Morning Reads



  • Carl Icahn is shorting GameStop (GME) shares. Bloomberg
  • Clayton Dubilier & Rice in discussions to invest $1 bln in Pegasystems (PEGA). Bloomberg
  • Cryptocurrency company Genesis Global Capital needs to raise cash (BTC, BITO, MSTR, COIN, HOOD, RIOT, APO). WSJ
  • China will fine Ant Group $1 bln (BABA). Reuters
  • FTX has $1.24 bln cash balance (BTC, BITO, MSTR, COIN, HOOD, RIOT). Bloomberg
  • KKR (KKR) and EQT (EQT) among final bidders for Global Switch. Bloomberg
  • TSMC (TSM) could produce Tesla (TSLA) self driving car chips. Digitimes







Icahn vs. GameStop?

Billionaire investor Carl Icahn is said to have a large short position in GameStop (GME) that he started to accumulate in January 2021 at the height of the meme-stock frenzy for the video game retailer.

Icahn began building his short when GameStop neared its high of $483 in January 2021 and still has a large bet that the retailer's shares will drop, according to a Bloomberg report, which cited people familiar with the matter. The exact size of the position was not known. GameStop's shares are down 71% from their high last year and have dropped 32% this year. GameStop, which announced 4-1 stock split earlier this year, has short interest of 21%.

Icahn, best known as an activist investor who recently disclosed a stake in beverage can maker Crown Holdings (CCK), is faring much better than other funds that shorted GameStop. Former hedge fund Melvin Capital shut down earlier this year at least partly after it was pummeled by the GameStop short squeeze last year.

Icahn is not just betting that GameStop will fall. Earlier this month, he said he still believes that we are in a bear market and doesn't expect inflation to go away in the near term. He also has a short bet against the S&P 500 (SP500) (SPY). (14 comments)

Genesis scrambles

Genesis, the troubled cryptocurrency brokerage that was forced to suspend consumer withdrawals last week in the wake of crypto exchange FTX's implosion, has warned that it may need to file for bankruptcy protection, according to published reports. But the company pushed back against the narrative.

“We have no plans to file bankruptcy imminently,” Genesis said. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”

The initial news shook crypto investors a bit. Bitcoin (BTC-USD) fell below $15,500 to a new 52-week low yesterday before rebounding and is lower this morning. Ethereum (ETH-USD) and Dogecoin (DOGE-USD) are also lower. The possible bankruptcy also underscores how FTX's collapse has sent shockwaves through the wider crypto ecosystem that don't appear to be abating.

Genesis was said to have spent the past few days trying to raise at least $1B in new capital from potential investors amid its liquidity crunch. Binance was included in such talks, people told Bloomberg, though funding has yet to come to fruition. Binance declined to comment on Seeking Alpha's request for comment, and Genesis did not immediately respond. (23 comments)

Iger in action

Disney's (DIS) brand-new (again) CEO Bob Iger is wasting no time after Disney's formal filing noting the executive change - reportedly issuing a company memo that will start to restructure the entertainment giant.

Kareem Daniel, the head of Disney Media & Entertainment Distribution since a high-profile restructuring a couple of years ago, is stepping down, according to media reports - not entirely surprising as he was a key lieutenant for now ex-CEO Bob Chapek.

"Over the coming weeks, we will begin implementing organizational and operating changes within the company," Iger said in a memo to DMED employees, according to various reports. "It is my intention to restructure things in a way that honors and respects creativity as the heart and soul of who we are."

"I’ve asked Dana Walden, Alan Bergman, Jimmy Pitaro, and Christine McCarthy to work together on the design of a new structure that puts more decision-making back in the hands of our creative teams and rationalizes costs, and this will necessitate a reorganization of Disney Media & Entertainment Distribution," leading to Daniel's exit, Iger reportedly wrote. His goal is to have the new structure in place in "coming months."

"Without question, elements of DMED will remain, but I fundamentally believe that storytelling is what fuels this company, and it belongs at the center of how we organize our businesses," Iger added. (123 comments)

Oil output

Crude is higher after a rollercoaster move Monday. Oil futures surged more than 5% midday Monday in reaction to a Wall Street Journal report that OPEC+ is considering a production hike of as much as 500K bbl/day for the cartel's meeting next month.

Saudi Arabia then denied the report, adding the "current cut of 2M bbl/day by OPEC+ continues until the end of 2023," and the United Arab Emirates also said it has not discussed changing the previous agreement. Prices quickly retreated.

Goldman Sachs cut its Q4 oil price outlook by $10 to $100/bbl to reflect reduced expectations for China's demand due to rising COVID-19 cases and the "lack of clarity" on the implementation of the G-7's oil price cap, which takes effect December 5. (16 comments)

Today's Markets

In Asia, Japan +0.61%. Hong Kong -1.31%. China -1.18%. India +0.49%.
In Europe, at midday, London +0.90%. Paris +0.50%. Frankfurt +0.45%.
Futures at 6:30, Dow +0.19%. S&P +0.21%. Nasdaq +0.18%. Crude +0.29% to $80.27. Gold +0.51% to $1748.40. Bitcoin -2.56% to $15,700.4.
Ten-year Treasury Yield -2 bps to 3.79%

Today's Economic Calendar

10:00 Richmond Fed Mfg.
11:00 Fed's Mester Speech
11:30 Results of $22B, 2-Year FRN Auction
1:00 PM Results of $35B, 7-Year Note Auction
1:00 PM Money Supply

Companies reporting earnings today »

What else is happening...

Jim Chanos: Coinbase (COIN) has a business model problem - it doesn't work.

COP27 deal puts U.S., wealthy countries on the hook to pay for pollution.

Tesla (TSLA) reportedly plans to cut prices in China.

Amazon (AMZN) may have considered saving Argo AI self-driving startup.

Adobe (ADBE) tumbles despite upbeat guidance.

Alibaba (BABA), Tencent (OTCPK:TCEHYhit the skids as Beijing's Covid rules weigh.

GSK (GSK) to stop selling blood cancer therapy Blenrep in U.S.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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