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How Pantera Made a 25000% Return on Bitcoin: DealBook Briefing

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Good Tuesday morning. Here’s what we’re watching

• A four-year-old Bitcoin investment fund has posted a 25,004 percent lifetime return.

• How the merely rich, but not the ultrarich, would be hurt by the tax bill.

• And who’s in the running to become ESPN’s next leader?

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The Bitcoin investor that blew away other hedge funds.

Over the past five years, an index that tracks hedge fund performance has risen 27.83 percent. Over the past four years, the Pantera Bitcoin Fund exceeded that by nearly 1,000 times.

The Pantera fund told investors on Tuesday that its lifetime return has been 25,004 percent — mostly by buying early into Bitcoin. (That number is bigger now, since the return was calculated last week, when the digital currency reached $15,500.) Not every investor in the fund enjoyed this eye-popping result, but Pantera’s compound annual return has been about 250 percent.

More from Nathaniel Popper of the NYT:

But Dan Morehead, who founded the Pantera fund after an earlier career at Goldman Sachs, said that it was not an easy decision to create a Bitcoin-focused hedge fund in 2013, when Bitcoin was primarily known as a currency for online drug markets.

“The first hard part was actually deciding to launch a crypto currency fund when everyone else thought that was crazy,” he said on Monday.

The digital currency flyaround

• Investors are falling over themselves to buy into the initial coin offering of Block.one, a software start-up that isn’t going to make much software and whose tokens, it says, have “no purpose.” (WSJ)

• Investors pushed up shares of LongFin, a financial technology company, by 1,000 percent after it announced plans to buy a specialist in blockchain, the transaction ledger tech that underpins digital currencies. (FT)

• The analyst Frederick Cannon of Keefe, Bruyette & Woods says that Bitcoin’s blockbuster rise is hurting its chances of becoming a viable currency. (WSJ)

Apollo gets a discount in its Qdoba deal.

The investment giant is buying the Mexican restaurant chain from Jack in the Box for $305 million in cash. As of its 2017 fiscal year, its total sales were more than $820 million.

What Apollo is getting: The country’s second-biggest Mexican restaurant chain, which operates and franchises more than 700 restaurants.

Why Jack in the Box is selling: The deal is “consistent with the company’s desire to transition to a less capital-intensive business model.” Read another way, that says, “We don’t want to own and operate so many restaurants.” Roughly 53 percent of Qdoba’s restaurants are company-owned-and-operated, compared to just 12 percent of Jack in the Box restaurants.

The advisers

For Apollo: Deutsche Bank, PJ Solomon, Morgan Lewis & Bockius and Paul, Weiss, Rifkind, Wharton & Garrison

For Jack in the Box and Qdoba: Morgan Stanley, Gibson, Dunn & Crutcher

Senator Susan Collins, Republican of Maine, said that she would support the tax bill, all but assuring its passage.CreditJ. Scott Applewhite/Associated Press..

The G.O.P. tax plan hurts the rich — just not the very rich.

Get ready to pull out your very tiny violin. But the distinction is there.

From Andrew’s latest DealBook column:

In the world of public company chief executives — many based in states like New York, New Jersey, Massachusetts and California, where a big chunk of the largest companies in the country reside — several told me they expected their federal taxes to increase substantially because, unlike some of their wealthy peers in other industries, they cannot turn themselves into pass-through companies or other tax-dodging entities.

And as one self-professed supporter of President Trump in Massachusetts tweeted, “I didn’t vote for this. I want low taxes for all — not ZERO for more folks. Where’s my dollar?”

How big companies will be affected

Tech companies like Microsoft that stash huge amounts of foreign profits offshore are set to take a hit from the overhaul, which would impose a 10.5 percent tax on overseas earnings, according to the WSJ.

That could induce some to return to the United States, which, as the WSJ points out, could reduce the country’s trade deficit.

Meanwhile, five financial giants including Citigroup, Bank of America and A.I.G. could collectively take a $50 billion hit, according to the FT.

