Ramy: God, Free Palestine!

Arab-Muslim comedian Ramy Youssef hosted a "spiritual" SNL last night with ongoing Ramadan and Easter Sunday coming together. Youssef gave a funny and heartfelt monologue, riffing on the Arab-American experience, politics, and prayer. He ended the segment by asking God to "free the people of Palestine" and "free all the hostages." His plea for the liberation of Gaza and West Bank received rapturous applause from the audience as polls show the majority of Americans (55%) oppose Israeli action in Gaza. Among Democrats it's closer to 80%. Ya habibi!

There was also a funny bit on Ramadan Ozepmic:

Ilhan Omar: Lost in Translation

Ilhan Abdullahi Omar made history in 2019 when she became the first Somali American in the U.S. Congress and the first woman of color to represent Minnesota. She was also one of the first Muslim women in Congress along with Michigan's Rashida Tlaib. Both are core members of the "Squad", an informal group of progressive Democrats, who are a favorite target of many Republicans. The latest brouhaha flared up earlier this after a clip of Omar making a speech in Somali went viral on X. In it she was purportedly bragging about advancing a Somalia First agenda in Congress. As context, Omar was expressing support for the Somali government in its dispute with a breakaway republic within Somalia, called Somaliland, that is not recognized by the U.S. 

The meltdown from the right was swift and predictable. Fellow Minnesotan and GOP Majority Whip, Tom Emmers, demanded Omar resign in disgrace. Florida Gov. Ron DeSantis said that she should be expelled from Congress, stripped of her citizenship and deported. Naturally, Majorie Talyor Greene called her words treasonous and sought to censure her. Except...that Omar never said any such thing. The video of Omar’s speech was circulated on social media with distorted English captions. 

As per the Intelligencer, the "captions made it appear that Omar had said that she and her audience were “Somalians first, Muslims second,” and that “The U.S. government will only do what Somalians in the U.S. tell them to do. They will do what we want and nothing else. They must follow our orders.” 

However independent reviews by the Minnesota Reformer and the Minneapolis Star Tribune found significant differences between the videos’ claims and what Omar actually said. 

Per the Star Tribune, that part of Omar’s speech actually went as follows: “My answer was the U.S. government will do what we tell the U.S. government to do. We as Somalis should have that confidence in ourselves. We live in this country. We pay taxes in this country. It’s a country where one of your own sits in Congress. As long as I’m in Congress, no one will take Somalia’s sea. And the United States will not support other people to rob us. Rest assured, Minnesotans. The woman you sent to Congress is aware of you and has the same interest as you.”

In fact, Omar's position on the issue of Somaliland is in line with U.S. policy. So, there shouldn't have been any controversy. But if you're Somali, Muslim, and/or both, things are always a little more complicated. Best for Omar keep her speeches in English at all times...so nothing gets lost in translation.

The Birth of American Exceptionalism

General Washington rousing the troops in 1777. One of SNL's best skits in a long while.

Mean Girls 2024: Stanley Cups are So Fetch!

Tina Fey's 2004 movie Mean Girls is considered a classic for its authenticity of teen culture, specifically teen girl culture. It astutely examined the rigid social hierarchy of secondary school filled with cliques, drama, and competition while giving us memorable lines like "that was so fetch"—Gretchen Weiners, "If you’re from Africa, why are you white?”—Karen Smith, and "...you're, like, really pretty. So, you agree? You think you're really pretty?"—Regina George. For many girls, life—at least for a time (perhaps more?)—is all about "Queen Bees and Wannabees".

Now, The Cut reports middle schools across the U.S. have been overtaken by Stanley Cup fever; and your status in the intricate social hierarchy of tween/teen girls is being dictated by whether or not you own an overpriced ($45-$55) 40z water bottle. Made by a 110-year old Seattle-based company, the Stanley Quencher has gone mega viral and is bringing overnight lines and mayhem to stores like Targets and Walmart. The sudden fame has turned the company that was generating about $70 million a year in revenue in 2019 into a $750 million business.  

