Animal Communicator

Katie Greifeld paid $75 for a 30-minute FaceTime animal communicator session covering her cat and her horse Gus via an astral plane connection. The communicator reported the cat believed Greifeld was sick and deteriorating rather than pregnant, while Gus allegedly knew about the pregnancy from day one and was proud. Matt Levine noted the cold reading critique applies because the communicator described the horse as outgoing and the cat as nervous, matching their already-known personalities. Greifeld framed the session as entertainment comparable to ETFs as performance art but also said she fully believes it.

The Subversive All Season Sports ETF filing proposes hiring a professional gambler to make sports bets on Kalshi, wrapped into an ETF structure. Levine and others characterized Kalshi and Polymarket as sports betting sites that everyone pretends are financial institutions. The SEC has categorized sports gambling and prediction market ETFs as novel products and opened them for public comment, with prediction market ETFs currently in regulatory purgatory. A Bloomberg Intelligence note titled What's the Fun in a Prediction Market ETF captured the view that sports gambling ETFs are less appealing to actual bettors because they outsource picks rather than letting bettors make their own decisions. Election prediction market ETFs are binary and time-limited, going to zero or doubling on outcome, while the Subversive sports ETF is designed to roll indefinitely so the manager can keep it alive. Levine wrote a column framed as an SEC comment letter about the sports gambling ETF, and someone actually filed it with the SEC.

South Korean regulators temporarily halted new listings of single stock leveraged ETFs, increased mandatory investor training to three hours from two hours, raised the minimum trading lot size to 20 units from one unit, and lifted the minimum deposit requirement. Approximately 70 percent of the South Korean stock market is composed of Samsung, SK Hynix, and leveraged single stock ETFs on those two companies. Leveraged single stock ETFs were described as perfect distilled margin debt because they mechanically borrow more when the stock rises and sell when it falls, concentrating volatility. A speaker found it hard to imagine the current SEC taking similar steps, noting the US operates on a disclosure-based system where issuers outline risks and investors bear responsibility for losses. FINRA considered knowledge checks on complex products roughly four years ago focused on leveraged single stock ETFs but dropped the idea after receiving many passionate letters opposing it.

Strategy, formerly MicroStrategy, is a Bitcoin treasury company with approximately 1,500 employees and an underlying software business that has been public for 25 years. Its business model involves issuing stock at a premium to buy Bitcoin and borrowing against Bitcoin at high floating rates, but that virtuous cycle has stopped functioning as Bitcoin declined and the premium collapsed. Strategy's floating-rate preferred stock called STRIFE was issued at approximately 9 percent, has risen to 12 percent, and now trades around 85 cents on the dollar rather than at par. Strategy abandoned defending par and instead plans to build a cash reserve to demonstrate dividend payment capacity, now holding enough cash to cover dividend payments for approximately two years. Strategy has also begun selling Bitcoin, reversing its famous policy of only accumulating it. One analyst noted Strategy only needs to consider risks associated with its debt when Bitcoin approaches 8,000 to 10,000 dollars, and that management splits time roughly 60-40 or 50-50 between the Bitcoin treasury operation and the software business.

SpaceX IPO shares were priced at 135, a number Levine said Elon Musk apparently made up rather than one arrived at through conventional IPO marketing, and the stock immediately traded up approximately 20 percent. By the time of recording the stock had fallen below the IPO price to around 132, which Levine described as a traditional source of shame and failure. SpaceX filings state that 100 percent of shares outside the 5 percent sold in the IPO are subject to lockups, with expirations beginning after earnings expected in early to mid-August. The shares set to be released after earnings represent more than the total shares sold in the IPO, more than doubling the available supply. Stock had been rising partly because hedge funds were buying in anticipation of index fund demand from Nasdaq funds, but that tailwind is now over and the next major supply and demand event is the lockup release. Whether insiders actually sell depends on price and individual psychology, and a rocket engineer sitting on 30 million dollars of SpaceX stock might take money off the table at first opportunity, though SpaceX employees may have different risk preferences than typical IPO participants.