| |  | TOGETHER WITH |  | | | Good morning and happy Tax Day.
A non-fungible token of Twitter founder Jack Dorsey’s mundane first tweet, which reads “just setting up my twttr,” has lost nearly all of its value in just a year. In March last year, Malaysian blockchain executive Sina Estavi paid $2.9 million for the NFT and said, “I think years later people will realize the true value of this tweet, like the Mona Lisa painting.”
Well, last week, he put the NFT up for auction and, as of this morning, the highest bid was a mere $30,000. Leonardo da Vinci’s painting, according to estimates, is worth $870 million in 2021 dollars. Safe to say Estavi isn’t Mona Lisa smiling. | | | • | | $140 billion is being invested in the US electric grid, and consumers will soon pay for it. | | • | | Startups are far from immune from the tech sell-off. | | • | | Paul Singer’s Elliott Management could net €600 million for making a soccer team good again. | | | | |  | Utilities | Multibillion-Dollar Utility Upgrades are On the Way, You Will Pay For Them | | Tired of all the cost-of-living increases these days? Strap in, this one may well drive you spark raving mad.
US utility companies are on track to spend $140 billion this year and again in 2023, the biggest yearly total since industry group Edison Electric Institute started keeping track in 2000. The costs, which should come as no shock, will soon zap your wallet. | Nothing’s Shocking | | Let’s face it, America’s power grid ain’t what it used to be. Much of the grid was built not long after the Second World War and needs upgrades. The American Society of Civil Engineers (ACSE) found last year that 70% of transmission lines are in the sunset years of their 50-year lifespans. Like Lebron James, the grid often still gets the job done, but needs more time off than it used to. Unfortunately, there’s a lot more at stake in keeping the power grid up and running than in a game of hoops.
Earlier this year, a review of federal data by The Wall Street Journal found 180 major grid outages happened in 2020, compared to less than two dozen in 2000. The average utility customer dealt with eight hours of energy disruption, double the amount in 2013 when the government started tracking outage durations. Climate change hasn’t helped, with weather-related outages topping 100 for the first time in 2020. It's no wonder utilities are spending so much on upgrades — and soon their customers will be pitching in: | • | | In 2021, the average retail electricity price for US residential customers rose 4.3% to 13.72 cents per kilowatt-hour, the biggest jump since 2008, according to the US Energy Information Administration. | | • | | Data firm Sector & Sovereign Research forecasts average residential utility bills will increase 2.5% to 3% every year for the next several years because of higher capital investment. And more increases will likely come from high gas prices. For most of the last decade, residential utility bills were flat, well below the rate of inflation. | | | | Short at the Register: Even with all the new capital investments, the ASCE forecasts the US will face a $200 billion funding gap for what’s needed to improve the grid and meet renewable targets in 2029.
Charging Up: Even as the S&P 500 has fallen over 7% this year, the Utilities Select Sector SPDR exchange-traded fund, which tracks US utilities, is up 6.3%. The lesson: it helps to have recurring revenue in hectic times. | | | | | | Tech | Tech Startups Face Widespread Stock Sell-Offs | | If billion-dollar tech startups have gone from ultra-rare unicorns to overpopulated invasive species, then 2022 may mark the start of open hunting season.
Just as public company big brothers like Meta, Alphabet, and Amazon face major stock slumps to begin the year, venture-backed private tech startups are seeing the valuation of their shares sink in private trading. | Silicon Peaks and Valleys | | In 2020, startups proved to be the winner of the pandemic, scoring a record $166 billion in funding, according to Pitchbook data. Last year, startups doubled that record, raising $330 billion, which saw the creation of 340 new unicorn companies.
But what goes up must come down. Market volatility is spooking investors, creating a chasm between prices sought by buyers and sellers and prompting a steep sell-off, and startups are beginning to feel the sting: | • | | Zanbato, a private share trading platform, says its index that tracks over 100 of the most widely traded private companies just posted its first negative quarter since early in the pandemic, the platform told the Financial Times. | | • | | Forge Global, a major venue for trading in private startups, told the FT prices of companies on its platform plummeted nearly 20% in February and March compared to the final quarter of 2021. | | | | For reference, the tech-heavy Nasdaq Composite index is down roughly 15% this year, while Cathie Wood’s tech-devoted ARK Innovation ETF is down an eye-watering 38% so far in 2022, and down over 50% in the past 12 months.
