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Also in this letter:
■ Twitter sacks 4,400-5,500 contractors without notice: report
■ Paytm on path to profit, says CEO, as loan disbursal grows 387%
■ Zomato could rally 38% to Rs 100, says Jefferies
Crypto investors want more transparency from exchanges after FTX’s collapse
The collapse of FTX, which was among the world’s biggest cryptocurrency exchanges, while unlikely to deter retail traders in India from investing in digital coins, is expected to put the spotlight on centralised exchanges, with investors seeking more information from these exchanges about their reserves and liabilities, according to several people we spoke to.
Indian crypto exchanges, which have been seeking regulatory oversight, tended to agree.
Also Read | Visa terminates global debit card agreements with FTX
Crypto’s ‘Enron moment’: Sam Bankman-Fried-founded FTX has entered voluntary bankruptcy proceedings, and is being probed by the US Department of Justice and the US Securities and Exchange Commission for alleged securities law violations and fraudulent related-party transactions.
“This is the time to be very cautious. Such episodes, which have happened before as well, have an impact on how much investors can trust exchanges. There’s a saying in crypto — ‘not your keys, not your crypto’. The exchanges should make reporting of proof of reserves and liabilities a norm,” 30-year-old Abhigyan Arora, a Mumbai-based freelance music producer and crypto investor, told us.
Also Read | Binance plans push for global digital-asset standards
Exchanges agree: Even though most Indian crypto exchanges did not have major exposure to FTX or its related entities, the collapse is expected to cause ripple effects in terms of investor sentiment.
Vikram Subburaj, cofounder and CEO of the Chennai-based Giottus told us the exchange would start providing its customers with proof of reserves. “It is high time that all exchanges divulge proof of reserves. Regulators must also make proof-of-reserves mandatory as part of compliance filings,” he said.
CoinDCX, one of India’s largest cryptocurrency exchanges, said it will go a step further. Cofounder and CEO Sumit Gupta wrote in a blog post that it is planning to periodically publish its reserves-to-liability (R2L) ratio.
“In our opinion, the much advocated ‘proof of reserves’ only showcases one side. There’s no visibility of liabilities. Proof of reserves without proof of liabilities is only half the picture,” Gupta wrote.
Also Read | Crypto.com says it’s not in trouble after heavy withdrawals spook investors
Twitter sacks 4,400-5,500 contractors without notice: report
Twitter terminated the services of 4,400 to 5,500 contractors without advance notice, according to a report by tech newsletter Platformer.
Details: The report, which was subsequently confirmed by Axios and CNBC, said most contract employees found out they had been sacked after losing access to the company’s email and internal communications systems.
The mass firings spanned Twitter’s operations in the US and around the world, and reportedly affected teams working in content moderation, real estate, marketing, engineering, and other departments.
Layoffs: The latest cuts come about 10 days after Twitter laid off nearly half its 7,500 on-roll employees. A number of executives have also resigned or been fired since Elon Musk took over the company, leaving it without a communications department.
Elon has ‘too much work’: Meanwhile, Musk said he has “too much work” as CEO of both Twitter and Tesla as he undertakes mass layoffs and grapples with an advertising backlash at the social-media company.
“I have too much work on my plate, that is for sure,” he said Monday. Musk also runs SpaceX, The Boring Company and Neuralink.
Blue-tick turmoil: Twitter has faced a tumultuous two weeks since Musk’s takeover. Late last week, the platform was forced to pause its $8-a-month premium offering, Twitter Blue, which gave users a blue tick without verifying their IDs. This sparked an explosion of verified impersonator accounts, which spread confusion and misinformation on the platform.
Also Read | The real cost of Twitter’s blue-tick saga
Paytm on path to profit, says CEO, as loan disbursal grows 387%
The value of Paytm’s loan disbursal grew 387% year-on-year (YoY) to Rs 3,056 crore in October, while the number of loans disbursed grew 161% YoY to 3.4 million, the digital payments firm said in a filing with India’s stock exchanges on November 14.
VSS upbeat: Paytm is on the path to profitability and free cash flow, chief executive Vijay Shekhar Sharma said in a letter to shareholders.
“Due to the huge demand for lending in our country, our low penetration and the compounding nature of our lending journey, we are extremely optimistic about the prospects of our lending business,” he added.
The company also said it clocked 42% YoY growth to $14 billion on total merchant GMV (gross merchandise value) processed through Paytm in October. It said this was “partly due to the festive season”.
Q2 results: On November 7, Paytm said revenue rose to Rs 1,914 crore ($233.81 million) in the July-September quarter, from Rs 1,086 crore a year earlier. Consolidated net loss widened to Rs 571 crore from Rs 473 crore in the same period last year as expenses related to employee benefits and payment processing charges surged.
Also read | Zomato’s head of new initiatives Rahul Ganjoo quits
Zomato could rally 38% to Rs 100, says Jefferies
Global brokerage Jefferies has maintained its ‘buy’ rating on Zomato with a target price of Rs 100 a share, implying an upside of 38% from the current price of Rs 72.40.
Jefferies cited the company’s break-even on food delivery and positive growth outlook in Blinkit as the reasons for its optimism.
Losses narrow: On November 10, Zomato reported a reduced consolidated net loss of Rs 250.8 crore for the September quarter, from Rs 434.9 crore in the same period last year. Its revenue from operations increased to Rs 1,661.3 crore during the quarter, from Rs 1,024.2 crore a year ago.
The company said this was the first quarter in which it has crossed $1 billion in annualised revenue. Total expenses rose to Rs 2,091.3 crore during the quarter from Rs 1,601.5 crore a year ago.
CEO Deepinder Goyal said while the food delivery business has been growing and steadily moving towards profitability, there is room for it to grow much faster.
Also Read | Darwinbox planning IPO in next three years, says cofounder
Tweet of the day
SoftBank stock tanks after another huge Vision Fund loss
Shares in Japan’s SoftBank Group plummeted on Monday after the company reported a heavy loss at its Vision Fund investment arm for a third consecutive quarter.
By the numbers: The shares sank 13% in early afternoon trade – heading for their biggest one-day loss in more than two and a half years.
Analysts said, however, that the share price slide was in part a pullback from a steep rally that had been driven by hopes of more share buybacks. As of Friday’s close, SoftBank shares had gained more than 40% since October.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.
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