More in taxes

• The Republican Senators Susan Collins and Mike Lee said that they would support the tax proposal, further ensuring its passage in a vote scheduled for today. (The Hill)

• Bob Corker said that he faced a “tough decision” in deciding to support the tax overhaul after initially opposing it — and he denied pushing for a last-minute change that would benefit him personally. (NYT)

President Trump delivering a national security speech in Washington on Monday.CreditManuel Balce Ceneta/Associated Press..

The Washington flyaround

• Mr. Trump outlined a national security strategy that called Russia and China competitors to American dominance. But he ignored investigations into Russian interference in last year’s presidential election and may not meaningfully change the American trade deficit with China. (NYT, Bloomberg)

• The tax bill’s repeal of the individual insurance mandate could lead to higher insurance premiums, though other potential effects have yet to be determined. (NYT)

• Matthew Petersen, who was nominated by the White House for a federal judgeship but drew scorn when he couldn’t answer basic legal questions, has withdrawn his candidacy. (NYT)

CreditDrew Angerer/Getty Images

Who could replace John Skipper at ESPN?

Mr. Skipper, who stepped down yesterday as president of the sports powerhouse, citing a “substance addiction,” was once one of The Walt Disney Company’s most important moneymakers. For now, Disney has appointed George Bodenheimer, a former ESPN president, as acting chairman for 90 days.

More on potential permanent replacements from Lucas Shaw and Eben Novy-Williams of Bloomberg:

Programming boss Connor Schell and distribution chief Justin Connolly are likely internal candidates, as is acting Chairman George Bodenheimer, said the person, who asked not to be identified because process is only just starting. An outside candidate is also possible, the person said.

The context

Mr. Skipper assumed control of the sports network when it was one of the most formidable media properties on the planet, able to command high carriage fees from pay-television providers given its popularity. But as cable TV providers lose customers to streaming services, ESPN has shed subscribers and resorted to layoffs.

The deal angle

Mr. Skipper is stepping down days after Disney announced a deal to buy most of 21st Century Fox. Among the assets that would be included in the transaction are Fox’s 22 regional sports networks, which could be combined with ESPN to shore up Disney’s sports holdings.

Whoever takes over ESPN will also oversee the introduction of one of Disney’s big initiatives: a new sports-focused streaming service, ESPN Plus.

Extra credit: Sports Illustrated spoke with several ESPN employees who said they were shocked. “He just signed a new contract,” one said. “He just gave us this rah-rah speech at the mandatory meeting. No one knows what to think.”

CreditKevin C. Cox/Getty Images North America

Selling the Panthers could earn billions for Jerry Richardson.

Pro sports teams are going for big numbers these days, and the Carolina Panthers — who almost won the Super Bowl last year — are assuredly going to earn Mr. Richardson a windfall, even as he faces numerous accusations of improperly touching and harassing women and using a racial slur.

Forbes estimates that the team could be worth $2.3 billion.

What works in the Panthers’ favor, according to Ken Belson of the NYT:

The Panthers play in a far larger, more vibrant region than the Bills, the most recent N.F.L. team to be sold. And the Panthers also have a more favorable stadium lease.

Remembering why the team is selling

From Juliet Macur’s latest Sports of the Times column in the NYT:

Jerry Richardson, the owner of an N.F.L. team, is crashing and burning amid sexual harassment allegations, including claims that he belittled women for years in various humiliating ways. But you know what? He has found an escape that looks more like a gentle ride under a golden parachute.

In other misconduct news: Microsoft said that it would eliminate forced arbitration agreements with employees who make sexual harassment claims, one of the most prominent companies to do so, according to the NYT.

CreditJason Decrow/Associated Press..

The food industry is still spending billions for marginally healthier products.

Exhibit A: Campbell agreed to buy Snyder’s-Lance, the maker of Kettle Chips and Pop Secret, for roughly $4.8 billion in cash.