When Stanleys are suddenly so fetch, they are a must-have. “Every day when I get into school at like 7:45 a.m., everybody comes over to me like, ‘Oh my God, I like your Stanley!’ or ‘It’s so cool, I want a Stanley just like yours!’” [said Dahlia], who is in eighth grade...“It makes me feel like I’m famous and being swarmed by paparazzi.”

On the other hand, you can be mercilessly banished to the Out Krowd if you have the wrong drinking receptacle. In a viral TikTok a mom said her daughter was made fun of for having a Walmart dupe. Another woman said her niece was "bullied by her classmates for bringing an off-brand version of the cup...basically the exact same product, minus the Stanley logo."

Of course, such dynamics aren't new. Studies find Mean Girls to be a distinct youth subculture with marked roles and positions: Queen, sidekick, banker, torn bystander, wannabees, and target. Particularly among girls, it can be characterized by social or relational aggressive behavior: back-biting and manipulation that can often be quite vicious. As protagonist Cady Hebron famously observes in the movie "in girl world, all fighting had to be sneaky." Such behaviors induce anxiety and stress that can take a significant toll on teenagers' mental health, with the CDC reporting 1 in 5 students feeling being bullied last year.   

What ya gonna do? To quote the Girl Who Doesn't Go to North Shore “I wish we could all get along...bake a cake filled with rainbows and smiles and everyone would eat and be happy.” More realistically, we will just have to shell out $50 for something our kids don't really need to keep them happy.  

NFTs: The Final Chapter?

Back in the surreal days of 2021 a restless population, flush with pandemic stimulus and speculative fervor, discovered...non-fungible tokens or NFTs. They were unique cryptographic tokens that exist on a blockchain and cannot be replicated--whatever that meant. But who cares? Have money, will play, right? NTFs were irreverent and fun, as exemplified by the sale of a set of Bored Apes NFTs for more than $24 million in Sotheby's "Ape In!" online auction. The NFT craze generated over $40 billion in trading volume in 2021, peaking with artist Beeple's digital work--The First 5000 Days--selling for $69 million! 

Good investments? Umm, you probably know where this is going. As per the Guardian, "a new report by dappGambl that reviewed data from NFT Scan and CoinMarketCap, 69,795 out of 73,257 NFT collections have a market cap of 0 Ether, leaving 95% of those holding NFT collections – or 23 million people – with worthless investments." 

Not surprising then that people are having regrets and looking for someone to blame. In addition to a long list of celebrity NFT promoters like Paris Hilton, Gwyneth Paltrow, Kevin Hart, Snoop Dogg, Serena Williams, Madonna, Jimmy Fallon, Steph Curry, and Justin Bieber, Sotheby's is also apparently at fault. The famous auction house "has been named as a defendant in a lawsuit filed by investors who regret buying Bored Ape Yacht Club NFTs that sold for highly inflated prices during the NFT craze in 2021. A Sotheby's auction duped investors by giving the Bored Ape NFTs "an air of legitimacy"...the class-action lawsuit claims." Sure, no one was trusting Hilton or Curry to be NFT experts, but Sotheby's was supposed to do some vetting? We dunno know...Sotheby's does have an authenticity guarantee but that was not an issue here. If people want to bid something up, it's almost by definition not an auction house's job to interject. But there's a twist...one of the buyers in the auction, it now turns out, was FTX. Does that make a difference, even though no one knew at the time? Seems like a stretch.

That's What She Said

The second Republican debate happened on Wednesday, if anyone even cared. With Trump, who has a nearly unassailable 40-point lead in the polls, absent again, it was a largely uneventful affair. Expect for maybe former South Carolina governor Nikki Haley's zinger about famously annoying candidate Vivek Ramaswamy, who shined in the first debate. On the topic of TikTok, Nikki snapped at Vivek with sincere disdain: “Honestly, every time I hear you, I feel a little bit dumber for what you say”. Burn.

