Weekend Reading #104
This is the hundred-and-fourth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 6th February 2021.
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What we're doing.
This week we sent out the first edition of our private markets–focused newsletter from 3BC, News & Views. This is a newsletter that is specifically designed to speak to 3BC’s affiliates, providing them with an update about what we’re up to and what our issuing companies are doing whilst providing a bit of content, inspiration and fun, too.
Affiliates are very important to our business, as they provide us with the deals that we list on 3BC and the investors that drive investment activity. By plugging into our technology and network, our affiliates allow us to scale. In return, we give them access to a unique, global network of investors and investment opportunities. It’s this partnership that allows us all to get more from private markets.
If you would be interested in becoming an affiliate of 3BC, or if you’d just like to receive a copy of News & Views on a regular basis, please drop us an email.
What we're thinking.
We have been thinking a lot recently about the changing nature of building a business on the internet.
The original batch of companies had to do all the heavy lifting themselves in order to build the infrastructure they needed to scale their businesses. Fast forward to today and there are a host of companies which make building and running an online business super easy! The most famous two examples are of course Shopify and Twilio. But we believe that it's time to add another to the mix. For some months we have had a position in our fund in a company called Agora. This week ,as new Silicon Valley social media sensation, Clubhouse, lit up with the arrival of the world’s richest man (on paper), Elon Musk, attention was drawn to Agora’s “Real time as a service” business. Agora offers developers the ability to plug their APIs into its global server network and run on their in-app video, chat and messaging technology. Clubhouse was built in little over a weak using Agora! The stock price has doubled over the past week or so as it seems the world has now woken up to this opportunity.
This week also saw the long-awaited IPO of Chinese video-sharing giant Kuaishou, which started trading at a whopping valuation of north of US$150bn in market capitalisation in Hong Kong, almost triple the price set when the IPO book was allocated. Slated as the antithesis to its dopamine-inducing counterpart Tiktok (or Douyin as it is known in China), built by self-style app-factory Bytedance, Kuaishou seems to have made it to the public markets first, setting a pretty high bar for Bytedance, as and when it chooses to tap the capital markets.
Social media apps have of course been all the rage, but perhaps the most amazing (or perhaps provocative) snippet of this entire episode was highlighted by the South China Morning Post:
“Retail investors have bet serious money on the world’s biggest technology stock sale this year, putting in almost HK$1.3 trillion to oversubscribe the IPO by 1,200 times, more than double the total cash in circulation in the city at the end of December.”
Kuaishou literally translates to “fast hands” in mandarin - and there were certainly some quick hand actions going on this week.
What we're playing.
This week we’ve downloaded "Don’t Starve", a somewhat strange looking 2D survival game for PS4 in which you traverse around an undiscovered wilderness world in which you as the protagonist, Wilson, are desperately trying to get back home. It has had excellent reviews from more than 20,000 ratings and so whilst on sale, we thought we’d give it a go. We’ll be back next week with our own thoughts and comments. If we’re impressed with it, there's also a multiplayer expansion we could try; and as always, we welcome our newsletter readers to join us if they wish to.
What we're reading.
It's hard to pick one from a magazine that’s packed with the world’s finest, funniest cartoons, but we rather liked this one from this week's New Yorker:
The action on Gamestop didn’t slow as we came across this excellent little limerick-style video which made us chuckle too.
What we're watching.
Every year, the arrival on our television screens of the Six Nations rugby championship heralds the fact that winter is slowing turning to spring. It is green shoots made manifest and is one of those events, like August Bank Holiday (end of summer) or Bonfire Night (start of winter), whose very presence signifies a change in the season. Sure, it’ll be cold in London for a month or so yet, and we might even have a little more snow next week, but the appearance of rugby in Dublin, Edinburgh, London, Paris, Cardiff, and Rome means that warmer days are not too far away.
The tournament kicks off this Saturday, with England facing Scotland in the Calcutta Cup, a rivalry that dates back to 1879 when the first ever Calcutta Cup match was held at the Raeburn Palace, Edinburgh and was, by all accounts, an instantly forgettable 3-3 draw. Last year’s 38-38 draw was somewhat more entertaining, and we’ll be hoping for more of the same this year.
Whether you like rugby or not, the Six Nations has a little something for everybody, with the clash of cultures being as hard hitting as the ferocious tackling. Settle in with a cup of something warm (or frothy) and look out for the unpredictable French, the prosaic English, the passionate Scots, safe in the knowledge that when the tournament is through, some 7 weekends from now, spring and better days will more than likely be upon us.
On a separate note, for reasons we don’t really understand, we have found real joy in Martin Scorsese and Fran Lebowitz’s documentary “Pretend it’s a city”. It’s dry, funny, stylish and strangely life affirming, what The Economist titled somewhat aptly a “caustic ode to New York”.
What we're listening to.
This podcast with one of our favourite crypto investors, Su Zhu, of Three Arrows Capital covers the recent Gamestop et al fiasco in the context of crypto and illustrates how those of us who have followed crypto for a long time are used to this type of thing. The key issue is how the generational shift in investor base may mean that younger investors look for different things. It also discusses how they may find them in the decentralised world of crypto investing where alignment between token holders and users is completely different. We touched on this over a year ago with our white paper entitled “The Theory of Nachas” and gave the example of Amazon. Our thinking has evolved further since this piece was put together but it's certainly worth a revisit!
The US Dollar has also been back in focus for us, both as a signal of liquidity conditions globally but also in the broader ongoing debate about value, bitcoin and financial dominance. Notwithstanding our views on all of these on which we have written extensively, we also strongly believe that it is the people on the other side of the argument who we have to listen to most carefully. And on the side of continued dollar dominance (arguably not on the merits of the US Dollar itself, but rather premised on the argument that there is no viable alternative) is Barry Eichengreen in this podcast.
With a tonne of work to shift through this week, we spent a lot of time buried in one of our favourite musical genres – movie soundtracks.
Having watched again David Fincher’s, The Social Network, we were reminded just how great the soundtrack is to that supreme film. Composed by Trent Reznor, from hard rock band Nine Inch Nails, and Atticus Ross, the soundtrack is dark, eerie and quite disturbing, but oddly energising and inspiring. It’s perfect for a late-night work session with headphones, and was a deserved winner of the Academy Award for Best Original Score in 2010.
Another great film score that we immersed ourselves in for an hour or so was from Australian maverick musician, Nick Cave, whose score for the modern Western, The Assassination of Jesse James By the Coward Robert Ford, is a perfect accompaniment to focused endeavour. This is also another great film, made better by a supremely evocative soundtrack.
There’s something about a movie soundtrack which we find inspiring to work to. Whatever it is, be it the epic-ness that a movie scores create, rising a falling through acts as if you were sat in front of the movie itself, that suits an hour or so of focused work. If you’ve got a serious task that needs completing, soundtracks seem to be a great accompaniment.
Bach’s great organ Prelude and Fugue in A BWV 543 has been a great way to get us going as it’s clearly a time travelling heavy metal piece.