Big Take Asia: CEO's Fakery Sparked $300 Million Crash
In late 2018, five years after launching fish-feeding company eFishery, Gibran Huzaifah found himself all out of cash. To save his business, the CEO started plugging fake numbers into financial reports. The brighter picture drew hundreds of millions of investor dollars. But his house of cards was doomed to collapse. On today's Big Take Asia Podcast, host K. Oanh Ha talks to Bloomberg's David Ramli about the fall of eFishery and what it says about the risks of venture capital investing.
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Musk-Trump Breakup Exposes Cracks in Wall Street's Meme Casino
(Bloomberg) -- It took less than a day for the great Donald Trump-Elon Musk split to reshape debates over billionaire power and influence in American capitalism. Next Stop: Rancho Cucamonga! ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Where Public Transit Systems Are Bouncing Back Around the World US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Trump Said He Fired the National Portrait Gallery Director. She's Still There. At another level, the breakup was a reminder of something else: the perils of personality-driven investing, a growing and lucrative business for the Wall Street bankers cranking out, rapid-fire, a never-ending array of new financial products. Few have done more to fuel these gambling spirits than the president and the world's richest man. In a matter of hours, a loosely connected web of Musk-linked trades — and a few tied to Trump — cratered as the public feud escalated. Dogecoin sank 10%; a publicly traded fund dangling SpaceX exploration for retail consumption slid 13%; leveraged bets amping up returns on Musk-related ventures lost a quarter of their value or more. Shares of Trump's media company slid. The spat — ignited by the deficit-expanding tax bill threatening Tesla's electric-vehicle subsidies — cooled on Friday and asset valuations steadied. But by then, investors had gotten the message loud and clear. 'You can go from being an incredible beneficiary one moment and then being bludgeoned the next,' said Peter Atwater, founder of Financial Insyghts. 'Anytime you are investing in something that is as crowded as these Elon Musk-related vehicles, you are going to be either the beneficiary or the victim of his standing.' The breakup drama was backdrop to a comparatively sleepy week in regular markets. The S&P 500 ended the week 1.5% higher, while the extended FANG index — which doesn't include Tesla — hit a record. The dollar touched its lowest level in about two years. Ten-year Treasury yields jumped more than 10 basis points this week, as Friday's jobs data eased concerns about an imminent economic slowdown. But for the casino crowd on Thursday, things got ugly. These investors aren't just trading stocks or crypto, they're paying for proximity to dominant personalities. Tesla is a financial avatar for Musk's ambitions. Trump's political resurgence reverberates across his media company, his fast-expanding crypto empire and MAGA-theme products across the broader industry. Each post, endorsement and headline is a chance to pull capital into the retail investment machine. It hasn't just drawn in risk junkies — it's built an entire product architecture, from speculative bets to more conventional funds tied to the fortunes of billionaire Musk. Vehicles like Baron Partners Fund and the Ark Innovation ETF got caught up in the selloff before markets rebounded on Friday. Tesla's sharp rout — its worst week since 2023 — was fueled by projections that the company faces a $1 billion hit to full-year profit, if it loses a tax credit from Trump's bill. Meanwhile, the president's businesses pushed deeper into the financial ecosystem. His media company was one step closer to launching the Truth Social Bitcoin ETF, the latest in a string of crypto-linked assets and 'MAGA'-themed investment vehicles. For those with the nerve to dive into the newfangled, the gains have been eye-popping at times. A closed-end fund with Space-X exposure, Destiny Tech100 Inc., surged about 500% in just a month after the Nov. 5 election. Dogecoin went from 15 cents to above 43 cents in November, when Ark surged by 26% in less than two weeks. Speculative spirits have run high since the pandemic but soared anew after Trump buddied up with Musk on the campaign trail and won the White House, backed by the $250 million the Tesla founder spent on the election. The meme ethos was cemented when Musk's program to cut government spending took its name from a crypto token born as a canine-themed joke. 'I put him in the separate category of the Zeus of personality cults, beyond anything that has ever happened,' said Jay Hatfield, CEO of Infrastructure Capital Management. 'We've never had anybody running a major company like him.' The result has been a speculative spasm that, until this week, was often insulated from old-school markets convulsed by Trump's on-again-off-again tariff threats. An element of the craze that infuriates Wall Street's old guard — the near-impossibility of forming a valuation case around things like crypto tokens and public vehicles for private holdings — proved a virtue at a time of rampant economic uncertainty. 