Hi and welcome back to Semafor Business, a twice-weekly look at the world of big money from Bradley ͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 


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Hi and welcome back to Semafor Business, a twice-weekly look at the world of big money from Bradley Saacks and me.

Listen. I had really hoped to not write about Sam Bankman-Fried for a little while. It’s a fascinating story, for sure, but it’s a big world.

And then… we got some documents. Reed Albergotti and I spent some wee hours going through memos and spreadsheets that laid out the early days of SBF’s crypto-trading firm, Alameda, whose troubles this year tipped his entire empire into bankruptcy last month. It might be semi-ancient history, but we thought it could help explain how this unknown, unkempt 20-something became the undeniable face of the crypto industry. It did.

Yesterday, we answered a question that’s been gnawing at us since then: Where did Alameda’s money come from in the first place? Today, we bring you the story of its chaotic early days, when the trading losses and lax oversight that eventually triggered its collapse were on full display.

Barring some insane twist — never out of the question in this world — I hope to be back next week with a palate cleanser. And today, for the crypto-weary crowd, we’ve got the whisper number on Goldman Sachs’ bonuses and One Good Text with Jeremy Wacksman on Zillow’s remote-work-forever policy.


➚ Buy: QT. Europe has so far watched from the sidelines while other central banks embraced “quantitative tightening,” turning off the gusher of money that propped up pandemic-bruised economies. Christine Lagarde, president of the European Central Bank, is widely expected to join the crowd this month and start selling down the 5 trillion euros in bonds it owns.

➘ Sell: QVC. Retailers are projecting shoppers to come back in person this holiday season, which is bad news for the channel and its tele-deals. Its bonds have lost nearly 40% of their value this year, and the stock of its parent company is down 72%.

Semafor Stat

Revenue by 2026 expected from peer-to-peer car rentals in a surprising emerging battleground: Australia. It’s a small market — 50 times smaller than the U.S. opportunity — but two big names are using it as a testing ground. Uber, which bought Australia’s Car Next Door this year, and Turo, billed as the Airbnb of car rentals, launched competing apps Down Under last month.

Liz Hoffman

Wall Street boom ends as Goldman cuts bonuses


Goldman Sachs’ bonus pool for senior employees is expected to shrink by as much as half, people familiar with the matter said, as CEO David Solomon tries to boost flagging shareholder returns in a tough year across Wall Street.

A smaller bonus pool for its 400-odd partners isn’t surprising, at least directionally speaking. Last year was a huge year for high finance, and compensation reflected that, while 2022 has been a rough one. But Goldman’s revenue, which tends to be a proxy for pay, is only down 20% over the first nine months of the year, so the expected cuts look deeper this year. It will be finalized by the end of the year.

In February, the firm set a new goal of raising its return on equity — a measure of stockholder gains — to 14%. But then the markets boom of 2021 went poof, and profits are down across Wall Street. As of Sept. 30, Goldman’s figure was at 12%. There’s only so much money to go around and the choice, as it is for all CEOs in lean times, is between courting investors and rewarding employees.


Solomon has been more attuned to shareholders’ concerns than his  predecessors, holding investor presentations and shedding some of the firm’s signature secrecy Partly that’s because he has to be — Goldman isn’t the undisputed king of Wall Street anymore — and partly because a higher stock price just makes everybody happy. (I covered the firm for five years, and you can take the resting pulse of Goldman headquarters at 200 West Street by just checking the stock price.)

Now with smaller profits, he has to pull the levers carefully, striking a balance between keeping the partnership happy and keeping his promise to shareholders. It’s an unenviable position.

The internal howling from cutting partner pay is inevitable – but also extremely predictable. After last year’s windfall, Goldman gave its partners a special stock awared, and was careful, as I wrote at the time, to “gift-wrap it as a one-time event and keep their expectations in check going forward.” It came with a public warning, too, from the company’s chief financial officer, who told analysts that “to the extent the environment in 2022 shifts, that compensation model is highly variable.” But Wall Street memories are short, and this will produce some internal hand-wringing.


Goldman has to answer to shareholders, just like most other public companies. The New York Times in 2018 created what it called the Marx Ratio, a measure of how companies shared their profits with employees versus shareholders. Big banks rated surprisingly low, as Bloomberg’s Matt Levine noted at the time.

Liz Hoffman and Reed Albergotti

Sam Bankman-Fried’s hedge fund was always a disaster


Sam Bankman-Fried’s crypto hedge fund started losing money, in every way you could lose it, from the moment it had real money to lose.