But wait...here's what Nikki said about Vivek in a blurb for his 2021 book, Woke Inc. that helped put him on the political map in the first place: "His combination of honesty, intellect, and foresight are exactly what we need..."

Nikki apparently changes her mind a lot, but that's politics!

Instacart: The Early Bird Gets the Worm?

The IPO market has largely been dormant for the past 18 months. However, hopes of a revival were kindled recently as several high-profile companies went public in the last two weeks, including pandemic darling Instacart.

 

                                         Source: stockanalysis.com. *Includes REITs, SPACs, closed-end funds, ADRs, 
                                         banks, limited partnerships and trusts, **Thru 9/22/2023.

The grocery delivery service's IPO on Sep 19 was priced at $30, valuing the company at ~$10 billion. That was far below its (infamous) March 2021 funding round which valued the company at astonishing $38.5 billion!! Oh, 2021. Now, $30/share seems to be a fair price according to valuation guru Aswath Damodaran in a detailed analysis of Instacart's business model. And the market agrees? After a strong debut (gaining 43% on its first trading day), Instacart fell back to its IPO price within a week.

Regardless, Instacart was estimated to have raised $660 million from its IPO, with all three of the company's co-founders cashing in: "Brandon and Maxwell Leonardo sold 1.5 million of their 7.8 million shares, pocketing about $43 million each, while former CEO Apoorva Mehta sold 700,000 of his 28.9 million shares, netting $21 million. Mehta, a great example of entrepreneurial grit and perseverance, is now worth an estimated $1.3 billion. Prettay, prettaay, good. So, who were the other winners from Instacart's IPO, if any?

The chart above (click to enlarge) shows Instacart had a lot funding rounds (up to Series I) and many investors. But if you didn't get in early, you didn't do too well. Series F and later investors lost money outright, but it gets even worse if you consider relative performance. As this table (click to enlarge) from Damodaran's analysis demonstrates: 

Source: Aswath Damodaran (aswathdamodaran.substack.com)

As per Damodaran, the seed capital providers Khosla, Canaan and Y Combinator will have earned a 55% compounded annual return on their original investment...well in excess of the S&P 500's annual return of 13% over the same period. Or put it another way that's an 80x (gross) return vs 3.4x for the S&P 500. Nice! If the typical VC seed investment in 2012 was about $600-$700K, then that's a potential gain of around $50 million! Silicon Valley's pre-eminent VC firm, Sequoia, will have done even better, earning 62% on its 2013 Series A investment of $8 million as per the WSJ; that's a potential gain of over $600 million--cha ching!! Andreesen Horowitz ("a16z") will have earned a 29% annual on its 2014 Series B investment (on a $15-$20 million investment, that would be a potential gain of $100-$150 million). 

After that things start to unravel...all investments in Instacart made after 2015 have underperformed the S&P 500 significantly, and the NASDAQ by even more. In fact, any investment made after 2018 generated an (unrealized) dollar loss! Hedge fund crossovers, Tiger, Coatue, and D1 underperformed but so did established VCs like DST Global and General Catalyst, who invested $75 million and $50 million, respectively. The worst off possibly was T. Rowe Price, whose growth fund invested $86 million in 2021. That investment has lost more than half of its value. 

To be sure, firms like Sequoia have invested in multiple rounds, taking some of the shine off their early perspicacity. But the success of those early rounds more than makes up for the losses of the later rounds. Sequoia, in fact, invested $300 million across all funding rounds prior to Instacart's IPO and currently owns more than 15% of the company; its stake is estimated to be worth over $1.5 billion. Interestingly, perhaps aware that a successful Instacart IPO was needed to help thaw a frozen IPO market for their other portfolio companies, Sequoia and other VCs agreed to buy up to $400 million worth of shares sold in Instacart's IPO, accounting for ~66% of the total proceeds. Unless they immediately sold, they are essentially holding those shares at cost less than a week later. 

Ultimately, Instacart's IPO was an expensive lesson in market timing and herd mentality. Yes, the early bird does get the worm...but habit rules the unreflecting herd. Invest carefully.