Well done. You’ve made it through your first week of the new year. Have you been as productive as you promised yourself you would be this year? If not, it may be some consolation to hear that some other big names – Tesla and Apple – have also had some productivity issues.

The lowdown

• 🤖 ChatGPT developer OpenAI seeking fresh capital at a $30 billion valuation.

• 🧖‍♀️ Bed Bath & Beyond warns that it may need to file for bankruptcy.

• 🪫 Tesla lowers the price of Model 3 and Model Y in China for the second time in three months.

Featured Stories

BREIT

On Wednesday, we looked at the deal between Blackstone and University of California, which appeared to be aimed at steadying the Blackstone Real Estate Income Trust (BREIT) after it had wobbled.

To recap, BREIT hit its quarterly withdrawal limits in the final quarter of last year, as some investors turned to the fund as a source of liquidity after being hit with margin calls elsewhere. The graph below from the FT ($) does a good job at explaining what is going on.

The blue line is BREIT, the other lines are publicly listed real estate trusts. BREIT is a private trust and so Blackstone does its own valuations to determine the value of units, which have increased slightly. The publicly listed REIT unit values are determined by the public markets and have all fallen.

You may recall in the movie The Big Short, which documented the 2008 financial crisis, that it took a long time for banks on the other side of subprime mortgage bond trades to concede that the bonds had indeed fallen in value. Some investors are spooked that something similar may be going on here – that Blackstone’s internal accounting may be a little too optimistic, a little too slow or even willfully blind to changed property values.

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The content we're consuming today

• The Economist: Investors conclude that Tesla is a carmaker, not a tech firm ($).

• The Australian Financial Review: What happened to Twitter’s missing billions? ($).

• Deloitte: CFO Signals, Fourth Quarter 2022.

Off-balance sheet items

• Balance Sheet readers get 10% off the sleep-improving Apollo wearable. (Ad)

• In 2020, Mark Zuckerberg abandoned his practice of setting lofty New Year’s resolutions. But until then, he had some really interesting ones, like only eating meat from animals he killed himself.

• Start your New Year finally learning that language with 60% off Babbel for Balance Sheet readers. (Ad)

The bottom line