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Texas’ Bitcoin gold rush results in ghost mines

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Courtesy of Argo Blockchain

Texas’ Bitcoin gold rush results in ghost mines 

 

The Future. Despite a rush to take advantage of low taxes and loose regulations in Texas, crypto miners (Bitcoin mainly) have faced a tougher economic environment and have stalled on their plans to build out mining facilities. With many of these companies on the verge of bankruptcy, Texas may soon be scattered with the modern equivalent of abandoned mines — monuments to a lost opportunity.

Boom to bust
Texas’ big Bitcoin ambitions have run out of juice. According to Bloomberg, a dozen leading Bitcoin mining companies, including Iris Energy, Argo Blockchain, and Core Scientific, have paused the construction of their sprawling facilities halfway through.

Why the stoppage?

  • Energy costs in Texas have soared due to major heat waves over the summer and the war in Ukraine.
  • The Federal Reserve’s interest-rate hikes have made it harder to repay their loans for infrastructure and supplies.
  • The price of Bitcoin has been pummeled this year, dropping more than 60% and crushing the companies’ valuations.

Mining migration
After China (the previous top mining country) banned Bitcoin mining, Texas welcomed crypto companies with open arms. The hope was that the sweet revenue would power the state’s economy.

The problem is that Bitcoin mining takes a lot of power, which Texas’ independent power grid has struggled with in recent years. A case in point was the cold snap of February 2021 that cut power to millions of residents and left over 200 dead.

It’s hard to justify plugging in the 37 gigawatts (yeah, that’s a big number) of crypto-mining requests to connect to the state grid when it’s already that stressed.

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Rent a property you don’t own, make money

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Illustration by Kate Walker

Rent a property you don’t own, make money

 

Emailing a stranger to sleep on their couch didn’t (and will never) sound like a safe idea. But, if you remember planning those post-high school Euro trips and wanting to extend your vacation after your Contiki tour ended, you either had to pay for a hotel or couch surf. Our options were limited. And it wouldn’t be till many years later that the option to rent a room in someone’s house would become possible.

Now we’re yet again faced with a financial dilemma. Having lived through a pandemic that changed priorities and pushed many people out of their comfort zones, old jobs, and into new cities… people have been trying to figure out ways to make passive income.

One way is short-term rental arbitrage (STR), something you may not realize is a thing.

Renting and re-renting is legal

As home prices have skyrocketed, and with home sales significantly declining (with no improvement ahead), the real estate market has seen innovative trends. In addition to communal homebuying and fractional ownership, renting a property and re-renting seems to be a creative loophole allowing one to earn a profit without actually having to buy anything.

STR arbitrage is the practice of renting out long-term properties and re-renting to others on a short-term basis. And it can be quite lucrative if you know what you’re doing.

  • First things first: Find a property in a desirable location and get the owner to like you. Analytics companies like Airbtics and Beyond can help you do the finding, helping you to instantly see your estimated annual revenue with a snapshot of the market, including trends, occupancy, daily rate, seasonality, and booking patterns.
  • The getting the landlord to like you part, that’s all you. But, if you’re well-researched, you’ll be able to deliver plenty of upsides which is what you’ll need to close the deal.
  • Tell them you’re going to pay the rent on time, in addition to making them believe they need you (they actually don’t). If not, they’ll end up renting it themselves instead of leasing the property to you.

Once you’ve found the property and the owner is on board (don’t try and sublease without the landlord knowing, you’ll get in trouble), you need to wrap your head around the law.

Letter of the law

Different states have different regulations enforced at the state or local level so make sure you study up.

  • What kind of rental is your desired property? Is it a home-share, short-term rental, or long-term vacation rental? Will the owner be present for the entire time or not at all? Not all places will allow your listing, and there are different rules for different types of listings.
  • You’re going to be a real estate business owner in the eyes of your local government, so there could be permits or licenses you’ll need to obtain depending on your city. In Santa Monica, for example, you must apply and obtain a Home-Sharing Permit and Home-Sharing Business License.
  • You might need to register for a tax ID so that you can pay taxes on your rental income, so make sure you check taxation rules.
  • Airbnb insurance protects guests during their stay but doesn’t cover damage to your property, so you’ll need to get insurance.

