impaired,” though borrowers with higher-quality office buildings have stayed current. Elevated vacancy rates, lower rent rolls and plummeting property values continue to batter the broader office market, with a turnaround nowhere in sight.
Smart Humans Podcast
In the latest episode of Smart Humans, Slava Rubin talks with Hiive CEO and Founder Sim Desai about trading private securities and launching a new private market index.
Explore
More stories worth checking out
📝 Top Stories
Revolut’s $45 billion valuation: The crypto-friendly digital bank had a big week, receiving a UK banking license, and reportedly nearing a deal to sell $500 million of employee-owned stock at a $45 billion valuation, as the business is on pace to double year-on-year.
Retail interest in sports ownership: Financial advisors are increasingly offering their clients the ability to invest in private equity firms that buy ownership stakes in sports teams, as valuations continue to grow.
Secondary market heats up: Global secondary deals hit a record $72 billion in the first half of the year, as liquidity issues are forcing investors to sell shares in venture capital, private equity, and other private funds, often at a discount.
⚾ Collectibles
(Twitter - @ericwhiteback)
X-Raying sealed boxes: Videos have surfaced of people using CT scanners and X-ray technology to look inside sealed boxes of high-end trading cards, a development that could upend the market for so-called “sealed wax” if there is a belief that all the boxes with good cards have already been peeked through and opened.
The National: Over 100,000 people are expected to attend this week’s National Sports Collectors Convention in Cleveland, the biggest event of the year for the hobby, and long lines everywhere are an indication that interest is higher than ever.
PSA & Comic Books: The dominant sports card grading company is adding a comic book grading division in 2025, coming after market leader CGC, which currently holds over a 90% market share.
🪙 Crypto
Kamala’s crypto stance: With the shakeup in the presidential race leaving Kamala Harris as the presumptive democratic nominee, it’s worth looking at whether she would be better for the crypto industry than President Biden - and for now, crypto bull Mark Cuban and other industry leaders think so.
Bitcoin 2024 conference: Former President Donald Trump and other lawmakers are heading to Nashville this weekend to speak at the largest Bitcoin conference in the world, highlighting how important the cryptocurrency has become in the political landscape.
Blockchain money-market fund: Coinbase is planning to create a new tokenized money-market fund, which would continue the trend of putting real-world assets on chain to increase transparency and liquidity.
💵 Private Credit
Private credit on Solana: Alternative investment manager Hamilton Lane became the first asset manager to put a private credit fund on the Solana blockchain, a development that could lead to greater accessibility and liquidity for private credit investors.
🏡 Real Estate
Luxury remains a bright spot: While sales of new and existing-homes dropped in June, sales of homes worth $1 million or more increased, highlighting the disconnect between the luxury market and the market overall.
Retail in high demand: Retail vacancies dropped to 5.3%, a two-decade low, as higher-end shopping centers thrive and construction remains at historic lows.
Foreign buyers pulling back: Foreign investment in U.S. existing homes dropped by 21.2%, due to a strong U.S. dollar, decreased inventory and higher rates.
🚀 Venture Capital
Meta’s new AI model: The release of Llama 3.1, an open-source model, was met with considerable attention, as it outperformed OpenAI’s ChatGPT-4o and Anthropic’s Claude 3.5 Sonnet on a number of metrics. CEO Mark Zuckerberg wrote that he believes open-source is the future of AI, a shot across the bow of his competitors.
Web3 funding rises: VC funding for Web3 startups hit $2 billion in Q2, a modest gain from Q1’s $1.8 billion and a substantial gain from Q4 2023’s $1.4 billion.
Non-AI startups: While it sometimes appears that all venture is AI-focused, only about 20% of rounds and 23% of funds - excluding xAI’s outlier $6 billion raise - went to the sector over the past two months, so just because a startup isn’t related to AI doesn’t mean it’s not worth looking at.
(Fast Company)
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