FT Lex : Prediction markets’ warp-speed growth is their biggest risk

Prediction markets’ warp-speed growth is their biggest risk
More wagers will draw even greater attention to a market already under regulatory scrutiny

From Super Bowl to ice dance? Prediction markets have boomed during the American football season. Operators such as Kalshi and Polymarket must hope the Winter Olympics will take up the gambling slack. It would be better, though, if the action cooled: more wagers will draw even more attention to a market attempting the legal equivalent of a triple axel.

The growth of prediction markets has been prodigious. Sums wagered have risen ninefold since the US football season began, encouraging a stampede of new entrants. These include the UK’s Plus500, which announced its intentions this week. And as the practice of making yes-or-no bets spreads from politics and economics to sports, it has grown much closer to the mainstream of both gambling and finance; Goldman Sachs boss David Solomon recently described it as “super interesting”.

The $4.3bn wagered in the last week of January suggests a $200bn-a-year market that may already have surpassed online sports betting in size. That makes the legal haze around the industry, which draws in sophisticated financiers as well as mom-and-pop punters, harder to bear.


Financial watchdogs have unsurprisingly moved to assert their control. This week, the Commodity Futures Trading Commission maintained these wagers are financial swaps. It promised rational and coherent rulemaking — just what financial players such as broker Robinhood and Chicago exchange giant CME, which have dipped their toes into prediction markets, want to hear.

Several state-level gaming regulators, including New York and Nevada, are meanwhile in court arguing that predictions are a form of gambling and fall under their purview, not that of a federal watchdog. CME boss Terry Duffy assured analysts this week that if predictions are indeed deemed to be gambling, he would back away from that market. It is likely others would follow suit.


One way or another, clarity will come. There are some signs that smaller investors, most likely retail, lose more on predictions than they do via other forms of betting — and more than bigger players do, according to a dataset analysed by a team at Citizens JMP Securities. That’s the sort of ratio that could gird politicians into action.

Prediction markets, meanwhile, have a packed schedule. The Olympics will be followed by the football World Cup, partly hosted by the US, and the US midterm elections in November, bang in the middle of football season. It is all grist to their mill. But will the rules of the game change in a way that spoils their profit plans? It would be brave, if not reckless, to bet against it.

FT : The biohackers who want to fix their vision without resorting to glasses

The biohackers who want to fix their vision without resorting to glasses
An alarming global surge in short-sightedness caused by lifestyle not genetics is encouraging many to seek clarity in strange ways

It seemed like a bright and clear October morning along New Hampshire’s Merrimack River, but Mike Craumer couldn’t be sure. As usual, he was not wearing his contact lenses, so the world beyond his arm’s length was a blur. Craumer was hoping that would not be the case for too much longer.

For several weeks leading up to that autumn day in 2020, the 35-year-old software engineer had been attempting to reverse his short-sightedness. He was one of a growing number of people subscribing to the notion that it is possible to correct even very poor vision (Craumer’s had been measured by an optometrist at -6 in the left eye and -6.25 in the right) with “biohacking” techniques, including tensing and relaxing the eyes, focusing on distant objects or simply imagining seeing the world in full clarity.

Until now, he had been struggling. Standing on the river bank, he could just about make out the shape of his black Labrador roaming through the woods and the trees dissolving into autumn colours. The river itself, perhaps glistening in the sunlight, was just a blue haze. Craumer waded in. “There’s something about coming out of the water that just seems to generate clarity,” he told me later. As he ducked his head into the river, the water felt soothing on his eyes. But then, as he straightened back up, he noticed something remarkable. The scene around him was definitely becoming sharper.

Reality is getting foggier. If, as the philosopher Walter Benjamin believed, the way we see is connected to the way we live, that people started to see the world differently, had new experiences of vision as we began driving cars, taking photographs and filming videos, then the experience that most defines our current screen-encumbered moment is blur at a distance. A 2016 study estimated that by 2020 2.6bn people would suffer from myopia globally, 50 per cent more than in 2000. By 2050, the study found, that number is set to double to nearly 5bn. Scientists used to believe myopia was mostly genetic in origin, but research over the past few decades has conclusively pinned this epidemic of nearsightedness on our lifestyles.

Spending too much time indoors and in front of screens stretches out our eyeballs, turning them from spherical into something more egg-like, disrupting how light moves through the optical system and causing far-off objects to look hazy. The reasons for this are not fully understood. Some scientists think the high contrast of screens might play a role. But experts agree that sunlight triggers dopamine, which tells the eye to stop growing. Too much time indoors, and the eye doesn’t know when to stop.

Sometimes, blur is the least of a myope’s problems. As short-sighted people age, their misshapen eyes risk causing serious diseases, including retinal detachments that can lead to blindness. The possibility that half the world’s population may be nearsighted by 2050 is a “time bomb” that threatens blindness on a mass scale, ophthalmologist and Emory University professor Machelle Pardue told me. Spending more time outdoors can hold off myopia for a while in children. Relaxation techniques, too, can help relieve eye strain, which is caused by focusing for long periods. But once the eyeball has become elongated, most ophthalmologists agree it cannot be reversed without surgery.

This is a fate more and more people are refusing to accept. The boom in short-sightedness is encouraging many to seek clarity in strange ways, believing myopia and other eye problems can be fixed without corrective lenses or surgery. Inspired by biohacking podcasters and wellness influencers, including American neuroscientist Andrew Huberman and tech entrepreneur Dave Asprey (who runs a chain of “human upgrade centres” across the US), and spurred on by the prevailing suspicion of mainstream medicine under the Trump administration, legions of myopes and hyperopes, presbyopes and amblyopes (the near- and the far-sighted, the ageing-eyed and the lazy-eyed) are trying to seize back control from their tech addictions, from mainstream optometry and the £108bn global lens industry. What they want to achieve is something every eye doctor I spoke to assured me was physically impossible: to train themselves to see clearly again. It was like trying to will yourself taller. “You can’t meditate your way into being 6ft 2in,” said Donald Mutti, an optometrist at Ohio State University. “It just can’t happen.”

Close your eyes and picture the darkest of blacks. Now imagine a shade even darker than that. No, even darker. Or conceive of the most vivid bunch of red roses you can muster and drink in all of the detail — the guard petals peeling back, the dense inner spiral, the tips of the thorns. Do this often enough and, one day, a clearer world might be there waiting when you open your eyes.

