Talibs Weekly Email - Week 32
Kodaks Fishy new deal 📷, Black Banks need your help 🏦 & Money in Trash 🗑️
Good Evening,
Hope everyone had a great weekend & a return to playoff sports! Lots of things in the news lately; some extremely troubling news unfolding with the blasts in Lebanon. Please donate here if you can.
What I’m listening to as I write this weeks email
Tweet that got me thinking
📷Kodaks big moment draws some scrutiny
🏦 Rapper Killer Mike advocating for black banks
🗑️ The Millions being made from Cardboard Theft
Podcast:
📷WSJ - Kodak’s big moment draws scrutiny
📸What happened? Kodak, the iconic US camera company which had filed for bankruptcy in 2012 had their stock surge from $2 to high as $60 over two days. This came to light of a disclosure that Kodak had gotten a $765 million loan from the government to make drug ingredients for COVID-19 vaccinations.
⚗️Why Kodak!? The US government wanted to look for companies domestically to make US drugs, they picked Kodak because Kodak has technically been involved in chemicals for years. Kodak has had a specialty chemicals devision that has traditionally focused on supporting Kodak’s traditional imaging process.
So Whats the problem?
📰a) Kodak releasing information before the Press release.
The rally may have triggered by some of the news being shared online on Twitter and websites by at least two reporters in Rochester (Kodak HQ) and two television stations before the official release of the information. Kodak claimed that they had not authorized the release of that information to the press; usually companies participate in an embargo of information with the press. They provide the necessary release ahead of schedule on confidentiality that the press releases the information only after the company issues the statement.
They do this so all appropriate parties have access to the information at the same time
💰b) Kodak executives issuing stock options to the board right before the release
Disclosures: As the deal broke through, Kodak disclosed in regulatory filings that it had issued stock options to several executives on July 27 before the shares soared. The SEC has opened up an investigation regarding this.
🗞️Latest news had indicated that on July 29 (The peak of Kodaks 2757% surge), a board member donated 3 million shares of Kodak stock - valued at $100 million at a time to a synagogue. The synagogue is a registered charity in New York and this could be classified as a donation (tax exemptions). There is an open investigation regarding this.
📈c) Kodak getting this loan - Why?
🇺🇸The deal is part of the Trump Administration to reduce dependence on external countries and start producing raw materials in the US. The company plans to open a new division called Kodak Pharmaceuticals that will focus on raw materials required to produce generic drugs.
🧑🔬Generic drugs require chemicals used to make pills & tablets, these are the initial building blocks known as “key starting materials” and more refined substances active in pharmaceuticals called “APIs”
🧪Only 10% of these materials are manufactured in the US and most are imported from China. When drug companies ask the FDA for permission to sell a new medicine, they must specify which API suppliers they plan on using. These API suppliers are vetted suppliers and approved by the FDA; this process can take up to 10 months. Kodak being involved in this process could lead to them being fast-tracked for many generic companies.
💭My Thoughts: I actually think is a good idea and a positive move to reduce dependance on other countries. Lots of American companies have struggled to survive and this loan allows the company to utilize their technology in a different way. The stock option issuance and the leak to the media is a bit shady and that should be looked into. I would argue that more governments should be doing this to lessen the dependence on foreign countries.
Article:
Bloomberg: Rapper Killer Mike Wants to Save America’s Disappearing Black Banks
TLDR: Rapper Killer Mike has been urging people to utilize black banks to help eliminate the racial wealth gap.
🏦Black Banks: Many Wall Street banks have been labeled as too big to fail, many black-owned banks have failed quite often in the past decade. Two decades ago, 48 black banks were open for business and this number has dwindled to just 21. The combined assets of the black-owned banks has actually declined in the last 10 years.
💰Where are these based out of normally? Black-owned banks are mostly in low & moderate income communities where they rely on small deposits and have smaller profit margins from making loans. These firms provide an alternative to payday lenders and loan sharks that charge high rates & fees.
🏧Why are black banks needed though? Black banks are imperative in helping balancing the racial inequalities that exist in American families. Black families have an average net worth of 1/10 of White families. In mainstream banking, black people have less access to credit and other banking services as legacies due to the segregation. There are unfair practices such as redlining which made it very difficult for black people to get mortgages in the US and the subprime crisis hurt Black communities significantly.
💳What has changed? Since the beginning of protests sparked by Floyd’s death, OneUnited has added more than 40K customers and Netflix Inc has pledged to shift as much as $100 million to lenders that support the black community.
💭My Thoughts: This is an excellent initiative to support black banks; this is a movement that impacts many people and helps black communities in minimizing that racial wealth gap. If you can fund entrepreneurs in black communities - these same entrepreneurs will create jobs for many people within the communities and have positive change. The starting of this point is allowing entrepreneurs to succeed by offering them adequate loans and sound business advice.
I just watched the movie The Banker featuring Anthony Mackie + Samuel L Jackson and highly recommend it
🌍BBC: The Millions being made from Cardboard Theft
🗑️Whats happening? Thieves have been stealing cardboard that shop owners or consumers leave out to be recycled and selling this for top $. Is it really stealing? Yes - because they’re actually taking away business from legitimate recycling firms and city authorities who take a cut for their sales
Behind him stand two of the Spanish capital's well-known blue municipal recycling bins, which until February of this year had been raided daily by one of the city's numerous recycled cardboard trafficking gangs. (This made me laugh a bit)
Turns out a paper-stealing posse can pull a neat profit selling old cardboard in China, where it’s pulped and made into shipping boxes.
🇪🇸Where is this happening? Madrid - it is approximated that almost 1/2 of all cardboard put into recycling in Madrid was stolen by these gangs. In fact- the city police failed to solve the issue with fining anyone caught stealing this.
📦Who was called? The spanish government called upon a task force and this “paper theft” task force arrested 42 members of a cardboard gang on suspicion of environmental offences and money laundering. One gang was accused of stealing 67k+ tons of paper waste/year, worth $11.8m/year.
📥What has Madrid done to stop this? Initially in 2016, the Madrid council deliberately introduced dumpsters with small holes to avoid men crawling in and out of these bins. They enforced strict fines with anyone caught stealing cardboard but these initiatives have not stopped the gangs.
🇨🇳So what do the gangs do with this cardboard? The gangs have set up a company that mixes the illegally collected cardboard with some legitimately sourced cardboard (to ruin the audit trail) and export these boxes to South East Asia.
💸Wait how big is this market? The annual value of legitimate trade in recycled cardboard is expected to climb to $5.4 bn by 2024 (up from 4.3bn in 2017). The growth is expected to be higher with the rise of online shopping.
✈️The Queen of Trash: This name has been given to billionaire Zhang Yin of China whose firm specialises in importing used cardboard from the US. The going price for a tonne of cardboard is around $120 to $150 CAD.
💭My Thoughts: Genius Genius & Genius. Shopkeepers do not have a stake in this since most of them have to pay to get rid of cardboard hence they do not care who is taking the garbage for free. The thieves are battling the government agencies at best; sounds like this is an industry that can be challenged legally.
Books of 2020
Here are my books to read/finish for the next while
Completed
Educated by Tara Westover (9/10)
Loonshots by Safia Bahchall (8/10)
Range - David Epstein (7/10)
American Dirt by Jeannine Cummings (9/10) [fiction]
The Ride of a Lifetime - Robert Iger (9/10)
If you’re looking for books to get, I would suggest checking out bookdepository.com or thriftbooks.com (both are cheaper than amazon at times