WE Soda, the world's largest producer of natural soda ash, has scrapped its London IPO in another blow to the UK’s equity markets. The company blamed the decision on ‘extreme investor caution in London’, which can be translated to ‘not achieving a valuation high enough to attract even its own management to hold shares in the group’ ($).

The lowdown

• 🗑️ WE Soda scraps plan for London IPO after failing to reach desired valuation.

• ✋ The Fed has left interest rates on hold for the first time in more than a year.

• 🗳️ Swiss to vote on whether to increase minimum corporate tax rates from 11% to 15%.

Flex your finance muscle

The Howey Test

Last week the SEC charged crypto trading platforms Binance and Coinbase with offenses relating to the unregistered sale of securities. But are crypto assets securities?

One way to answer this question is by using the Howey test. The test dates to a 1946 Supreme Court case, which established a set of criteria used to determine if an asset qualifies as an investment contract and, therefore, a security. The test requires: an investment of money, in a common enterprise, with an expectation of profit, based on the efforts of others.

SEC Chair Gary Gensler has made his view clear stating that "most crypto tokens are investment contracts under the Howey Test," meaning cryptocurrencies should be regulated as securities.

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Former SoftBank COO Marcelo Claure’s next move

Former SoftBank COO Marcelo Claure left the company in early 2022 following a dispute with CEO Masayoshi Son regarding Claure's pay – a measly $17 million in 2020.

Claure has announced that he is establishing a Latin America-focused growth equity firm named Bicycle Capital ($) backed by Mubadala, Abu Dhabi’s sovereign wealth fund. The firm has managed to secure $440 million in initial commitments and is aiming to raise a total of $500 million.

Claure has a history of successful financial ventures in Latin America, including selling wireless distribution company Brightstar to SoftBank for over $1 billion. Will we see Bicycle ride as high?

The content we're consuming today

• Unhedged podcast: Where’s the recession?

• American Banker: The cautionary tale of inflation in Great Britain ($).

• The Verge: Reddit CEO tells employees that subreddit blackout ‘will pass.’

Off-balance sheet items

• The author of ‘The Road’ and ‘No Country for Old Men’ Cormac McCarthy died on Tuesday. You should read those books if you haven’t. But, if that’s not your thing, No Country for Old Men is also a pretty awesome film.

The bottom line