Many vision biohackers take the view, first proposed by William Bates, a renegade ophthalmologist who worked in New York at the turn of the 20th century, that eye problems like myopia are due not to the immutable shapes of eyeballs but instead stem from a sort of chronic strain, inner blockage, spiritual sickness, even failure of imagination. Glasses and contact lenses, they believe, are overprescribed. The idea that eyesight naturally declines over time is incompatible with biohackers’ trust in near-perpetual bodily optimisation. Meditation and eye yoga can supposedly hack vision back to sharpness, manifesting more of the world into lucidity. “If you twisted an ankle,” I was told by one natural-vision coach, who claimed she’d improved her -8 myopic eyes to the point where she no longer needs glasses at all, “would you just think, ‘This is it?’”

Many holistic-health proponents believe sharpening your vision could also help mend your mind, perhaps even help put the world to rights. Rangan Chatterjee, until recently a practising GP and the resident doctor on the morning TV show BBC Breakfast, links poor vision to high stress levels, lack of empathy, phone addiction, even to angry or tunnel-visioned ways of interacting online. “Maybe,” said Chatterjee recently on Feel Better, Live More, his health podcast that he claims is Europe’s most successful, “if more and more of us could improve our visual processing . . . it could help make the world a kinder . . . place.” 

Chatterjee’s guest on that episode was the controversial Maryland optometrist Bryce Appelbaum, who treats problems most of his colleagues say cannot be improved and believes “vision is the new microbiome”. After spending several days in Appelbaum’s vision-improvement clinic, Chatterjee credited the rebel optometrist with helping reduce his own myopia.

Back in New Hampshire, Craumer was having his own revelation. As he swam in the river, he noticed the trees along the bank coming into focus. He waded out of the water, sat down on a log and looked around. The rocks, he saw, were becoming clear. He could see vivid patterns emerging from the granite. On the ground were individual grains of sand! He took in the sharpened landscape and wondered if he’d already been cured.

But then, worried he was late for work, Craumer checked the time on his phone. As he looked back up, the world was once again a haze. The breakthrough had lasted about 15 seconds, but Craumer knew it meant he was on the right track. Now, it was simply a matter of making that glossy world he’d glimpsed permanent. He walked back to his house to begin the working day, inserting his contact lenses so he could see his computer screen.

Craumer’s story was one of many I’d been hearing. People were claiming to be fixing their eyesight naturally and I wanted to know what was going on. So last summer, I signed up for the International Conference of Holistic Vision, which would be the largest gathering in the community’s history, held in October in Valencia, Spain. After years in the shadows, an organiser told me, the community’s ideas were finally catching on.

Short-sighted for most of my adult life, I wondered, perhaps against my better judgment, if biohacking techniques could make a difference. And while it all seemed rather suspect, even a little unseemly, the myopia surge was making me worried — about inexorable sensory decline, about a degradation of vision hastened by the attention-industrial complex. I was also curious, at a time when our vision is collectively worsening, about the motivations of this coterie trying to bring things into greater focus through sheer force of will.

Last October, I arrived at the conference with 300 or so other attendees, all of us filling a vast, bright room inside a building on the shore. A racing yacht, its hull wrapped in plastic, was moored up against the floor-to-ceiling windows and blocked our view of the sea.

Over the next five days, there would be a packed schedule of vision-yoga workshops, group eye-therapy sessions and talks about shifting mindsets. The miraculously ex-blind were here, I’d heard, with driving licences in their pockets. I watched people’s eyes widen as they recognised fellow biohackers from previous gatherings. Many were wearing the official conference T-shirt, its SEE AND BE SEEN slogan arranged in the shape of an eye chart on their backs. Failing to count a single pair of glasses, I slipped my own frames into my shirt pocket and took my seat for the first workshop of the day.

Carme Llimargas, a Spanish vision coach dressed in a white linen dress, with bare feet and a silver bob, was there to lead a morning workshop called Heal your Vision, Heal your Life. Llimargas was teaching us how to remove our spiritual blockages to clear vision. She told everybody to stand up with their eyes closed and sway from side to side, on a floor covered in pink, yellow and blue balloons.

Part of the problem, Llimargas said, was that living in states of anxiety was causing our vision to fog up. “We need to programme ourselves to see clearly,” she said. “Nothing is impossible.” I noticed one attendee repeat a mantra under her breath: “I know I can see, I know I can see.” Outside, in the concrete yard beside the yacht, a woman was turning her head slowly back and forth in the sun, her eyes closed — a relaxation ritual called “sunning”. We were told to link arms, form a circle, close our eyes and breathe deeply. After several minutes, Llimargas asked us to open our eyes. “Maybe we can see more clearly now,” she said. Most people nodded.

After a concluding namaste, it was time for lunch. Over my tortilla, I complained to another biohacker that I’d noticed no improvement in my visual acuity. The biohacker, an American vision coach in his thirties who said his eyesight had already slightly improved since the morning, explained the key to clarity was faith. Observing reality, the natural-vision people believed, was a largely mental act, an exercise in conjuring clarity out of your head.

In some ways it was an instinctive idea. To believe we live in a shared world that can be measured and understood, you first must grasp how it becomes visible, which is not intuitively clear. Plato believed that we saw the world thanks to rays shooting out of our eyes. Other ancient philosophers thought objects sent out tiny replicas of themselves which wafted through the air and landed in the eyes.

Confusion lasted until the 11th century, when the Iraqi mathematician, astronomer and physicist Ibn al-Haytham, known as the father of modern optics, first explained how light bounces off objects before reaching the eyes, to be interpreted by the brain. In revealing that our perception of the world could be explained by geometrical rules, he demonstrated that the natural world could be precisely calculated, a major step towards mathematical theories of reality. With optics, wrote the historian Theresa Levitt, “the world became eminently legible”.

Not for the myopes, though, who had to wait until the 14th century for their first concave eyeglass. How the glasses worked was a mystery, until Johannes Kepler, the German astronomer, explained in 1604 that light reaches its focal point too soon inside myopic (and therefore elongated) eyes, landing in front of the retina rather than directly upon it. Concave lenses focused the light a little further back. Back then, myopia was rare. It wasn’t until the industrial revolution that German doctors noticed a rapid increase in the problem, which studies have since linked to the introduction of compulsory education.

Some casualties of myopia, such as Claude Monet, embraced the condition. When the painter of hazy scenes tried on a pair of spectacles, he was reportedly dismayed by the world’s hard edges (towards the end of his life Monet developed cataracts, and had to wear corrective glasses). Paul Cézanne, “an artist exasperated by a defective vision . . . who discovered the basis of a new art”, in the words of one 19th-century critic, refused to wear glasses. Other myopes believed glasses actively damaged eyesight, acting as a crutch while worsening the underlying causes of visual problems. Like the vision coach from Istanbul at the conference, who recounted to me the story of being sued by the Turkish government for practising medicine without a licence (she won the case). Or the Israeli therapist who went from severe myopia to driving at night without glasses and investigated the “inner emotional roots” of her patients’ vision problems by “conversing with the eyes”.

