This Week in Startups Archegos founder arrested, Bolt sued by Authentic Brands, $GOOG & $MSFT earnings, Apple sells repair parts, EV Corvette | E1445
Apr 28, 2022
The recent arrest of Archegos Capital's founder reveals shocking financial misconduct involving hidden leverage, shaking the banking world. Meanwhile, Bolt faces a lawsuit from its largest customer for failing to deliver on promised technology. Tech giants Google and Microsoft report contrasting earnings, spotlighting the competitive social media landscape. Apple takes a bold step in consumer rights by offering repair parts, and excitement builds around GM’s announcement of an electric Corvette, merging performance with sustainability.
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Archegos Founder Arrest
- Bill Hwang, Archegos Capital owner, arrested for hiding billions in leverage, causing massive losses.
- He lost $20 billion in two days, highlighting the dangers of excessive leverage and margin calls.
Leverage and Margin Calls
- Leverage lets traders control larger positions with borrowed money, amplifying gains and losses.
- A margin call happens when losses trigger forced selling to cover the borrowed amount.
Total Return Swaps and Market Manipulation
- Total return swaps let investors take large, anonymous positions with little upfront capital.
- This anonymity potentially enabled market manipulation by hiding the true size of positions.