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Matt Davis — Need2Know Chedditor

News You Need2Know

• Elite Wall Street lawyers ran insider trading ring

• Injuries are costing the NBA playoffs $313m

• I bet you Kalshi is now worth $22 billion

• Gas and fast food are making record profits, but l …

• Anthropic boss says firm could grow x80

• Poll of the day: It’s world-famous-5-7-5™ time

• Poll of the day: Slap on the wrist, indeed

What’s the stock market up to, eh?*

$SPX ( ▼ 0.38% ) $DJI ( ▼ 0.63% ) $NDX ( ▲ 1.59% )  

Companies mentioned in today’s newsletter

$CI ( ▲ 0.73% )  $ESRX ( ▼ 3.62% )$KALSHI ( 0.0% )  $SHEL ( ▼ 3.39% )  $BP ( ▼ 1.84% )  $TTE ( ▼ 1.37% )  $MCD ( ▼ 0.14% )  $WHR ( ▼ 11.91% )  $NVDA ( ▲ 1.77% )  $GOOGL ( ▼ 0.01% )  $AMZN ( ▼ 1.39% )  

Elite Wall Street lawyers ran insider trading ring

You thought the million-dollar partner draw was enough to satisfy the fine legal minds of Wall Street? Think again. Federal prosecutors in Boston just unsealed indictments revealing that some of the brightest bulbs from top firms, including powerhouses like Latham & Watkins, Goodwin Procter, and Wachtell Lipton, allegedly spent a decade side-hustling in a massive insider trading ring.

According to the feds, this extracurricular club netted tens of millions of dollars in illicit profits by stealing and using confidential details on nearly 30 major corporate transactions, including Cigna’s $CI ( ▲ 0.73% ) $54 billion acquisition of Express Scripts $ESRX ( ▼ 3.62% ) . At the center of the drama is corporate attorney Nicolo Nourafchan, a Yale Law grad who apparently decided legal prestige wasn’t enough. He even allegedly roped in a college classmate to help recruit more lawyer tipsters.

As FBI Special Agent Ted Docks told the Financial Times: “Everyone charged today is accused of scoring significant profits from expected market moves and making out like bandits.”

Naturally, the big law firms are clutching their pearls. Goodwin claimed to be “deeply disappointed” by the violations of trust, while Wachtell and Latham rushed to point out that the accused "responsible party" and "former associate" haven't actually worked at their firms in four or five years. Not since, like, 2021, or so.

Time heals all wounds.

Quote of the Day

Injuries are costing the NBA playoffs $313m

You’d think paying someone tens of millions of dollars would guarantee they actually, you know, play basketball when it matters most. Instead, the NBA playoffs have turned into the world's most expensive doctor’s waiting room.

A staggering eight recent All-Stars — raking in a combined $313.7 million this season —have already missed postseason duty. Take the Lakers, who are getting steamrolled by the Thunder. Partly it’s because superstar Luka Doncic has been keeping the bench warm in street clothes with a hamstring strain. As LeBron James helpfully explained: “We have a guy that averaged 37 a game... That’s the issue right there.”

Meanwhile, the Celtics’ Jayson Tatum lamented that he was “upset... sad... disappointed all day” after missing a decisive Game 7 with a bum knee, which his team lost. The 76ers' Joel Embiid survived an emergency appendectomy to win that game, only to immediately get sidelined again with hip and ankle pain in game two against the Knicks last night. My sense is he wants to be fresh for game three but whatever.

The culprit? The NBA's exhausting obsession with running non-stop for "pace and space." As orthopedic surgeon Dr. Neal ElAttrache explains the modern game, “you’re exceeding their ability to stay healthy.” I think there might also be a bit of Gen Z snowflakiness going on because the 1990s Bulls enjoyed pristine playoff attendance from Michael Jordan and Scottie Pippen. Still, today's teams are just crossing their fingers and praying that whoever is left standing can hobble across the finish line.

I bet you Kalshi is now worth $22 billion

Betting used to just be a fun way to lose money and your marriage and ultimately, perhaps, your life. Now, one prediction market is a $22 billion business. And that’s a totally different thing entirely, of course.

Kalshi $KALSHI ( 0.0% ) just bagged a massive $1 billion funding round, making its founders billionaires on paper. Millions of users are apparently flocking to the platform to gamble on everything from presidential election outcomes to the winner of Survivor and the exact high temperature in New York City on a given afternoon. All this casual wagering has pushed Kalshi's annualized trading volume to a staggering $178 billion. As the lead investor’s Lucas “Double Entend-not” Swisher told the New York Times: “Literally, outside of A.I., you don’t see anything growing like that.”