Or like Craumer, who I spotted on the second day standing next to the conference merch table wearing a pair of pinhole glasses on his forehead (glasses with a black plastic grating through which small beams of light enter to help reduce blur). The burly American’s beard was scraggly, his eyes the colour of light-wash denim. Inches away from his nose, he was holding a book called A New World of Seeing. Intrigued, I followed him out into the yard for lunch.

Five years ago, Craumer told me while spreading peanut butter across a slice of bread, he looked up at the stars and decided the heavens couldn’t have been this hazy to his ancestors. “Something seemed off,” he said. “Something didn’t seem natural.” As he said this, I noticed he had a dead-eyed look. He was, chillingly, gazing not at me but straight through me. “I feel like you’re looking past me,” I said. “As if I’m not here.” Craumer admitted that whenever he’s outdoors, he likes to make the most of it by focusing his eyes steadfastly on the distance, even when an object — such as another person — is in the way.

Craumer discovered the YouTube videos of Nathan Oxenfeld, a vision-biohacking influencer from Vermont, who introduced him to the teachings of vision biohacking’s founding father, Bates, who claimed to have cured his own poor eyesight. While researching his 1920 book, Perfect Sight Without Glasses, Bates brought a retinoscope to the Central Park Zoo, where he measured the optics of the eyes of an elephant, a monkey and a Cape buffalo. He supposed that each animal became myopic when anxious. Problems like myopia, Bates came to believe, were caused by an epidemic of mental strain that corrective lenses were worsening. He theorised that tension in the muscles surrounding the eye causes them to press down upon the eyeball and flatten it, like squeezing a balloon. (Ophthalmologists say such a phenomenon is anatomically impossible.)

Bates also believed a good memory was essential to seeing clearly. One of his patients, he wrote, had cured her short-sightedness by vividly recalling a buttercup she once saw — an achievement that helped cement Bates’s faith in memory’s curative power, even as he himself experienced bouts of prolonged memory loss that led to his occasional disappearance. In 1902, months after vanishing from New York without warning, his wife found him working in London’s Charing Cross Hospital as an assistant, having been admitted in a fugue state. He spent a couple of nights recuperating in the Savoy hotel before vanishing again and turning up, years later, as a small-town eye doctor in North Dakota.

For Bates, telling lies or imagining things that didn’t exist, such as “a blue sun” could also obscure one’s vision. The real sun, meanwhile, had in his view been a victim of ophthalmological slander. With fully relaxed eyes, Bates assured his patients, they would be able to stare at it for hours without harm or discomfort. Techniques for achieving such relaxation included palming, swaying, closing one’s eyes in the sun and shifting one’s gaze from side to side.

With the help of Bates’s techniques, and after achieving that fleeting moment of clarity in a New Hampshire river in 2020, Craumer worked relentlessly to improve his vision. Four years later, his world had become a little clearer, he told me. He took an eye test. His myopia prescription, his optometrist found, had dropped by 1.5 dioptres in the right eye, and 1.75 in the left. (Dioptres are the unit used to calculate the strength of an optical lens.) Craumer showed me a picture of the two prescriptions, but when I told eye doctors his story, they all doubted myopic eyes could ever improve so dramatically.

It was becoming a familiar tale. In Valencia, dozens of people, from wellness bros and eye yogis to renegade ophthalmologists, from fringe-medicine faithful and spiritual seekers to the nearly blind and the newly healed, all swore they’d improved their vision naturally. Most did so while making direct eye contact with me and without blinking (which I took as a sign of their honesty). Some, like Craumer, even had the documents to prove it. It sounded fantastical. But then I had an odd flash of clarity of my own that forced me to consider whether I might now be one of them.

During one workshop, a vision coach from Tennessee called Gloria Ginn asked us to sit and “palm” for several minutes. Before we started, I looked over at the emergency exit sign above the door. It was blurry. After covering my closed eyes with my palms for a few minutes, I opened them, blinked, and yawned. The sign shifted into focus for a couple of seconds. I could make out the letters SALIDA DE EMERGENCIA. It was the furthest I could ever remember seeing without my glasses.

Conventional ophthalmology had a few different takes on my lucid flash. Most eye doctors I asked about it suggested that, because I was then in a state of relaxation, the tension in my ciliary muscles, which control the focusing of the lenses, could have been temporarily relieved. Such tension, they told me, can give rise to blurry distance vision, a condition known as “pseudomyopia”. Biohacking techniques could never cure true myopia, which is caused by the structure of the eye, but it was possible that some biohacking techniques could relieve pseudomyopia.

Perhaps some of the biohackers — so convinced of their ability to manifest the world into clarity in defiance of facts like the anatomical structure of the eye — had never had myopia at all. Others, a couple of ophthalmologists told me, might have adapted to the blur and now believe they see more clearly than they do. Still, the biohackers’ obsession with taking the visible world by the reins was something I could understand. A couple of the people I met seemed to enjoy telling me how inspiring it was to see all around you the rewards of your achievement — like being deeply moved by a view that comes at the end of a long and arduous hike, but that would leave you cold if seen through a car window.

After the revelation of the emergency-exit sign, I took the lift to the building’s roof terrace. I wanted to see how far I could now see into the distance without my glasses. It was a warm and breezy evening and the sky was pink. Behind me were dusty shadows of distant mountains. I looked out across the sea, towards the horizon, but the view was so blurry that I put my glasses back on. Now I saw a small rowboat pass in front of a bright blue freighter loaded with containers. Between them was a person nimbly riding a hydrofoil. Birds were swooping overhead and people were strolling along the promenade past café terraces. It was a beautiful scene. Would it have been more beautiful if I could believe seeing it was my own doing?

I took the lift back down to the ground floor. One of the conference organisers was reciting poetry about the ocean. Around a dozen people were lying on the floor, palming on their yoga mats. I spread my jacket on the ground and lay down alongside them, but I couldn’t relax. Screams from the other side of the window were distracting me. I cracked open an eye, turned my head to the side, and peered through a gap in my fingers. Outside, I saw hundreds of biohackers running around with black felt strips hanging down the middle of their faces to divide their fields of vision in two. They were playing catch with tennis balls which they kept dropping and chasing across the yard, crashing into each other, whooping with delight.

