Uncle Sean's Update - 5/21/21

Happy Friday!!!!
 
What a crazy week it was - here is the Uncle Sean Update for 5/21/21:
 

• It was a rough week in the cryptocurrency markets.  Extreme volatility was enough to make a seasoned merchant marine seasick – LOL!!  Many crypto supporters have stated that a correction was overdue and that the subsequent rebound from the lows (BTC-USD was down 31% and ETH-USD was down 43% intraday at one point) was proof of the staying power of crypto.  Federal Reserve Chairman Powell wasn’t impressed and noted that the volatility tied to cryptocurrencies has prevented them, to date, “as a convenient way to make payments” (not to be confused with a US CBDC stablecoin which the Fed will be releasing a report on later this summer).  The selloff did not appear to be linked to a single cause, but rather a culmination of events (yep – a rough week indeed):
  • Tesla no longer accepts bitcoin as payment citing ESG / cost of mining concerns from Elon Musk.
  • China bans financial institutions and payment companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading.
  • SEC Chair Gary Gensler recommending more regulation surrounding crypto currency marketing, issuance of crypto tokens, and cryptocurrency exchanges.
  • U.S. Treasury calls for stricter cryptocurrency compliance with IRS and will require any transfer worth $10,000 or more to be reported to the IRS citing tax evasion risk.
  • Not to mention the DarkSide $4.4M ransomware attack on Colonial Pipeline that was paid in bitcoin rehashing old fears of cryptocurrencies being a “pirate exchange” (via anonymity).

 

• As expected, Marqeta filed their S-1 Registration Statement late last Friday.  Private market valuation reported by CNBC tops $16B.  Key points from the S-1 include $350M annualized run rate in 4Q20; actual was $290M net revenue for 2020 with 41% gross margins and a net loss of $47.7M.  One item specifically caught my eye – on page 24 of the S-1 under Risk Factors, Marqeta states that Square accounted for 60% of 2019 net revenue, 70% for 2020, and 73% for 1Q2021 revenue…  WOWZA!!!!!  They better keep Square happy as that is some serious concentration risk and one hell of a valuation multiple on revenue (46x)!

 

• Now this should make the Zelle fans happy - LOL…..  BuzzFeed announced that they found Joe Biden's secret Venmo account after less than 10 minutes of looking for it, along with nearly a dozen Biden family members (including grandchildren), senior White House officials, and all of their contacts.  BuzzFeed did contact the White House and all of the accounts were removed without identifying any usernames (thankfully).  The article went on to state that “privacy advocates and journalists have warned about Venmo’s privacy problems for years, yet the PayPal-owned app has persisted with features that can place people — including the president of the United States — at risk.”  Now THAT is a PR nightmare!!!!

 

• PNC gained regulatory approval for their acquisition of BBVA and expects the $11.6B merger to close on June 1.

 

• Serial acquirer, Glacier Bancorp, Inc. (Nasdaq: GBCI) to acquire Altabancorp (Nasdaq: ALTA) in an all stock transaction valued at $933M.  At first glance this deal looks to be very expensive at 290% P/TBV, but a deeper look into the Investor Deck shows that this was only a 15% premium to ALTA share price; the deal is immediately accretive to GBCI (no TBV payback period); and enhances the Glacier footprint in rapidly growing Utah.  Additionally, both banks are running Jack Henry Core (a look into the FedFis Fintegration Ecosystem© confirms they are both on JH Silverlake for Core and JH NetTeller for Online) so tech integration costs will be minimal. 

 

• Bank of America will raise their US minimum hourly wage to $25 by 2025 and requires all its US vendors to pay $15 per hour or more.  This move comes after BOA raised their minimum wage to $20 just last March.
  • CFO Dive has a really good article regarding labor shortages and wage inflation.

 

• Meanwhile, there is no shortage of FinTech funding (particularly BNPL as of late); and no signs of it slowing down:
  • Sunbit becomes the latest unicorn in the BNPL pace with their $130M Series D funding round with a valuation of $1.1B.
  • Amount (BNPL) is back in the news with a $99M Series D funding round with a 50% valuation increase since their Series C launching them to the coveted Unicorn valuation status of $1B.  Recall about three weeks ago where we talked about Barclays US partners with Amount to offer BNPL feature.
  • Figure Technologies raises $200M in Series D with a valuation of $3.2B. 
  • DailyPay (on demand EWA platform) raises $500M in new capital including a $175M Series D round plus $375M in credit capital. 
  • Privacy.com (physical and virtual card issuing platform) rebrands to Lithic and raised $43B in Series B funding round.

 

• And more BNPL - Ally Lending moves into BNPL / point-of-sale financing with Sezzle.  The first integration of its type for Sezzle - select shoppers can now choose to pay over time using Ally's longer-term, fixed-rate installment loans or Sezzle's BNPL offering.  Ally's financing extends to purchases up to $40,000 with 3-60-month terms.

 

• Wise (fka TransferWise) joins Temenos MarketPlace to enable Temenos customers to use Wise international transfer platform.

 
 
Random Uncle Sean Stuff:

• Tim Tebow signed a one-year $920,000 contract with the Jacksonville Jaguars this week to try to make the NFL roster as a tight end instead of a quarterback…..  I’m still waiting on the Minnesota Vikings to contact me about replacing Brett Favre due to his retirement back in 2010.  I pretty much have all of my eggs in that basket – LOL!!!!!
• And a few quick Dad Jokes due to popular demand:
  • It rained so much in Texas this week – I was going to flag Noah down for a ride but he had already left town!!!
  • If April showers bring May flowers, then what do May flowers bring…???  Pilgrims, of course!
  • Aunt Patty and I wanted to cook some alligator tail this weekend, but we don’t have a “croc” pot….  LOL!!!!!!
  • If the Terminator retires, is he then known as The Exterminator?
  • There’s an email going around about processed pork, gelatin, and salt in a can.  If you get it, don’t open it – it’s spam…….
  • Studies have shown that humans eat more bananas than monkeys…  Must be true because I’ve never eaten a monkey in my entire life!
  • And here is one more for our very own FedFis VP of Relationship Management, Mr. Dan Heilveil -  Do they allow loud laughing in Hawaii, or just “a low ha”????

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.