But squeezing money out of everyday internet bettors isn't enough anymore. Kalshi is now targeting financial heavyweights by wooing institutional investors like hedge funds and brokerages. CEO Tarek Mansour told the Times, “From a business perspective, the current business is working great,” but added that “the next step is going to institutionals, because that’s how you get a deeper layer of liquidity.”

I bet it is, Tarek. I bet it is.

Song of the Day: Lady Gaga, ‘Glamorous Life’

Ah, a Lady Gaga track from the Devil Wears Prada sequel, which describes your life and mine. I’m delighted!

Gas and fast food are making record profits, but luxury appliances? Not so much...

War breaks out, and who wins? Big Oil and the Golden Arches, apparently. As the U.S.-Iran conflict sends gas prices skyrocketing, British energy giant Shell $SHEL ( ▼ 3.39% ) casually dropped a $6.92 billion quarterly profit. CEO Wael Sawan delicately referred to the reason behind it as an “unprecedented disruption in global energy markets.” Unprecedentedly profitable, maybe! European rivals like BP $BP ( ▼ 1.84% ) and TotalEnergies $TTE ( ▼ 1.37% ) are also raking it in, although your summer travel plans might suffer a tad.

You’d think paying sky-high prices at the pump would keep people eating at home, but it’s been a boon for value burger chain McDonald’s $MCD ( ▼ 0.14% ) , who just posted nearly $2 billion in net income. Apparently, consumers are drowning their inflation sorrows in $4 breakfast deals and value-menu fries.

A Sausage and Egg McMuffin is indeed the perfect hangover cure. But while we're happily gobbling up cheap chicken nuggets, nobody is buying fancy washing machines. Whirlpool’s $WHR ( ▼ 11.91% ) stock plummeted 20% after they slashed their earnings guidance in half and suspended their dividend. The appliance maker is blaming a "recession-level industry decline." Chief Financial Officer Roxanne “Put on the Red Light” Warner lamented that consumers are “being a bit more cautious in terms of what they’re spending, and most likely reducing the amount of big-ticket purchases.” 

That high-end smart-fridge is going to have to wait. To cope, Whirlpool is planning to hike their prices even further this July. Good luck with that!

Anthropic boss says firm could grow x80

Most CEOs would sacrifice their firstborn for a 10x growth rate, but Anthropic's $ANTHROPIC ( 0.0% ) Dario Amodei really wants his AI startup to slow down.

At a recent developer conference, Amodei dropped the casual bombshell that his company, originally planning for a "modest" 10-times expansion, might actually grow 80 times as big this year. With their annual revenue run rate skyrocketing from $9 billion at the end of 2025 to a cool $30 billion last month, Amodei is seemingly exhausted by the sheer volume of demand. As the CEO lamented: “I hope that 80-times growth doesn’t continue because that’s just crazy and it’s too hard to handle.” He added, drowning in success, “I’m hoping for some more normal numbers.”

Me too, Dario. I feel like this every time I check my 401(k). Honestly.

To feed its monstrous growth, Anthropic is frantically hoovering up computing power. They just inked a massive deal with Elon Musk's SpaceX to hijack the Colossus 1 data center's planned 220,000 Nvidia $NVDA ( ▲ 1.77% ) chips, and they're plotting to build AI data centers in space. Amodei promised they are “working as quickly as possible to provide more compute than we have in the past.”

Throw in a combined $65 billion in fresh investments from Google $GOOGL ( ▼ 0.01% ) and Amazon $AMZN ( ▼ 1.39% ) , and it looks like Amodei’s dream of "normal numbers" is unlikely to come to pass any time soon. Sleep well, sweet AI prince. Nap good.

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Should you check your 401(k) today?

👎️ 

Not today but maybe tomorrow.

Poll of the day: It’s world-famous-5-7-5™ time

Poll of the day: Slap on the wrist, indeed

We asked: Did the SEC let Elon Musk off easy on his Twitter deal?

You answered:

🟨⬜️⬜️⬜️⬜️⬜️ No, no. A $1.5 million civil penalty for a guy worth $789.9 billion who just saved $150 million on the deal is a devastating financial blow. I’m sure he’ll be eating ramen for weeks. (61)
⬜️⬜️⬜️⬜️⬜️⬜️ Of course not, the SEC was vicious! But thankfully he was "cleared of all issues," and waiting 11 extra days to tell the world you're buying up Twitter was obviously just an "inadvertent" little oopsie. (19)
⬜️⬜️⬜️⬜️⬜️⬜️ Actually, I think it was too tough, considering this is technically the largest SEC penalty in history for this exact type of violation. (20)
🟩🟩🟩🟩🟩🟩 Yes. (267)
367 Votes via @beehiiv polls

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