I believed some of them had seen genuine improvements in their vision. Others couldn’t see much at all. Still, they evidently felt the world was out there, somewhere in the murk, ready to be polished into focus. And that seemed like plenty.

FT : ‘Hermès orange’ iPhone sparks Apple comeback in China

‘Hermès orange’ iPhone sparks Apple comeback in China
Vivid redesign and social media buzz lure Chinese buyers back after a prolonged slump

Chinese consumers are snapping up Apple’s new iPhones, with a flashy “Hermès orange” premium model going viral and helping reverse a lengthy sales decline in one of the Silicon Valley company’s largest markets.

Chief executive Tim Cook recently touted Apple’s record-breaking iPhone sales in China in the fourth quarter, when revenue jumped 38 per cent year-on-year to $26bn, contributing nearly a fifth of total sales.

Analysts said a design refresh for the iPhone 17 range has reinforced Apple’s status-symbol position in China by making the latest handsets more immediately recognisable as new and high-end.

In particular, a new vivid orange-coloured device has attracted thousands of online posts and videos from fans showing off their new phones since its launch last autumn.

The phone has been dubbed “Hermès orange” for its resemblance to the French luxury brand’s signature hue, though Apple officially calls the tone ‘cosmic orange’.

“It sounds simple, but it’s the external obvious changes to design, which includes the introduction of a shout-out orange colour, that pulled out early upgraders,” said IDC senior research director Nabila Popal. 

“I was instantly drawn to the colour — it felt very special, who doesn’t like Hermès orange?” said a model and influencer who goes by the stage name Xiao Mei, in a video posing with her new accessory. “The more I look at it, the more I love it.”

The turnaround in China reverses a roughly three-year sales slump that left investors questioning the tech company’s future in the highly competitive smartphone market where it vies for attention against domestic rivals such as Huawei, Vivo and Xiaomi.

It is a boost to the iPhone-maker which is emerging from a year of tariff risks and AI setbacks that hammered its stock. Strong iPhone demand globally has helped lift Apple’s shares 7 per cent over the past week.

It has also suffered as tensions between Beijing and Washington triggered a top-down drive for Chinese public-sector employees to phase out iPhone usage, and Huawei rolled out a high-end smartphone running on a locally made processor. 

Analysts worried that Beijing’s failure to approve Apple’s suite of AI features for local iPhones would hurt sales. But Chinese consumers have instead been wowed by the redesigned casing and finish.

“It’s eye-catching,” said David Qiu, who swapped an old iPhone for the new orange shade. “It’s the newest colour.”

Apple’s base iPhone 17 model has also benefited from government subsidy policies for cheaper phones in China. Consumers receive subsidies of up to Rmb500 ($72) on smartphones priced below Rmb6,000 as part of Beijing’s drive to stimulate the economy. 

Bank of America analyst Wamsi Mohan noted that Apple is meanwhile benefiting from comparisons to a lacklustre 2024. The US group’s China sales had contracted for eight of the previous nine quarters, and had not seen consistent growth since 2022.


Significant upgrades to the iPhone 17’s cameras, chip, display and battery helped drive an upgrade “supercycle” that comes exactly four years after the company’s last major growth spurt in China in 2021, according to IDC’s Popal.

She added that Apple had also benefited from stumbles on the part of Huawei, which saw its sales decline about 10 per cent in the last quarter amid user complaints about its Harmony operating system.

Buyers of the orange iPhone played up the colour’s association with success, riffing on wordplay in which “orange” sounds like “success” in Mandarin.

“May all your wishes turn orange; may orange come at once,” many purchasers of the new iPhone posted online.

An Liang, a social media influencer who has built a following by flaunting his wealth, said in a recent video: “Picking orange means everyone knows this is the new iPhone 17,” adding: “I’m just a badass.”

WSJ : Justice Department Casts Wide Net on Netflix’s Business Practices in Merge

Justice Department Casts Wide Net on Netflix’s Business Practices in Merger Probe
As it probes bids for Warner, the department is asking if the streamer has engaged in conduct that could make it a monopoly

  • The Justice Department is investigating Netflix for potential anticompetitive tactics as it probes the company’s proposed acquisition of Warner Discovery’s studios and HBO Max streaming service
  • The Justice Department is also reviewing Paramount’s rival $77.9 billion hostile bid for Warner Discovery, including its cable-networks unit.
  • The department, in its subpoena, asked whether either deal might hurt competition.

The Justice Department is investigating whether Netflix NFLX 1.64%increase; green up pointing triangle has engaged in anticompetitive tactics as it probes the streaming giant’s proposed acquisition of Warner Discovery’s studios and HBO Max streaming service, according to a civil subpoena viewed by The Wall Street Journal.

Questioning how Netflix competes with rivals suggests the department is looking at whether its planned Warner deal could entrench its market power, or lead to a monopoly in the future. U.S. law gives enforcers broad power to oppose mergers that could lead to a monopoly.

“Describe any other exclusionary conduct on the part of Netflix that would reasonably appear capable of entrenching market or monopoly power,” the agency asked in the subpoena, sent to another entertainment company.

Netflix agreed in December to pay $27.75 a share in cash in a deal totaling $72 billion. Paramount has made a rival $77.9 billion hostile bid for all of Warner Discovery including its cable-networks unit that houses CNN, TNT, Food Network and other channels.

The Justice Department is also reviewing Paramount’s proposed acquisition, which Warner has told its shareholders to reject. The department, in its subpoena, asked whether either deal might hurt competition. It asked how past mergers of studios or distributors had affected competition for creative talent and sought information on how talent contracts vary between studios.

Antitrust enforcers can sue to block any deal that substantially reduces competition. Scrutinizing whether Netflix has unfairly hobbled rivals could give the Justice Department another legal argument against the Warner acquisition. The line of questioning also could give the department a broader window into how Netflix does business.

Steven Sunshine, a lawyer for Netflix, said the company thinks the department is conducting a standard review of its proposal to buy Warner’s studio and streaming assets. “We have not been given any notice or seen any other sign that the DOJ is conducting a separate monopolization investigation,” Sunshine said.

“We are constructively engaging with the Department of Justice as part of the standard review of our proposed acquisition of Warner Bros,” a Netflix spokeswoman said. “We remain focused on the value Netflix and Warner Bros. can create together,” she said.

The Justice Department’s investigation is at an early stage. The department’s merger reviews can take as long as a year, although they sometimes advance more quickly. Enforcers conduct many antitrust investigations, and not all lead to formal legal action against a deal.

