The Unhedged Awards

Episode Summary

Executive Summary: In this year-end awards episode, Unhedged hosts Ethan Wu, Robert Armstrong, and Katie Martin review finance and markets in 2023 through playful category winners. They select Binance for scam of the year, Michael Dell’s role in the Broadcom–VMware deal, Turkey’s central bank chief for central banker, a collapsing NFT-gaming IPO, Katie’s Fed-rate prediction, and cruise stocks for trade of the year. Their choices highlight market excesses, deal scarcity, and surprising resilience.

Main Topics: Scam of the Year: Binance: The panel chooses Binance over FTX, citing a $4.3 billion fine and an extensive range of alleged compliance failures and illicit transactions. FTX is acknowledged as a major fraud, but its collapse began in 2022. Deal of the Year: Michael Dell and Broadcom–VMware: With few major deals in a weak M&A year, the hosts recognize Michael Dell’s approximately $6 billion equity contribution across transactions involving Dell, VMware, and Broadcom, which they say grew to a value around $60 billion. Central Banker of the Year: Turkey’s Hafize Gaye Erkan: The panel praises Turkey’s central bank chief for pursuing conventional rate increases to address inflation and for helping restore some foreign investor interest, while noting that her authority depends on President Erdoğan’s support. IPO of the Year: NFT Gaming Company: The hosts award the category to NFT Gaming Company, whose stock fell sharply after listing. They also cite UK payments company CAB Payments as a disappointing IPO, underscoring their bleak view of the year’s listings. Prediction of the Year: The hosts revisit their forecasts: Unhedged’s late-October call that long bonds might be attractive came close to the Treasury yield peak, while Katie’s prediction that the Fed would not cut rates until the third quarter of the following year appeared stronger than Ethan’s first-quarter rate-cut forecast. Trade of the Year: Cruise-line stocks: Royal Caribbean and Carnival are recognized for exceptionally strong returns, a striking bet against recession given their discretionary businesses and heavy pandemic-era debt. The discussion also notes that markets recovered from the SVB and Credit Suisse crises without the predicted wider catastrophe.

Key Arguments: Binance deserved the scam award because the scale and breadth of the conduct described in its case—including a $4.3 billion penalty—made it a more comprehensive example of financial misconduct than FTX, despite FTX’s spectacular collapse. Michael Dell’s investment and the subsequent value associated with the VMware–Broadcom transactions stood out in a year the hosts described as unusually quiet for dealmaking. Erkan’s return to more conventional, forceful rate increases helped attract tentative foreign investor interest in Turkey; however, the panel cautioned that the policy’s continuation depends on Erdoğan’s backing. The NFT Gaming Company’s stock performance illustrated the risks in speculative public offerings, while CAB Payments’ sharp decline further reflected the weakness of the IPO market. Unhedged’s October long-bond discussion was close to the peak in 10-year Treasury yields, and the panel considered Katie’s later Fed-cut forecast more credible than Ethan’s earlier forecast. Cruise stocks were a particularly strong pro-growth, anti-recession trade: their high returns came despite discretionary demand and substantial debt accumulated during the pandemic.

Data Points: Binance penalty: $4.3 billion - The panel cites the fine in explaining its selection of Binance for scam of the year, describing it as including the largest U.S. Treasury fine of its kind. Michael Dell equity contribution: About $6 billion - The hosts describe this as Dell’s contribution across the transactions connected to VMware and Broadcom. Value associated with Dell’s stakes: About $60 billion - The discussion says Dell’s stakes had reached roughly this value, framing the outcome as an approximately tenfold gain. NFT Gaming Company debut price: $14.15 per share - The company’s stock debuted at this price after listing. NFT Gaming Company later share price and market capitalization: 36 cents per share; under $5 million - The hosts cite these figures to illustrate the stock’s severe post-listing decline. CAB Payments share-price decline: 72% - The UK payments company’s stock reportedly fell three months after listing, amid reduced revenue forecasts. 10-year Treasury yield movement: About 100 basis points lower - After Unhedged’s October discussion of buying long bonds, the hosts said yields had fallen by roughly this amount from the peak. Cruise-line stock total returns: Royal Caribbean: 144%; Carnival: 125% - The hosts identify these as the two cruise companies’ S&P 500 total returns cited in their trade-of-the-year discussion. NFT game app reviews: 15 - The hosts say the NFT Gaming Company’s game Galaxy Axos Brawlbots had 15 reviews on the Apple App Store. Deal-flow comparison: Around a 10-year low - A newsroom M&A reporter is quoted as characterizing the year’s deal activity this way.

Pivotal Quotes: "literally Binance checked every conceivable box for things to do wrong with money." — Robert Armstrong: His case for choosing Binance over FTX as scam of the year. "this particular central banker has got market trust. It's a miracle." — Katie Martin: Her assessment of Hafize Gaye Erkan’s efforts to restore confidence in Turkey’s monetary policy. "Genuinely, we had a banking crisis, and nothing happened." — Katie Martin: Her wry observation that markets and the broader economy endured the SVB and Credit Suisse failures without the feared systemic collapse.

Implications: The awards underscore how unusual 2023 was: dealmaking and IPOs were weak, yet speculative assets and indebted cruise operators could rally sharply. Turkey’s policy credibility remained politically contingent, while market resilience rewarded investors willing to resist panic—but the hosts stress that their picks are commentary, not financial advice.