Alameda Research $1.1B+ in new creditor claims and FTX identifies $3.2B in transfers to founders and insiders
Top stories today: 1) Alameda has $1.1B in new creditors, 2) FTX gave $3.2B to insiders, 3) Swiss central bank lends $54B to Credit Suisse, 4) Government looking to auction SVB and Signature by Fri, and 5) Microsoft AI event today at 11 AM ET.
Hi, and welcome to today's Bay Area Times daily newsletter. Top stories today: 1) Alameda has $1.1B in new creditors, 2) FTX gave $3.2B to insiders, 3) Swiss central bank lends $54B to Credit Suisse, 4) Government looking to auction SVB and Signature by Fri, and 5) Microsoft AI event today at 11 AM ET.
0. Data and calendar
All values as of 3 AM PT / 6 AM ET, other than S&P500 close (1 PM PT / 4 PM ET).
All times are ET.
1. Alameda Research has at least $1.1B in new creditor claims
This is according to legal filings just published by the new FTX management on Kroll, where Alameda Research and its affiliates detailed their assets and liabilities. Below, we summarize the findings from Alameda Research Ltd, the main holding company of Alameda.
Because FTX had already disclosed that they found $6.1B in liquid assets, including over $2B at Alameda, here we focus on the liabilities part:
$950M of these liabilities are secured claims
A Google Sheets with the full accounting can be found here.
A previous FTX filing reported $6B in assets and $11B in non-Alameda liabilities
With $12B+ in total liabilities, this would suggest a recovery rate of around 50%
The math behind it: $6B assets / $12B liabilities = 50%
This excludes: 1) around $1B of these assets might go to the secured creditors first, 2) legal and other costs (could total 10% of total assets), 3) FTX has $5B in illiquid assets that could become money (e.g. $500M investment in Anthropic), and 4) liquid asset prices could fluctuate.
2. FTX also identified $3.2B in transfers to founders and insiders
FTX's new management will seek to get some of this money back. Previously, Bankman-Fried had said that most of this money went to business investments and donations, although his statements could have been false. - Press release
In related news, SBF is asking FTX to pay his criminal defense bills. We don't expect the judge to grant him that, especially as he and FTX did not have a formal D&O agreement. - The Block
3. Swiss central bank to lend up to $54B to Credit Suisse
Soft bailout that will likely make central bank money: When central banks lend money to troubled banks, in theory, they're lending good money with bad collateral. However, the act of the central bank "saving" the bank by itself improves market conditions and collateral prices, which usually leads to the bank not failing, paying back the loan, and the central bank profiting. That is what generally happened in 2008, and the baseline scenario is a similar situation here. - WSJ
Top shareholder says bank is fine: "If you look at what even the Swiss National Bank said yesterday with all the ratios, they’re all sound, everything is fine. I don’t think they’ll need more capital." - Ammar Al Khudairy, chairman of Saudi National Bank. - Bloomberg
Credit Suisse's stock bounced after falling 38% in the week
4. Meanwhile, U.S. regulators want to sell SVB and Signature Bank by Friday
Only existing banks can bid. Say good-bye to Apollo and other PE groups.
Any buyer of Signature must give up all crypto business at the bank. - Reuters
Fun fact: SVB's $9.5B venture unit included large investments in Andreessen, Sequoia
In related news...
First Republic Bank is also exploring options, including a sale.
How Goldman's plan to buy SVB crumbled.
FedNow, Fed's new instant payments system, to launch in July.
Barney Frank says he joined Signature to make money, liked their housing programs.
5. Today at 11 AM PT: Microsoft AI event, where GPT-4's integration with 365 is expected
AI is coming to 365: Word, Excel, PowerPoint, etc. As GPT-4 was released on Tuesday, we expect this event to show how Microsoft uses the new LLM to bring AI features to Microsoft's 365 suite. - LinkedIn event
Hopefully, we will see some launches today. We hope Microsoft delivers before Google, whose Docs and Gmail AI features were released yesterday, but only in closed beta.
6. Other headlines
TikTok is threatened with U.S. ban if Chinese owners don't sell stakes.
Foxconn to start manufacturing AirPods in India, plans $200M factory.
Adobe's revenue rises 9% to $4.66B, net income $1.25B.
Stripe raises $6.5B+ at $50B valuation.
LinkedIn expands its generative AI assistant to ads and profiles.
PwC signs contract with AI lawyer Harvey.
SpaceX now offers global roaming (Starlink Roam) for $200/mo.
Interview with OpenAI's co-founder: "we were wrong" on open-source.
Interview with OpenAI president Greg Brockman on what's new with GPT-4.
OpenAI allowed an AI safety group to assess GPT-4 risks before launch.
Microsoft rationing AI hardware for some teams as it prioritizes Bing and GPT.
How AI surpassed virtual assistants like Siri and Alexa, who don't use LLMs.
Copyright Office: AI works that reflect author's "mental conception" may be protected.
Economy shows signs of slowing down: retail sales, inflation.
Ryan Reynolds-backed Mint is bought by T-Mobile for $1.35B.
Buzzfeed asks reporters to write more stories, as company nears bankruptcy.
U.S. seizes $46M+ connected to alleged money launderer ChipMixer.
Gensler again proposes that proof-of-stake tokens are securities.
Cathie Wood raised $16M for new crypto fund.
Guo Wengui arrested, charged with multiple schemes totaling $1.4B, including crypto.
U.S. government using crisis to choke off crypto access to banks: Brian Brooks.
Washington and more
Trump grand jury juror: "it's gonna be massive", suggesting criminal indictment.
Russia authorized U.S. drone strike, say U.S. officials; unclear whether Putin knew.
New Jan. 6 footage shows Sen. Grassley being evacuated right next to rioters.
Mike Lindell says his company had to borrow $10M to keep lights on.
U.S. maternal mortality hits highest level since 1965.
Netanyahu not yet welcomed at the White House.
7. Interesting tweets, memes, and images
Look what VCs did now! 😱 https://t.co/d5cFuL8r4m
— David Sacks (@DavidSacks)
Mar 16, 2023
NEW: The numbers are in for much the top execs at FTX made. Sam Bankman-Fried walked away with $2.2B before the collapse. What really blows our mind is how little money Caroline got paid for how much risk she took. It seems almost offensive. Crazy!
— Autism Capital 🧩 (@AutismCapital)
Mar 16, 2023
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