A Justice Department spokeswoman declined a comment. A Paramount spokeswoman said the company’s all-cash offer for all of Warner provides its investors with “greater value with a more certain, expedited path to completion.”

Both Netflix and Paramount are likely to face antitrust review in Europe and in the U.K.

Enforcers sometimes investigate whether to block a merger because the acquirer is already too powerful in a given market.

When the Justice Department conducted a merger investigation of Visa’s $5.3 billion proposed acquisition of financial-technology firm Plaid Inc., it looked at the payment company’s market power, and sued in 2020 to block the deal. Visa had a 70% market share in online debit transactions when it sought to buy Plaid, according to the department.

Visa ultimately abandoned the transaction, but the Justice Department sued the company four years later alleging it monopolized debit markets.

Makan Delrahim, Paramount’s chief legal officer, was the Justice Department’s antitrust chief during President Trump’s first term and made the decision to challenge the Visa-Plaid deal. Delrahim, as part of his pitch for Paramount’s offer, has suggested that the department could follow the Visa playbook during its investigation of Netflix’s acquisition.

Netflix and HBO Max together would control around 30% of the U.S. subscription streaming marketplace, not including bundles with wireless or cable providers, according to Antenna estimates. Netflix says the statistic isn’t meaningful because 80% of HBO Max subscribers also subscribe to Netflix. The company argues that it competes in a marketplace that also includes YouTube and other free video platforms on TV.

Mergers of direct competitors are presumed to be illegal when the combined company would have more than 30% market share, according to Justice Department guidelines. U.S. law says monopolies generally involve a much higher market share of 60% or greater.

Netflix has said that a combination with Warner’s HBO Max streaming service would account for only 10% of viewing time in U.S. TV households. The company has argued Netflix doesn’t directly compete with Warner Bros and that its deal should be regarded as a vertical merger, meaning Netflix is mainly a distributor for content and Warner is a supplier of movies and TV shows.

Warner and Netflix have said they expect regulatory approval for the deal.

Ted Sarandos, co-CEO of Netflix, told the Senate Judiciary Committee this week that consumers would pay less for a bundled Netflix and HBO Max.

In an interview with NBC News this week, Trump said he wouldn’t get involved in the deal and that it was up to the Justice Department. “I’ve decided I shouldn’t be involved,” Trump said when asked about the deal. “The Justice Department will handle it.”

WSJ : SpaceX Delays Mars Plans To Focus on Moon

SpaceX Delays Mars Plans To Focus on Moon
Elon Musk’s rocket company had aimed to reach the red planet in 2026

SpaceX has put off a mission to Mars planned for this year, shifting its focus to a long-promised lunar voyage for NASA.

The rocket company told investors it will prioritize going to the moon first and attempt a trip to Mars at a later time, according to people familiar with the matter. The company will target March 2027 for a lunar landing without humans on board, another person said.

The strategic shift comes as SpaceX doubles down on plans to launch artificial-intelligence data centers in space after acquiring Elon Musk’s startup xAI. That deal, announced Monday, gives the combined company a $1.25 trillion valuation. SpaceX also plans to go public in an IPO that could come as soon as summer.

In a memo announcing the merger, Musk, who also serves as SpaceX’s CEO, outlined the company’s plans to help build a permanent presence on the moon. He referenced aspirations to use it as a base for exploration deeper in space.

“The capabilities we unlock by making space-based data centers a reality will fund and enable self-growing bases on the Moon, an entire civilization on Mars and ultimately expansion to the Universe,” he said.

NASA hired SpaceX a few years ago to prepare a version of its Starship vehicle to meet an agency spacecraft near the moon, take on a crew and transport U.S. astronauts down to the lunar surface. Landing U.S. astronauts there is a key part of the agency’s Artemis space-exploration program.

The Texas-based company has used its billions of dollars in NASA funding to help develop Starship, a more than 400-foot-tall rocket which is designed to be fully reusable.

Last year, Musk called the moon “a distraction” and said SpaceX is going “straight to Mars.” Musk previously lobbied President Trump for backing on his Mars mission by telling the president that getting people to the planet would cement his legacy as a “president of firsts,” The Wall Street Journal reported.

SpaceX previously said it planned to launch five Starships to Mars in late 2026 to take advantage of a time when the distance between Earth and Mars shrinks, creating an easier voyage.

In a podcast interview aired in January, Musk downplayed the prospects of getting to Mars this year. “We could but it would be a low probability” and “somewhat of a distraction,” he said.

The company will be hard-pressed to meet the March 2027 schedule. Doing so will require the company to frequently launch Starship and show it can refuel the vehicle while it is in orbit.

Agency officials put pressure on SpaceX last year, calling on the company to prioritize the moon. In October, Transportation Secretary Sean Duffy, who was then running NASA, said SpaceX was behind and wanted more competition to deliver a vehicle that could get astronauts on the moon.

Since then, SpaceX has pitched NASA on what it has called a simplified path back to taking crews down to the moon.

Jeff Bezos’s Blue Origin is pushing to beat SpaceX to the moon with its own simplified moon-landing system. In January, Blue Origin said it would pause its suborbital tourism business to focus on lunar efforts.

NASA Administrator Jared Isaacman said at his confirmation hearing last year he welcomed competition between SpaceX and Blue Origin in creating lunar lander vehicles.

The agency plans to launch astronauts soon on a lunar fly-by called Artemis II. That mission would set the stage for a potential astronaut moon landing in 2028 with SpaceX or Blue Origin.

WSJ : A New Crypto Winter Is Here and Even the Biggest Bulls Aren’t Certain Why

A New Crypto Winter Is Here and Even the Biggest Bulls Aren’t Certain Why
Some of crypto’s biggest champions can’t put their finger on what went wrong

Bitcoin just suffered its largest weekly decline in more than three years. But the worst part for some of crypto’s permabulls is that they aren’t sure what exactly caused the crash.

The selloff left many of the market’s luminaries—those so well-known that they go simply as “Pomp” and “Novo” and “Mooch”—searching for answers.

“Bitcoin is crashing and investors are freaking out,” Anthony Pompliano, a crypto evangelist and investor, wrote Friday.

Bitcoin fell 16% to $70,008 this past week, down a sharp 45% from its all-time high of $126,273 in October. Ether dropped 24% to $2,052, off 59% from its own high of last year. Both tokens staged furious rallies Friday, but the week remained a historically bad one for crypto. And few seem to know what went wrong.

Market theories for the selloff ranged from investors’ pivot toward the prediction markets and other risky bets, to widespread profit-taking after a blistering bull run.


