No One Could Have Predicted This!

No One Could Have Predicted This!

In a move no one could see coming (sarcasm), Coinbase is also being sued today by the SEC for failure to register as an exchange and broker. We can only assume that good guy Gary Gensler loves the media spotlight and Coinbase short sellers, because why would you space the announcements over two days instead of doing it all at once?

We’re not lawyers but it seems Coinbase will have difficulty claiming the coins are not securities when they also operate Coinbase Ventures that invests in blockchain startups to get pre-sale tokens which are then sold to the public on their platform.

The Howey Test is pretty clear:

(1) an investment of money, (2) in a common enterprise, (3) with the expectation of profit, or (4) to be derived from the efforts of others.

Ex:

Coinbase Ventures invested in ethereum L2 Polygon ($MATIC), operated by Polygon Labs which employs a large team to grow the Polygon ecosystem which increases the value of the native token.

The lawsuit includes tweets from Polygon founder discussing number go up technology.

We’re not sure how you can possibly spin that any other way, but we’ll be watching closely to see how it plays out!

Someone who also needs their own spin doctor is Cathie Woods of ARKK.

$COIN is the fifth largest holding in the portfolio with an average cost of $254.65.

Cathie misses the entire AI rip with NVDA only to get stuck bagholding COIN which may not be able to survive the lawsuit because operating a US compliant crypto exchange means you’re stuck with spot only trading of BTC and ETH.

In other news that no one could have seen coming the PGA Tour and LIV Golf are merging because ultimately monopolies make more money and everything is rigged.

SPY Outperformance

The S&P 500 up 11% YTD entered a new bull market on Monday, but the gains are due to weighting of big tech names like $AAPL, $MSFT, and $NVDA. If you equal weight all of the stocks in the index, we’d be up 1.1% for the year.

Looking further the outperformance of market-cap weighted vs equal weight is the highest level ever based on data that started in 1990.

Will the tech’s rising tide raise all of the ships or are we headed down to goblin town?

According to LPL Financial:

The current share of S&P 500 stocks above their 200dma… 38%.

Other news:

Short-sellers Hindenburg Research dropped a report on Tingo Group ($TIO) which apparently does not actually engage in… checks notes… agriculture financial technology in Africa. The stock is down 57.21%.

Park Resorts & Hotels ($PK) stopped making payments on the 1,921-room Hilton Union Square and the 1,024-room Parc 55 both in San Francisco. Instead of working with the lender on securing better terms for the $725 million loan, they’re basically saying fk it we’re fed up with this shit and just handing them over to the bank. Maybe SF is the next Detroit. $PK is up 2.03%

Christian financial guru Dave Ramsey is getting sued for promoting a “Timeshare Exit Team” a scam that was supposed to help you exit the scam timeshare you purchased. Ramsey failed to mention he was getting paid $450,000 a month to promote the service. Nothing like dumping on your followers.

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