It’s a lot to know, but the money could be worth your effort.

Rake in the dough
So, how much money could you be making? Well, that depends on a variety of factors, and there are formulas to help determine that. Here’s a look at how vacation rental software iGMS broke theirs down:

  • Know the daily rental rates for your area for weekdays and weekends. Airbnb just released a new feature, Airbnb-friendly apartments, and it has all the info you need. Their insights even review 12 months of similar listings.
  • iGMS says you should next calculate the weighted average rate of all the properties. Weighted Average Airbnb Rate = (Weekday Average Airbnb Rate * 5 + Weekend Average Airbnb Rate * 2) divided by 7. For example, if the weekday average Airbnb rate is $50 and the weekend average Airbnb rate is $100, the Weighted Average Airbnb Rate is $64 because ($50 * 5 + $100 * 2) / 7 = $64.
  • The third step is to calculate your total daily property expenses (monthly costs / 30)
    • Rental deposits.
    • Furnishings. You should at least do semi-furnished, but if you were to fully furnish the place, you should be to do this for under 5K.
    • You’ll need photography, although you can take the pics yourself to ditch this cost.
    • While cleaning is included in starting costs, you’ll need to eventually spend on cleaning services — probably $50 to $250, depending on size and location.
    • Having legal counsel available is important should you need help with damage claims, insurance, and or any other mishaps.
  • To get your final ratio, divide the weighted average rate by your daily property costs. This will let you know how many days you need to rent your property to make any money. If your ratio equals 1 or more, you can turn a profit by renting fewer days per month. iGMS advises a ratio of 2 or higher to make sure you at least break even.

If you pick the right location and property, you could be making tens of thousands a month. Some folks have even laid out their step-by-step success models as this side hustle has become quite popular as of late.

Your path you must decide

While you need to think about upfront costs, the landlord being able to halt subleasing whenever they want, wear and tear costs, inconsistent bookings, and maintenance costs, we think the pot of gold over the rainbow could very well be worth it as you’re upfront costs are low, there is huge opportunity to scale, and you’d then be able to use those profits to further invest.

The building of your empire could begin now. You’re welcome.

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On Black Friday, most products are 0% off

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On Black Friday, most products are 0% off

 

The Future. The steepest inflation in 40 years has raised the cost of living more than usual in 2022, and shoppers are on the hunt for discounts. But they’re not likely to find them because, according to the consumer rights group Which?, the vast majority of products discounted for  Black Friday are actually the same price or cheaper during other times of the year. It might be best to just wait for those post-holiday savings…

What’s the deal?
Which? analyzed 214 Black Friday deals from seven major retailers and compared them with their products’ prices on every other day of the year.”

  • 183 of these 214 studied products — 86% of them — were the same price or cheaper at some point in the six months before the sales event.
  • 209 of these products, or 98%, were lower priced at some point during the year, and not one single product was cheapest on Black Friday alone.
  • Which? accused Amazon and Very as the retailers guilty of the most dubious discounts, reporting that over 70% of their analyzed products were cheaper at other times of the year than they were during past Black Fridays.

Some retailers also raise costs just before Black Friday, only to reinstate normal prices on Black Friday and call them discounts.

Early bird gets the worst

Retailers prepare for the best case if they can, stocking up for Black Friday and the holiday season in hopes that they won’t have excess inventory. If they do, they’ll be forced to keep prices low or even slash them further for the rest of the year in order to offload their products.

The earlier you shop, the less power you have over retailers; the later you cave, the more desperate they’ll be to offload excess inventory, and the more likely you’ll encounter a genuine deal. Good things come to those who wait.

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Disney debuts C-suite drama with the sudden return of Bob Iger

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Photo by Josh Hallett

Disney Debuts C-Suite Drama With the Sudden Return of Bob Iger

 

The Future. In case you haven’t checked Twitter, Apple News, or those free newspapers at Starbucks, Bob Iger is back in as the Big Cheese at the Mouse House. Iger now comes in when many of his past successes as CEO are being tested (Disney+ needs to make more money, while content silos like Lucasfilm and Marvel need to fight off franchise fatigue), Hulu is about to come up for sale for a lot, and upcoming, high-stakes Hollywood union negotiations will require financial compromise. In other words, these may be his most challenging years on the job yet.