“There was no smoking gun,” said Michael Novogratz, who runs Galaxy Digital, a crypto merchant-banking and trading firm.

For much of last year, crypto was in ascendance. President Trump’s return to the White House ushered in a new era for digital assets, which continued to gain acceptance among individual investors and legitimacy on Wall Street. As bitcoin and other popular tokens touched record highs, it seemed as though the market’s best days always lay ahead.

“I really didn’t think that we’d see a six at the beginning of the bitcoin price ever again,” said Cory Klippsten, chief executive officer of the bitcoin financial services firm Swan Bitcoin.

And yet, for a 24-hour stretch that ended Friday afternoon, bitcoin was back at that level. Past crypto selloffs had clearer explanations, which made this one more mystifying.

Anthony Scaramucci sits in a black leather chair, wearing a blue suit jacket and light blue collared shirt.
Anthony Scaramucci, who briefly served as a Trump administration aide, is known as a crypto bull. Jonah Rosenberg for WSJ
In 2018, bitcoin fell 80% from its peak after the initial coin offering bubble burst, ending an era in which thousands of unproven startups raised billions of dollars with little more than a sales pitch. In 2022, the $40 billion collapse of TerraUSD and Luna coins triggered a cascade of company failures across the crypto sector that culminated in the implosion of Sam Bankman-Fried’s FTX exchange.

This time, there is no clear consensus. “If you ask five experts, you’ll get five explanations,” said Anthony Scaramucci, who served for 11 days as communications director during Trump’s first term and is among the best-known crypto bulls at his firm, SkyBridge Capital.

Here are some of the most popular explanations:

New shiny objects
There is no shortage of other markets for traders to make audacious bets, said Pompliano, the CEO of ProCap Financial. Prediction markets, gold, silver, artificial intelligence and so-called meme stocks are all vying for their attention of late, drawing eyes away from crypto.

“It used to be that bitcoin was the consensus view where asymmetry existed,” Pompliano said. “Now you have AI, prediction markets…many other areas where people can go and they can speculate.”

More supply?
Wall Street has sought to capitalize on crypto’s popularity by launching a growing array of exchange-traded funds and derivatives linked to bitcoin and other popular tokens. Their proliferation might not affect the sheer number of bitcoins, ethers and other tokens, but some investors thought their arrival has dented bitcoin’s appeal as a scarce asset.

Bitcoin’s main appeal has always been its limited supply of 21 million coins. By launching ETFs and complex derivatives, Wall Street has enabled investors to bet on the price of bitcoin without needing to buy or hold the actual coins, some analysts said.

New sheriff
Other investors suspected that Kevin Warsh, Trump’s pick to be the next chair of the Federal Reserve, might be bringing down crypto prices.

Warsh, they said, is seen as more hawkish on interest rates as a tool to tame inflation, and more supportive of a stronger U.S. dollar. Higher rates and a stronger dollar are conditions that typically hurt some alternative assets, such as gold and crypto, making them less attractive to investors. And this past week, the WSJ Dollar Index edged up 0.4%.

Still, Warsh and the Fed are expected to cut rates this year, not raise them. And Warsh has warmed to bitcoin. He famously dubbed the digital currency a “policeman for policy,” saying in a TV interview that bitcoin’s price can inform policymakers when they are doing things right and wrong.

Clouded clarity
After Trump signed into law the Genius Act last year, paving the path for stablecoins—digital assets pegged to fiat currencies like the dollar—the industry turned its attention to the next important piece of legislation: the Clarity Act. This bill would create a clear regulatory framework for the burgeoning industry.

Congress appeared on the cusp of moving the bill ahead when a dispute between crypto exchanges and traditional banks stalled that momentum. Without this measure, many financial firms are hesitant to integrate digital assets into their offerings. And unless a compromise is reached, the dust-up might deny the crypto market a catalyst that could have extended the rally.

CEOs are embedding AI across operations to boost productivity, adaptability, and competitive edge. Discover strategies behind this shift.
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Profit-taking
Novogratz and some other investors thought much of the selloff was driven by investors eager to lock in gains they collected when bitcoin, ether and other digital tokens rallied in the midst of the “euphoria” of Trump’s election in 2024 and pledge to make the U.S. the world’s crypto capital.

And those gains were indeed spectacular. Bitcoin, for one, rocketed around 80% from Election Day until early October of last year.

Sharp selloffs are hardly unusual in crypto, of course. They are so regular, in fact, that investors give them a name—crypto winter—that befits the belief that these downturns are as predictable as the seasons.

Some analysts believe this crypto winter could thaw faster than those of the past. No key companies have collapsed or faced allegations, revelations that have elicited crises of confidence in past crashes.

For believers, Friday’s rally served as reassurance that cryptocurrencies have always bounced back, part of why they stick with these investments.

“The infrastructure is stronger, stablecoin adoption continues to grow and institutional interest hasn’t evaporated, it’s just sidelined,” said Jasper De Maere, a strategist at the crypto trading firm Wintermute. Interest in these investments “can return quickly,” he said.

Many of crypto’s true believers are willing to wait.

CrunchBase : The Week’s 10 Biggest Funding Rounds: Waymo Leads An AI-Driven Line

The Week’s 10 Biggest Funding Rounds: Waymo Leads An AI-Driven Lineup Of Large Financings

Startup investors offered fresh evidence once again that there is plenty of capital available for favored companies. Autonomous driving unicorn and robotaxi operator Waymo led the pack this week, with $16 billion in fresh funding at a $126 billion valuation. Other large round recipients were also overwhelmingly AI companies, with additional activity in aviation and space tech.

1. Waymo, $16B, autonomous driving: Waymo, the autonomous driving company spun out of Alphabet nearly 10 years ago, raised $16 billion in new funding at a $126 billion post-money valuation. Dragoneer Investment Group, DST Global and Sequoia Capital led the round, along with a long list of other investors. The Mountain View, California-based company says it plans to enter 20 more cities this year, including Tokyo and London.

2. Cerebras Systems, $1B, AI processors: Cerebras Systems, a developer of large, fast AI processors, closed a $1 billion Series H round. Tiger Global led the financing, which set a post-money valuation of approximately $23 billion for the Sunnyvale, California-based company.

3. ElevenLabs, $500M, AI audio: New York-based ElevenLabs, a developer of AI audio technology, secured a $500 million Series D round led by Sequoia Capital. The round sets an $11 billion valuation for ElevenLabs, more than tripling from a year ago. The company also reported over $330 million in annual recurring revenue last year.

