TOP STORY
👨‍⚖️ The Trial of Disgraced FTX Founder Begins

Criminal mastermind or clueless CEO? That is the hotly debated topic in the legal case of Sam Bankman-Fried, who is on trial for seven criminal counts including fraud against FTX customers. What’s at stake? Sam spending the rest of his life behind bars.

As a quick recap, in November 2022, FTX - one of the biggest cryptocurrency exchanges - collapsed with $8.9B in customer assets missing. Where did it go? Prosecutors argue Sam was funneling money into ‘Alameda Research’, a separate investment firm run by his ex-girlfriend, and the money was used for speculative trading and to finance a luxury lifestyle.

🙅‍♂️ Sam has pleaded not guilty.

💡 Here are some of the most interesting aspects of the trial so far:

• Caroline Ellison, the head of Alameda Research, Sam’s ex-girlfriend, and now the star witness in the case against Sam, took the stand admitting to financial crimes and saying that Sam directed her to manipulate financial documents.

• Caroline recounted the “constant state of dread” and stress about lying to investors, the public, and employees.

• It was revealed that Sam also had a fling with Lily Zhang, the CEO of Modulo - a competing hedge fund to Alameda that Sam also invested in, Caroline admitted that she “wanted to crush Modulo” partially out of jealousy and thinking “Sam liked Lily more than her”.

• FTX Co-Founder Garry Wang testified that Alameda had an unlimited line of credit to tap FTX customer funds.

The outcome of the case remains uncertain, but things aren’t looking so hot for the once-crypto kingpin.

If you find this case interesting and want to dive deeper, I’ve personally enjoyed Tiffany Fong’s extensive coverage of the trial on YouTube.

SPONSORED BY HAMILTON ETFS
🏦 Canadian Banks: A Rare Buying Opportunity? History Suggests Yes

Canada’s big-6 banks have faced some pressure over the last two years. You’re probably wondering, is now a good time to buy? Hamilton ETFs recently published research that takes a look at history to put this question into context for investors.

💡 Research Insights:

• Canadian Banks: History Points to a Stronger 2024 (After Two Tough Years)

• Canadian Banks: Three Ways the Banks Might “Clean Up” fQ4 (and Improve in f2024)

Hamilton ETFs is currently the #2 provider of Canadian bank ETFs by assets under management (AUM), accounting for over $1 billion of the firm’s ~$3 billion in AUM. Some of their popular Canadian bank products include:

🏦 Growth & Income – Hamilton Enhanced Canadian Bank ETF ($HCAL)

• Equal-weight exposure to Canada’s Big-6 banks

• Modest 25% leverage to enhance growth potential & yield

• 8.36% yield* – monthly distributions

⚖️ Low-Cost – Hamilton Canadian Bank Equal-Weight Index ETF ($HEB)

• Equal-weight exposure to Canada’s Big-6 banks

• Low-cost (0.19% management fee)

• 5.58% yield* – monthly distributions

💸 Monthly Income – Hamilton Canadian Financials Yield Maximizer ETF ($HMAX)

• Diversified exposure to Canada’s 10 largest financial services companies

• Active covered call strategy to maximize monthly income

• 15.82% yield* – monthly distributions

For the latest updates on the banking sector, sign up for Hamilton ETFs' monthly newsletter.

* An estimate of the annualized yield an investor would receive if the most recent distribution remained unchanged for the next 12 months, stated as a percentage of the price per unit on September 29, 2023.

ENTERTAINMENT
🏰 Disney Hikes Theme Park and Disney+ Prices as Activist Investor Returns

This week, Disney announced price hikes for theme park admissions, following a bold $60 billion investment plan into their ”Parks, Experiences, and Products segment” over the next decade.

• Disney World's annual passes are up by $30-$50.

• Parking fees increased by $5.

• Disneyland ticket prices jumped by $5 to $65 and saw significant hikes in annual passes, reaching $1,649 for the top-tier Inspire pass.

• “Park hopper” and Genie+ add-ons, also saw increases.

In addition, Disney announced an increase in its streaming service prices on Thursday, reflecting its ongoing struggles with profitability in its direct-to-consumer segment and decreasing number of subscribers.

• Disney+'s ad-free subscription is now $13.99/month, up from $10.99, and double the initial $6.99 launch price in 2019.

• Hulu's ad-free version has increased by $3, now $17.99/month.

• ESPN+ experienced a $1 hike, bringing it to $10.99/month.

Amid these price hikes, Activist investor Nelson Peltz is launching a renewed board challenge at Walt Disney, signaling dissatisfaction with the company's trajectory.

This move comes less than a year after Disney addressed his initial concerns.

With Disney's stock down 30% in the past 5 years, Peltz, through his Trian Fund Management, is seeking multiple board seats, increasing his influence as one of the company's largest shareholders with a stake of approximately $2.5 billion.

CANADIAN FINTECH
🛍️ Questrade went shopping

Flexiti, a point-of-sale lender was acquired by Questrade for $55m. This is the second time Flexiti has been acquired in two years. Curo, a subprime consumer lender, purchased them in 2021 for $155m.

Questrade launched as a discount stock brokerage in 1999 but pushed into lending after acquiring Community Trust Co. in 2019.

Flexiti will be their second consumer lending product. QuestMortgage launched last year.

This story is taken from the Canadian Fintech newsletter which reports on which Canadian fintechs are raising money, launching new products, and making acquisitions.

If you like keeping up with Canadian Fintech news like this, check out the newsletter here!

EARNINGS
🥤 PepsiCo Reports Q3 Earnings, Beating Estimates

This week, PepsiCo ($PEP) reported its Q3 2024 earnings, beating Wall Street’s estimates, and raising its earnings outlook for 2023. This marks the third consecutive quarter that PepsiCo has raised its full-year forecast.

• Revenue: $23.45 billion (vs. $23.39 expected)

• Earnings: $2.25 adjusted (vs. $2.15 expected)

• Frito-Lay North America sales: $5.95 billion (vs. $5.96 billion expected)

• Quaker Foods North America sales: $747 million (vs. $729.2 million expected)

Despite this strong performance, PepsiCo's sales volume continued to decline, attributed to price hikes which have impacted product demand.

Pepsi remains optimistic, pointing to double-digit revenue growth for Gatorade and plans to relaunch the fan-favorite, Mountain Dew Baja Blast.

Pepsi also revealed that they’ve implemented a strategy of reducing portion sizes and introducing smaller value packs to encourage more transactions. This approach gives consumers more affordable choices but results in reduced volume sold.

 FROM THE BLOSSOM COMMUNITY

🎙 Top Discussions This Week

🗞️ What else you might’ve missed:

• Microsoft ($MSFT) has successfully finalized its $69 billion acquisition of Activision Blizzard.

• UnitedHealth ($UNH), the largest health insurer by revenue, rose after beating analyst expectations.

• Birkenstock ($BIRK)’s initial public offering debut saw its shares drop nearly 13%.

• General Motors ($GM) and its Canadian workers have reached a tentative contract agreement.

• The PC market, which includes manufacturers like Apple ($AAPL), HP ($HPQ), and Microsoft ($MSFT) is rebounding.