SBF is still trying to raise cash to make FTX customers whole. But after seeing the leaked FTX balance sheet, I think it may be time to let go of that idea. It is kind of horrifying to think this document came from a company that was last valued at $32 billion. Take a look if you haven’t yet – it will hopefully be the second most enjoyable Balance Sheet you read today.

The lowdown

• ✂️ Alphabet is the latest tech company to face a call from an activist investor to cut costs.

• 🛒 Walmart increases market share and announces share buyback.

• 🚗 Elon Musk “working and sleeping” at Twitter headquarters as Tesla investors worry.

Featured stories

Bird warns investors it is scooting towards bankruptcy

On Monday, e-scooter rental company Bird advised in a regulatory filing that its financial statements for the last two and a half years could no longer be relied upon. Bird had been erroneously recognizing revenue from rides where the required funds did not exist in customers’ preloaded “wallet” balances.

In a press release, Bird went on to warn investors that, as of 30 September 2022, the company had only $38.5 million in cash and, without raising more capital, may struggle to continue as a going concern. Quite a turnaround for the fastest startup ever to reach unicorn status.

Bird CFO Ben Lu does have one interesting idea on how to boost revenue. “While the restatement we announced today related to our overstatement of revenue from failed payments has reduced our historical revenues, we are in the process of completing an unrelated analysis on preloaded wallet balances that we do not expect to be redeemed in the future, which we expect to complete in Q4 2022. Upon completion, we expect to record on-going breakage revenue and anticipate booking a true-up that would increase our revenues next quarter.”

To recognize revenue from a ride, the ordinary accounting treatment would be to do so once the ride has been provided to the customer. Bird will instead begin including in its revenues funds held in users’ wallets where it does not expect to have to provide a ride in exchange, and does not have to return. That is to say, Bird will now begin counting its chickens before they hatch. Unfortunately, this won't do anything for its cash balance.

The content we're consuming today

• Acquired podcast: Qualcomm – Season 11, Episode 6.

• Financial Times on YouTube: Cryptocurrencies: How regulators lost control.

Off-balance sheet items

• The teaser trailer for season 4 of this newsletter’s favorite television show Succession is here.

The bottom line