'Retail traders — the bro trade component of retail — they've never really cared much about fundamentals,' said Dave Mazza, Chief Executive Officer at Roundhill Investments who in February launched a Tesla-focused product. 'These folks really believe in the narrative on stocks like Tesla and Palantir Technologies Inc. Some of these names are really dependent upon a dream premium and not what they actually do for business.' Another case in point: 16% of ETFs launched this year offer single-security strategies that use either leverage or options overlay, according to Bloomberg Intelligence's Athanasios Psarofagis. That's a record. Many target retail investors who trade aggressively, take on higher risk, and use them for dip buying. 'The rise of degen leverage and derivative products on the highest profile stocks makes a mockery of the idea that the market is 'allocating capital' in any rational way,' says Dave Nadig, an ETF industry expert. 'It's immensely profitable. That's why very few people are even suggesting there are any issues in ETF land.' --With assistance from Vildana Hajric and Isabelle Lee. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Robinhood Extends Rally as Speculation Over S&P 500 Inclusion Grows
(Bloomberg) -- Robinhood Markets Inc. shares extended gains into a sixth straight day as investors speculate that the online brokerage could become the latest firm to earn a coveted spot in the S&P 500 Index. Next Stop: Rancho Cucamonga! ICE Moves to DNA-Test Families Targeted for Deportation with New Contract Where Public Transit Systems Are Bouncing Back Around the World US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Trump Said He Fired the National Portrait Gallery Director. She's Still There. Wall Street firms including Bank of America Corp. and Barclays Plc have called the company a top candidate to join the benchmark, a distinction that would spur passive funds to snap up its shares. The rebalancing is set to be announced after the close of regular trading Friday. Robinhood shares rose 3.3% in the session, bringing their gain to 17% over six trading days. 'It does seem like the speculation about the stock being included in today's S&P 500 announcement is having the bigger impact,' said Matt Maley, chief market strategist at Miller Tabak + Co. 'With so much money invested in index funds and index ETFs today, the stocks involved will rally no matter what.' Ares Management Corp., AppLovin Corp., and Tradeweb Markets Inc. are among other companies that analysts have flagged as possible additions. Barclays analyst Benjamin Budish said the S&P 500 has added an average of 1.5 new companies in the June quarter, either through additions or promotions from its other indexes. Fellow new-finance player Coinbase Global Inc. received a dramatic boost when its inclusion was announced last month. The stock jumped 24% in the next trading session on its way to a 34% weekly gain. Robinhood, meanwhile, has jumped more than 100% this year and, on Tuesday, closed at a record for the first time since 2021. 'Stocks selected for index inclusion typically experience 7%+ gains into the first day of trading,' Budish wrote in a note to clients. 'However, the stocks appear to sell off by about 1.4% on average in the first week following index inclusion, and are down about 1% in the following 4 weeks.' Other stocks linked to cryptocurrencies also advanced Friday as US labor data boosted appetite for risk and lifted digital tokens. Coinbase rose 2.9%, while Bitcoin was trading above $104,000. --With assistance from Monique Mulima. (Updates shares throughout, Bitcoin price in final paragraph.) Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Is Elon Musk's Political Capital Spent? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Sign in to access your portfolio
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Elon Musk predicts a recession this year. 8 sneaky signs we actually could be headed for one
Elon Musk said yesterday he predicts a recession for later this year, a call many executives have made since President Donald Trump implemented his tariff regime. The threat to business activity has also caused concern about a potential recession. Some consumer behaviors can indicate when a recession might be on the way. Amid Elon Musk and Donald Trump's mudslinging on Thursday, the Tesla CEO said the president's tariffs 'will cause a recession in the second half of this year.' Musk could be on to something. Other executives have had the same idea for a while, ever since President Trump instituted sweeping tariffs in early April. While he later put the highest rates on pause, risks remain. Survey results released by Chief Executive in May showed 46% of CEOs forecast a recession or slowdown in the next six months. Goldman Sachs also said in May it expects there is a 35% chance of a recession. In April, Ray Dalio, founder of Bridgewater Associates, warned the U.S. could see something 'worse than a recession.' 