After borrowing more than $100 million from two philanthropic comrades of Bankman-Fried in early 2018, as Semafor reported Wednesday, Alameda Research lost $20 million within a month. The figure appears in internal documents that blame poor internal controls, a lack of basic trading safeguards, and crippling interest payments.

The documents are a sort of post-mortem, compiled by Bankman-Fried in the spring of 2018 and shared with others, that tried to dissect and explain the problems that had already piled up. They show that the risky trading and lax oversight that eventually brought Alameda down — and with it Bankman-Fried’s FTX empire — were there from its earliest days. (Bankman-Fried is an investor in Semafor.)

Losses in February of that year ate through nearly all of the $15 million in profits that Alameda had racked up in its four months of existence, according to the documents, which say that the firm:

  • Lost $2.5 million when it converted $110 million in cryptocurrency borrowed from Jaan Tallinn, the co-founder of Skype, into cash because it failed to properly hedge against it. The cryptocurrency in question, ether, fell while Alameda was offloading the stake.
  • Misplaced $10 million worth of coins. Moving crypto between exchanges can sometimes require a manual final step, and Alameda missed it on some transactions. At the time, it “didn’t have systems that would notice a transfer that [never] arrived,” and by the time they realized and retrieved the coins, their value had dropped, racking up at least $3 million in losses.
  • Lost $3 million betting against bitcoin and buying other tokens – a plain-vanilla trading strategy – because it didn’t bother managing spreads in the portfolio.
  • Spent $9 million on interest payments to Tallinn and Luke Ding, a former currency trader turned philanthropist, whose loans charged 43%. “This was a small price to pay in an environment where it’s easy to make 1% per day,” Bankman-Fried wrote in one document, “but when our trading was poor the interest piled on.”
  • Paid Tallinn a $2.2 million fee up front.

Alameda launched in the fall of 2017 with $500,000, the documents show, and profited by exploiting small differences in the price of cryptocurrencies in different countries. One spreadsheet shows the firm had estimated daily profits of about $17,000 in November and $133,000 by January.

That’s when Bankman-Fried raised serious money from Tallinn and $6 million from Ding. (We told the story of those loans, and the deep ties between Alameda and the Effective Altruism movement, yesterday. Read it here.)

Tallinn and Ding demanded their money back in March, and Alameda didn’t have the money to pay the interest that had accrued. It cut a deal, giving back about 80% of their money and reducing the interest rate on what remained of the loan, the documents show.



Bankman-Fried is an adherent of a philanthropic movement called Effective Altruism, which brings a brutalist, data-driven approach to the idea of doing the most good. So in 2018, taking stock of mounting losses and an employee exodus at Alameda, he made a spreadsheet.

Obtained by Semafor and discussed in my story with Reed yesterday, it calculated the “grief suffered,” “social capital effect” and “total impact” on the world for Alameda’s two dozen employees and investors.

In case you’re wondering, “grief suffered” is the “grief effect,” divided by four, multiplied by $2 million, multiplied by … never mind. Read that story here.


One Good Text with ... Jeremy Wacksman

Zillow went full-remote after the pandemic; employees can work from anywhere, forever, and three-quarters do. I checked in with its chief operating officer, Jeremy Wacksman.

What We're Tracking

Layoffs have come for all, no matter the industry. There’s been major cuts at Morgan Stanley, Plaid, and BuzzFeed, among others — not to mention the tech giants that have fired thousands of staffers earlier this year.

Even the inherently chill weed sector has had to face the music, such as Weedmaps, which fired a quarter of its employees. Curaleaf, a marijuana grower and distributor, rubbed salt in the wound when it sent the 200 staffers it laid off an exit survey that asked — among other questions — why they decided to leave the company.

Unsplash/Chase Fade

Staff Picks
  • Nate Anderson, the short-seller fresh off a successful takedown of electric truckmaker Nikola, has raised red flags about Welltower, the largest owner of senior care facilities in the United States. The REIT has been “obfuscating its distressed assets,” Anderson and his team wrote, boosting its stock price despite shaky financials.
  • Elsewhere in short campaigns, a judge dismissed a lawsuit against several big pharma companies alleging that a popular heartburn drug, Zantac, caused cancer. Shares of GSK and Sanofi surged Wednesday, a surprise for hedge funds that shorted them.
  • “Babies lacking object permanence — the understanding that things they cannot see continue to exist—love the game of peekaboo…Grown-ups no longer enjoy being deceived — unless they invest in private equity and venture capital, where hiding bad news is part of the fun.” The Economist’s zingy take on valuation games in private markets.
  • “Bankman-Fried held talks with Taylor Swift over $100mn sponsorship deal” because of course he did.
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— Liz and Bradley