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Culture War Roundup for the week of September 4, 2023

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When Beyond's lockup expired in October 2020, they were still trading at $100/share. ($11 now and still overpriced). Insiders absolutely cashed.

Nothing like Alex Karp levels, but yes, this was a transfer of wealth from your pension fund to company insiders. Dumb money retail sets the price, and then indexers come and buy in volume. So while you and I might realize that Beyond at $100 was fake, your pension fund was more than happy to buy in size.

Did it enter an index? Maybe the Russell. They all have some rules to prevent the worst stuff.

Yes, it's in the Russell 1000, Russell 3000, and Nasdaq Composite. (Because it's a tech stock, lol).

If you own VTI, you own it. Its not in the SPY index which has a profitability filter. But this doesn't mean that SPY is shenanigans proof. People front run stocks before they enter the SPY.

Am I butt-hurt that people who aren't me are becoming centimillionaires on the back of this stuff? Yes, I am. This is the real wealth inequality, not some doctor making $400k or whatever.

Beyond has multiple insiders who made $10 million plus on insider sales in the last 3 years alone. I don't have the totals from 2019, but they would be way worse, quite possible 9 figure exits. https://www.marketbeat.com/stocks/NASDAQ/BYND/insider-trades/

Lockup periods need to be 5 years at least.

Ya. Tesla was the big shenanigan in SP500.

Though at the higher price in BYND a reasonable time after lock up settling it was $8-10 billion. I don’t see that as obviously stupid. As there have been plenty of things I’ve called obviously stupid like crypto being more than a nerds play thing.

Conceivably BYND could have gotten a little flywheel going and continued to innovate into healthier better options. Maybe eventually add lab meats and become a behemoth. As the first to market they could have become the platform for all alt meats.

Water in a bottle companies have been sold in that range of 6-10 billion so atleast they innovated.

There have been far worse offenders than bynd. And I do feel like the SEC should figure out how to end some of the worst offenders. Chamath one of the worst. Whatever that Vietnamese electric car company that went to 130 billion last week was. Just makes are markets look comical. Maybe give companies rights to randomly sell stock if it’s behaving stupid to keep the punters out. It just seems like we could have a more orderly market.

I’d still think that for the most part pensions funds etc didn’t lose on these things (large amount).

Conceivably BYND could have gotten a little flywheel going and continued to innovate into healthier better options.

I sort of get what you're gesturing at. A flywheel represents the difficulty of spinning up a new market. You need to solve both supply and demand at the same time to get the engine running. Failure is catastrophic while success is a money machine. If there is an imbalance, the flywheel is bottlenecked and doesn't want to spin.

In this case, the flywheel represents the pseudo-meat market, I suppose. There have been meat substitutes and meat replacements before, but this is really a new kind of market and new kind of product. Maybe this particular market is cursed, but if the flywheel gets going, then maybe:

continued to innovate into healthier better options.

AKA the pivot

Think you got it. Not necessarily a pivot though. It’s more like Tesla.

Entering Market as basically custom handmade cars.

Develop experience building cars and improving battery tech. And marketing skill. Plus develop car programming.

Enter at more scale and cheaper price point. Repeat all the same process improvements.

Once again cut price point and increase operational scale.

For beyond it would have been make $300-400 million a year selling shitty vegetable meat. Invest that in better vegetable meat at more scale. Probably eventually add on some kind of lab grown meat. Use experience in day chicken to expand into all kinds of lab meats.

Fair enough. By and large I think we agree. Beyond was a bad investment, insiders got rich, and pension funds lost (debatable how much). But it wasn't a scam like Nikola or some of the other worst offenders.

Were pension funds substantially invested in Beyond? The Canadian teachers probably did, but they’re notorious gamblers (admittedly it’s paid off for them they’ve have something like 9% annualized real returns for 40 years), but most won’t have. I don’t care to find their cap table, and they’re not hugely helpful for pension funds ownership anyway for various reasons, but I’d be surprised if pension funds were well represented among the top institutional shareholders.