Exhibit B: Hershey agreed to buy Amplify Snack Brands, the maker of Skinny Pop popcorn, for about $902 million (or $1.6 billion including debt).

Both Campbell and Hershey are trying to diversify from their core food products, soup and chocolate. Both have had stagnant sales in recent years. The advantage of pursuing Snyder’s-Lance and Amplify is that they focus on somewhat more healthful snacks, a category that has risen in popularity.

Critics corner

• Lauren Silva Laughlin writes of the Snyder’s-Lance deal, “Big family shareholders are an obstacle to any outside investor trying to derail the deal, which is a pity because Campbell is on course to destroy shareholder value.” (Breakingviews)

• Tara Lachapelle writes, “Here come those desperate-looking food deals we told you about.” (Gadfly)

Things are looking up for Twitter.

Shares in the social networking company jumped 11 percent yesterday, in one of their biggest one-day leaps in the past year.

Possible reasons

• JPMorgan Chase’s Doug Anmuth upgraded the stock’s price target to $27 from $20 and called the company one of the “top small and mid-cap ideas in 2018.”

• Jonathan Kees of Summit Redstone began coverage with a “buy” recommendation and a price target of $26, adding, “now is the time to jump in.”

How to grade the Twitter recovery in 2018

• Whether daily average user numbers continue to grow

• Whether a renewed focus on live events brings in advertisers

In other news: In other news: Twitter banned several accounts tied to Britain First, the far-right group that produced an anti-Muslim video retweeted by Mr. Trump.

Revolving Door

Tony Ressler, a co-founder of Ares Management, said that he would step down as chief executive and would become executive chairman. A younger co-founder, Michael Arougheti, will become C.E.O. (Ares)

Chart of the Day

On Dec. 12, 1962, Warren Buffett paid $7.50 a share to buy 2,000 shares of a failing textile maker. (That’s $60.86 in 2017 dollars.)

On Dec. 18, 2017, A shares in the company, Berkshire Hathaway, closed at $300,000 apiece.

That’s a rise of about 492,834 percent, adjusted for inflation. Not a Bitcoin-mania-type return, but we suspect that Mr. Buffett is pretty happy regardless.

The Speed Read

• See how the savings of many Puerto Ricans were wiped out, and what role UBS may have played in that. (CNBC)

• Ikea is under investigation for possibly having skirted E.U. tax regulations. (NYT)

• HNA, the debt-ridden Chinese conglomerate, is looking to sell about $6 billion worth of property around the world to pay off its obligations, according to unidentified people. (WSJ)

• Companies have borrowed $6.8 trillion this year, capitalizing on still-low interest rates. (FT)

• Behind a swell in hospital operator mergers is a frantic attempt to attract patients in an age where people have more choices about where to go for medical care. (NYT)

• The drug Daranide was created a half-century ago and once cost virtually nothing. Now it’s known as Keveyis and, under new ownership, could cost as much as $219,000 a year. (WaPo)

• Starboard Value, the activist hedge fund, has taken a 9.9 percent stake in Cars.com and believes that the online marketplace could be sold to a private equity firm. (WSJ)

• Virgin Hyperloop One, the futuristic transport company, took in $50 million in new capital from investors in Dubai and Russia, named Richard Branson as its chairman and rebuffed a takeover bid. (Bloomberg)

• Silvio Berlusconi has had a good year: His net worth grew about $2 billion after shares in his media empire rose dramatically and his center-right political party did well in elections. (Bloomberg)

• Greenyard, a Belgian food company, said it was in talks to buy Dole Food, the company synonymous with Hawaiian pineapple. (Reuters, Greenyard)

• In related news, scientists are scouring the globe to find a potential replacement for the widely known type of banana, the Cavendish, which is at risk of extinction because of a fungus epidemic. (WSJ)

You can find live updates throughout the day at nytimes.com/dealbook.

We’d love your feedback as we experiment with the writing, format and design of this briefing. Please email thoughts and suggestions to bizday@nytimes.com.

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