4. Skyryse, $300M, aviation: Skyryse, an aviation hardware and software company developing an operating system for flight as well as aircraft called the Skyryse One, landed over $300 million in Series C funding at a valuation over $1 billion. Autopilot Ventures and Fidelity led the financing for the 10-year-old, El Segundo, California-based company.

5. (tied) Bedrock Robotics, $270M, construction robotics: Bedrock Robotics, a startup developing robotics technology for the construction industry, raised over $270 million in Series B funding. CapitalG and Valor Atreides AI Fund led the financing, which reportedly set a valuation around $1.75 billion for the roughly 2-year-old, San Francisco-based company.

5. (tied) CesiumAstro, $270M, space tech: Austin-based CesiumAstro, a provider of connectivity hardware and software for the space and defense industries, secured $270 million in Series C equity financing and $200 million in debt funding. Trousdale Ventures led the equity portion while Export-Import Bank of the United States and JP Morgan provided the debt.

7. Positron AI, $230M, AI infrastructure: Positron, a developer of energy-efficient AI inference hardware, picked up $230 million in Series B funding at a post-money valuation of more than $1 billion. Arena Private Wealth, Jump Trading and Unless co-led the financing for the Reno, Nevada-based company.

8. Fundamental, $225M, enterprise AI: Fundamental, a developer of AI models to build predictions from enterprise data, emerged from stealth and announced it raised a $225 million Series A led by Oak HC/FT. The San Francisco-based company, founded in 2024, also had a previously undisclosed $30 million seed round.

9. Tomorrow.io, $175M, weather technology: Boston-based Tomorrow.io, developer of an AI-native weather satellite constellation, closed on $175 million in equity financing led by Stonecourt Capital and HarbourVest. The company says it has fully deployed its first 13- satellite constellation.

10. Goodfire, $150M, AI research lab: AI research lab Goodfire raised $150 million in Series B funding at a $1.25 billion valuation. B Capital led the financing for the San Francisco-based startup.

Barron's : India and Brazil Are the Anti-AI Trade. Why Their Markets Are Ready t

India and Brazil Are the Anti-AI Trade. Why Their Markets Are Ready to Shine.

Rising fears over artificial intelligence didn’t just rock U.S. stocks this week —they also spilled over to the emerging markets that have benefited from corporate America’s AI spending spree. Some parts of EM, however, could act as a hedge against broader market weakness.

While the AI trade is usually viewed as confined to the U.S., it’s played a big part in EM as well, particularly in Asia. So with U.S. markets selling off, it shouldn’t be a surprise that the iShares MSCI Emerging Markets exchange-traded fund has fallen 2.5% this week, while the iShares MSCI Taiwan ETF was off 1.6%, the iShares MSCI South Korea ETF shed 4.7%, and the iShares MSCI China ETF dropped 5%.

“AI needs a lot of infrastructure to support it, and when you look at emerging markets, they have China, South Korea, Taiwan—very tech-heavy areas that could support AI growth,” said Stacie Mintz, managing director and head of quantitative equity for PGIM’s Quantitative Solutions business.

There’s a lot more to emerging markets than East Asia, however. India is “arguably one of the most compelling” non-AI emerging market plays, says Kunal Desai, a portfolio manager and EM specialist at GIB Asset Management. Although the country underperformed other emerging markets in 2025, this year is setting up for a strong recovery. FactSet consensus estimates see the iShares MSCI India ETF’s earnings per share rising 16% year over year in 2026 compared with the prior year, and then increasing another 15% in 2027.

India isn’t entirely insulated from the AI meltdown. Some of its largest companies, Infosys and Tata Consultancy Services among them, got caught up in this week’s selloff, shedding 4.8% and 3.6%, respectively. But as Desai notes, India’s broader equity market is driven by a “very different set of fundamentals,” including domestic consumption, infrastructure investment, and service-led growth. The country is also set to benefit from recent trade deals struck with the European Union and the U.S. that significantly reduce tariffs on Indian goods.

“From an equity market perspective, improved market access to Europe would disproportionately benefit domestically listed Indian companies with global aspirations, particularly in industrials, pharmaceuticals, specialty chemicals and select consumer exporters,” Desai said.

The iShares MSCI India ETF has gained 2.3% this week, bucking the pessimism in other emerging markets.

Brazil is another strong hedge against the AI trade, and arguably, a much cheaper one.

The iShares Brazil MSCI ETF currently trades at 10.6 times the next 12 months’ earnings, below the India ETF’s price/earnings ratio of 21.7 and the S&P 500’s 22.8 times earnings.

It’s also tech-light, unlike Taiwan and South Korea. Brazil tilts more toward financials and commodities—it is one of the world’s major sources of iron ore, and has vast, underdeveloped rare-earth deposits.

The biggest risk is Brazil’s coming presidential elections. Volatility could increase if left-wing incumbent Luiz Inácio Lula da Silva wins in October. But then again, if a right-wing candidate were to win, it could spark a rally in Brazilian equities, experts say.

AI or no AI, it’s an opportunity we wouldn’t want to miss.

Barron's : How the Software Panic Hit BDC Stocks—and Why Some Might Be Worth Buy

How the Software Panic Hit BDC Stocks—and Why Some Might Be Worth Buying
If marquee, public companies like Salesforce, ServiceNow, and Workday are getting hammered by concerns about AI, what is the outlook for the dozens of smaller, highly leveraged companies?

The private credit “cockroaches” may have finally arrived, and they’re scurrying from the software sector. They may also have created opportunities in shares of business development companies that own the debt of the companies.

Few asset classes have been as popular—or as controversial —as private credit. The market totals over $1 trillion of loans made directly to riskier companies. The loans are then sold to institutional investors through non-publicly traded private credit funds, and to retail investors through publicly traded business development companies, or BDCs, like Ares Capital, Blue Owl Capital, and FS KKR Capital, as well as semiliquid private funds like Blackstone Private Credit and Apollo Debt Solutions. The funds have big payouts juiced by financial leverage, and in good times appear to carry little risk.

But times could be changing. JPMorgan Chase CEO Jamie Dimon warned last year about “cockroaches” in private credit markets after two auto-related blowups last year. The culprit this time, however, has been the sharp decline in publicly traded software stocks, which are now down an average of 20% this year. The typical private-credit fund invests about a fifth of its money in the sector, according to a recent report from UBS, though the actual amount could be higher. Software’s decline helped prompt a selloff in the $350 billion BDC market, with the VanEck BDC Income
exchange-traded fund down 5% this past week and hitting a 52-week low. The BDC now yields 12%.