'Right now, we are at a decision-making point and very close to a recession. I'm worried about something worse than a recession if this isn't handled well,' Dalio told NBC in April. 'We have something that's much more profound, we have a breaking down of the monetary order.' While executive predictions and investment bank analysis can be a more reliable way to predict an economic downfall, there are several oddball recession indicators that come straight from consumers themselves. In its earning call this week, Campbell's CEO Mick Beekhuizen said there is a 'growing preference for home-cooked meals,' adding it was the highest level since early 2020. And that could be a bad sign for the economy. Consumers dining out less and opting more for cheaper alternatives like Campbell's soup signal a tightening budget. Meanwhile, spending on discretionary items like crackers and chips declined, Beekhuizen said. Campbell's is already starting to see a decline in discretionary spending on snacks—and so are some other major snack food companies. In February, Nestle posted its weakest sales growth in more than two decades. PepsiCo, the maker of Lay's and Tostitos, also reported earlier this year net sales had dropped by 2% and volume for savory snacks fell 4%. 'Consumer conditions in many markets remain subdued' and 'have an uncertain outlook,' said PepsiCo CEO Ramon Laguarta. Also in the food-related realm, pizza purchases can serve as an indicator of economic conditions. A Bloomberg analysis published Friday shows low-income consumers are being 'priced out of pizza,' and same-store sales were down during the first quarter at Pizza Hut, Papa John's, and Domino's. Since 2019, the average price of a large pizza at the top five chains is up 30% to $18.19, Richard Shank, an analyst at market research firm Technomic, told Bloomberg. Meanwhile, Nestle reported frozen pizza is one of its 'underperformers' due to pricing, according to Bloomberg. The lipstick index was popularized during the 2008 recession, and stems from Estée Lauder heir Leonard Lauder noting his company's sales of lipstick rose after the 2001 terrorist attacks. The idea is that when the economy is struggling, sales of affordable luxury items like lipstick, nail polish, and perfume tend to increase. Although consumers may be tightening their belts, they want something affordable to feel a sense of normalcy—i.e. a $5 lipstick from the convenience store. E.l.f. Beauty, which recently announced it had acquired Hailey Bieber's makeup company Rhode, reported on May 28 its net sales jumped 28%. L'Oréal reported in April its lip products 'fueled its strong innovation lineup,' and helped its consumer products division outpace the market. Ulta Beauty also had a strong earnings report in late May, seeing net sales jump 4.5%. Another odd recession indicator is the men's underwear index. Alan Greenspan, who served as Federal Reserve chair from 1987 to 2006, followed this index, which assumes people treat men's underwear purchases as discretionary spending and they'll purchase less of it during recessions. Calvin Klein, one of the most ubiquitous men's underwear brands, saw fourth-quarter revenue drop 5% due to a 'a tougher than expected macroeconomic backdrop,' according to CFO Zac Coughlin. While consumers may buy affordable luxuries during a recession, they tend to shy away from more expensive treats, like champagne. Bubbly sales dropped dramatically in 2024, and provisional February sales data shows sales continued to decline this year, according to Wine Searcher. 'Champagne is a true barometer of consumer mood,' said Maxime Toubart, president of the Champagne Syndicat Général des Vignerons (SGV) and co-president of the Comité Champagne. 'This is no time for celebration, with inflation and global conflicts taking place, as well as economic and political uncertainty in some of Champagne's largest markets, such as France and the U.S.' As costs continue to rise, 'people have less disposable income to splurge on champagne,' Emma Versaw, head of alcohol business at retail technology company Swiftly, previously told Fortune. 'So maybe there aren't less celebrations, but less extravagant celebrations.' One TikTok user also suggested that more wealthy people are moving to increasingly exclusive places and that that's a recession signal. 'There are new levels of exclusivity,' the user said. 'People are climbing this social ladder and trying to be around the rich, trying to be rich, all that stuff, and improve their lives. The people who are already in there—the established rich—are moving away. 'There's new tiers opening,' she added, citing airlines adding more exclusive lounges. 'It feels like each time the 99% break that ceiling—or at least crack it—the rich build another level with another glass ceiling. I think it's about to be more severe now that we're kind of in decline,' she said. As housing becomes increasingly expensive, people turn toward storage units to house their goods when they're not able to downsize. A Financial Times analysis published in April found the number of storage units is growing, which could serve as a recession indicator. This story was originally featured on Sign in to access your portfolio
