Money meltdown
Bill Hwang's financial flameout
Good morning, friends. This is your Stock Market Rundown for May 15th, 2024. Thanks for joining me, once again. Let’s dig in:
TODAY’S TOP STORY: RISK RECKONING
Money manager Bill Hwang was once worth over $30 billion. But after blowing up spectacularly three years ago, he became a footnote in financial history. As he stands trial for conspiracy and fraud over the coming weeks, the question will be: is he a criminal?
Hwang has a checkered history. After being mentored by legendary hedge fund manager Julian Robertson, he launched his own fund. But it shuttered in 2012 amidst accusations of insider trading and fraud.
After such a faceplant, many would have pursued another line of work. Not Hwang: he set up Archegos Capital Management as his family office, and dove right back into aggressive trading.
Prosecutors charge that he illegally manipulated the market, making trades designed to artificially pump the prices of a handful of stocks. Eventually, the stocks deflated and his fund blew up, incinerating billions for both Hwang and the banks who loaned him money.
Hwang’s defense? He’s just a failed trader, not a scammer. If banks lost billions financing his trades, their own risk management departments must’ve been asleep at the wheel. We’re talking about some of the world’s most sophisticated financial institutions, like Credit Suisse and Morgan Stanley—these guys didn’t just fall off the turnip truck.
With Hwang facing 20 years, his freedom hinges on his ability to convince a jury that he didn’t lie, cheat or steal… he’s just a schmuck who gambled big and lost.
SO WHAT ELSE IS GOING ON?
Consumers flipped their preferences from “plant-based” to beef-based faster than you can flip a burger on a hot grill. Beyond Meat posted results for the quarter that were as dry and tasteless as its patties, with revenue plummeting double digits.
Dating app Bumble reported growth in paying users partly thanks to an app refresh that lets guys make the first move. You’ll never lose money betting on male thirstiness.
Scrooge McDuck isn’t swimming in a vault of money this quarter: Disney’s stock dropped as it reported weak box office and its TV business stumbled.
TikTok is suing to block the law aimed at banning it from the US. They're not just fighting for free speech—they're battling to protect every American's right to watch 10-second videos of cats falling into a bathtubs.
That’s me signing off for today, folks. Let's meet again tomorrow morning for more of the same. Yours in capitalism, The Axe
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