The Silver Lining? Where one man sees disaster, another may see opportunity. While venture capitalists are slowing dealmaking compared to last year, investment activity is still above historical norms. “We see this as an opportunity,” Hans Swildens, chief executive of the private secondary trading market-focused Industry Ventures, told the FT. “You want to buy when the market is down.” | | | | | | SPONSORED BY outer | Turn Your Patio Into a 5-Star Resort | FACT: 93% of our life is spent indoors. ALSO FACT: 99% of our favorite moments happen outdoors. So go take a look at your deck/patio/backyard. Leaving a little something to be desired? Then it’s time to go to Outer for an upgrade. Outer creates resort-quality outdoor furniture at big box store prices. From relaxing teak chairs just begging for you to sip a drink in, to that fire pit you’ve always dreamed of gathering around, Outer has everything you need to make your outdoor space the highlight of your home. Every Outer product is made from sustainable materials, is totally modular, and comes with a patented built-in cover that protects it from rain and dew (which was enough to make Shark Tank’s Lori Greiner invest). Porch season is almost here, so click here to learn why Outer is on everyone’s mind this summer. | | | | | | Sports | Paul Singer’s Hedge Fund in Talks to Sell AC Milan for €1 Billion |  | | This is a message to the owners of the New York Jets: winning leads to more money. Try it out.
Just look at US hedge fund Elliott Management, now on the cusp of selling a top Italian soccer team acquired on the cheap four years ago for hundreds of millions more. | The Calm Before the Score | | A global brand with a proud history of Italian and European championships, AC Milan was in disarray when Elliott took over in 2018. The Rossoneri (red and blacks) had spent several years mired in mediocrity and fell out of the prestigious Champions League reserved for the best clubs in Europe.
Elliott — which had loaned the cash-strapped consortium that owned AC Milan €300 million — seized control for an effective value of about €400 million when they defaulted on a €32 million payment. Elliott’s founder, the famed investor Paul Singer, has been called a “vulture capitalist” by critics for hunting for distressed firms to flip for a profit, but it’s hard to fault what happened next. The $38 billion hedge fund immediately injected the club with €50 million and decided AC Milan needed to do one thing to unlock value for its new owners: win games. It worked: | • | | Elliott greenlit the purchase of talent, from youngster Theo Hernández (acquired from Spain’s Real Madrid for €20 million) to wise-cracking veteran Zlatan Ibrahimović, who has somehow remained a decent goal scorer at age 40. Last year, AC Milan finished second in Italy’s Serie A, and this year are battling crosstown rivals Inter Milan for the title. | | • | | According to estimates by Calcio e Finanza, AC Milan’s revenue is on track to top €300 million for the first time in the 2021-22 fiscal year, up from €260 million in 2020-21. Investcorp — a Gulf-based private equity firm with €42 billion in assets under management — is in exclusive talks with Elliott to buy the club for €1 billion or more, according to the Financial Times. | | | | Speaking of Distressed Owners: On Friday, Chicago’s Ricketts family, who own the Cubs baseball team, withdrew their bid for English soccer powerhouse Chelsea, put up for sale by its heavily-sanctioned Russian oligarch owner. But another American billionaire baseball owner, Los Angeles Dodgers co-owner Todd Boehly, has stepped up to the plate. Over the weekend, he added former UK Chancellor George Osborne as an advisor to his bid and is seen as a leading contender alongside Bain Capital co-chair and Boston Celtics co-owner Stephen Pagliuca. | | | | | | Extra Upside | • | | An NCAA football team replaced its jersey numbers with QR codes over the weekend. | | | | | | | | | | |  | Just For Fun | | | | | Written by Sean Craig and Brian Boyle. | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