A Tale of Two Bobs
Here’s how Robert Allen Iger succeeded his successor, Robert Alan Chapek (you can’t make this stuff up), as the CEO of Disney.

  • Discontent had already been brewing at Chapek’s performance, including a corporate restructuring that took power away from creative execs, a battle with Scarlett Johannson over compensation for Black Widow, and controversy over the handling of Florida’s “Don’t Say Gay” bill.
  • But the Nov. 11 quarterly earnings call where he  in the DTC division, a sudden call for cost-cutting and potential layoffs, and the resulting stock plunge is what broke the camel’s back for the company’s board.
  • So chairwoman Susan Arnold reached out to Iger roughly a week ago to see if he would be interested in returning. Although he had taken on a few advisory roles and was in discussions for a position at RedBird Capital, Iger could never really let Disney go.
  • So a deal was struck, and Chapek received a call midday Sunday that he was out. That night, the Iger announcement was made, which both shocked and elated Disney employees.

And yes, the stock is up.

The Bob is Back
Iger has wasted no time in making changes.

  • He dismantled Chapek’s Disney Media & Entertainment Division, which centralized the company’s creative and marketing decisions under executive Kareem Daniel.
  • He then fired Daniel and set up an exec team to develop a new distribution structure that puts “decision-making back in the hands of our creative teams and rationalizes costs.”

And besides righting the ship, Iger’s two-year contract — expect that to get renewed; he pushed off retirement four times — calls for him to groom his new, new successor. Just like much of its film slate, call it a Disney reboot.

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TV news tightens its budget

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Illustration by Kate Walker

TV news tightens its budget

 

The Future. Anxiety is roiling newsrooms as every outlet has announced staff reductions, budget cuts, and a pullback on all spending. While the cuts are timed with the midterms winding down, expect every outlet to ramp up again when the presidential election goes into full swing in 2024… and they could be met with some new digital news startups created by recently-released employees.

Breaking budgets
Depressed stock, ad rollbacks, inflation, and just a general downturn in viewership are leading top news stations to get frugal, per THR.

  • ABC News is set for cuts after Disney’s disappointing quarterly results led the CEO Bob Chapek to institute a hiring freeze and budget cuts, especially regarding travel and expenses.
  • CNN, under the leadership of newly-installed president Chris Licht, announced that layoffs are coming next month as Warner Bros. Discovery finishes finding $3.5 billion in savings.
  • CBS News is set for bloodletting as Paramount CFO Naveen Chopra foreshadowed a “meaningful and sizable” restructuring.
  • NBC parent company NBCUniversal is offering early retirement packages to employees with “10 years of service who are age 57 or older.”
  • CNBC president KC Sullivan said the brand is doubling down on its “core strengths of business news and personal finance,” so it would need to “shift some of [its] priorities and resources and make some difficult decisions” in the near future.

Talk about everyone covering the same angle.

Primetime punishment
What do cuts usually look like when it comes to the news?

  • Mark Feldstein, chair of the broadcast journalism department at the University of Maryland, says it usually hits foreign bureaus and units such as documentary production and investigations (they’re not on the air often).
  • Speaking of people, not on the air that often, off-camera producers also take a big hit.

And although Warner Bros. Discovery CEO David Zaslav killed CNN+ about a month into existence, streaming is the one sector that is reportedly growing for every outlet — so don’t expect cuts to hit there too hard.

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FTX’s demise threatens all of crypto

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Illustration by Kate Walker

FTX’s demise threatens all of crypto

 

The Future. The downfall of FTX is sending shockwaves throughout the entire crypto industry — losing customers’ savings, making assets unavailable, and strangling other lenders who are now trying to complete an avalanche of withdrawals. The whole episode is reminiscent of the fall of Lehman Brothers back in 2008, which led to the financial crisis. Is the crypto world about to experience a similar collapse?

Blockchain blast radius
According to Axios, FTX had such deep ties in the crypto industry that many other top firms are feeling the fallout.

