“Hindenburrrrrggg!” Smoke will be coming out of Gautam Adani’s ears right now after he was forced to cancel the Adani share sale and return money to investors after market prices fell below the subscription offer. The fall could be because when Hindenburg said, “we mustache you 88 questions”, Adani decided to respond to 0 of them… over 413 pages.

The lowdown

• ❌ Adani Group cancels share sale as losses balloon to $100 billion in wake of short seller report.

• 📈 Fed raise interest rates by 25 basis points. ECB and BoE will meet today.

• 💬 Microsoft rolls out Teams Premium which will utilize ChatGPT.

Flex your finance muscle

The Rule of 40

No, it has nothing to do with a midlife crisis. The Rule of 40 is a metric used predominantly in SaaS venture capital that says a company's growth rate and operating margins should add up to 40%. It is used as a rough benchmark to evaluate the financial health and potential of a startup.

The idea behind the rule is that a company growing slowly has to generate a healthy operating margin, while a company growing quickly can be unprofitable. For example, a company growing 20% year-on-year has to have a 20% operating margin to satisfy the Rule of 40. But a company growing 60% yearly can have a -20% operating margin and still satisfy it.

However, the Rule of 40 is not a hard and fast one, and should be considered along with other financial metrics and business factors when evaluating a company.

Read more about it in this blog post from Mckinsey.

Featured Stories

Peloton may be turning around

Peloton shareholders have been on some ride over the last couple of years. The company had a really good pandemic as gyms closed and people sought ways to work out at home. When lockdowns ended and people returned to gyms, growth slowed, and the company’s overly ambitious planning resulted in a $700 million loss three quarters ago.

The company has shifted strategy from selling pricey stationary bikes to a subscription model where customers pay to access content that does not necessarily require one of its bikes.

On Wednesday, Peloton forecast higher than expected revenue for Q3 and reported a slowing cash burn. Shares in the company rose 26.5% though the company remains about 90% down from its peak.

The content we're consuming today

• Vulture: The boom — or glut — in streaming documentaries has sparked a reckoning among filmmakers and their subjects.

• FT: KPMG partner pay climbs as hot deals market overshadows fines ($).

Off-balance sheet items

• The horror film Winnie the Pooh: Blood and Honey comes out this month and it looks terrible. What is interesting though is that the film is being made – copyright protection on AA Milne’s 1926 creation has expired and soon other characters will be free too ($). 

The bottom line