FT News Briefing Investing’s cults of personality
May 26, 2022
Hedge funds are grappling with losses in the wake of a tech stock downturn. The ongoing war in Ukraine is exacerbating a dire global food crisis, prompting calls for urgent action. Meanwhile, the story of a crypto pioneer and the collapse of the Terra and Luna stablecoins is unraveling, revealing intense investor fallout and a controversial leader. The tumult in these financial sectors underscores the immense pressure and personality-driven narratives shaping modern investing.
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Global Food Crisis
- The war in Ukraine is causing a global food crisis, by blocking grain exports from reaching the global market.
- This could lead to widespread hunger and starvation.
Melvin Capital Liquidation
- Gabe Plotkin, founder of Melvin Capital Management, is liquidating his funds after heavy losses.
- This follows a similar pattern of other hedge funds struggling with the downturn in tech stocks.
Do Kwon and the "Lunatics"
- Do Kwon, co-founder of Terra/Luna, cultivated a brash persona, attracting loyal investors called "lunatics."
- His combative style and disregard for traditional decorum fueled the hype, despite the inherent risks.