  • Gemini, a lender, run by the Winklevoss twins, had to pause withdrawals from their Earn program that allowed customers to deposit their coins for high-interest payments.
  • That’s because Gemini’s partner lender, Genesis, said it couldn’t meet customer demand this week.
  • Top lender BlockFi is reportedly considering filing for bankruptcy.
  • Marketplace Voyager Digital, which FTX was going to acquire for $1.4 billion, is back on the auction block after filing for bankruptcy in July.
  • And crypto hedge funds like Galois Capital and Ikigai Asset Management have said that a vast percentage of their funds are wrapped up in FTX’s missing assets.

And among the many, many people who have lost their assets in FTX, anyone who purchased one of the Coachella NFTs — including the ten sought-after lifetime passes — are now unavailable.

Even the celebrities who appeared in FTX commercials — Tom Brady, Gisele Bündchen, Shaquille O’Neal, and Larry David — are getting sued for shilling for the company.

Built to fail
As for FTX, the marketplace’s business is proving to have been a house of cards all along.

  • Founder Sam Bankman-Fried (aka SBF) filed for bankruptcy and stepped down as CEO. He’s now kind-of on the lam (but incessantly posting on Twitter) as the DOJ and SEC are investigating him.
  • John Ray III, the executive who restructured Enron after its infamous 2001 bankruptcy, has taken the reins of FTX. In a court filing, he said FTX was the biggest “failure of corporate control” he’s ever seen… and that’s saying a lot.
  • Ray also said that the financial info the company kept was “untrustworthy” and that SBF used software to “conceal the misuse of customer funds.” He’s only been able to recover above $740 million of the $8 billion owed.

And with SBF candidly revealing to a Vox reporter how unethically he ran the company, the drama is far from over.

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AMC Theatres books… Zoom?

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conference cinema // Illustration by David Vendrell

AMC Theatres books… Zoom?

 

The Future. AMC Theatres is partnering with Zoom to turn screens into conference rooms, allowing companies to hold company-wide events for a hybrid workforce. While this might eventize the quarterly all-hands meeting, it may be a perfect example of CEO Adam Aron’s claim that there are not enough new movies to fill up available screens… so they want to monetize them somehow.

Conference cinema
AMC now wants you to work at the cinema.

  • THR reports that AMC’s movie theater Zoom rooms will debut in 17 US markets sometime next year.
  • Companies can reserve three-hour blocks at several locations simultaneously.

AMC and Zoom will provide the proper equipment and even offer concession services, a dedicated concierge, and, yes, an actual movie viewing for an extra cost.

There’s always money in the banana stand
This isn’t AMC and Adam Aron’s first wild idea at juicing up revenue post-COVID. It acquired a 22% stake in a gold and silver mining operation in Nevada, making its popcorn available for retail, and creating a stock dividend called APE to keep the retail investor crowd on Reddit happy.

It still hasn’t been quite enough to lift AMC’s stock, which hit a 52-week low after losing 80% of its value this year, per CNBC. During its Q3 earnings call yesterday, the theater chain reported a 27% increase in revenue (yay!) but widening losses due to more operational costs (not yay).

But AMC execs are probably at least happy they’re not working at Cineworld right now…

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Binance swoops in to save rival FTX

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Binance takes control. // Illustration by Kate Walker

Binance swoops in to save rival FTX

 

The Future. The once high-flying FTX had a reversal of fortune this week and needed money fast… and its rival Binance has come to the rescue. While Binance has plenty of cash to fulfill FTX’s cash crunch (it’s the largest crypto exchange at a $300 billion market cap; FTX is worth $32 billion), the merger of the two powerful exchanges may kick up antitrust scrutiny… or at least crater the confidence of traders who are already battling a persisting crypto winter.

Middle fish
After spending the past year bailing out bankrupt crypto exchanges, FTX is now being bailed out by Binance, per NYT.

  • After facing a “liquidity crunch” (the inability to fulfill withdrawals), FTX is being bailed out by rival Binance.
  • The deal is for an undisclosed sum — but TechCrunch notes it’s “likely not great / utterly terrible for investors of FTX.
  • The deal will allow FTX to complete withdrawal requests, of which there are many right now (more on that below).
  • The deal won’t include FTX’s smaller US-based arm, FTX US.

The deal — a major surprise that even caught FTX’s investors off guard — comes at the height of a social media spat between FTX founder Sam Bankman-Fried and Binance founder Changpeng Zhao over… well… FTX’s financial health.