The concern is that if marquee, public software companies with strong balance sheets like Salesforce, ServiceNow, and Workday are getting hammered by concerns about artificial intelligence, what’s the outlook for dozens of smaller, highly leveraged software companies?

All this is hitting stocks of alternative asset managers such as Blackstone, KKR, Apollo Global Management, Ares Management, and Blue Owl Capital, since private credit has been a big growth area for them. The private credit industry may now be facing one of its toughest tests since it came on the scene after the financial crisis.

Think of private credit as a private version of the junk bond market. Funds make loans to highly leveraged private companies generally valued at $5 billion or less that now carry high-single-digit to low-double-digit yields. The loans usually carry interest rates that adjust at a margin of four to six percentage points above short-term rates. The market is a private-equity financing mechanism, since most borrowers were taken private in leveraged buyouts.

It is also opaque, since the loans rarely trade and offer limited or no liquidity, and valuations are usually set by the fund manager. Borrower financial data is rarely available publicly. The appeal is that private credit can offer 10% yields on diversified portfolios, and historic loan quality has been strong with minimal losses. Management has mattered. Ares and Blackstone have better records than KKR and Goldman Sachs, based on their BDC credit quality.


The issue now is whether the trend of high yields and limited losses will continue, given how AI is disrupting software. Software companies have enticed private credit because of their active deal flow, high yields—often above 10%—and greater-than-usual asset coverage. But tech and software loans tend to have less traditional earnings and have riskier pay-in-kind structures than private credit loans to other sectors.

Barclays fixed-income analyst Peter Troisi highlighted the challenge of evaluating BDCs that report their net asset values quarterly. “At a higher level, it is nearly impossible to determine which software exposures at BDCs contain the highest latent risk because they are investments in private companies,” he explains. More-liquid loans to bigger software companies in the broadly syndicated market, he notes, are down 3% to 4% in recent weeks.

Asset managers take a more benign view. Ares Capital, the largest BDC, was one of the first to report its fourth-quarter results. In a conference call this past week, CEO Kort Schnabel said portfolio quality is in “excellent shape,” with nonaccrual loans around 1%. Blackstone President Jon Gray had a similar message in January on the firm’s fourth-quarter earnings conference call.

Blue Owl Co-CEO Marc Lipschultz addressed private credit and software exposure on the asset-management company’s conference call this past week. Blue Owl’s stock has been hit hardest among its peers due to the firm’s outsize private credit exposure. Lipschultz said technology “continues to be the most pristine among all our portfolios.” He added that tech loans on average are about 30% of the value of companies doing the borrowing, providing “huge equity cushions.”


Private credit carries other risks beyond software. Both public and private funds use leverage, amplifying potential downsides. BDCs generally use about a dollar of borrowing for every dollar of equity. Private fund leverage generally is somewhat lower. The leverage is much higher than comparable investments in closed-end junk bond funds like the BlackRock Corporate High Yield fund, which has 25 cents in debt for every dollar of equity.

Leverage can compound mistakes. BlackRock TCP Capital, a BDC, recently reported a 19% drop in its quarterly net asset value on Dec. 31 due to problems at six portfolio companies. That prompted a 20% drop in its stock price, and the shares now trade around $5, a nearly 30% discount to its NAV of $7. The portfolio’s loss was much smaller, but the BDC’s leverage turned an 8% drop in its total portfolio value into a drop in its NAV of more than twice that, Morningstar analyst Eric Jacobson calculated.

Investors can also pay a high price for the privilege of owning private credit. BDC and private-fund fees are steep, often running at 3% to 5% annually of net assets, with the Ares and Blue Owl BDCs at the high end of that range, Barron’s calculates. These are considerably higher than comparable investments, such as closed-end bond, junk, and loan funds or leveraged-loan ETFs. The industry argues that leverage is appropriate given strong credit history and that fees need to be higher than on funds focused on public securities since more-intensive work is needed to evaluate private businesses. Another issue: Lower short-term rates are putting downward pressure on loan yields, which has prompted some BDC dividend cuts.

BDCs offer a window on investment sentiment because the stocks can trade at a premium or discount to NAV based on investor demand. Sentiment is now the worst since 2022, and with BDCs trading at big discounts to NAV, some of the risks may be mitigated.

Industry leader Ares Capital, which has generally traded at a premium, now trades around $19, a 5% discount to NAV, while Blackstone Secured Lending, which a year ago traded at a 15% premium, has swung to a nearly 10% discount. Overall, the average BDC now trades at a 20%-plus discount to its NAV, and many traded this past week at discounts of 25% or more, including such large funds as Blue Owl Capital, Blue Owl Technology Finance, and FS KKR Capital. The discounted prices mean investors can get current yields of 12% or more.

“There are not a lot of areas of the market where valuations are attractive, and this is one of them,” says Julian Klymochko, the CEO of Accelerate, a Canadian firm focused on alternative investments. “The market is pricing in a significant amount of loan losses, and I don’t think we will see that.”


He cites deeply discounted BDCs like Morgan Stanley Direct Lending, Bain Capital Specialty Finance, and Nuveen Churchill Direct Lending, which trade at roughly 25% discounts to their NAV, with yields topping 13%. He adds that investors should favor BDCs like the Morgan Stanley and Nuveen funds, which focus on the highest-quality senior secured loans instead of those that own riskier subordinated debt and equity.

Private funds, however, are another story. They are bought and sold at their NAV, which means investors have to pay full price for what they can buy at a discount elsewhere. The industry may have made a mistake in creating both, since sustained drops in BDC stock prices create incentive for investors to sell a private fund for 100 cents on the dollar and buy a comparable one for 75 or 80 cents, often from the same manager. Withdrawals are usually capped at 5% of net portfolio assets a quarter, although that limit can be waived.

Investor redemptions from many private funds picked up in the December quarter and appears to have continued in the current quarter. Blackstone Private Credit’s redemptions were 4.5% of the fund’s shares, or about $2 billion, but the fund still had a net inflow of $1.2 billion in the fourth quarter. It’s possible that stepped-up investor redemption requests could prompt private funds to limit redemptions—as Blackstone’s private real estate investment fund, Blackstone Real Estate Investment Trust, or BREIT, did in late 2022 and 2023.

Accelerate’s Klymochko says he would “stay away” from private funds. The largest are Blackstone Private Credit, Blue Owl Credit Income, and Apollo Debt Solutions.

For investors comfortable with the risks in private credit, avoiding semiliquid private funds in favor of BDCs priced at big discounts makes sense.

You could even call it good business.