Still melting
With FTX seemingly looking like the white knight of the crypto world for so long, why did the company suddenly need saving?

  • A balance sheet from Bankman-Fried’s trading firm, Alameda Research, leaked, showing that it was on shaky financial footing — bad news when most of its assets are tied to FTX’s native token, FTT.
  • That spurred Binance (a former FTX investor) to announce it was selling its FTT to avoid risk — a move that sent the worth of FTT spiraling.
  • That made people panic that FTX could go under, so they started withdrawing their crypto holdings — nearly $6 billion in 72 hours instead of the typical “tens of millions” per day.
  • Suddenly without enough money to process withdrawals, FTX had no choice but to look for outside funding… and, ultimately, go to Binance for help.

The moves have hurt not only FTX but the entire crypto market, with every coin from Bitcoin to Ethereum to Dogecoin dropping in value. It looks like that crypto winter — where $2 trillion in value was lost this spring — is holding on even longer.

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Airbnb will stop letting hosts take advantage of guests

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Airbnb cracks down on hosts // Illustration by Kate Walker

Airbnb will stop letting hosts take advantage of guests

 

The Future. Airbnb has long faced criticism for allowing hosts to inflate stay prices with hidden fees and stick guests with unreasonable checkout tasks. In response, the app has decided to present users with the total stay price upfront — making exorbitant “cleaning fees” impossible to hide — as well as crackdown on checkout tasks. The move is likely to increase user satisfaction, but only if the higher upfront numbers don’t repel them.

The whole package
Starting this December, Airbnb will allow users to view listings according to the total stay cost instead of the nightly rate.

  • The main target of this new initiative is the cleaning fee, which hosts can set arbitrarily high and sometimes costs more than the actual stay. Now that fee will be factored into the total stay price, which is the first thing users will see (if they choose to search for total stay price).
  • The second focus is checkout tasks, which can range from the reasonable — like turning off the lights and locking the door before you leave — to the outlandish, such as vacuuming, laundering all the bedding, and dusting every surface. Airbnb’s getting rid of these last three.
  • Users who’d prefer to stick to the old model, prioritizing nightly rates, can still do that if they want.

Villains, show yourselves
“Junk fees” like Airbnb’s cleaning fee have gotten so bad that the Biden administration ranted about them in a recent initiative, so there was really no way for Airbnb to hold out any longer.

But Airbnb had a reason for waiting. The last time they tested out presenting total stay cost to users up front, it didn’t go so well. Besides the addition of a cleaning fee, total stay prices are (naturally) so much higher than individual nightly rates that the higher number often repels users.

Users probably won’t be angry with Airbnb anymore, but if they’re driven away by high stay prices, it won’t really make a difference. (Then no one would have to vacuum…)

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Disney is programming e-commerce into Disney+

disney-merchandise-toys-app-thefutureparty
Illustration by Kate Walker

Disney is programming e-commerce into Disney+

 

The Future. While every entertainment conglomerate has a dedicated merch arm, Disney is the first major one to bring the ability to purchase exclusive products directly on its streaming app — turning fans into consumers without ever having to put down the remote. With a recent Publishers Clearing House survey finding audiences want streamers to include as many services as possible, Disney may be ensuring that no one is tempted to cancel from month to month.

Watch & Shop
Disney is looking to turn Disney+ into a portal for its lucrative merch sales.

  • WSJ reports that the Mouse House is testing a feature allowing users to purchase exclusive toys and apparel directly on the streaming platform.
  • Users can access the store by scanning a QR code on the Disney+ menu screen of select titles (or by visiting ShopDisney.com and plugging in their credentials).
  • Up for grabs: replicas of Marvel superhero Dr. Strange’s cloak, a Black Panther mask, or a Darksaber toy weapon from The Mandalorian.

By introducing e-commerce right on the streamer, Disney is combining its two key fiefdoms: “media, entertainment, and distribution” and “parks, experiences, and products.”

For all revenue
By combining those two businesses, Disney is getting closer to creating what CEO Bob Chapek calls a “lifestyle brand app.” Here’s what that could look like:

By making Disney+ the portal to all things Disney, the company gets a clean way to collect every piece of data on how you interact with the brand… with the hope of knowing your preferences better than you do.

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